On October 27, 2016 Varian Medical Systems (NYSE: VAR) reported Grupo Oncoclínicas, the largest private cancer center network in Latin America, acquired thirteen medical linear accelerators, five TrueBeam and eight VitalBeam, as part of a multi-phase program to expand the radiotherapy capabilities in its centers across Brazil (Press release, InfiMed, OCT 27, 2016, View Source [SID1234516094]). To support advanced treatment capabilities, Grupo Oncoclínicas has also ordered Varian’s software including the Eclipse treatment planning system, InSightive analytics solution, RapidPlan knowledge-based treatment planning software, Velocity multi-modality imaging software, and ARIA oncology information system. Varian will be installing the equipment and software at several clinics over the next three years.

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The Varian TrueBeam and VitalBeam medical linear accelerators are built from the same platform and are designed to enable high-quality rapid and precise image-guided treatment. Grupo Oncoclínicas will have the first cancer centers in Latin America equipped with the VitalBeam systems.

"Grupo Oncoclínicas and Varian share a commitment to increasing patient access to the most advanced cancer treatments," said Hélio Salmon, radiotherapy director of Grupo Oncoclínicas. "By utilizing the TrueBeam and VitalBeam systems and Varian software as part of our radiotherapy expansion project, together we are giving patients across Brazil powerful new tools in the fight against cancer. This partnership also allows us to collaborate on the development of clinical protocols for advanced radiotherapy techniques such as hypofractionation."

"We are proud Grupo Oncoclínicas has selected Varian as its radiotherapy partner in the expansion of its cancer treatment centers in Brazil," said Chris Toth, president Oncology Systems Americas at Varian. "We are committed to working closely with them on the installation of this advanced equipment and increasing access to cancer care in Brazil."

Eclipse software creates an optimized radiotherapy treatment plan based on a physician’s dose instructions, and information about the size, shape and location of the tumor to be treated. The software incorporates unique features such as RapidPlan knowledge-based planning, which makes it easier and faster to plan sophisticated cancer treatments like intensity-modulated radiotherapy (IMRT), image-guided radiotherapy (IGRT), and RapidArc radiotherapy.

InSightive analytics software allows users to easily explore their clinical and operational data to uncover trends that may lead to improved outcomes. ARIA is a comprehensive electronic medical record and image management system that aggregates patient data into an organized, oncology-specific medical chart with functional components for managing clinical, administrative and financial operations for medical, radiation and surgical oncology.

About Varian Medical Systems

On October 27, 2016 Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported its financial results for the third quarter of 2016, ended October 1, 2016 (Press release, Thermo Fisher Scientific, OCT 27, 2016, View Source [SID1234516086]).

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Third Quarter 2016 Highlights

Revenue increased 9% to $4.49 billion.
GAAP diluted earnings per share (EPS) increased 1% to $1.19.
Adjusted EPS grew 13% to $2.03.
Strengthened presence in clinical markets by receiving FDA clearance to launch new DRI Hydrocodone assay and two new EliA IgG thyroid tests as well as extend use of BRAHMS PCT sepsis test to the emergency room.
Increased capabilities to support biopharma growth in Asia-Pacific markets with new clinical packaging and supplies facility in Seoul, South Korea, and expansion of cryogenic storage and logistics operations in Tokyo, Japan.
Completed acquisition of FEI Company, adding leading electron microscopy products that strengthen offerings for attractive structural biology and materials science markets, and significantly enhance our customer value proposition.
Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

"We delivered another great quarter, with excellent earnings growth on solid top-line results," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "We drove strong operational performance while successfully executing our growth strategy to position Thermo Fisher for an even brighter future.

"In the quarter, we strengthened our offering for clinical customers by expanding our menu of tests for detecting sepsis, opioids and thyroid disease, and launching new quality control software to ensure the accuracy of results in the clinical laboratory. In Asia-Pacific, we increased our biopharma services capabilities in South Korea and Japan to support the growing number of clinical trials and continue our strong growth momentum in the region.

"We were also pleased to complete our acquisition of FEI earlier than expected. We look forward to the new opportunities we have to create value for our customers, including broadening the use of FEI’s leading imaging technologies in the life science research markets that we serve."

Third Quarter 2016

For the third quarter of 2016, revenue grew 9% to $4.49 billion, versus $4.12 billion in the third quarter of 2015. Organic revenue growth was 4%; acquisitions increased revenue by 5% and currency translation decreased revenue slightly.

GAAP Earnings Results

GAAP diluted EPS increased to $1.19, versus $1.18 in the same quarter last year. GAAP operating income for the third quarter of 2016 was $541 million, compared with $563 million in the third quarter of 2015. GAAP operating margin was 12.0%, compared with 13.7% in the third quarter of 2015. GAAP operating results reflect acquisition-related charges in the 2016 period.

Non-GAAP Earnings Results

Adjusted EPS in the third quarter of 2016 grew 13% to $2.03, versus $1.80 in the third quarter of 2015. Adjusted operating income for the third quarter of 2016 increased 11% compared with the year-ago quarter. Adjusted operating margin was 23.0%, compared with 22.6% in the third quarter of 2015.

2016 Guidance Update

Thermo Fisher is raising its revenue and adjusted EPS guidance for 2016 to reflect the addition of FEI, strong operational performance in the first nine months and a more favorable foreign exchange environment. The company now expects revenue to be in the range of $18.25 to $18.39 billion versus its previous guidance of $17.84 to $18.00 billion, which would result in revenue growth of 8% over 2015. The company is also raising its adjusted EPS guidance to a new range of $8.19 to $8.30 versus the $8.07 to $8.20 previously announced, which now results in 11% to 12% growth year over year.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the company’s four business segments, as highlighted below. Since these results are used for this purpose, they are also considered to be prepared in accordance with GAAP.

Life Sciences Solutions Segment

In the third quarter of 2016, Life Sciences Solutions Segment revenue grew 14% to $1.23 billion, compared with revenue of $1.08 billion in the third quarter of 2015. Segment operating margin was 30.1% versus 30.8% in 2015.

Analytical Instruments Segment

Analytical Instruments Segment revenue grew 15% to $0.90 billion in the third quarter of 2016, compared with revenue of $0.78 billion in the third quarter of 2015. Segment operating margin was 21.2% versus 18.8% in the 2015 quarter.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue in the third quarter increased 3% to $0.80 billion in 2016, compared with revenue of $0.78 billion in the third quarter of 2015. Segment operating margin was 26.8% versus 26.4% in the 2015 quarter.

Laboratory Products and Services Segment

In the third quarter of 2016, Laboratory Products and Services Segment revenue grew 7% to $1.75 billion, compared with revenue of $1.64 billion in the third quarter of 2015. Segment operating margin was 14.8% versus 15.2% in the 2015 quarter.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs; restructuring and other costs/income; and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses that are either isolated or cannot be expected to occur again with any regularity or predictability, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and the results of discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We also use a non-GAAP measure, free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts.

For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 20 years. In 2016, based on acquisitions closed through the end of the third quarter, our adjusted EPS will exclude approximately $2.42 of expense for the amortization of acquisition-related intangible assets. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, benefits from tax credit carryforwards and the impact of significant tax audits or events (such as the effect on deferred tax balances of enacted changes in tax rates), which are either isolated or cannot be expected to occur again with any predictability and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business or real estate, gains or losses on significant litigation-related matters, gains on curtailments of pension plans, the early retirement of debt and discontinued operations.

We also report free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities.

Thermo Fisher’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company’s core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher’s results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables. Thermo Fisher does not provide GAAP financial measures on a forward-looking basis because we are unable to predict with reasonable certainty and without unreasonable effort items such as the timing and amount of future restructuring actions and acquisition-related charges as well as gains or losses from sales of real estate and businesses, the early retirement of debt and the outcome of legal proceedings. The timing and amount of these items are uncertain and could be material to Thermo Fisher’s results computed in accordance with GAAP.

On October 27, 2016 Agenus Inc. (NASDAQ: AGEN), an immuno-oncology (I-O) company developing antibodies, including checkpoint inhibitors and other checkpoint modulators and cancer vaccines, reported an update on its progress and reported financial results for the third quarter ended September 30, 2016 (Press release, Agenus, OCT 27, 2016, View Source [SID1234516081]).

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Agenus Logo
"In the third quarter we advanced our pre-clinical and clinical programs and focused our efforts on our product development plans with an intent to commercialize Agenus’ first generation of I-O products in the next five years," commented Garo H. Armen, Ph.D., Chairman and CEO of Agenus. "We have delineated our clinical development path as it relates to our monoclonal antibodies, targeting the foundational immune checkpoints CTLA-4 and PD-1. In addition, we are steering our antibody vaccine combinations towards the clinic. Our world class team, along with our diverse portfolio and capabilities, are key differentiators for Agenus to compete in the field and to deliver on the promise of immunotherapy."

Recent Highlights

Our first CTLA-4 antibody AGEN1884 advanced in the clinic.
Our novel checkpoint antibodies and vaccine programs progressed in various stages of development.
GlaxoSmithKline’s Shingrix vaccine candidate containing Agenus’ QS-21 Stimulon for prevention of shingles in adults aged 50 years or older, was filed for US regulatory approval.
Jean-Marie Cuillerot, M.D. appointed Vice President and Global Head of Clinical Development.
James Gorman, M.D., Ph.D. appointed Vice President of Strategic Planning and Portfolio Management.
Projected Near-Term Milestones

Phase 1 trial initiation for OX40 agonist INCAGN1949 in collaboration with Incyte.
Phase 1 trial initiation for PD-1 antagonist AGEN2034.
Clinical study initiation combining CTLA-4 and PD-1 antagonists.
Third party-sponsored randomized trial initiation for Prophage together with a checkpoint antagonist in newly diagnosed glioblastoma.
Phase 1 trial initiation for AutoSynVax.
Consummation of additional strategic partnerships.
Third Quarter 2016 Financial Results

For the third quarter ended September 30, 2016, Agenus reported a net loss attributable to common stockholders of $40.8 million which includes $18.7 million of non-cash expenses. This compares to a net loss attributable to common stockholders for the third quarter of 2015 of $13.2 million which included $4.1 million of non-cash income. Net loss was $0.47 per share, and $0.16 per share, basic and diluted, for the three months ended September 30, 2016 and 2015, respectively. The increase in net loss attributable to common stockholders for the three months ended September 30, 2016, compared to the net loss attributable to common stockholders for the same period in 2015, was largely due to the $22.7 million increase in non-cash expenses primarily from fair value adjustments of the contingent obligations in addition to $4.9 million applicable to the advancement of the checkpoint and cancer vaccine programs.

For the nine months ended September 30, 2016, the company reported a net loss attributable to common stockholders of $101.0 million, which includes $35.9 million in non-cash expenses, compared with a net loss attributable to common stockholders of $72.4 million, which included $22.5 million in non-cash expenses, for the nine months ended September 30, 2015. Net loss was $1.16 per share and $0.95 per share, basic and diluted for the nine months ended September 30, 2016 and 2015, respectively.

Cash, cash equivalents and short-term investments were $95.4 million as of September 30, 2016.

On October 27, 2016 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the third quarter 2016, updated financial guidance for the full-year 2016, introduced sales growth outlook for full-year 2017 and reaffirmed long-term 2020 financial targets (Press release, West Pharmaceutical Services, OCT 27, 2016, View Source;reqid=2216475 [SID1234516080]).

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West Pharmaceutical Services, Inc.
Third Quarter 2016 Highlights

Reported net sales of $376.7 million grew 9.4% over the prior-year quarter. Net sales at constant currency grew by 10.0%.
Third quarter 2016 reported diluted EPS was $0.50 as compared to $0.02 in the prior-year quarter. Adjusted diluted EPS was $0.53 as compared to $0.44 in the prior-year quarter, representing 20% year-over-year growth. Both reported and adjusted diluted EPS comparisons to the prior-year period were adversely impacted by $0.04 of currency impacts.
Raising full-year 2016 net sales guidance and tightening adjusted diluted EPS guidance range.
Full-year net sales are now expected to be between $1.510 billion and $1.520 billion compared to prior range of $1.505 billion to $1.520 billion.
Full-year 2016 adjusted diluted EPS is now expected to be between $2.17 and $2.22 compared to prior range of $2.15 to $2.25.
Providing preliminary 2017 sales growth guidance at the high-end of our long-term guidance and reaffirms 2020 financial targets.
"Net sales at constant currency" and "adjusted diluted EPS" are Non-GAAP measurements. See discussion under the heading "Non-GAAP Financial Measures" in this release.

Executive Commentary

"West had another successful quarter with double-digit organic sales growth, year-over-year increases in gross and operating profit margins and strong double-digit growth in adjusted earnings," said Eric M. Green, President and Chief Executive Officer. "Sales growth contribution came from both Proprietary Products and Contract-Manufactured Products segments. The growth was broad-based across our Biologics, Generics and Pharma market units as well as in all geographies. We continue to see strong double-digit sales growth and growing customer demand for our high-value product offerings including FluroTec, Westar RU, Daikyo, administration systems and NovaPure components."

"Fueled by our organic sales growth and a favorable product mix of high-value products, we had year-over-year gross margin expansion. Importantly, our Global Operations team remains on track to achieve our targets of reduced lead times and backlog, which is critical in ensuring a stable supply chain for our customers."

Mr. Green continued, "Last year, we issued 5-year financial targets for 2020. We are off to a good start, and we are reaffirming those targets. In the first year of the plan, we realigned our organization to a market-led strategy, expanded manufacturing capacity and launched new high-value products. In addition, our customers have received regulatory approval for several products using Crystal Zenith and SmartDose technologies."

In the first three quarters of 2016, we have generated almost 10% organic sales growth, expanded both gross and operating profit margins and grown adjusted diluted EPS by 21%. We are raising our full-year 2016 organic sales growth guidance to the upper end of our prior range of 7% to 9% and expect full-year 2016 adjusted diluted EPS to grow approximately 20% at the mid-point of our updated range of $2.17 to $2.22. As we look to 2017, we see continued demand trends from the markets we serve, and we expect to be at the high end of our long-term guidance range of 6% to 8% organic sales growth."

Third Quarter 2016 Results

Gross profit margin was 32.1%, an increase of 70 basis points compared to the prior-year quarter. Proprietary Products gross profit margin was 36.4%, an increase of 90 basis points, primarily due to product mix improvements and modest price increases partially offset by increased labor and overhead costs and changes in foreign currency rates. Contract-Manufactured Products gross profit margin was 16.0%, a decrease of 80 basis points, primarily due to an unfavorable mix of products sold, including low-margin tooling sales.

Third quarter 2016 reported operating profit margin was 13.6%, compared with -1.0% in the prior-year quarter. Excluding 2016 restructuring activities and a 2015 pension settlement charge, third quarter 2016 adjusted operating profit margin was 14.2% compared to 13.2% in the 2015 quarter, an increase of 100 basis points.

Third Quarter 2016 Business Segment Results

Proprietary Products ($298.1 million, 79% of overall net sales)

Proprietary Products reported sales growth was 10.7% over the prior-year quarter. Organic sales growth was 11.6%, led by double-digit growth in the Biologics market unit, high-single digit sales growth in the Generics market unit and mid-single digit sales growth in the Pharma market unit. High-value product offerings had organic sales growth of 25%.

The Proprietary Products backlog of committed orders at September 30, 2016 was $388 million, a decrease of 2% at constant currency compared to September 30, 2015. This continues the 2016 quarterly trend of reduced lead times and backlog as a result of successful Global Operations initiatives and capacity enhancements.

Operating profit for the segment was $57.5 million, resulting in an operating profit margin of 19.3%, compared to $49.5 million and 18.4% in the 2015 period. The margin increase was primarily due to an improvement in gross profit margin.

Contract-Manufactured Products ($79.0 million, 21% of overall net sales)

Contract-Manufactured Products reported sales growth and organic sales growth both were 4.6%, primarily due to higher drug delivery and diagnostic product sales.

Operating profit for the segment was $8.9 million, resulting in an operating profit margin of 11.1%, compared to $8.3 million and 11.0% in the 2015 period. Cost controls on selling, general and administrative expenses offset the decline in gross profit margin.

Corporate and Other

General corporate costs declined by $1.2 million to $6.0 million. Stock-based compensation costs increased by $1.0 million to $4.6 million. U.S. pension expense increased $0.7 million, to $2.2 million.

The effective tax rate used in determining reported net income was 29.3% for the third quarter of 2016. The effective tax rate used in determining adjusted net income was 28.8% as compared to 26.7% in the same quarter of 2015.

During the quarter, the Company repurchased 117,310 shares for $9.6 million. During the first nine months of 2016, the Company has repurchased 370,810 shares for $26.8 million. There are up to 329,190 shares remaining to be repurchased in the program authorized in December 2015.

Full-Year 2016 Financial Guidance

West’s full-year 2016 net sales, margin and EPS guidance are as follows:

(in millions, except EPS)
2016 Updated
Guidance

Prior Guidance
Consolidated net sales
$1,510 to $1,520
$1,505 to $1,520

Consolidated gross profit margin (% of net sales)
33.6% to 33.7%
33.6% to 34.0%

Proprietary Products net sales
$1,195 to $1,200
$1,195 to $1,200

Proprietary Products
Gross profit margin (% of net sales)

38.0% to 38.2%

37.9% to 38.4%

Contract-Manufactured Products net sales
$315 to $320
$310 to $320

Contract-Manufactured Products
Gross profit margin (% of net sales)

16.8% to 17.2%

17.1% to 17.6%

Full-Year adjusted diluted EPS*
$2.17 to $2.22
$2.15 to $2.25
* Adjusted diluted EPS is a non-GAAP measurement. See discussion under the heading "Non-GAAP Financial Measures" in this release.

The principal currency assumption used in preparing these estimates is the translation of the euro at $1.10 for the remainder of 2016 as compared to the prior guidance exchange rate of $1.12 per euro.

With one quarter remaining in the year, the gross profit margin guidance range has been tightened and reflects the expected positive impact from the mix of high-value product sales growth offset by changes in foreign currency exchange rates, in particular the Japanese yen, and incremental sales of low-margin contract manufacturing tooling sales.

The Company expects that its annual effective tax rate, used in determining adjusted net income and adjusted diluted EPS, will be approximately 28.5%.

The Company estimates its 2016 capital spending at between $150 million and $175 million.

2017 Revenue and Long-Term Outlook

The Company expects 2017 organic sales growth to grow at the high end of its long-term outlook of 6% to 8%. Sales growth of high-value products is expected to be in the low-double digits.

The Company is reaffirming its 2020 financial targets of sales between $2.2 billion and $2.4 billion with a consolidated operating profit margin in the range of 19% to 23%. Over this period, the Company continues to estimate capital spending to be in the range of $150 million to $175 million per year.

On October 27, 2016 argenx (Euronext Brussels: ARGX), a clinical-stage biopharmaceutical company focused on creating and developing differentiated therapeutic antibodies for the treatment of cancer and severe autoimmune diseases, reported a business update and announced financial results for the third quarter ended 30 September 2016(Press release, arGEN-X, OCT 27, 2016, View Source [SID1234516078]).

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"This is a very exciting time for the company as we finalize later-stage clinical development plans for our two lead antibody programs, ARGX-113 and ARGX-110. Over the next six months, we expect to launch four Phase 2 studies, all in therapeutic settings with a strong scientific rationale. For ARGX-113, we have seen the potential of the drug to reduce IgGs, and look forward to initiating trials and reporting results in indications such as myasthenia gravis and immune thrombocytopenia, where pathogenic IgG’s are a key contributor to disease. For ARGX-110, we plan to initiate two combination trials with the goal of enhancing standard of care for TCL and AML patients," commented Tim Van Hauwermeiren, Chief Executive Officer of argenx.

THIRD QUARTER 2016

Hosted inaugural R&D day in New York with updates on lead programs in auto-immune disease and oncology including:

Myasthenia gravis (MG) and immune thrombocytopenia (ITP) will be the initial indications for Phase 2 studies of ARGX-113. The first of the studies in myasthenia gravis is expected to initiate by the end of 2016.
T-cell lymphoma (TCL) and acute myeloid leukemia (AML) are the indications for Phase 2 combination studies of ARGX-110. The studies are expected to initiate by the end of 2016.

FINANCIAL HIGHLIGHTS (as of 30 September, 2016) (compared to financial highlights as of 30 September 2015)

Operating income of EUR 12.5 million (30 September 2015: EUR 7.3 million).
Net loss of EUR 12.6 million (30 September 2015: EUR 10.1 million).
Cash position of EUR 103.1 million (cash, cash-equivalents and financial assets) allowing Company to pursue development of its product portfolio as planned.

DETAILS OF OPERATIONAL RESULTS

Products in clinical development:
ARGX-113

Data set from Phase 1 single ascending dose (SAD) and multiple ascending dose (MAD) studies showed favorable safety profile and specific IgG reduction of up to 85 % with a long duration of effect, with repeated dosing of the drug.
Complete MAD data will be presented at a workshop being held in conjunction with the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting.
Start of Phase 2 study in MG by the end of 2016.
Start of Phase 2 study in ITP in Q1 2017.

ARGX-110

T-cell lymphoma (TCL):
Interim data of Phase 1b safety expansion study in TCL show partial responses and improvement of skin lesions in cutaneous TCL patients.
Update from safety expansion study to be presented by the end of 2016 at a workshop being held in conjunction with the ASH (Free ASH Whitepaper) annual meeting.
First combination study with romidepsin to initiate by the end of 2016.
Acute myeloid leukemia (AML):
Role of CD70 in newly diagnosed AML patients was presented during R&D day.
First combination study with azacitidine to initiate by the end of 2016.
Preclinical data to be presented by the end of 2016 at a workshop being held in conjunction with ASH (Free ASH Whitepaper) annual meeting.
ARGX-111

Twenty-five patients have been treated in the dose escalation and safety expansion cohort of the Phase 1b study. No additional recruitment of MET-amplified patients is planned and the Company is focused on partnering the asset ahead of any Phase 2 study.

Products in Preclinical Development

ARGX-115

In collaboration with AbbVie to develop and commercialize ARGX-115.
Under agreement, argenx will conduct research and development through IND-enabling studies. Upon successful completion of IND-enabling studies, AbbVie may exercise the exclusive option to license ARGX-115 and assume responsibility for further clinical development and commercialization.
Corporate

Increased FTEs to 71.3 in support of the expansion of the business.
Recognized by the 2016 European Frost & Sullivan Award for Technology Innovation for SIMPLE Antibody discovery platform.
The Company continues to collaborate with Shire, LEO Pharma and Bird Rock Bio. Milestone payments to be expected in 2017.
Mr. Tony Rosenberg will serve as an independent advisor to the Board of Directors, effective 1 October 2016. Previously he served as Global Head, M&A and Licensing for Novartis and has held diverse leadership positions with Novartis predecessor company, Sandoz.

KEY FIGURES (CONSOLIDATED)

in thousands of euros

Period ended

Sept 30, 2016

Period ended

Sept 30, 2015

Variance

Revenue

10,515

4,981

5,535

Other operating income

2,010

2,320

(310)

Total operating income

12,525

7,300

5,225

Research and development expenses

(20,170)

(14,200)

(5,970)

General and administrative expenses

(4,927)

(3,345)

(1,581)

Operating profit/(loss)

(12,572)

(10,245)

(2,327)

Financial income/(expense)

55

51

4

Exchange gains/(losses)

(51)

119

(170)

Profit/loss for the period

(12,568)

(10,075)

(2,494)

Net increase (decrease) in cash, cash-equivalents and financial assets (compared to year end 2015 and 2014)

60,740

(9,336)

Cash, cash-equivalents and financial assets at the end of the period

103,067

46,637

THIRD QUARTER 2016 FINANCIAL RESULTS

On 30 September 2016, operating income reached EUR 12.5 million compared to EUR 7.3 million at the same date in 2015. The increase of EUR 5.2 million in operating income in 2016 results primarily from (i) the deferred revenue recognized from the collaboration agreement signed with Abbvie in April 2016 and (ii) the milestone payment received in February 2016 from the collaboration with LEO Pharma.

Research and development expenses totalled EUR 20.2 million and EUR 14.2 million for the nine-month period ended 30 September 2016 and 2015, respectively. The increase of EUR 6 million in R&D expenses in the first nine months of 2016 correspond principally to (i) increased clinical trial and product manufacturing activities (ii) the recruitment of additional R&D personnel and consultants in relation to increased R&D activities and (iii) the share based payment costs recognized in compensation for the grant of stock options to the R&D employees.

General and administrative expenses amounted to EUR 4.9 million on 30 September 2016, compared to EUR 3.3 million on 30 September 2015. The increase of EUR 1.6 million in G&A expenses in the first nine months of 2016 is principally explained by (i) the increase of personnel expenses related to the employees recruited to strengthen the Group’s G&A activities and support R&D activities, (ii) increased expenses in relation with the growth of the operational activities of the Company (including notably the new offices and laboratory, travel, business development and ICT expenses), and (iii) the share based payment costs recognized in compensation for the grant of stock options to the G&A employees.

During the first nine months of 2016, the Company generated a net loss of EUR 12.6 million compared to a net loss of EUR 10.1 million in the same period of 2015.

On 30 September 2016 the Company’s cash, cash equivalents and financial assets amounted to EUR 103.1 million compared to EUR 42.3 million on 31 December 2015 and EUR 46.6 million on 30 September 2015. The significant increase in the Company’s cash, cash equivalents and financial assets is explained by (i) the two financings completed in January and June 2016 with institutional investors for total gross proceeds of EUR 46 million and (ii) the upfront payment of USD 40 million received following the signature of the collaboration agreement with Abbvie in April 2016.