July 2024 – Page 3 – 1stOncology™: Cancer Intelligence Service

Merck Returns to Organic Sales Growth

On July 31, 2024 Merck, a leading science and technology company, reported organic sales growth in the second quarter of 2024 (Press release, Merck KGaA, JUL 31, 2024, View Source [SID1234645212]). EBITDA pre remained around stable organically compared with the year-earlier figure, which had been increased by one-time effects. Excluding these one-time effects in the year-earlier quarter, EBITDA pre would also have grown organically.

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"We announced that we would gradually return to organic growth during the course of 2024. The second quarter shows our progress on this journey," said Belén Garijo, Chair of the Executive Board and CEO of Merck. "Our business dynamics as well as our assumptions point to growth also for the rest of the year. We are therefore raising our forecast for 2024 at Group level and for the Healthcare and Electronics business sectors."

Thanks to the good business performance of Healthcare and Electronics, Group sales in the second quarter of 2024 increased by 1.7% organically. Foreign exchange effects, especially from the U.S. dollar, had a negative impact of 0.7% on sales development. Overall, Group sales increased by 0.9% to € 5,352 million.

EBITDA pre decreased organically by only 0.8% and amounted to € 1,509 million despite the higher comparative base of the year-earlier quarter, which included one-time effects. Moreover, a provision of a mid double-digit million euro amount for the termination of the xevinapant program had a negative impact on EBITDA pre in the second quarter of 2024. In addition, negative foreign exchange effects of 2.1% were incurred. The total decrease compared with the year-earlier quarter was 2.9%. Without the one-time effect from a patent agreement in OLEDs with UDC (Universal Display Corporation) in the year-earlier quarter and the xevinapant termination provision, EBITDA pre would have grown in the mid-single digit percentage range in the second quarter of 2024. The Group EBITDA pre margin was 28.2% and earnings per share pre were stable compared with the year-earlier quarter at € 2.20.

On July 31, 2024, Merck completed the acquisition of Mirus Bio, which had been announced in May 2024. Mirus Bio is a U.S. life science company that specializes in transfection reagents for the manufacture of viral vectors. With this US$ 600 million acquisition, Merck is complementing its portfolio for the development and manufacture of novel modalities such as cell and gene therapies.

Life Science: Order intake in Process Solutions continues to recover; other business units deliver organic sales growth

In Life Science, sales declined organically by 3.7% and came in at € 2,258 million in the second quarter of 2024. The main reasons for this were the expected continued inventory destocking by customers of Process Solutions and the decrease in Covid-19-related demand. Sales of Process Solutions were down by 11.8% organically, evolving positively compared with the organic decrease of 19.0% in the first quarter of 2024. At the same time, order intake in this business unit improved both sequentially and in comparison with the second quarter of 2023. Merck expects sales of Process Solutions to recover gradually in the second half of 2024 as inventory destocking by customers comes to an end. The two other Life Science business units delivered organic sales growth in the second quarter of 2024: Science & Lab Solutions by 1.4% and Life Science Services by 8.2%.

EBITDA pre of Life Science decreased organically by 6.1% and amounted to € 655 million. This was mainly attributable to the decline in sales of Process Solutions and the lower share of sales from products with a higher contribution to earnings, partly offset by strict cost management. The EBITDA pre margin of the business sector reached 29.0%. Sequentially, i.e. compared with the first quarter of 2024, both EBITDA pre and the EBITDA pre margin of Life Science increased.

Healthcare: Solid organic growth driven by the Oncology and CM&E franchises

The Healthcare business sector delivered sales of € 2,137 million in the second quarter of 2024. Organically, sales grew by 5.3%. The Oncology franchise, with its cancer drugs Erbitux, Bavencio and Tepmetko, achieved organic sales growth. Sales of Mavenclad for the treatment of multiple sclerosis grew organically by 1.3% compared with the particularly high base of the year-earlier quarter. The organic sales growth of the Cardiovascular, Metabolism and Endocrinology (CM&E) franchise was attributable to various factors, including the market recovery in the area of diabetes in mainland China.

EBITDA pre of Healthcare was € 720 million, growing organically by 4.6% compared with a higher year-earlier base, which was supported by portfolio management. The provision for the termination of the xevinapant program had a negative impact on Healthcare earnings. The EBITDA pre margin of the business sector was 33.7% in the second quarter of 2024.

Electronics: Semiconductor Solutions growth based on market recovery in artificial intelligence and advanced nodes

In the second quarter of 2024, sales of the Electronics business sector grew organically by 7.6% and reached € 957 million. This growth was mainly driven by the Semiconductor Solutions business unit, which delivered organic sales growth of 11.4%. Alongside an increase in demand due to the market inflection for semiconductor materials for artificial intelligence applications and advanced nodes, the business with equipment for customer plants within the Delivery Systems & Services (DS&S) business unit also contributed to this. For the second half of 2024, Merck expects the remaining semiconductor materials market to gradually recover. However, the phasing of the DS&S project business will partly offset this effect.

EBITDA pre of Electronics declined organically by 3.1% against an increased comparative base and came in at € 255 million. The year-earlier quarter had recorded a one-time effect from a patent agreement in OLEDs with UDC. The increased sales in the Semiconductor Solutions unit had a positive effect on EBITDA pre. The EBITDA pre margin of Electronics reached 26.7%. Without the one-time effect, the EBITDA pre margin would have increased compared with the year-earlier quarter.

Merck raises guidance for 2024

For fiscal 2024, Merck is raising its guidance for the Group and for the Healthcare and Electronics business sectors – for both sales and EBITDA pre in each case. This is based on the continued strong performance of Healthcare and by the earlier inflection of the AI and advanced nodes semiconductor materials market in Electronics. For Life Science, the company confirms its previous organic guidance. Merck now expects the following development on Group level:

Net sales: in a range of € 20.7 billion to € 22.1 billion with organic growth of +2% to +5% (previously: € 20.6 billion to € 22.1 billion; organic growth of +1% to +5%) and foreign exchange effects of -3% to 0%.
EBITDA pre: in a range of € 5.8 billion to € 6.4 billion with organic growth of +4% to +10% and negative foreign exchange effects (FX) of -5% to -1% (previously: € 5.7 billion to € 6.3 billion; organic growth of +1% to +7%, FX ‑4% to ‑1%).
EPS pre: € 8.20 to € 9.30 (previously: € 8.05 to € 9.10).
Overview of the key figures for Q2 2024

Merck Group

Key figures

€ million

Q2 2024

Q2 2023

Change

Jan.-June 2024

Jan.-June 2023

Change

Net sales

5,352

5,302

0.9%

10,472

10,595

-1.2%

Operating result (EBIT)1

792

969

-18.3%

1,724

2,004

-14.0%

Margin (% of net sales)1

14.8%

18.3%

16.5%

18.9%

EBITDA2

1,472

1,452

1.4%

2,857

2,942

-2.9%

Margin (% of net sales)1

27.5%

27.4%

27.3%

27.8%

EBITDA pre1

1,509

1,553

-2.9%

2,963

3,140

-5.7%

Margin (% of net sales)1

28.2%

29.3%

28.3%

29.6%

Profit after income tax

605

706

-14.3%

1,305

1,506

-13.3%

Earnings per share (€)

1.40

1.62

-13.6%

2.99

3.45

-13.3%

Earnings per share pre (€)1

2.20

0.0%

4.26

4.57

-6.8%

Operating cash flow

861

622

38.4%

1,896

1,475

28.6%

Net financial debt1, 3

7,950

7,500

6.0%

–

Number of employees4

62,176

63,701

-2.4%

–

1 Not defined by International Financial Reporting Standards (IFRS).

2 Not defined by International Financial Reporting Standards (IFRS); EBITDA corresponds to operating result (EBIT) adjusted by depreciation,
amortization, impairment losses, and reversals of impairment losses.

3 Figures for the reporting period ending on June 30, 2024, prior-year figures as of December 31, 2023.

4 Figures for the reporting period ending on June 30, 2024, prior-year figures as of June 30, 2023. This figure refers to all employees at sites of fully consolidated entities.

Life Science

Net sales by business unit

€ million

Q2 2024

Organic growth1

Exchange rate effects

Acquisitions/ divestments

Total change

Q2 2023

Science & Lab Solutions

1,192

53%

1.4%

-0.5%

–

0.9%

1,182

50%

Process Solutions

871

39%

-11.8%

-0.5%

–

-12.3%

994

42%

Life Science Services

194

8.2%

1.0%

–

9.2%

178

Life Science

2,258

100%

-3.7%

-0.4%

–

-4.1%

2,354

100%

1 Not defined by International Financial Reporting Standards (IFRS).

Healthcare

Net sales by major product lines/products

€ million

Q2 2024

Organic
growth1

Exchange rate effects

Total change

Q2 2023

Oncology

490

23%

9.2%

-2.1%

7.1%

458

22%

thereof: Erbitux

276

13%

8.2%

-2.1%

6.1%

260

13%

thereof: Bavencio

186

6.4%

-1.9%

4.5%

178

Neurology & Immunology

434

20%

-7.4%

0.2%

-7.2%

467

23%

thereof: Mavenclad

266

12%

1.3%

0.1%

1.4%

262

13%

thereof: Rebif

168

-18.5%

0.3%

-18.2%

205

10%

Fertility

403

19%

-0.5%

-0.9%

-1.5%

409

20%

thereof: Gonal-f

227

11%

5.0%

-1.0%

4.0%

219

11%

Cardiovascular, Metabolism and Endocrinology

746

35%

13.7%

-1.6%

12.1%

665

32%

thereof: Glucophage

238

11%

23.5%

-2.6%

20.9%

197

10%

thereof: Concor

158

13.2%

-1.8%

11.4%

142

thereof: Euthyrox

155

19.2%

-0.8%

18.4%

131

thereof: Saizen

23.0%

-0.6%

22.4%

Other

Healthcare

2,137

100%

5.3%

-1.1%

4.3%

2,049

100%

1 Not defined by International Financial Reporting Standards (IFRS).

Electronics

Net sales by business unit

€ million

Q2 2024

Organic growth1

Exchange rate effects

Acquisitions/ divestments

Total change

Q2 2023

Semiconductor Solutions

665

69%

11.4%

-0.6%

-0.4%

10.4%

602

67%

Display Solutions

188

20%

-2.4%

-1.5%

–

-3.9%

196

22%

Surface Solutions

104

11%

4.1%

-1.3%

–

2.8%

101

11%

Electronics

957

100%

7.6%

-0.9%

-0.2%

SELLAS Life Sciences Announces $21.0 Million Registered Direct Offering Priced at a Premium to Market

On July 31, 2024 SELLAS Life Sciences Group, Inc. (NASDAQ: SLS) ("SELLAS’’ or the "Company"), a late-stage clinical biopharmaceutical company focused on the development of novel therapies for a broad range of cancer indications, reported that it has entered into a securities purchase agreement with a single institutional investor for the purchase and sale of 15,849,056 shares of common stock (or common stock equivalents in lieu thereof) and warrants to purchase up to an aggregate of 15,849,056 shares of common stock, in a registered direct offering priced at a premium to market (Press release, Sellas Life Sciences, JUL 31, 2024, View Source [SID1234645210]). The combined effective offering price for each share of common stock (or common stock equivalent in lieu thereof) and accompanying warrant is $1.325. The warrants will have an exercise price of $1.20, will be immediately exercisable and will expire five years from issuance.

The gross proceeds to the Company are expected to be approximately $21.0 million before deducting placement agent fees and other estimated offering expenses. The offering is expected to close on or about August 1, 2024, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as the sole placement agent for the offering.

This offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No 333-278334) previously filed with the U.S. Securities and Exchange Commission (the "SEC"). A prospectus supplement describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at View Source Electronic copies of the prospectus supplement may be obtained, when available, from Maxim Group LLC, at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Syndicate Department, or by telephone at (212) 895-3745 or by email at [email protected].

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

Schrödinger Reports Strong Second Quarter 2024 Financial Results

On July 31, 2024 Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based computational platform is transforming the way therapeutics and materials are discovered, reported financial results for the second quarter of 2024 (Press release, Schrodinger, JUL 31, 2024, View Source [SID1234645209]).

"We are very pleased with our results for the second quarter. We delivered 21% software revenue growth, and we see many opportunities for customers to increase their scale of adoption of our technology. Our recently announced predictive toxicology initiative reflects our commitment to investing in the science underlying our platform to drive future growth," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "Recent clinical and corporate milestones at co-founded companies further validate our platform and underscore the strength of our business model. Our proprietary therapeutics pipeline also continues to progress, and we look forward to sharing the initial Phase 1 data from each of our three lead programs next year, starting with SGR-1505 in the first half of 2025."

Second Quarter 2024 Financial Results
•Total revenue for the second quarter was $47.3 million, compared to $35.2 million in the second quarter of 2023.
•Software revenue for the second quarter increased 21% to $35.4 million, compared to $29.4 million in the second quarter of 2023. The increase reflects increased contribution from new and existing customers purchasing hosted licenses as well as the renewal of several multi-year deals.
•Drug discovery revenue was $11.9 million for the second quarter, compared to $5.8 million in the second quarter of 2023. The increase was primarily due to the recognition of milestone revenue associated with the progression of ongoing collaboration programs.
•Software gross margin increased to 80% for the second quarter, compared to 77% in the second quarter of 2023, primarily due to increased revenue in the period.
•Operating expenses were $84.1 million for the second quarter, compared to $74.9 million for the second quarter of 2023. The increase was primarily due to higher R&D expenses.
•Other expense, which includes changes in fair value of equity investments and interest income, was $1.2 million for the second quarter, compared to other income of $45.0 million for the second quarter of 2023, reflecting the difference in mark to market value of the company’s equity investments.
•Net loss for the second quarter was $54.0 million, compared to net income of $4.3 million in the second quarter of 2023.
•At June 30, 2024, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $381.5 million, compared to approximately $468.8 million at December 31, 2023.

Three Months Ended
June 30,
2024 2023 % Change
(in millions)
Total revenue $ 47.3 $ 35.2 35%
Software revenue 35.4 29.4 21%
Drug discovery revenue 11.9 5.8 104%
Software gross margin 80 % 77 %
Operating expenses $ 84.1 $ 74.9 12%
Other (expense) income $ (1.2) $ 45.0 —
Net (loss) income $ (54.0) $ 4.3 —

For the three and six months ended June 30, 2024, Schrödinger reported non-GAAP net losses of $48.1 million and $110.5 million, respectively, compared to non-GAAP net losses of $56.8 million and $84.4 million for the three and six months ended June 30, 2023. A reconciliation of non-GAAP net loss to GAAP net (loss) income can be found in "Non-GAAP Information" and financial tables below.

2024 Financial Outlook
Today Schrödinger updated its 2024 full-year guidance for software gross margin and operating expense growth and maintained its other financial guidance. The company’s financial expectations for the fiscal year ending December 31, 2024, are as follows:
•Software revenue growth is expected to range from 6% to 13%.
•Drug discovery revenue is expected to range from $30 million to $35 million.
•Software gross margin is now expected to be slightly lower than 2023 and in the range of 2022 based on the effect of the research grant from the Bill & Melinda Gates Foundation.
•Operating expense growth in 2024 is now expected to range from 8% to 10%.
•Cash used for operating activities in 2024 is expected to be above cash used for operating activities in 2023.

For the third quarter of 2024, software revenue is expected to range from $32 million to $34 million.

Recent Highlights
Platform
•In July, Schrödinger launched an initiative to expand its computational platform to predict toxicity associated with binding to off-targets. The goal of this initiative is to develop a computational solution to improve the properties of drug development candidates and reduce the risk of development failure. The project will be funded initially by a $10 million grant from the Bill & Melinda Gates Foundation and will leverage NVIDIA’s AI technology.

•In June, Schrödinger and AstraZeneca scientists published a method yielding more accurate predictions of experimental free energies for optimizing protein-protein interactions, which is central to biologics design. The case studies demonstrate how FEP+ calculations can be applied to real-world protein therapeutic design projects, potentially increasing throughput and lowering discovery costs.

Proprietary Pipeline
•The company is advancing the Phase 1 dose-escalation study of SGR-1505, its MALT1 inhibitor, in patients with relapsed/refractory B-cell malignancies, and enrollment is ongoing in the U.S. and Europe. The company expects to report initial clinical data from this study in the first half of 2025.

•Schrödinger announced today that the FDA has granted SGR-2921, the company’s investigational CDC7 inhibitor, FDA Fast Track Designation for the treatment of relapsed/refractory acute myeloid

leukemia. The Phase 1 study of SGR-2921 in patients with acute myeloid leukemia or myelodysplastic syndrome continues to enroll patients in the U.S. and EU. The company expects to report initial clinical data from this study in the second half of 2025.

•Today, Schrödinger announced the initiation of dosing in a Phase 1 clinical study of SGR-3515, an investigational Wee1/Myt1 inhibitor in patients with advanced solid tumors. The dose-escalation study is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity, and a recommended Phase 2 dose of SGR-3515. The company expects to report initial clinical data from this study in the second half of 2025.

Collaborators, Partners, and Co-Founded Companies
•In July, Morphic Holding, Inc., a company that Schrödinger co-founded, announced its planned acquisition by Lilly for $57 per share, or approximately $3.2 billion. Schrödinger currently owns 834,968 shares of Morphic and is entitled to low single-digit royalties on its clinical development programs, including MORF-057.

•Development programs at other companies co-founded by Schrödinger continued to progress. In May, Ajax Therapeutics, Inc. completed a Series C financing and received Investigational New Drug clearance for AJ1-11095, a type II JAK2 inhibitor. In June, Structure Therapeutics presented obesity and diabetes data from its Phase 1b/2a study of GSBR-1290, a GLP-1 receptor agonist, at the Annual Meeting of the American Diabetes Association.

Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its second quarter 2024 financial results on Wednesday, July 31, 2024, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.

Rezolute to Participate in the BTIG Virtual Biotechnology Conference

On July 31, 2024 Rezolute, Inc. (Nasdaq: RZLT) ("Rezolute" or the "Company"), a late-stage biopharmaceutical company committed to developing novel, transformative therapies for serious rare diseases, reported that Nevan Charles Elam, Chief Executive Officer and Founder of Rezolute, will participate in a fireside chat during the BTIG Virtual Biotechnology Conference on Monday, August 5, 2024, at 12:00 p.m. ET (Press release, Rezolute, JUL 31, 2024, View Source [SID1234645208]).

Management will be participating in one-on-one investor meetings throughout the conference. Investors interested in scheduling a meeting with the Rezolute management team should contact their BTIG representative.

QIAGEN delivers solid performance and exceeds outlook for Q2 2024

On July 31, 2024 QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) reported results for the second quarter and first half of 2024 (Press release, Qiagen, JUL 31, 2024, View Source [SID1234645207]).

Net sales were stable at $496 million in Q2 2024 compared to Q2 2023, while results at constant exchanges rates (CER) of $502 million rose 1% and were above the outlook for at least $495 million CER. The adjusted operating income margin rose about one percentage point to 28.4% from Q2 2023 on efficiency gains while supporting targeted investments. Adjusted diluted earnings per share (EPS) were $0.55, and results at CER of $0.55 were above the outlook for at least $0.52 CER.

QIAGEN has updated its FY 2024 outlook based on the solid core business performance in the first half of the year, which was about $15 million CER above guidance, as well as the decision to phase out the NeuMoDx clinical PCR system. As a result, total net sales are expected to be at least $1.985 billion CER and includes a $30 million CER adjustment in expected NeuMoDx sales for 2024.

The outlook for adjusted diluted EPS has been increased to at least $2.16 CER, while the adjusted operating income margin target is for at least 28.5% compared to 26.9% in 2023.

"Our teams executed well in the second quarter, showing sequential growth from the first quarter as well as over the year-ago period as we accelerate our performance during 2024. We are on track to achieve our updated outlook that reflects the strong trends in our core business along with the decision on the NeuMoDx system," said Thierry Bernard, CEO of QIAGEN.

"We are strengthening our portfolio with new product launches, particularly for QIAstat-Dx with the FDA 510(k) clearances of the new gastrointestinal panel and the updated respiratory panel. As we head into the second half of 2024, we continue to expect solid growth trends in our core business and are well-positioned to deliver on our commitments for 2024," Bernard said.

"QIAGEN again delivered growth ahead of our outlook for the second quarter of 2024 that gives us renewed confidence in achieving the updated outlook for sales and adjusted earnings for 2024," said Roland Sackers, Chief Financial Officer of QIAGEN. "We are seeing the benefits of our initiatives to improve profitability, as we confirm our full-year target for an adjusted operating income margin of at least 28.5%, combined with higher free cash flow. These improvements put us on a trajectory to achieve the targets we have set for 2028 as part of our commitment to solid profitable growth."

Please find the full press release incl. tables as a PDF for download at the top of this page.

Investor presentation and conference call

A conference call is planned for Thursday, August 1, 2024 at 15:00 Frankfurt Time / 14:00 London Time / 9:00 New York Time. A live audio webcast will be made available in the investor relations section of the QIAGEN website, and a recording will also be made available after the event.
A presentation will be available before the conference call at View Source

Use of adjusted results

QIAGEN reports adjusted results, as well as results on a constant exchange rate (CER) basis, and other non-U.S. GAAP figures (generally accepted accounting principles), to provide additional insight into its performance. These results include adjusted net sales, adjusted gross income, adjusted gross profit, adjusted operating income, adjusted operating expenses, adjusted operating income margin, adjusted net income, adjusted net income before taxes, adjusted diluted EPS, adjusted EBITDA, adjusted EPS, adjusted income taxes, adjusted tax rate, and free cash flow. Free cash flow is calculated by deducting capital expenditures for Property, Plant & Equipment from cash flow from operating activities. Adjusted results are non-GAAP financial measures that QIAGEN believes should be considered in addition to reported results prepared in accordance with GAAP but should not be considered as a substitute. QIAGEN believes certain items should be excluded from adjusted results when they are outside of ongoing core operations, vary significantly from period to period, or affect the comparability of results with competitors and its own prior periods. Furthermore, QIAGEN uses non-GAAP and constant currency financial measures internally in planning, forecasting and reporting, as well as to measure and compensate employees. QIAGEN also uses adjusted results when comparing current performance to historical operating results, which have consistently been presented on an adjusted basis.

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Month: July 2024

Merck Returns to Organic Sales Growth

SELLAS Life Sciences Announces $21.0 Million Registered Direct Offering Priced at a Premium to Market

Schrödinger Reports Strong Second Quarter 2024 Financial Results

Rezolute to Participate in the BTIG Virtual Biotechnology Conference

QIAGEN delivers solid performance and exceeds outlook for Q2 2024