On October 25, 2016 Can-Fite BioPharma Ltd. (NYSE MKT: CANF) (TASE:CFBI), a biotechnology company with a pipeline of proprietary small molecule drugs being developed to treat inflammatory and liver diseases, cancer, and sexual dysfunction, reported it has signed a distribution agreement with Chong Kun Dang Pharmaceuticals (CKD) (Korean Stock Exchange: 185750.KS) for the exclusive right to distribute CF102 for the treatment of liver cancer in South Korea, upon receipt of regulatory approvals, for up to $3,000,000 in upfront and milestone payments, plus a percentage rate of royalties on net sales in the low twenties (Press release, Can-Fite BioPharma, OCT 25, 2016, View Source [SID1234515991]).

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The distribution agreement further provides that Can-Fite will deliver finished product to CKD and grants CKD a right of first refusal to distribute CF102 for other indications for which Can-Fite develops CF102.

"This agreement marks our first distribution deal for CF102 as we near completion of patient enrollment in our Phase II trial of CF102 as a second line treatment for hepatocellular carcinoma. The pressing need for an effective drug in this difficult to treat cancer makes CF102, in our opinion, a strong potential candidate as we look towards Phase II results and ahead to Phase III in the U.S. where CF102 has Fast Track Designation in this indication," stated Can-Fite CEO Dr. Pnina Fishman. "We look forward to working with CKD to advance CF102 in South Korea."

Approximately, 51,000 people had liver cancer in Korea, with approximately 11,000 deaths in 2012 according to a study published in Cancer Research and Treatment: Official Journal of Korean Cancer Association in 2015.

Can-Fite is currently conducting a global Phase II double-blind, placebo controlled study evaluating the efficacy of CF102 as a second-line treatment for advanced HCC. The primary endpoint is overall survival. In the coming quarters, Can-Fite intends to initiate a Phase II study of CF102 in the treatment of non-alcoholic fatty liver disease (NAFLD), the precursor to non-alcoholic steatohepatitis (NASH).

This agreement with CKD marks Can-Fite’s second distribution and licensing deal in South Korea, where the Company’s Piclidenoson (CF101) has already been out-licensed to Kwang Dong Pharmaceutical Co. for the treatment of rheumatoid arthritis.

About CF102

CF102 is a small orally bioavailable drug that binds with high affinity and selectivity to the A3 adenosine receptor (A3AR). A3AR is highly expressed in diseased cells whereas low expression is found in normal cells. This differential effect accounts for the excellent safety profile of the drug. In Can-Fite’s pre-clinical and clinical studies, CF102 has demonstrated a robust anti-tumor effect via deregulation of the Wnt signaling pathway, resulting in apoptosis of liver cancer cells. Based on preclinical data showing CF102 has strong liver protective properties, Can-Fite intends to initiate a Phase II study in NASH. Can-Fite has received Orphan Drug Designation for CF102 in Europe and the U.S., as well as Fast Track Status in the U.S. as a second line treatment for hepatocellular carcinoma.

On October 25, 2016 Bristol-Myers Squibb Company (NYSE:BMY) reported new results from CheckMate -205, a multi-cohort, single-arm, Phase 2 trial evaluating Opdivo (nivolumab) in patients with classical Hodgkin lymphoma (cHL) (Press release, Bristol-Myers Squibb, OCT 25, 2016, View Source [SID1234515990]).

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These results from cohort C (n=100) of the trial included patients with cHL who had received brentuximab vedotin before and/or after autologous hematopoietic stem cell transplantation (auto-HSCT). After a median follow-up of 8.8 months, the primary endpoint of objective response rate (ORR) per an independent radiologic review committee (IRRC) was 73% (n=73; 95% CI: 63.2-81.4) overall, which was consistent across patient subgroups regardless of the timing of prior brentuximab vedotin relative to auto-HSCT. The ORR was 70% (n=23; 95% CI: 51.3-84.4) in patients who received brentuximab vedotin only before auto-HSCT; 72% (n=41; 95% CI: 58.5-83.0) in patients who received brentuximab vedotin only after auto-HSCT; and 88% (n=7; 95% CI: 47.3-99.7) in patients who received brentuximab vedotin before and after auto-HSCT. The safety profile of Opdivo was consistent with previously reported data in this tumor type, and no new clinically meaningful safety signals were identified.

These data will be presented at the 10th International Symposium on Hodgkin Lymphoma (ISHL) in Cologne, Germany on Tuesday, October 25 at 3:00 p.m. CEST (Abstract #0149). This abstract was awarded the Karl Musshoff Prize for the Best Clinical Research Abstract, which is granted every three years in conjunction with ISHL for outstanding results in the field of Hodgkin lymphoma.

"These data from cohort C build on existing evidence supporting the benefit of Opdivo in classical Hodgkin lymphoma patients who have relapsed or progressed after autologous hematopoietic stem cell transplantation and post-transplantation brentuximab vedotin," said Andreas Engert, M.D., study investigator and professor of Internal Medicine, Hematology and Oncology, University Hospital of Cologne, Cologne, Germany. "Results from cohort C indicated a benefit with Opdivo regardless of the order of prior treatment with autologous hematopoietic stem cell transplantation and brentuximab vedotin, providing important insights as we continue researching the potential role Opdivo could provide for heavily pre-treated classical Hodgkin lymphoma patients."

In May 2016, the U.S. Food and Drug Administration approved Opdivo for the treatment of patients with cHL who have relapsed or progressed after auto-HSCT and post-transplantation brentuximab vedotin based on a combined analysis of data from cohort B of CheckMate -205 and the Phase 1 CheckMate -039 trial. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

In October 2016, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency recommended the approval of Opdivo for the treatment of adult patients with relapsed or refractory cHL after auto-HSCT and treatment with brentuximab vedotin based on data from cohort B of CheckMate -205 and CheckMate -039. The CHMP recommendation is now being reviewed by the European Commission, which has the authority to approve medicines for the European Union. Opdivo also is currently under regulatory review for cHL in Japan.

Fouad Namouni, M.D., head of development, Oncology, Bristol-Myers Squibb, commented, "We continue to expand our Immuno-Oncology science in hematology, and these latest results from CheckMate -205 will help inform our research into classical Hodgkin lymphoma and aid us in determining whether Opdivo may provide benefit to a broader population of patients living with this difficult-to-treat disease."

About CheckMate -205 Cohort C

Key efficacy results from cohort C of CheckMate -205 are summarized below.



Cohort C
Overall
(n=100)


BV Only Before
Auto-HSCT
Subgroup
(n=33)

BV Only After
Auto-HSCT
Subgroup
(n=57)

BV Before and
After Auto-
HSCT
Subgroup (n=8)
ORR per IRRC, n (%)
[95% CI]
73 (73)
[63.2, 81.4]
23 (70)
[51.3, 84.4]
41 (72)
[58.5, 83.0]
7 (88)
[47.3, 99.7]
Complete response, n (%)
[95% CI]
17 (17.0)
[10.2, 25.8]
6 (18.2)
[7.0, 35.5]
7 (12.3)
[5.1, 23.7]
3 (38)
[8.5, 75.5]
Partial response, n (%)
[95% CI]
56 (56.0)
[45.7, 65.9]
17 (51.5)
[33.5, 69.2]
34 (59.6)
[45.8, 72.4]
4 (50.0)
[15.7, 84.3]
6-month PFS rate per IRRC, %
[95% CI]
76.6
[66.3, 84.2]
83.7
[65.1, 92.9]
71.2
[56.7, 81.6]
83.3
[27.3, 97.5]
Median PFS, months
[95% CI]
11.2
[8.5, NA]
11.2
[8.5, NA]
8.9
[8.3, NA]
NA
[5.6, NA]
Median DOR, months
[95% CI]
7.0
[6.7, NA]
7.0
[6.7, NA]
NA
[5.4, NA]
NA
[3.3, NA]
6-month OS, %
[95% CI]
93.9
[86.9, 97.2]
97
[80, 100]
91
[80, 96]
100
[100, 100]

In CheckMate -205 cohort C, the safety profile of Opdivo was consistent with previously reported data in this tumor type, and no new clinically meaningful safety signals were identified. Treatment-related adverse events (AE) occurred in 68% of patients between the first dose and 30 days after the last dose of Opdivo. The most common treatment-related AEs were diarrhea, infusion-related reaction and fatigue (11% each). Grade 3/4 AEs occurred in 19% of patients. Serious treatment-related AEs were reported in 17% of patients, and treatment-related AEs leading to discontinuation occurred in 6% of patients. At present, no treatment-related deaths have been reported.

About CheckMate -205

CheckMate -205 is a Phase 2, open-label, international, multicenter, non-comparative, multi-cohort study that evaluated the safety and efficacy of Opdivo in adult patients with classical Hodgkin lymphoma (cHL). Cohort A included cHL patients who had received autologous hematopoietic stem cell transplantation (auto-HSCT) and who were brentuximab vedotin-naïve (n=63); cohort B included cHL patients who had received auto-HSCT followed by brentuximab vedotin (n=80); and cohort C included cHL patients who had received brentuximab vedotin before and/or after auto-HSCT (n=100). CheckMate -205 also includes cohort D, which is currently enrolling and evaluating Opdivo in combination with chemotherapy in newly diagnosed, advanced-stage cHL patients who are treatment-naïve (n=50).

Patients enrolled in this trial were treated with Opdivo 3 mg/kg intravenously every two weeks until disease progression or unacceptable toxicity; in cohort C, patients also were treated until investigator-assessed complete response (CR) lasting one year.

The primary endpoint of the study was objective response rate by independent radiologic review committee (IRRC) assessment. Secondary and other exploratory endpoints included duration of response (DOR) by IRRC assessment for CR rate and partial response rate, progression-free survival (PFS) by IRRC assessment, overall survival (OS) and safety.

About Classical Hodgkin Lymphoma

Hodgkin lymphoma (HL), also known as Hodgkin disease, is a cancer that starts in white blood cells called lymphocytes, which are part of the body’s immune system. Worldwide, there are about 66,000 new HL cases and 25,500 deaths from HL estimated each year. The disease is most often diagnosed in early adulthood (ages 20-40) and late adulthood (older than 55 years of age). Classical Hodgkin lymphoma is the most common type of HL, accounting for 95% of cases. There remains a significant unmet need for patients who relapse or who become refractory to approved treatments that are currently available.

Bristol-Myers Squibb & Immuno-Oncology: Advancing Oncology Research

At Bristol-Myers Squibb, patients are at the center of everything we do. Our vision for the future of cancer care is focused on researching and developing transformational Immuno-Oncology (I-O) medicines that will raise survival expectations in hard-to-treat cancers and will change the way patients live with cancer.

We are leading the scientific understanding of I-O through our extensive portfolio of investigational and approved agents, including the first combination of two I-O agents in metastatic melanoma, and our differentiated clinical development program, which is studying broad patient populations across more than 20 types of cancers with 11 clinical-stage molecules designed to target different immune system pathways. Our deep expertise and innovative clinical trial designs uniquely position us to advance the science of combinations across multiple tumors and potentially deliver the next wave of I-O combination regimens with a sense of urgency. We also continue to pioneer research that will help facilitate a deeper understanding of the role of immune biomarkers and inform which patients will benefit most from I-O therapies.

We understand making the promise of I-O a reality for the many patients who may benefit from these therapies requires not only innovation on our part but also close collaboration with leading experts in the field. Our partnerships with academia, government, advocacy and biotech companies support our collective goal of providing new treatment options to advance the standards of clinical practice.

About Opdivo

Opdivo is a programmed death-1 (PD-1) immune checkpoint inhibitor that is designed to uniquely harness the body’s own immune system to help restore anti-tumor immune response. By harnessing the body’s own immune system to fight cancer, Opdivo has become an important treatment option across multiple cancers.

Opdivo’s leading global development program is based on Bristol-Myers Squibb’s scientific expertise in the field of Immuno-Oncology and includes a broad range of clinical trials across all phases, including Phase 3, in a variety of tumor types. To date, the Opdivo clinical development program has enrolled more than 25,000 patients. The Opdivo trials have contributed to gaining a deeper understanding of the potential role of biomarkers in patient care, particularly regarding how patients may benefit from Opdivo across the continuum of PD-L1 expression.

In July 2014, Opdivo was the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world. Opdivo is currently approved in more than 57 countries, including the United States, the European Union and Japan. In October 2015, the company’s Opdivo and Yervoy combination regimen was the first Immuno-Oncology combination to receive regulatory approval for the treatment of metastatic melanoma and is currently approved in more than 47 countries, including the United States and the European Union.

INDICATIONS

OPDIVO (nivolumab) as a single agent is indicated for the treatment of patients with BRAF V600 mutation-positive unresectable or metastatic melanoma. This indication is approved under accelerated approval based on progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO (nivolumab) as a single agent is indicated for the treatment of patients with BRAF V600 wild-type unresectable or metastatic melanoma.

OPDIVO (nivolumab), in combination with YERVOY (ipilimumab), is indicated for the treatment of patients with unresectable or metastatic melanoma. This indication is approved under accelerated approval based on progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of patients with metastatic non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving OPDIVO.

OPDIVO (nivolumab) is indicated for the treatment of patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy.

OPDIVO (nivolumab) is indicated for the treatment of patients with classical Hodgkin lymphoma (cHL) that has relapsed or progressed after autologous hematopoietic stem cell transplantation (HSCT) and post-transplantation brentuximab vedotin. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

IMPORTANT SAFETY INFORMATION

WARNING: IMMUNE-MEDIATED ADVERSE REACTIONS

YERVOY can result in severe and fatal immune-mediated adverse reactions. These immune-mediated reactions may involve any organ system; however, the most common severe immune-mediated adverse reactions are enterocolitis, hepatitis, dermatitis (including toxic epidermal necrolysis), neuropathy, and endocrinopathy. The majority of these immune-mediated reactions initially manifested during treatment; however, a minority occurred weeks to months after discontinuation of YERVOY.

Assess patients for signs and symptoms of enterocolitis, dermatitis, neuropathy, and endocrinopathy and evaluate clinical chemistries including liver function tests (LFTs), adrenocorticotropic hormone (ACTH) level, and thyroid function tests at baseline and before each dose.

Permanently discontinue YERVOY and initiate systemic high-dose corticosteroid therapy for severe immune-mediated reactions.

Immune-Mediated Pneumonitis

OPDIVO can cause immune-mediated pneumonitis. Fatal cases have been reported. Monitor patients for signs with radiographic imaging and for symptoms of pneumonitis. Administer corticosteroids for Grade 2 or more severe pneumonitis. Permanently discontinue for Grade 3 or 4 and withhold until resolution for Grade 2. In patients receiving OPDIVO monotherapy, fatal cases of immune-mediated pneumonitis have occurred. Immune-mediated pneumonitis occurred in 3.1% (61/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated pneumonitis occurred in 6% (25/407) of patients.

In Checkmate 205 and 039, pneumonitis, including interstitial lung disease, occurred in 4.9% (13/263) of patients receiving OPDIVO. Immune-mediated pneumonitis occurred in 3.4% (9/263) of patients receiving OPDIVO: Grade 3 (n=1) and Grade 2 (n=8).

Immune-Mediated Colitis

OPDIVO can cause immune-mediated colitis. Monitor patients for signs and symptoms of colitis. Administer corticosteroids for Grade 2 (of more than 5 days duration), 3, or 4 colitis. Withhold OPDIVO monotherapy for Grade 2 or 3 and permanently discontinue for Grade 4 or recurrent colitis upon re-initiation of OPDIVO. When administered with YERVOY, withhold OPDIVO and YERVOY for Grade 2 and permanently discontinue for Grade 3 or 4 or recurrent colitis. In patients receiving OPDIVO monotherapy, immune-mediated colitis occurred in 2.9% (58/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated colitis occurred in 26% (107/407) of patients including three fatal cases.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal (diarrhea of ≥7 stools above baseline, fever, ileus, peritoneal signs; Grade 3-5) immune-mediated enterocolitis occurred in 34 (7%) patients. Across all YERVOY-treated patients in that study (n=511), 5 (1%) developed intestinal perforation, 4 (0.8%) died as a result of complications, and 26 (5%) were hospitalized for severe enterocolitis.

Immune-Mediated Hepatitis

OPDIVO can cause immune-mediated hepatitis. Monitor patients for abnormal liver tests prior to and periodically during treatment. Administer corticosteroids for Grade 2 or greater transaminase elevations. Withhold for Grade 2 and permanently discontinue for Grade 3 or 4 immune-mediated hepatitis. In patients receiving OPDIVO monotherapy, immune-mediated hepatitis occurred in 1.8% (35/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated hepatitis occurred in 13% (51/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal hepatotoxicity (AST or ALT elevations >5x the ULN or total bilirubin elevations >3x the ULN; Grade 3-5) occurred in 8 (2%) patients, with fatal hepatic failure in 0.2% and hospitalization in 0.4%.

Immune-Mediated Neuropathies

In a separate Phase 3 study of YERVOY 3 mg/kg, 1 case of fatal Guillain-Barré syndrome and 1 case of severe (Grade 3) peripheral motor neuropathy were reported.

Immune-Mediated Endocrinopathies

OPDIVO can cause immune-mediated hypophysitis, immune-mediated adrenal insufficiency, autoimmune thyroid disorders, and Type 1 diabetes mellitus. Monitor patients for signs and symptoms of hypophysitis, signs and symptoms of adrenal insufficiency, thyroid function prior to and periodically during treatment, and hyperglycemia. Administer hormone replacement as clinically indicated and corticosteroids for Grade 2 or greater hypophysitis. Withhold for Grade 2 or 3 and permanently discontinue for Grade 4 hypophysitis. Administer corticosteroids for Grade 3 or 4 adrenal insufficiency. Withhold for Grade 2 and permanently discontinue for Grade 3 or 4 adrenal insufficiency. Administer hormone-replacement therapy for hypothyroidism. Initiate medical management for control of hyperthyroidism. Withhold OPDIVO for Grade 3 and permanently discontinue for Grade 4 hyperglycemia.

In patients receiving OPDIVO monotherapy, hypophysitis occurred in 0.6% (12/1994) of patients. In patients receiving OPDIVO with YERVOY, hypophysitis occurred in 9% (36/407) of patients. In patients receiving OPDIVO monotherapy, adrenal insufficiency occurred in 1% (20/1994) of patients. In patients receiving OPDIVO with YERVOY, adrenal insufficiency occurred in 5% (21/407) of patients. In patients receiving OPDIVO monotherapy, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 9% (171/1994) of patients. Hyperthyroidism occurred in 2.7% (54/1994) of patients receiving OPDIVO monotherapy. In patients receiving OPDIVO with YERVOY, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 22% (89/407) of patients. Hyperthyroidism occurred in 8% (34/407) of patients receiving OPDIVO with YERVOY. In patients receiving OPDIVO monotherapy, diabetes occurred in 0.9% (17/1994) of patients. In patients receiving OPDIVO with YERVOY, diabetes occurred in 1.5% (6/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe to life-threatening immune-mediated endocrinopathies (requiring hospitalization, urgent medical intervention, or interfering with activities of daily living; Grade 3-4) occurred in 9 (1.8%) patients. All 9 patients had hypopituitarism, and some had additional concomitant endocrinopathies such as adrenal insufficiency, hypogonadism, and hypothyroidism. 6 of the 9 patients were hospitalized for severe endocrinopathies.

Immune-Mediated Nephritis and Renal Dysfunction

OPDIVO can cause immune-mediated nephritis. Monitor patients for elevated serum creatinine prior to and periodically during treatment. Administer corticosteroids for Grades 2-4 increased serum creatinine. Withhold OPDIVO for Grade 2 or 3 and permanently discontinue for Grade 4 increased serum creatinine. In patients receiving OPDIVO monotherapy, immune-mediated nephritis and renal dysfunction occurred in 1.2% (23/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated nephritis and renal dysfunction occurred in 2.2% (9/407) of patients.

Immune-Mediated Skin Adverse Reactions and Dermatitis

OPDIVO can cause immune-mediated rash, including Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), some cases with fatal outcome. Administer corticosteroids for Grade 3 or 4 rash. Withhold for Grade 3 and permanently discontinue for Grade 4 rash. For symptoms or signs of SJS or TEN, withhold OPDIVO and refer the patient for specialized care for assessment and treatment; if confirmed, permanently discontinue. In patients receiving OPDIVO monotherapy, immune-mediated rash occurred in 9% (171/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated rash occurred in 22.6% (92/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal immune-mediated dermatitis (eg, Stevens-Johnson syndrome, toxic epidermal necrolysis, or rash complicated by full thickness dermal ulceration, or necrotic, bullous, or hemorrhagic manifestations; Grade 3-5) occurred in 13 (2.5%) patients. 1 (0.2%) patient died as a result of toxic epidermal necrolysis. 1 additional patient required hospitalization for severe dermatitis.

Immune-Mediated Encephalitis

OPDIVO can cause immune-mediated encephalitis. Evaluation of patients with neurologic symptoms may include, but not be limited to, consultation with a neurologist, brain MRI, and lumbar puncture. Withhold OPDIVO in patients with new-onset moderate to severe neurologic signs or symptoms and evaluate to rule out other causes. If other etiologies are ruled out, administer corticosteroids and permanently discontinue OPDIVO for immune-mediated encephalitis. In patients receiving OPDIVO monotherapy, encephalitis occurred in 0.2% (3/1994) of patients. Fatal limbic encephalitis occurred in one patient after 7.2 months of exposure despite discontinuation of OPDIVO and administration of corticosteroids. Encephalitis occurred in one patient receiving OPDIVO with YERVOY (0.2%) after 1.7 months of exposure.

Other Immune-Mediated Adverse Reactions

Based on the severity of adverse reaction, permanently discontinue or withhold treatment, administer high-dose corticosteroids, and, if appropriate, initiate hormone-replacement therapy. Across clinical trials of OPDIVO the following clinically significant immune-mediated adverse reactions occurred in <1.0% of patients receiving OPDIVO: uveitis, iritis, pancreatitis, facial and abducens nerve paresis, demyelination, polymyalgia rheumatica, autoimmune neuropathy, Guillain-Barré syndrome, hypopituitarism, systemic inflammatory response syndrome, gastritis, duodenitis, sarcoidosis, histiocytic necrotizing lymphadenitis (Kikuchi lymphadenitis), myositis, myocarditis, rhabdomyolysis, motor dysfunction, vasculitis, and myasthenic syndrome.

Infusion Reactions

OPDIVO can cause severe infusion reactions, which have been reported in <1.0% of patients in clinical trials. Discontinue OPDIVO in patients with Grade 3 or 4 infusion reactions. Interrupt or slow the rate of infusion in patients with Grade 1 or 2. In patients receiving OPDIVO monotherapy, infusion-related reactions occurred in 6.4% (127/1994) of patients. In patients receiving OPDIVO with YERVOY, infusion-related reactions occurred in 2.5% (10/407) of patients.

Complications of Allogeneic HSCT after OPDIVO

Complications, including fatal events, occurred in patients who received allogeneic HSCT after OPDIVO. Outcomes were evaluated in 17 patients from Checkmate 205 and 039, who underwent allogeneic HSCT after discontinuing OPDIVO (15 with reduced-intensity conditioning, 2 with myeloablative conditioning). Thirty-five percent (6/17) of patients died from complications of allogeneic HSCT after OPDIVO. Five deaths occurred in the setting of severe or refractory GVHD. Grade 3 or higher acute GVHD was reported in 29% (5/17) of patients. Hyperacute GVHD was reported in 20% (n=2) of patients. A steroid-requiring febrile syndrome, without an identified infectious cause, was reported in 35% (n=6) of patients. Two cases of encephalitis were reported: Grade 3 (n=1) lymphocytic encephalitis without an identified infectious cause, and Grade 3 (n=1) suspected viral encephalitis. Hepatic veno-occlusive disease (VOD) occurred in one patient, who received reduced-intensity conditioned allogeneic HSCT and died of GVHD and multi-organ failure. Other cases of hepatic VOD after reduced-intensity conditioned allogeneic HSCT have also been reported in patients with lymphoma who received a PD-1 receptor blocking antibody before transplantation. Cases of fatal hyperacute GVHD have also been reported. These complications may occur despite intervening therapy between PD-1 blockade and allogeneic HSCT.

Follow patients closely for early evidence of transplant-related complications such as hyperacute GVHD, severe (Grade 3 to 4) acute GVHD, steroid-requiring febrile syndrome, hepatic VOD, and other immune-mediated adverse reactions, and intervene promptly.

Embryo-Fetal Toxicity

Based on their mechanisms of action, OPDIVO and YERVOY can cause fetal harm when administered to a pregnant woman. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with an OPDIVO- or YERVOY- containing regimen and for at least 5 months after the last dose of OPDIVO.

Lactation

It is not known whether OPDIVO or YERVOY is present in human milk. Because many drugs, including antibodies, are excreted in human milk and because of the potential for serious adverse reactions in nursing infants from an OPDIVO-containing regimen, advise women to discontinue breastfeeding during treatment. Advise women to discontinue nursing during treatment with YERVOY and for 3 months following the final dose.

Serious Adverse Reactions

In Checkmate 037, serious adverse reactions occurred in 41% of patients receiving OPDIVO (n=268). Grade 3 and 4 adverse reactions occurred in 42% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions reported in 2% to <5% of patients receiving OPDIVO were abdominal pain, hyponatremia, increased aspartate aminotransferase, and increased lipase. In Checkmate 066, serious adverse reactions occurred in 36% of patients receiving OPDIVO (n=206). Grade 3 and 4 adverse reactions occurred in 41% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of patients receiving OPDIVO were gamma-glutamyltransferase increase (3.9%) and diarrhea (3.4%). In Checkmate 067, serious adverse reactions (73% and 37%), adverse reactions leading to permanent discontinuation (43% and 14%) or to dosing delays (55% and 28%), and Grade 3 or 4 adverse reactions (72% and 44%) all occurred more frequently in the OPDIVO plus YERVOY arm (n=313) relative to the OPDIVO arm (n=313). The most frequent (≥10%) serious adverse reactions in the OPDIVO plus YERVOY arm and the OPDIVO arm, respectively, were diarrhea (13% and 2.6%), colitis (10% and 1.6%), and pyrexia (10% and 0.6%). In Checkmate 017 and 057, serious adverse reactions occurred in 46% of patients receiving OPDIVO (n=418). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, pulmonary embolism, dyspnea, pyrexia, pleural effusion, pneumonitis, and respiratory failure. In Checkmate 025, serious adverse reactions occurred in 47% of patients receiving OPDIVO (n=406). The most frequent serious adverse reactions reported in ≥2% of patients were acute kidney injury, pleural effusion, pneumonia, diarrhea, and hypercalcemia. In Checkmate 205 and 039, among all patients (safety population [n=263]), adverse reactions leading to discontinuation (4.2%) or to dosing delays (23%) occurred. The most frequent serious adverse reactions reported in ≥1% of patients were infusion-related reaction, pneumonia, pleural effusion, pyrexia, rash and pneumonitis. Ten patients died from causes other than disease progression, including 6 who died from complications of allogeneic HSCT. Serious adverse reactions occurred in 21% of patients in the safety population (n=263) and 27% of patients in the subset of patients evaluated for efficacy (efficacy population [n=95]).

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO (n=268) was rash (21%). In Checkmate 066, the most common adverse reactions (≥20%) reported with OPDIVO (n=206) vs dacarbazine (n=205) were fatigue (49% vs 39%), musculoskeletal pain (32% vs 25%), rash (28% vs 12%), and pruritus (23% vs 12%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO plus YERVOY arm (n=313) were fatigue (59%), rash (53%), diarrhea (52%), nausea (40%), pyrexia (37%), vomiting (28%), and dyspnea (20%). The most common (≥20%) adverse reactions in the OPDIVO (n=313) arm were fatigue (53%), rash (40%), diarrhea (31%), and nausea (28%). In Checkmate 017 and 057, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=418) were fatigue, musculoskeletal pain, cough, dyspnea, and decreased appetite. In Checkmate 025, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=406) vs everolimus (n=397) were asthenic conditions (56% vs 57%), cough (34% vs 38%), nausea (28% vs 29%), rash (28% vs 36%), dyspnea (27% vs 31%), diarrhea (25% vs 32%), constipation (23% vs 18%), decreased appetite (23% vs 30%), back pain (21% vs 16%), and arthralgia (20% vs 14%). In Checkmate 205 and 039, among all patients (safety population [n=263]) and the subset of patients in the efficacy population (n=95), respectively, the most common adverse reactions (≥20%) were fatigue (32% and 43%), upper respiratory tract infection (28% and 48%), pyrexia (24% and 35%), diarrhea (23% and 30%), and cough (22% and 35%). In the subset of patients in the efficacy population (n=95), the most common adverse reactions also included rash (31%), musculoskeletal pain (27%), pruritus (25%), nausea (23%), arthralgia (21%), and peripheral neuropathy (21%).

In a separate Phase 3 study of YERVOY 3 mg/kg, the most common adverse reactions (≥5%) in patients who received YERVOY at 3 mg/kg were fatigue (41%), diarrhea (32%), pruritus (31%), rash (29%), and colitis (8%).

Please see U.S. Full Prescribing Information, including Boxed WARNING regarding immune-mediated adverse reactions, for YERVOY.

Please see U.S. Full Prescribing Information for OPDIVO.

On October 24, 2016 Mersana Therapeutics, Inc., a biotechnology company focused on discovering and developing a pipeline of antibody drug conjugates (ADCs) based on its proprietary Fleximer platform technology, reported that the U.S. Food and Drug Administration (FDA) cleared the company’s Investigational New Drug (IND) application to begin Phase 1 clinical trials for its lead oncology drug candidate XMT-1522 (Press release, Mersana Therapeutics, OCT 25, 2016, View Source [SID1234515988]). The compound is Mersana’s first pipeline product, and defines a new class of HER2-targeted therapies.

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The drug is being co-developed with Takeda Pharmaceutical Company Limited (TSE:4502) and as part of that agreement Mersana will receive a $20 million milestone payment based on FDA clearance of this IND. In February, Takeda, through its wholly owned subsidiary Millennium Pharmaceuticals, Inc., entered into a strategic partnership with Mersana to co-develop XMT-1522, and Mersana will lead execution of the Phase 1 trial. Mersana will retain full commercial rights in the United States and Canada while
Takeda will have rights in rest of world.

“XMT-1522 represents a promising therapeutic approach for cancer patients with significant unmet medical needs and we are pleased to be in a position to move this therapy into clinical development.” said Donald A. Bergstrom, M.D. Ph.D., Chief Medical Officer, Mersana Therapeutics. “We have designed a robust Phase I program that will allow us to better understand the potential of XMT-1522 to address the needs of several patient groups who currently have limited options.”

XMT-1522 incorporates a novel, proprietary HER2 antibody, which is conjugated with Mersana’s Dolaflexin platform which includes its Fleximer technology and proprietary auristatin payload. XMT-1522 provides a drug load of approximately 12 molecules per antibody, specifically designed to improve potency while simultaneously increasing tolerability. XMT-1522 has the potential to extend HER2-targeted therapy beyond the current “HER2-positive” populations into patients with lower levels of HER2 expression. The Phase 1 protocol will evaluate XMT-1522 in patients with advanced HER2-positive breast and gastric cancer, as well as advanced breast cancer with low HER2 expression and non-small cell lung cancer.

“Our partnership with Mersana exemplifies our approach of uniting Takeda’s experience in bringing novel oncology therapies to market with promising drug discovery technology like Mersana’s Fleximer to help drive science forward for patients with unmet medical needs,” said Phil Rowlands, Interim Head, Oncology Therapeutic Area Unit, Takeda.

On October 24, 2016 Mersana Therapeutics, Inc., a biotechnology company focused on discovering and developing a pipeline of antibody drug conjugates (ADCs) based on its proprietary Fleximer platform technology, reported that the U.S. Food and Drug Administration (FDA) cleared the company’s Investigational New Drug (IND) application to begin Phase 1 clinical trials for its lead oncology drug candidate XMT-1522 (Press release, Mersana Therapeutics, OCT 25, 2016, View Source [SID1234515988]). The compound is Mersana’s first pipeline product, and defines a new class of HER2-targeted therapies.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

The drug is being co-developed with Takeda Pharmaceutical Company Limited (TSE:4502) and as part of that agreement Mersana will receive a $20 million milestone payment based on FDA clearance of this IND. In February, Takeda, through its wholly owned subsidiary Millennium Pharmaceuticals, Inc., entered into a strategic partnership with Mersana to co-develop XMT-1522, and Mersana will lead execution of the Phase 1 trial. Mersana will retain full commercial rights in the United States and Canada while
Takeda will have rights in rest of world.

"XMT-1522 represents a promising therapeutic approach for cancer patients with significant unmet medical needs and we are pleased to be in a position to move this therapy into clinical development." said Donald A. Bergstrom, M.D. Ph.D., Chief Medical Officer, Mersana Therapeutics. "We have designed a robust Phase I program that will allow us to better understand the potential of XMT-1522 to address the needs of several patient groups who currently have limited options."

XMT-1522 incorporates a novel, proprietary HER2 antibody, which is conjugated with Mersana’s Dolaflexin platform which includes its Fleximer technology and proprietary auristatin payload. XMT-1522 provides a drug load of approximately 12 molecules per antibody, specifically designed to improve potency while simultaneously increasing tolerability. XMT-1522 has the potential to extend HER2-targeted therapy beyond the current "HER2-positive" populations into patients with lower levels of HER2 expression. The Phase 1 protocol will evaluate XMT-1522 in patients with advanced HER2-positive breast and gastric cancer, as well as advanced breast cancer with low HER2 expression and non-small cell lung cancer.

"Our partnership with Mersana exemplifies our approach of uniting Takeda’s experience in bringing novel oncology therapies to market with promising drug discovery technology like Mersana’s Fleximer to help drive science forward for patients with unmet medical needs," said Phil Rowlands, Interim Head, Oncology Therapeutic Area Unit, Takeda.

On October 25, 2016 Merck (NYSE:MRK), known as MSD outside the United States and Canada, reported financial results for the third quarter of 2016 (Press release, Merck & Co, OCT 25, 2016, View Source [SID1234515986]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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"The latest achievements for KEYTRUDA and other recent regulatory approvals across our portfolio show that our innovation strategy is working," said Kenneth C. Frazier, chairman and chief executive officer, Merck. "We are confident that our focus on the science, along with continued commercial execution, will drive long-term results for the company and our shareholders."

Financial Summary

$ in millions, except EPS amounts Third Quarter
2016 2015

Sales $10,536 $10,073
GAAP EPS 0.78 0.64
Non-GAAP EPS that excludes items listed below1
1.07 0.96
GAAP net income2
2,184 1,826
Non-GAAP net income that excludes items listed below1,2
2,989 2,720

Worldwide sales were $10.5 billion for the third quarter of 2016, an increase of 5 percent compared with the third quarter of 2015, including a 1 percent negative impact from foreign exchange. Sales in the third quarter of 2016 include an estimated benefit of approximately $150 million of additional sales in Japan resulting from the timing of shipments in anticipation of a resource planning system Merck is implementing in the fourth quarter of 2016.

GAAP (generally accepted accounting principles) earnings per share (EPS) assuming dilution were $0.78 for the third quarter. Non-GAAP EPS of $1.07 for the third quarter excludes acquisition- and divestiture-related costs and restructuring costs. GAAP and non-GAAP EPS in the third quarter include an estimated benefit of approximately $0.04 from the timing of shipments in Japan noted above.

Pipeline Highlights

Merck significantly advanced the clinical development program for KEYTRUDA (pembrolizumab), an anti-PD-1 therapy. KEYTRUDA is now approved in the United States for the treatment of previously untreated metastatic NSCLC in patients whose tumors express high levels of PD-L1 (TPS of 50 percent or more) and previously treated metastatic NSCLC in patients whose tumors express PD-L1 (TPS of 1 percent or more), as well as advanced melanoma and previously treated recurrent or metastatic head and neck cancer (HNSCC). Earlier this month at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Congress, data were presented from 30 studies evaluating the use of KEYTRUDA as a monotherapy and in combination in 23 cancers.

Lung Cancer

Yesterday the U.S. Food and Drug Administration (FDA) approved two supplemental Biologics License Applications (sBLA) for KEYTRUDA in lung cancer.
Based on the KEYNOTE-024 study, KEYTRUDA was approved for the first-line treatment of patients with metastatic NSCLC whose tumors have high PD-L1 expression (TPS of 50 percent or more) as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations. The data from KEYNOTE-024 were published in The New England Journal of Medicine and highlighted at ESMO (Free ESMO Whitepaper).
The FDA also approved a sBLA to include data from the pivotal KEYNOTE-010 study in which KEYTRUDA showed superior overall survival compared to chemotherapy in patients with previously treated advanced NSCLC whose tumors express PD-L1 (TPS of 1 percent or more) as determined by an FDA-approved test.
Data were presented at ESMO (Free ESMO Whitepaper) from KEYNOTE-021, Cohort G, showing superior efficacy of KEYTRUDA plus chemotherapy compared to chemotherapy alone as a first-line treatment for patients with metastatic non-squamous NSCLC regardless of PD-L1 expression. These data were simultaneously published in The Lancet Oncology.
The European Commission approved KEYTRUDA for the treatment of locally advanced or metastatic NSCLC in patients whose tumors express PD-L1 and who have received at least one prior chemotherapy regimen.
Head and Neck Cancer

The FDA approved a sBLA for KEYTRUDA for the treatment of patients with recurrent or metastatic HNSCC with disease progression on or after platinum-containing chemotherapy.
Bladder Cancer

On Friday the company announced that the KEYNOTE-045 trial investigating the use of KEYTRUDA in patients with previously treated advanced bladder cancer (urothelial cancer) met its primary endpoint. In the study, KEYTRUDA met the primary endpoint of overall survival and was superior compared to investigator choice chemotherapy.
Interim Phase 2 data were presented at ESMO (Free ESMO Whitepaper) for the first time investigating the use of KEYTRUDA in previously untreated patients with advanced bladder cancer.

Last week the U.S. Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices voted to recommend a 2-dose vaccination regimen for GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), a vaccine to prevent certain cancers and other diseases caused by HPV, in certain girls and boys 9 through 14 years of age, which followed the FDA’s approval of a 2-dose regimen in this adolescent population earlier this month.

The FDA accepted for review the New Drug Application (NDA) for MK-1293, an investigational follow-on biologic insulin glargine candidate for the treatment of people with type 1 and type 2 diabetes that is being developed in collaboration with and partially funded by Samsung Bioepis.

The FDA accepted for review a supplemental NDA for a once-daily formulation of ISENTRESS (raltegravir) in combination with other antiretroviral therapies for the treatment of HIV-1 infection in previously untreated patients or patients whose virus remains suppressed after treatment with an initial regimen of 400 mg of ISENTRESS twice-daily. The FDA granted a PDUFA action date of May 27, 2017.

Merck announced last week that the pivotal Phase 3 study of letermovir, an investigational antiviral medicine for prevention of cytomegalovirus infection in high-risk bone marrow transplant patients, met its primary endpoint; Merck will submit results from the study for presentation at a future scientific conference.

Third-Quarter Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as total sales of Animal Health products.


$ in millions Third Quarter Change Change
Ex-Exchange
2016 2015

Total Sales $10,536 $10,073 5% 6%
Pharmaceutical 9,443 8,925 6% 6%
JANUVIA / JANUMET 1,554 1,576 -1% -2%
ZETIA / VYTORIN 944 936 1% –
GARDASIL / GARDASIL 9 860 625 38% 38%
PROQUAD / M-M-R II / VARIVAX 496 390 27% 28%
ISENTRESS 372 377 -1% 1%
KEYTRUDA 356 159 124% 128%
CUBICIN 320 325 -2% -2%
REMICADE 311 442 -30% -28%
Animal Health 865 827 5% 7%
Other Revenues 228 321 -29% 10%
Pharmaceutical Revenue

Third-quarter pharmaceutical sales increased 6 percent to $9.4 billion, reflecting higher sales in vaccines, oncology, the cardiovascular franchise and hospital acute care.

Growth in vaccines resulted from higher sales of GARDASIL 9 and GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine, Recombinant], vaccines to prevent certain cancers and other diseases caused by HPV, primarily due to the timing of public sector purchases and increased pricing and demand in the United States; and higher sales of PROQUAD (Measles, Mumps, Rubella and Varicella Vaccine Live), driven by the timing of sales activity in the third quarter of 2015 related to the Pediatric Vaccine Stockpile of the U.S. CDC.

Growth in oncology was driven by KEYTRUDA as the company continues to launch the product with new indications globally.

Higher sales in the cardiovascular portfolio were driven by an increase in sales of ADEMPAS (riociguat), a medicine for treating pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension, which the company is now promoting and distributing in Europe; and ZETIA (ezetimibe), a medicine for lowering LDL cholesterol, primarily driven by higher sales in Japan due to the timing of shipments. U.S. sales of ZETIA were $411 million for the third quarter of 2016; in December 2016 the company will lose market exclusivity in the United States for ZETIA and anticipates a significant decline in U.S. ZETIA sales thereafter.

Growth in hospital acute care primarily resulted from higher sales of BRIDION (sugammadex) Injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery, which had worldwide sales of $139 million for the quarter that were driven by the ongoing launch in the United States, higher sales in Europe and the timing of shipments in Japan.

Pharmaceutical sales growth also reflects the continued launch of ZEPATIER (elbasvir and grazoprevir), a medicine for the treatment of chronic hepatitis C virus genotypes 1 or 4 infection, which had sales of $164 million in the third quarter.

Third-quarter pharmaceutical sales reflect a decline in REMICADE (infliximab), a treatment for inflammatory diseases, due to the impact of biosimilar competition in the company’s marketing territories in Europe.

U.S. sales of CUBICIN (daptomycin for injection), an I.V. antibiotic, were $264 million in the third quarter. The company has lost U.S. patent protection for CUBICIN and anticipates a significant decline in U.S. CUBICIN sales going forward.

Animal Health Revenue

Animal Health sales totaled $865 million for the third quarter of 2016, an increase of 5 percent compared with the third quarter of 2015, including a 2 percent negative impact from foreign exchange. Sales growth was primarily driven by an increase in sales of companion animal and poultry products, particularly the BRAVECTO (fluralaner) line of products that kill fleas and ticks in dogs and cats for up to 12 weeks.

Earlier this month, the company announced that the U.S. Department of Agriculture approved a license for Nobivac Canine Flu Bivalent vaccine, the first vaccine to aid in the control of disease associated with both canine influenza virus H3N2 and canine influenza virus H3N8.

Third-Quarter Expense, EPS and Related Information

The table below presents selected expense information.


$ in millions Acquisition-
and
Divestiture- Certain
Related Restructuring Other
Non-
GAAP
Costs (3)
Costs Items
GAAP (1)
Third-Quarter 2016
Materials and production $3,409 $773 $36 $– $2,600
Marketing and administrative 2,393 36 1 – 2,356
Research and development 1,664 13 14 – 1,637
Restructuring costs 161 – 161 – –
Other (income) expense, net 22 12 – (6) 16

Third-Quarter 2015
Materials and production $3,761 $1,184 $70 $– $2,507
Marketing and administrative 2,472 26 17 – 2,429
Research and development 1,500 (71) 17 – 1,554
Restructuring costs 113 – 113 – –
Other (income) expense, net (170) 7 – (283) 106
GAAP Expense, EPS and Related Information

On a GAAP basis, the gross margin was 67.6 percent for the third quarter of 2016 compared to 62.7 percent for the third quarter of 2015. The increase in gross margin for the third quarter of 2016 was primarily driven by lower acquisition- and divestiture-related costs, which negatively affected gross margin by 7.7 percentage points in the third quarter of 2016 compared with 12.4 percentage points for the third quarter of 2015. The increase in gross margin also reflects the favorable effects of product mix.

Marketing and administrative expenses were $2.4 billion in the third quarter of 2016, a 3 percent decrease compared to the third quarter of 2015. The decline primarily reflects lower selling and promotional expenses as a result of prioritizing investments in key brands, the favorable impact of foreign exchange and lower restructuring costs, partially offset by higher acquisition- and divestiture-related costs.

Research and development (R&D) expenses were $1.7 billion in the third quarter of 2016, an 11 percent increase compared to the third quarter of 2015. The increase primarily reflects higher clinical development spending, as well as a reduction in the third quarter of 2015 of the estimated fair value of liabilities for contingent consideration.

Other (income) expense, net, was $22 million of expense in the third quarter of 2016 compared to $170 million of income in the third quarter of 2015, reflecting a gain of $250 million in the third quarter of 2015 on the divestiture of certain migraine clinical development programs, as well as lower foreign exchange losses in the third quarter of 2016.

GAAP EPS was $0.78 for the third quarter of 2016 compared with $0.64 for the third quarter of 2015.

Non-GAAP Expense, EPS and Related Information

The non-GAAP gross margin was 75.3 percent for the third quarter of 2016 compared to 75.1 percent for the third quarter of 2015. The increase in non-GAAP gross margin for the third quarter of 2016 reflects the favorable impact of product mix.

Non-GAAP marketing and administrative expenses were $2.4 billion in the third quarter of 2016, a 3 percent decline compared to the third quarter of 2015. The decline reflects lower selling costs and promotional spending as a result of prioritizing investments in key brands and the favorable impact of foreign exchange.

Non-GAAP R&D expenses were $1.6 billion in the third quarter of 2016, a 5 percent increase compared to the third quarter of 2015. The increase primarily reflects higher clinical development spending.

Non-GAAP EPS was $1.07 for the third quarter of 2016 compared with $0.96 for the third quarter of 2015.

Non-GAAP other (income) expense, net, was $16 million of expense in the third quarter of 2016 compared to $106 million of expense in the third quarter of 2015, reflecting lower foreign exchange losses.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows. Year-to-date results can be found in the attached tables.


$ in millions, except EPS amounts Third Quarter
2016 2015
EPS
GAAP EPS $0.78 $0.64
Difference4
0.29 0.32
Non-GAAP EPS that excludes items listed below1
$1.07 $0.96

Net Income
GAAP net income2 $2,184 $1,826
Difference 805 894
Non-GAAP net income that excludes items listed below1,2 $2,989 $2,720

Decrease (Increase) in Net Income Due to Excluded Items:
Acquisition- and divestiture-related costs3 $834 $1,146
Restructuring costs 212 217
Gain on divestiture of certain migraine clinical development programs – (250)
Other (6) (33)
Net decrease (increase) in income before taxes 1,040 1,080
Income tax (benefit) expense5
(235) (186)
Decrease (increase) in net income $805 $894
Financial Outlook

Merck has narrowed and raised its full-year 2016 GAAP EPS to be between $2.02 and $2.09. The company has narrowed and raised its full-year 2016 non-GAAP EPS to be between $3.71 to $3.78, including an approximately 1 percent negative impact from foreign exchange at mid-October exchange rates. The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs.

Merck has narrowed and raised its full-year 2016 revenue range to be between $39.7 billion and $40.2 billion, including an approximately 2 percent negative impact from foreign exchange at mid-October exchange rates.

The following table summarizes the company’s 2016 financial guidance.


GAAP Non-GAAP 1

Revenue $39.7 to $40.2 billion $39.7 to $40.2 billion*
Marketing and administrative expenses Lower than 2015 Lower than 2015
R&D expenses Higher than 2015 Higher than 2015
Effective tax rate 26.0% to 27.0% 21.5% to 22.5%
EPS $2.02 to $2.09 $3.71 to $3.78
*The company does not have any non-GAAP adjustments to revenue.
A reconciliation of anticipated 2016 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.


$ in millions, except EPS amounts

Full-Year 2016

GAAP EPS $2.02 to $2.09
Difference4 1.69
Non-GAAP EPS that excludes items listed below1 $3.71 to $3.78

Acquisition- and divestiture-related costs $4,750
Restructuring costs 900
Net decrease (increase) in income before taxes 5,650
Estimated income tax (benefit) expense (955)
Decrease (increase) in net income $4,695
The expected full-year 2016 GAAP effective tax rate of 26.0 to 27.0 percent reflects an unfavorable impact of approximately 4.5 percentage points from the above items.

Total Employees

As of Sept. 30, 2016, Merck had approximately 68,000 employees worldwide.