On July 23, 2015 Vanderbilt University reported Marco Davila, M.D., Ph.D., assistant professor of Medicine and of Cancer Biology, has received a grant from the Damon Runyon Cancer Research Foundation that will provide $450,000 over three years to help fund his research on therapies for several types of blood disorders, including various forms of leukemia and non-Hodgkin (also known as non-Hodgkin’s) lymphoma (Press release, Vanderbilt University, JUL 23, 2015, View Source [SID:1234506607]).
Davila’s current research focuses on the body’s immune system.

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!

"Some people would argue that cancers that develop are, in part, a failure of the immune system," said Davila.

Normally the body’s immune system defenses should recognize and attack cancer cells, but scientists have discovered mechanisms that throw up a screen, making the cancer cells invisible. The immune system uses white blood cells, or lymphocytes, which originate in the bone marrow. The lymphatic system includes T cells and B cells which have receptors on their surface that can recognize invaders. Davila said B cells have a protein called CD19 which is present in almost all B cell malignancies like leukemia.

Prior to joining Vanderbilt in 2014, Davila and colleagues at Memorial Sloan Kettering Cancer Center in New York created an antigen receptor that would recognize and lock onto CD19.

"By genetically modifying T cells to CD19 we created a huge bulk population of cells that are now going to be reactive to this B cell target," said Davila.

They tested this CAR T antigen receptor in mouse models and in some patients with relapsed ALL (acute lymphocytic leukemia) with remarkable results.

"This is a disease where with standard salvage chemotherapy the survival rate would be 20 to 30 percent. In the patients we treated the complete response rate was nearly 90 percent," Davila said.

However, the CAR T cell therapy was not as effective with CLL (chronic lymphocytic leukemia) or non-Hodgkin diseases. Davila and colleagues believe CLL is immune resistant to CD19-targeted CAR T cell therapies.

"We can see the disease is eradicated in the bone marrow but a lot of times the disease is still residual in the lymph nodes. So we think that within the lymph node the tumor cells themselves or maybe some other cells that they are recruiting in the tumor microenvironment are suppressing the CAR T cells that infiltrate into the lymph node," said Davila.

He is hoping to develop an "armored CAR" third generation that will be resistant to immune suppression within the lymph node or the tumor microenvironment.

"We’re engineering the cells in a way to be able to activate themselves and avoid immune suppression within these lymph nodes in the hostile tumor microenvironments."

Davila said support from the Damon Runyon Cancer Research Foundation is critical for this project and he is excited about the "luminaries of cancer research" working with the foundation who will be monitoring his project and helping him troubleshoot any barriers to the translation of his research.

The foundation is named in honor of Damon Runyon, a journalist and short story writer active in the early part of the last century who was renowned for his humorous sports coverage and creation of colorful characters from the sports, horse racing and gambling worlds. Since 1946, the Foundation has invested more than $287 million dollars in innovative cancer research, supporting the work of more than 3,400 cancer investigators.

On July 23, 2015 Eli Lilly and Company (NYSE: LLY) reported financial results for the second quarter of 2015 (Press release, Eli Lilly, JUL 23, 2015, View Source [SID:1234506606]).

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!

Certain financial information for 2015 and 2014 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the period. Non-GAAP measures exclude the items described in the reconciliation tables later in the release. Non-GAAP measures in 2014 include the results of Novartis Animal Health as if the acquisition and the financing for the acquisition had occurred as of January 1, 2014. Non-GAAP financial measures for all periods presented also exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties. The company’s 2015 financial guidance is also being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company’s business.

"Lilly remains on track to return to growth in 2015, driven by strong underlying business performance, including uptake of our recently launched products – Jardiance, Trulicity and Cyramza," said John C. Lechleiter, Ph.D., Lilly’s chairman, president and chief executive officer. "With tangible results from launches of new medicines and continued progress in our pipeline, along with careful control of operational expenses, we are confident that our innovation-based strategy will continue to provide the basis for solid growth in the years ahead."

Key Events Over the Last Three Months

Cyramza (ramucirumab) achieved a number of development and commercial milestones:
Approved and launched in the U.S. in combination with FOLFIRI (irinotecan, folinic acid, and 5-fluorouracil) chemotherapy for the treatment of patients with metastatic colorectal cancer with disease progression on or after prior therapy with bevacizumab, oxaliplatin, and a fluoropyrimidine.

Launched in Japan for patients with unresectable, advanced or recurrent gastric cancer.

Submitted in Japan for second-line metastatic colorectal cancer.

The Japan Ministry of Health, Labor and Welfare approved Trulicity (dulaglutide) as a treatment for type 2 diabetes. The company will co-promote Trulicity in Japan with Sumitomo Dainippon Pharma Co., Ltd.

The U.S. Food and Drug Administration (FDA) approved Humalog 200 units/mL KwikPen (insulin lispro 200 units/mL; U-200), a pre-filled pen containing a concentrated formulation of Lilly’s rapid-acting insulin Humalog (insulin lispro 100 units/mL) to improve glycemic control in people with type 1 and type 2 diabetes.

The European Commission granted marketing authorization for Synjardy (empagliflozin/metformin) for the treatment of adults with type 2 diabetes. Synjardy is part of the company’s diabetes collaboration with Boehringer Ingelheim.

The FDA issued a Complete Response Letter for Synjardy, for the treatment of adults with type 2 diabetes. Boehringer Ingelheim submitted their response to the FDA and received a Class 1 status for an expected decision within two months.

The company is encouraged by the FDA Oncologic Drugs Advisory Committee’s review of data supporting necitumumab in combination with gemcitabine and cisplatin for use in first-line treatment of patients with advanced squamous non-small cell lung cancer. The company believes necitumumab represents a meaningful advancement. FDA action is expected by the end of the year.

The company submitted ixekizumab in the EU for moderate-to-severe plaque psoriasis.

The company announced results from an extension of the Phase III solanezumab trials, indicating the treatment effect was preserved in patients with mild Alzheimer’s disease, compared to patients who began treatment at a later point, further suggesting a potential disease-modifying effect on underlying disease progression.

The company announced collaborations with:
AstraZeneca to evaluate the safety and preliminary efficacy of AstraZeneca’s investigational anti-PD-L1 immune checkpoint inhibitor, MEDI4736, in combination with Cyramza, as a treatment for patients with advanced solid tumors.

Immunocore Limited to explore the utility of Immunocore’s lead T cell receptor-based investigational therapeutic, IMCgp100, in combination with Lilly’s galunisertib and merestinib for the treatment of melanoma.

Sarah Cannon Research Institute to co-develop an investigational oncology compound, LY3023414, a PI3K/mTOR dual inhibitor.
BioNTech AG to discover novel cancer immunotherapies.

Sanford-Burnham Medical Research Institute to discover and develop immunological therapies.

Dana-Farber Cancer Institute to research new medicines under development to fight cancer.

The UK Court of Appeal ruled that the Alimta (pemetrexed disodium) vitamin regimen patents would be indirectly infringed by a generic competitor that had stated its intent to market certain alternative salt forms of pemetrexed in the United Kingdom, France, Italy and Spain prior to the patents’ expiration in June 2021.

The company announced plans to establish a new drug delivery and device innovation center in Cambridge, Massachusetts, and to expand its existing research and development center in San Diego, California.

The company issued €2.1 billion of euro-denominated debt and repurchased $1.65 billion principal amount of higher interest rate U.S. dollar-denominated debt.

Second-Quarter Reported Results

In the second quarter of 2015, worldwide revenue was $4.979 billion, an increase of 1 percent compared with the second quarter of 2014. The revenue growth included increases of 8 percent due to increased volume and 1 percent due to higher prices, largely offset by a decrease of 8 percent due to the unfavorable impact of foreign exchange rates. The 8 percent increase in volume was primarily due to the inclusion of revenue from Novartis Animal Health, and to a lesser extent increased volume for several products, including Cyramza and Trulicity. These worldwide volume increases were partially offset by lower demand for Cymbalta and Evista, largely due to U.S. patent expirations in December 2013 and March 2014, respectively. Revenue in the U.S. increased 6 percent to $2.528 billion, driven primarily by higher prices, the inclusion of revenue from Novartis Animal Health and increased volume for several products, partially offset by patent expirations for Cymbalta and Evista. Revenue outside the U.S. decreased 4 percent to $2.451 billion, driven by the unfavorable impact of foreign exchange rates, partially offset by the inclusion of revenue from Novartis Animal Health and increased volume for the majority of pharmaceutical products, due in part to wholesaler buying patterns in Japan.

Gross margin remained relatively flat at $3.760 billion in the second quarter of 2015, as the favorable impact of foreign exchange rates on international inventories sold and the inclusion of Novartis Animal Health were largely offset by the foreign exchange impact on revenue and inventory step-up and amortization costs. Gross margin as a percent of revenue was 75.5 percent, a decrease of 0.4 percentage points compared with the second quarter of 2014. The decrease in gross margin percent was primarily due to the inclusion of Novartis Animal Health and inventory step-up and amortization costs, largely offset by the impact of foreign exchange rates on international inventories sold.

Operating expenses in the second quarter of 2015, defined as the sum of research and development and marketing, selling and administrative expenses, were $2.805 billion, a decrease of 2 percent compared with the second quarter of 2014. Research and development expenses decreased 2 percent to $1.169 billion, or 23.5 percent of revenue, driven primarily by the favorable impact of foreign exchange rates, partially offset by expenses of Novartis Animal Health. Marketing, selling and administrative expenses decreased 2 percent to $1.635 billion, due to the favorable impact of foreign exchange rates and ongoing cost-containment measures, partially offset by expenses of Novartis Animal Health and marketing and selling expenses related to new product launches.

In the second quarter of 2015, the company recognized acquired in-process research and development charges of $80.0 million. These charges included a $50.0 million payment to Hanmi Pharmaceutical Co., Ltd., related to a previously announced exclusive license and collaboration agreement for Hanmi’s oral Bruton’s tyrosine kinase (BTK) inhibitor for the treatment of autoimmune and other diseases, and a $30.0 million payment to BioNTech AG related to a research collaboration to discover novel cancer immunotherapies. There were no acquired in-process research and development charges in the second quarter of 2014.

In the second quarter of 2015, the company recognized asset impairment, restructuring and other special charges of $72.4 million. The charges primarily relate to integration costs for Novartis Animal Health, asset impairments and severance costs. There were no asset impairment, restructuring and other special charges in the second quarter of 2014.

Operating income in the second quarter of 2015 was $803.0 million, a decline of 9 percent compared with the second quarter of 2014, driven by higher acquired in-process research and development charges and asset impairment, restructuring and other special charges, partially offset by lower operating expenses.

Other income (expense) was an expense of $123.3 million in the second quarter of 2015, compared with income of $53.8 million in the second quarter of 2014. Other expense in 2015 was driven by a net charge of $152.7 million related to the repurchase of $1.65 billion of debt.

The effective tax rate was 11.6 percent in the second quarter of 2015, compared with 22.0 percent in the second quarter of 2014. The decrease in the 2015 effective tax rate was primarily due to the tax impact of the net charge related to the repurchase of debt, acquired in-process research and development charges, and asset impairment, restructuring and other special charges. The 2015 effective tax rate also reflected a net discrete tax benefit of approximately $24 million. Neither period includes the benefit of certain expired U.S. tax provisions, including the R&D tax credit.

In the second quarter of 2015, net income decreased 18 percent to $600.8 million, and earnings per share decreased 18 percent to $0.56, compared with $733.5 million and $0.68, respectively, in the second quarter of 2014. The declines in net income and earnings per share were driven by charges related to the repurchase of debt and lower operating income, partially offset by a lower effective tax rate.

Second-Quarter 2015 Non-GAAP Measures

On a non-GAAP basis, worldwide revenue was $4.979 billion in the second quarter of 2015, a decline of 4 percent compared with the second quarter of 2014. The revenue decline was driven by the unfavorable impact of foreign exchange rates and lower demand for Cymbalta and Evista following U.S. patent expirations, partially offset by increased volume for several products, including Cyramza and Trulicity, and higher prices. U.S. revenue increased 3 percent to $2.528 billion, driven primarily by higher prices and increased volume for several products, partially offset by the patent expirations for Cymbalta and Evista. Revenue outside the U.S. decreased 11 percent to $2.451 billion, driven by the unfavorable impact of foreign exchange rates, partially offset by increased volumes for the majority of pharmaceutical products.

Gross margin decreased 1 percent to $3.945 billion in the second quarter of 2015, as the negative impact of foreign exchange rates on revenue was largely offset by the favorable impact of foreign exchange rates on international inventories sold and increased volume. Gross margin as a percent of revenue was 79.2 percent, an increase of 2.5 percentage points compared with the second quarter of 2014. The increase in gross margin percent was due to the impact of foreign exchange rates on international inventories sold.

Operating expenses in the second quarter of 2015 were $2.769 billion, a decline of 7 percent compared with the second quarter of 2014. Research and development expenses decreased 5 percent to $1.169 billion, or 23.5 percent of revenue, driven primarily by the favorable impact of foreign exchange rates. Marketing, selling and administrative expenses decreased 8 percent to $1.600 billion, due to the favorable impact of foreign exchange rates, cost reductions in the combined animal health organization and ongoing cost-containment measures, partially offset by marketing and selling expenses related to new product launches.

Other income (expense) was income of $29.4 million in the second quarter of 2015, compared with income of $18.3 million in the second quarter of 2014.

The effective tax rate decreased to 20.8 percent, compared with 23.1 percent in the second quarter of 2014, due primarily to a discrete tax benefit of approximately $24 million in 2015.

Net income increased 20 percent to $954.8 million, and earnings per share increased 22 percent to $0.90, compared with $798.1 million and $0.74, respectively, in the second quarter of 2014. The increases were driven primarily by a decrease in operating expenses and a lower effective tax rate, partially offset by lower gross margin. Earnings per share benefited slightly from a lower number of shares outstanding in the second quarter of 2015 compared with the second quarter of 2014.

For further detail, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this release.

Year-to-Date Results

For the first six months of 2015, worldwide revenue remained relatively flat at $9.623 billion compared with the same period in 2014. Reported net income and earnings per share were $1.130 billion and $1.06, respectively. Net income and earnings per share, on a non-GAAP basis, were $1.879 billion and $1.76, respectively.

Humalog

For the second quarter of 2015, worldwide Humalog sales decreased 7 percent to $654.3 million. Sales in the U.S. decreased 3 percent to $399.7 million, driven primarily by lower net effective selling prices. Sales outside the U.S. decreased 11 percent to $254.6 million, driven by the unfavorable impact of foreign exchange rates, partially offset by increased volume and higher prices.

Alimta

For the second quarter of 2015, Alimta generated sales of $664.3 million, a decline of 7 percent compared with the second quarter of 2014. U.S. sales of Alimta increased 3 percent to $330.0 million, driven by higher prices. Sales outside the U.S. decreased 14 percent to $334.3 million, driven by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower prices, partially offset by increased volume.

Cialis

Cialis sales for the second quarter of 2015 remained flat at $567.9 million. U.S. sales of Cialis were $309.5 million, a 16 percent increase compared with the second quarter of 2014, driven by higher prices, partially offset by decreased volume. Sales of Cialis outside the U.S. decreased 14 percent to $258.4 million, driven by the unfavorable impact of foreign exchange rates, partially offset by increased volume.

Humulin

Worldwide Humulin sales of $316.4 million for the second quarter of 2015 decreased 10 percent compared with the second quarter of 2014. U.S. sales increased 4 percent to $188.1 million, driven primarily by increased demand and higher prices. Sales outside the U.S. decreased 25 percent to $128.3 million, driven by decreased volume, primarily in Brazil, and the unfavorable impact of foreign exchange rates.

Forteo

Second-quarter 2015 sales of Forteo were $328.4 million, a 6 percent increase compared with the second quarter of 2014. U.S. sales of Forteo increased 13 percent to $144.6 million, driven by higher prices, partially offset by decreased demand. Sales outside the U.S. increased 2 percent to $183.8 million, as increased volume, primarily due to wholesaler buying patterns in Japan, was largely offset by the unfavorable impact of foreign exchange rates.

Cymbalta

For the second quarter of 2015, Cymbalta generated $274.1 million of sales, a decline of 32 percent compared with the second quarter of 2014. U.S. sales of Cymbalta decreased 64 percent to $40.5 million, due to the loss of U.S. patent exclusivity in December 2013. Sales of Cymbalta outside the U.S. were $233.6 million, a decline of 19 percent, driven by the unfavorable impact of foreign exchange rates and the loss of exclusivity in 2014. This was partially offset by increased volume in Japan, primarily due to wholesaler buying patterns.

Zyprexa

In the second quarter of 2015, Zyprexa sales totaled $253.7 million, an increase of 4 percent compared with the second quarter of 2014. U.S. sales of Zyprexa were $57.6 million. Zyprexa sales outside the U.S. decreased 4 percent to $196.1 million, due to the unfavorable impact of foreign exchange rates, partially offset by increased volume in Japan, primarily due to wholesaler buying patterns.

Strattera

During the second quarter of 2015, Strattera generated $191.8 million of sales, a decline of 3 percent compared with the second quarter of 2014. U.S. sales decreased 7 percent to $121.1 million, driven primarily by lower net effective selling prices. Sales outside the U.S. increased 4 percent to $70.7 million, driven by increased volume, primarily due to wholesaler buying patterns in Japan, partially offset by the unfavorable impact of foreign exchange rates.

Effient

Effient sales were $128.8 million in the second quarter of 2015, a decrease of 4 percent compared with the second quarter of 2014. U.S. Effient sales increased 2 percent to $102.0 million, as higher prices were largely offset by decreased demand. Sales outside the U.S. decreased 19 percent to $26.8 million, driven by the unfavorable impact of foreign exchange rates.

Evista

Evista sales for the second quarter of 2015 were $59.7 million, a decline of 45 percent compared to the second quarter of 2014. U.S. sales of Evista decreased 75 percent to $13.7 million, due to the loss of U.S. patent exclusivity in March 2014. Sales outside the U.S. decreased 14 percent to $46.0 million, driven by the unfavorable impact of foreign exchange rates.

Animal Health

In the second quarter of 2015, worldwide animal health sales totaled $840.8 million, an increase of 40 percent compared with the second quarter of 2014. U.S. animal health sales increased 24 percent to $410.0 million, and animal health sales outside the U.S. increased 60 percent to $430.8 million. The increases were primarily driven by the inclusion of revenue from Novartis Animal Health.

Including the sales of Novartis Animal Health in 2014, worldwide animal health sales decreased 4 percent, U.S. animal health sales increased 1 percent and animal health sales outside the U.S. decreased 9 percent. The increase in U.S. animal health sales was driven by increased volume in companion animal products and to a lesser extent higher prices, partially offset by decreased volume in food animal products. The decrease in animal health sales outside the U.S. was driven by the unfavorable impact of foreign exchange rates, partially offset by increased volume, primarily in food animal products, and to a lesser extent higher prices. Including the sales of Novartis Animal Health in 2014 and excluding the unfavorable impact of foreign exchange rates, worldwide animal health sales increased 3 percent.

2015 Financial Guidance

The company has revised certain elements of its 2015 financial guidance on a reported basis and on a non-GAAP basis. Full-year 2015 earnings per share are now expected to be in the range of $2.20 to $2.30 on a reported basis. On a non-GAAP basis, full-year 2015 earnings per share are now expected to be in the range of $3.20 to $3.30.

Amortization and inventory step-up costs associated with the Novartis Animal Health and Erbitux rights acquisitions are subject to final acquisition accounting adjustments. Numbers do not add due to rounding.

The company now anticipates 2015 revenue of between $19.7 billion and $20.0 billion, reflecting solid underlying performance for the first six months of the year, including the launch trajectories of Jardiance, Trulicity and Cyramza.

The company still expects that gross margin as a percent of revenue will be approximately 74.5 percent on a reported basis. On a non-GAAP basis, gross margin as a percent of revenue is still expected to be approximately 78.0 percent, reflecting the exclusion of inventory step-up costs associated with the acquisition of Novartis Animal Health as well as amortization of intangibles.

Marketing, selling, and administrative expenses on a reported basis are still expected to be in the range of $6.4 billion to $6.7 billion. On a non-GAAP basis, marketing, selling, and administrative expenses are still expected to be in the range of $6.3 billion to $6.6 billion. Research and development expenses are still expected to be in the range of $4.7 billion to $4.9 billion.

Other income (expense) is now expected to be in a range between $50 million of expense and $0 on a reported basis due to the net charge related to the repurchase of debt. On a non-GAAP basis, other income (expense) is now expected to be in a range between $100 million and $150 million of income, reflecting net gains on investments realized to date.

The 2015 tax rate is now expected to be approximately 14.5 percent on a reported basis, primarily due to the tax impact of the net charge related to the repurchase of debt. The non-GAAP tax rate is now expected to be approximately 21.0 percent. Both rates assume a full-year 2015 benefit of the R&D tax credit and other tax provisions up for extension. If these items are not extended, the non-GAAP 2015 tax rate would be approximately 1.5 percentage points higher.

Capital expenditures are still expected to be approximately $1.3 billion.

On July 23, 2015 Celgene Corporation (NASDAQ:CELG) reported net product sales of $2,254 million for the second quarter of 2015, a 22 percent increase from the same period in 2014 (Press release, Celgene, JUL 23, 2015, View Source [SID:1234506605]). The negative net impact of currency on net product sales was 2 percent. Second quarter total revenue increased 22 percent to $2,278 million compared to $1,873 million in the second quarter of 2014. Adjusted net income for the second quarter of 2015 increased 36 percent to $1,019 million compared to $748 million in the second quarter of 2014. Adjusted diluted earnings per share (EPS) in the second quarter of 2015 was $1.23 which includes a $0.06 gain related to the sale of an equity investment upon completion of their acquisition by another company. For the same period in 2014, adjusted diluted EPS was $0.90.

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!

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported second quarter of 2015 net income of $356 million or $0.43 per diluted share. For the second quarter of 2014, net income was $598 million or $0.72 per diluted share.

"The Celgene team delivered exceptional results across the portfolio in the second quarter," said Bob Hugin, Chairman and Chief Executive Officer of Celgene Corporation. "We continue to invest strategically in the long-term future of Celgene and expect our recently announced transactions with AstraZeneca, Juno and Receptos to accelerate our earnings growth beginning in 2019."

Second Quarter 2015 Financial Highlights

Unless otherwise stated, all comparisons are for the second quarter of 2015 compared to the second quarter of 2014. The adjusted operating expense categories presented below exclude share-based employee compensation expense and upfront collaboration payments. Please see the attached Reconciliation of GAAP to Adjusted Net Income for further information.

Net Product Sales Performance

REVLIMID sales for the second quarter increased 19 percent to $1,444 million and were driven by volume in both the U.S. and International markets, increased duration of therapy and continued market share leadership in multiple myeloma. U.S. sales of $873 million and International sales of $571 million increased 22 percent and 15 percent, respectively.

ABRAXANE sales for the second quarter were $244 million, a 13 percent increase. U.S. sales of $170 million and International sales of $74 million increased 6 percent and 34 percent, respectively. The increase in sales reflects volume growth in both the U.S. and Europe driven by increased use in pancreatic cancer.

POMALYST/IMNOVID sales for the second quarter were $235 million, an increase of 46%. U.S. sales were $144 million and International sales were $91 million, an increase of 38% and 60%, respectively. POMALYST/IMNOVID sales were driven by volume increases globally, increasing duration of treatment and share gains, as well as geographic expansion, including the launch in Japan in June.

VIDAZA sales in the second quarter remained flat year-over-year at $152 million. International sales were $146 million, an increase of 3 percent.

OTEZLA sales for the second quarter were $90 million, increasing 49 percent over the first quarter of 2015. U.S. sales were $85 million and International sales were $5 million. OTEZLA uptake and market share gains have been strong in the U.S. since the initial approval in March 2014. Early launch countries in Europe have begun contributing. Prescription trends continue to increase.
All other product sales, which include THALOMID, ISTODAX and an authorized generic of VIDAZA drug product in the U.S., were $89 million in the second quarter of 2015 compared to $98 million for the second quarter of 2014.

Research and Development (R&D)

Adjusted R&D expenses were $477 million for the second quarter of 2015 compared to $397 million for the second quarter of 2014. The increase was primarily due to an increase in clinical trial activity across the portfolio. On a GAAP basis, R&D expenses were $1,110 million for the second quarter of 2015 and $457 million for the same period in 2014 primarily reflecting an increase in upfront collaboration expenses.

Selling, General, and Administrative (SG&A)

Adjusted SG&A expenses were $541 million for the second quarter of 2015 compared to $440 million for the second quarter of 2014. The increase was primarily due to investments in support of the global launches of OTEZLA in psoriasis and psoriatic arthritis and REVLIMID in newly diagnosed multiple myeloma. On a GAAP basis, SG&A expenses were $617 million for the second quarter of 2015 compared to $492 million for the same period in 2014. The increase in GAAP SG&A expenses also included an increase in share-based compensation expense.

Cash, Cash Equivalents, and Marketable Securities

In the second quarter of 2015, Celgene purchased approximately 7.9 million of its shares at a total cost of approximately $902 million. In June, the share repurchase authorization was increased by an additional $4.0 billion. As of June 30, 2015, the Company had approximately $5.1 billion remaining authorization under the stock repurchase program, including the additional $4.0 billion.

Operating cash flow was $284 million in the second quarter of 2015 which included $570 million of upfront payments relating to research and development collaborations. Celgene ended the quarter with approximately $7.5 billion in cash, cash equivalents and marketable securities.

2015 Adjusted EPS Guidance Raised

Total net product sales are expected to be in the range of $9.0 billion to $9.5 billion
REVLIMID net sales are expected to be in the range of $5.6 billion to $5.7 billion
ABRAXANE net sales are expected to be in the range of $1.0 billion to $1.25 billion
Adjusted diluted EPS is expected to be in the range of $4.75 to $4.85, up from the original range of $4.60 to $4.75, an increase of approximately 29% over 2014 adjusted diluted EPS
GAAP diluted EPS is expected to be in the range of $2.17 to $2.46, lowered from the original range of $2.97 to $3.19

Key Accomplishments in First Half of 2015

Hematology

Received approval for REVLIMID for the expanded use in patients newly diagnosed with multiple myeloma in the U.S. and Europe
Presented results from the Follicular Lymphoma Analysis of Surrogacy Hypothesis (FLASH) trial, co-sponsored by Celgene and Roche, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting
Presented updated overall survival results from the MM-020/IFM 07-01 FIRST trial of REVLIMID in newly diagnosed multiple myeloma (NDMM) at ASCO (Free ASCO Whitepaper) and the European Hematology Association (EHA) (Free EHA Whitepaper) annual congress
Initiated enrollment in the phase III ROBUSTTM trial with REVLIMID in diffuse large B-cell lymphoma (DLBCL)
Received approval for POMALYST in Japan for the treatment of relapsed and refractory multiple myeloma (RRMM)
Announced that accelerated approval requirements for POMALYST in the U.S. have been fulfilled and the U.S. label has been updated with overall survival results from MM-003
Announced, in collaboration with partner Acceleron Pharma, plans to initiate a phase III program with luspatercept in beta-thalassemia and myelodysplastic syndromes (MDS) by year-end 2015
Entered into a strategic collaboration with AstraZeneca/MedImmune to develop and commercialize durvalumab for hematologic malignancies and generated a clinical development plan covering multiple indications with trials to initiate by year-end

Oncology

Received approval for ABRAXANE in combination with carboplatin in Europe for first-line non-small cell lung cancer (NSCLC) in adult patients who are not candidates for potentially curative surgery and/or radiation
Collaboration partner OncoMed began enrollment in phase II trials with demcizumab in first-line advanced-stage NSCLC and pancreatic cancer
OncoMed presented data from a phase Ib trial of demcizumab in NSCLC at the European Lung Cancer conference and presented data from a phase I trial with demcizumab in pancreatic cancer and NSCLC at ASCO (Free ASCO Whitepaper)
Multiple trials with ABRAXANE in immune-oncology combinations initiated
Achieved reimbursement for ABRAXANE for pancreatic cancer and NSCLC in key European markets

Inflammation & Immunology

Received approval in Europe for OTEZLA for use in adult patients with moderate-to-severe chronic plaque psoriasis who failed to respond to or who have a contraindication to, or are intolerant to other systemic therapy including cyclosporine, methotrexate or psoralen and ultraviolet-A light and active psoriatic arthritis who have had an inadequate response or who have been intolerant to disease modifying antirheumatic drugs
Presented data from the phase III LIBERATETM (PSOR-010) trial with OTEZLA at the American Academy of Dermatology
Published data from the phase II (BCT-001) trial of OTEZLA in Behçet’s disease in The New England Journal of Medicine
Achieved the primary endpoint for PSOR-011, a trial to support registration for OTEZLA in Japan
Submitted OTEZLA for approval in Turkey for Behçet’s disease
Achieved primary endpoint in the phase III trial PSA-006 evaluating OTEZLA in TNF-alpha naïve patients
Completed enrollment in AD-001, a phase II trial of OTEZLA in atopic dermatitis
Initiated the registration-enabling endoscopy trial with GED-0301 in Crohn’s disease
Published data from a phase II trial of GED-0301 in Crohn’s disease in The New England Journal of Medicine
Presented post-hoc subgroup analysis from the phase II trial of GED-0301 in active Crohn’s disease at the Digestive Disease Week annual meeting
Received Orphan Drug Designation from the U.S. Food and Drug Administration for GED-0301 for the treatment of pediatric Crohn’s disease
Announced the signing of an agreement to acquire Receptos, Inc. for $232.00 per share, or a total of approximately $7.2 billion, net of cash acquired

Research and Early Development

Filed four Investigational New Drug (IND) applications
Initiated phase I trials with CC-90002 (anti-CD47 antibody) in multiple myeloma and solid tumors
Initiated CC-486 in phase II trials for metastatic breast cancer and nasopharyngeal cancer and a phase I trial for DLBCL
Initiated phase I trial with CC-90003 (selective ERK inhibitor) in relapsed and refractory solid tumors
Initiated phase I trial with CC-90005 (selective PKC theta inhibitor) in healthy volunteers and patients with moderate-to-severe plaque psoriasis
Exercised option to obtain an exclusive license outside the U.S. for Agios’ AG-120
Entered into a joint worldwide development and profit share agreement for Agios’ AG-881 and initiated phase I trial with AG-881 in IDH-1 and/or IDH-2 mutated hematologic malignancies and solid tumors
Announced agreement to acquire privately-held biotechnology company Quanticel Pharmaceuticals Inc.
Announced global collaboration with Lycera that includes an exclusive option to license the company’s portfolio of ex vivo
Entered into a strategic collaboration with Juno Therapeutics to develop and commercialize novel immunotherapies for the treatment of cancer and autoimmune diseases

Key Milestones Expected During the Second Half of 2015

Hematology & Oncology

Regulatory decision on REVLIMID for NDMM in Japan
Submission of REVLIMID for non-del5q MDS in the U.S. and Japan
Complete enrollment in the phase III CONTINUUM trial with REVLIMID for chronic lymphocytic leukemia
Regulatory decision in Europe on REVLIMID for relapsed and refractory mantle cell lymphoma
Opinion from the EU Committee for Medicinal Products for Human Use on VIDAZA for elderly acute myeloid leukemia (AML)
Initiate CC-122 in phase I/II trials in DLBCL
Initiate pivotal program for luspatercept in beta-thalassemia and MDS
Initiate pivotal program for AG-221 in AML with IDH-2 mutation
Inflammation & Immunology

Complete enrollment in registration-enabling endoscopy trial with GED-0301 in Crohn’s disease
Initiate enrollment in the phase III trials of GED-0301 in Crohn’s disease
Initiate enrollment in a phase II trial of GED-0301 in ulcerative colitis
Complete enrollment in a phase II trial with CC-220 in systemic lupus erythematosus
Close acquisition of Receptos

On July 23, 2015 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company, reported unaudited consolidated financial results for the second quarter and year-to-date periods ended June 30, 2015 (Filing, 8-K, AMAG Pharmaceuticals, JUL 23, 2015, View Source [SID:1234506603]). Total revenues for the second quarter of 2015 increased to $123.9 million, compared with $24.8 million in the second quarter of 2014. This increase is primarily related to the addition of Makena (hydroxyprogesterone caproate injection) in November 2014, which contributed $63.6 million in net product sales to the second quarter 2015 results, and the recognition of $39.2 million of collaboration revenue related to the termination of the company’s ex-US ferumoxytol marketing agreement. Net income on a GAAP basis totaled $33.3 million, or $0.82 per diluted share(1) for the second quarter of 2015. Non-GAAP net income, or cash earnings(2), for the second quarter of 2015 totaled $44.8 million, or $1.12 per diluted share, compared with $0.6 million, or $0.03 per diluted share, for the same period in 2014.

"We continue to deliver strong financial performance by driving product sales growth, including Makena, which grew more than 58% in the quarter compared to the same quarter last year, and by identifying and executing on new business development opportunities," said William Heiden, chief executive officer of AMAG. "We recently announced our plan to acquire Cord Blood Registry (CBR), and we also purchased an option for the rights to a development program for the treatment of severe preeclampsia, an area of significant unmet need among at-risk pregnant women. Both of these transactions further our commitment to helping pregnant women and their families and strengthens our efforts to collaborate with the maternal health community. In addition to providing future avenues of growth for AMAG, we also expect these acquisitions to add new capabilities to our organization that can be leveraged across our current and future product lines."

(1) See share count reconciliation at the conclusion of this press release.
(2) See summaries of non-GAAP adjustments to reconcile GAAP Consolidated Statements of Operations to Non-GAAP Consolidated Statements of Operations for the three and six month periods ended June 30, 2015 and 2014 at the conclusion of this press release.

2Q15 Business Highlights and Recent Developments

· Net product sales increased to $84.7 million in the second quarter of 2015, compared to $22.5 million in the corresponding period in 2014. This increase was driven by record sales of Makena in the quarter ended June 30, 2015.

· The company delivered record earnings in the second quarter of 2015, including operating income on a GAAP basis of $61.1 million, compared with $1.2 million for the same period in 2014. On a non-GAAP basis, adjusted EBITDA grew to $52.1 million, compared with $1.6 million in the second quarter of 2014(2).

· Makena achieved significant market share growth, increasing four percentage points over the first quarter of 2015 (to an estimated 32% share of patients) and continued to take share from compounded product.

· Feraheme (ferumoxytol) injection sales declined eight percent in the second quarter of 2015, as compared to the corresponding period in 2014 to $20.6 million as the company implemented label changes to the package insert in March 2015.

· The company continued to advance its lifecycle management program for Makena, including the submission of a prior approval supplement with the FDA for the manufacture of a single-dose, preservative-free formulation of Makena by Hospira, Inc., the current manufacturer of the company’s multi-dose vial.

· The company announced that it entered into a definitive agreement to acquire CBR, the world’s largest stem cell collection and storage company serving pregnant women and their families, for $700 million in cash. The transaction will further diversify AMAG’s revenue base, expand the size of its obstetrician-focused sales team, and add new consumer-directed sales and marketing capabilities. The transaction is forecasted to be immediately accretive to adjusted EBITDA and earnings and is expected to close in the third quarter of 2015.

· The company entered into an option agreement with Velo Bio, LLC (Velo), which includes an upfront payment of $10 million to acquire the global rights to an orphan drug candidate being developed for use in the treatment of severe preeclampsia in pregnant women. The option to acquire the program can be exercised at the conclusion of an upcoming Phase 2b/3a clinical study. This transaction further expands AMAG’s maternal health portfolio and advances the company’s strategy of adding differentiated products in growing specialty markets.

Second Quarter Ended June 30, 2015 Financial Results (unaudited)

Total revenues for the second quarter of 2015 were $123.9 million, compared with $24.8 million for the same period in 2014. This increase is primarily related to the addition of Makena, which contributed $63.6 million to net product sales in the second quarter, as well as the recognition of $39.2 million of collaboration revenue related to the termination of the company’s ex-US ferumoxytol marketing agreement with Takeda Pharmaceutical Company Limited (Takeda), which included cash of $5.6 million recorded as revenue during the quarter related to termination and royalty payments and the recognition of $33.6 million representing all remaining Takeda-related previously deferred revenues.

Net product sales for the second quarter of 2015 totaled $84.7 million, compared with $22.5 million in the second quarter of 2014. Sales of Makena in the second quarter of 2015 totaled $63.6 million, representing an increase of 58 percent from $40.3(3) million of Makena sales for the same period in 2014. Sales growth of Makena was driven by increasing volume, as more clinically indicated pregnant women, including those covered by commercial insurance plans as well as Medicaid, were prescribed Makena therapy to reduce their risk of preterm birth. Makena’s volume increased across all distribution channels, including compounding pharmacies that now dispense Makena instead of compounded hydroxyprogesterone caproate. The conversion of Makena compounders into distributors is our fastest growing channel and accounted for approximately 16 percent of Makena’s second quarter sales, compared with three percent in the second quarter of 2014.(3) In the company’s hematology/oncology and hospital business, Feraheme net product sales declined eight percent to $20.6 million in the second quarter of 2015, compared with $22.2 million for the same period in 2014. The decline in Feraheme sales was partially a result of recent changes to the product’s label that included adding a boxed warning. Prescription volume of Feraheme in the second quarter of 2015 increased over the first quarter of 2015 and was down slightly from the second quarter of 2014 with the market share loss partially offset by growth of the overall intravenous (IV) iron market. The company anticipates that sales of Feraheme will return to growth in the second half of the year driven by expected continued growth in the overall IV iron market and forecasted future price appreciation.

Total operating expenses, excluding cost of product sales, for the second quarter of 2015 were $43.1 million, compared with $20.8 million for the same period in 2014. The increases in operating expenses were primarily due to costs related to the Lumara acquisition and costs associated with managing the company’s expanded product portfolio. During the second quarter, the company incurred approximately $2.7 million related to certain acquisition-related costs associated with the CBR transaction announced in June 2015.

The company reported net income of $33.3 million, or $1.09 per basic share and $0.82 per diluted share(1), for the second quarter of 2015, compared with net loss of $1.5 million, or ($0.07) per basic and diluted share, for the same period in 2014. The weighted average diluted shares used in calculating diluted net income per share for the second quarter of 2015 followed the if-converted method of accounting for the convertible debt.

Non-GAAP adjusted EBITDA for the second quarter of 2015 was $52.1 million, compared with $1.6 million for the same period in 2014. After deducting cash interest expense, the company generated non-GAAP cash earnings of $44.8 million, or $1.12 per non-GAAP diluted share. The weighted average diluted shares used in calculating the non-GAAP cash earnings per diluted share for the second quarter of 2015 followed the treasury stock method of accounting for the convertible debt and related warrants.(2)

As of June 30, 2015, the company’s cash and investments totaled approximately $398.4 million and debt (face value) totaled $523.0 million.

"The second quarter momentum built off an already strong start to 2015," said Frank Thomas, president and chief operating officer of AMAG. "Our business continues to generate significant positive cash flow and earnings. We believe that the CBR transaction will allow us to further diversify our portfolio and achieve even greater financial flexibility as we pursue additional business development transactions."

Six Months Ended June 30, 2015 Financial Results (unaudited)

Net product sales for the six months ended June 30, 2015 were $162.1 million, compared with $40.0 million for the same period in 2014.

On a GAAP basis, net income for the first six months of 2015 totaled $46.2 million, compared with a net loss of $8.6 million for same period in 2014. GAAP basic earnings per share were $1.60(1), compared with ($0.40) in 2014. GAAP diluted earnings per share were $1.23, compared with ($0.40) in 2014. The weighted average diluted shares used in calculating diluted net income per share for the first half of 2015 followed the if-converted method of accounting for the convertible debt.

Non-GAAP adjusted EBITDA for the six months ended June 30, 2015 was $99.5 million, compared with a loss of $2.1 million for the same period in 2014. After deducting cash interest expense, the company generated non-GAAP cash earnings of $84.5 million, or $2.27 per non-GAAP diluted share. The weighted average diluted shares used in calculating the non-GAAP cash earnings per diluted share followed the treasury stock method of accounting for the convertible debt and related warrants.(2)

Updating 2015 Financial Outlook

The company is updating its 2015 guidance to reflect the business performance for the first half of 2015 and the outlook for the business for the remainder of 2015, including expectations of continued strong management of operating expenses. The guidance below does not include any expected revenue or expenses related to the acquisition of CBR, which is expected to close in the third quarter of 2015 and be immediately accretive to adjusted EBITDA and cash earnings, or the impact of the option agreement with Velo. The company will provide further guidance for the combined business later this year.

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!

Conference Call and Webcast Access

AMAG Pharmaceuticals, Inc. will host a conference call and webcast with slides today at 8:00 a.m. ET, during which management will discuss the company’s financial results and growth prospects. To access the conference call via telephone, please dial (877) 412-6083 from the United States or (702) 495-1202 for international access. A telephone replay will be available from approximately 11:00 a.m. ET on July 23, 2015 through midnight on July 30, 2015. To access a replay of the conference call, dial (855) 859-2056 from the United States or (404) 537-3406 for international access. The pass code for the live call and the replay is 81280898.

The call will be webcast with slides and accessible through the Investors section of the company’s website at www.amagpharma.com. The webcast replay will be available from approximately 11:00 a.m. ET on July 23, 2015 through midnight on August 21, 2015.

Use of Non-GAAP Financial Measures

AMAG has presented certain non-GAAP financial measures, including non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization), non-GAAP net income or cash earnings and non-GAAP diluted earnings per share. These non-GAAP financial measures exclude certain amounts, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of AMAG’s operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

Summary:

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!

2015 Second Quarter Results

Total Revenue $2.7 billion; an increase of 34% over the prior year
Excluding negative impact of foreign exchange ($173 million) and the contribution of Salix ($313 million), revenue increased 27% over the prior year
Same Store Sales Organic Growth was 19%, driven by:
U.S. businesses, driven by the strength of dermatology, contact lenses, dental and Obagi
Emerging markets including China, the Middle East/North Africa, and Russia
GAAP EPS Loss of $0.15; Cash EPS $2.56
Excluding negative impact of foreign exchange ($0.13) and the negative contribution of Salix ($0.04) , Cash EPS would have been $2.73, a growth rate of 43%
GAAP Operating Cash Flow $411 million; Adjusted Operating Cash Flow $773 million
Excluding Salix, GAAP Operating Cash Flow $714 million
Salix Revenue was $313 million
Strong Xifaxan script uptake following IBS-D approval
Salix wholesaler inventory levels reduced from 4-5 months to 3-3.5 months

Continued Progress of R&D pipeline

New Drug Application (NDA) submitted for RELISTOR (methylnaltrexone bromide) Tablets
NDA submitted for VESNEO (latanoprostene bunod ophthalmic solution) 0.024%

Full Year 2015 Guidance Update

Increasing 2015 Total Revenue to $10.7 – $11.1 billion up from $10.4 – $10.6 billion
Salix revenue expected to be ~$1.2 billion
Increasing 2015 Cash EPS to $11.50 – $11.80 per share up from $10.90 – $11.20 to reflect continued business outperformance and approval of IBS-D indication for Xifaxan
Increasing Adjusted Cash Flow from Operations to greater than $3.2 billion, up from greater than $3.1 billion
Expect Same Store Sales Organic Growth of >10% for second half of 2015

Third Quarter 2015 Guidance

Total Revenue $2.6 – $2.8 billion
Cash EPS $2.60 – $2.70 per share

Fourth Quarter 2015 Guidance

Total Revenue $3.2 – $3.4 billion
Cash EPS $3.98 – $4.18 per share

On July 23, 2015 Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) reported second quarter financial results for 2015(Press release, Valeant, JUL 23, 2015, http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-Pharmaceuticals-Reports-Second-Quarter-2015-Financial-Results/default.aspx [SID:1234506602]) .

"We once again exceeded our guidance and delivered our fourth consecutive quarter of greater than 15% organic growth," stated J. Michael Pearson, chairman and chief executive officer. "Our strong second quarter results were driven by outperformance in our U.S. businesses, strong results in certain emerging markets and outstanding starts to both the Salix and Dendreon acquisitions. In addition, we have signed eight new transactions so far this year and have realized several significant R&D milestones, including the approval of Xifaxan for IBS-D and the NDA submissions for Vesneo and Relistor Oral. As a result, we feel confident in raising our guidance for the remainder of 2015."