On October 25, 2016 Baxter International Inc. (NYSE:BAX) reported results for the third quarter of 2016, and increased its earnings per share outlook for full-year 2016. Baxter’s third quarter worldwide sales totaled $2.6 billion, an increase of 3 percent on a reported basis and 4 percent on a constant currency basis as compared to the prior-year period (Press release, Baxter, OCT 25, 2016, View Source [SID1234515982]).

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"We are pleased with the continued strength across our core franchises as well as our improved financial performance, both of which are reflected in our third quarter results," said José (Joe) E. Almeida. "Given this progress, we are intensifying our focus on portfolio management and innovation to accelerate our efforts to introduce new products and therapies."

Financial Results

During the quarter, Baxter reported income from continuing operations of $127 million, or $0.23 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis. These results included net after-tax special items totaling $184 million, primarily related to business optimization initiatives, intangible asset amortization, debt extinguishment and Baxalta related spin-off costs.

On an adjusted basis, excluding special items, Baxter’s third quarter income from continuing operations totaled $311 million, or $0.56 per diluted share, exceeding the company’s previously-issued guidance of $0.43 to $0.45 per diluted share.

Baxter’s worldwide sales totaled $2.6 billion in the third quarter, an increase of 3 percent on a reported basis and 4 percent on a constant currency basis as compared to the prior-year period. Sales within the U.S. were $1.1 billion, advancing 6 percent, while international sales totaled $1.5 billion, representing a 1 percent increase on a reported basis, and an increase of 3 percent on a constant currency basis. Adjusting for the impact of foreign exchange, generic competition for cyclophosphamide, and 2015 PROTOPAM orders, Baxter’s sales increased 12 percent in the U.S. and rose 6 percent globally in the third quarter.

By business, Hospital Products sales of $1.6 billion in the third quarter increased 2 percent on a reported basis and 3 percent on a constant currency basis. Adjusting for the impact of foreign exchange, cyclophosphamide and PROTOPAM, Hospital Products sales advanced 7 percent from the prior-year period. Hospital Products performance in the quarter benefited from strong sales across the portfolio, driven by increased demand and favorable pricing in the U.S. for the company’s IV solutions, nutritional therapies, pharmacy injectables and IV access administration sets. Strength internationally in the company’s hospital pharmacy compounding services and cytotoxic contract manufacturing business also contributed to growth in the quarter.

Baxter’s Renal sales totaled $977 million in the third quarter, representing a 4 percent increase on a reported basis, and a 6 percent increase on a constant currency basis. Growth was driven by strong sales of peritoneal dialysis products as well as increased demand globally for continuous renal replacement therapies. Contributing to growth in the quarter were the recent launches of Baxter’s new Automated Peritoneal Dialysis (APD) systems, AMIA in the U.S. and HOMECHOICE CLARIA outside the U.S. Both of these systems utilize Baxter’s SHARESOURCE Connectivity Platform, which is the first and only two-way, remote patient management system for home dialysis therapy globally.

Financial Outlook

Based on the company’s strong performance in the first three quarters of the year, Baxter is raising its financial outlook for full-year 2016 including sales growth of approximately 2 percent on a reported basis or 4 percent on a constant currency basis, and earnings from continuing operations, before special items, of $1.88 to $1.91 per diluted share for the full year. Previous guidance called for reported sales of 1 to 2 percent (or 3 to 4 percent constant currency) and earnings of $1.69 to $1.74 per diluted share.

For the fourth quarter, the company expects sales growth of approximately 2 percent on both a reported and constant currency basis. Baxter expects earnings from continuing operations, before special items, of $0.49 to $0.52 per diluted share for the fourth quarter of 2016.

The earnings per share guidance for the fourth quarter and full-year 2016 excludes $0.05 and $0.22, respectively, per diluted share of intangible asset amortization expense; an estimated $0.01 and $0.07, respectively, per diluted share of Baxalta separation-related expense activities; an estimated $0.07 and $0.51, respectively, per diluted share of business optimization charges; and $7.84 per diluted share of asset impairment, debt extinguishment loss, product related reserve adjustments, and Baxalta retained stake gains for full-year 2016. These estimates are based on information reasonably available at the time of this release and future events or new information may result in different actual results. Reconciling for the inclusion of these items results in GAAP earnings of $0.36 to $0.39 per diluted share for the fourth quarter of 2016, and $8.92 to $8.95 per diluted share for full-year 2016.

A webcast of Baxter’s third quarter conference call for investors can be accessed live from a link on the company’s website at www.baxter.com beginning at 7:30 a.m. CDT on October 25, 2016.
Please see www.baxter.com for more information regarding this and future investor events and webcasts.

Baxter provides a broad portfolio of essential renal and hospital products, including home, acute and in-center dialysis; sterile IV solutions; infusion systems and devices; parenteral nutrition; biosurgery products and anesthetics; and pharmacy automation, software and services. The company’s global footprint and the critical nature of its products and services play a key role in expanding access to healthcare in emerging and developed countries. Baxter’s employees worldwide are building upon the company’s rich heritage of medical breakthroughs to advance the next generation of healthcare innovations that enable patient care.

A Single Arm, Open-Label, Multi-Centre, Phase I/II Study Evaluating the Safety and Clinical Activity of AUTO2, a CAR T Cell Treatment Targeting BCMA and TACI, in Patients with Relapsed or Refractory Multiple Myeloma

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On October 25, 2016 Array BioPharma (NASDAQ: ARRY) and Pierre Fabre reported that results from the Phase 3 COLUMBUS trial of binimetinib and encorafenib in BRAF-mutant melanoma will be presented at the 2016 Society for Melanoma Research (SMR) Annual Congress in Boston, Massachusetts on November 9 (Press release, Array BioPharma, OCT 25, 2016, View Source;p=RssLanding&cat=news&id=2215774 [SID1234515994]). Findings from COLUMBUS evaluating the combination of encorafenib plus binimetinib ("combination") in patients with unresectable or metastatic BRAF-mutant melanoma will be presented as an oral, late-breaking abstract. Two data analyses from the NEMO Phase 3 trial will also be presented, which evaluated binimetinib in patients with NRAS-mutant melanoma.

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COLUMBUS TRIAL DATA

Data from the Phase 3 study will be featured as an oral presentation during the late-breaking abstract session on Wednesday, November 9 from 10:00 – 10:15 AM ET:

Abstract 2617508: Results of COLUMBUS Part 1: A Phase 3 Trial of Encorafenib (ENCO) Plus Binimetinib (BINI) Versus Vemurafenib (VEM) or ENCO in BRAF-Mutant Melanoma
Presenter: Keith T. Flaherty, M.D., Director of the Termeer Center for Targeted Therapy, Massachusetts General Hospital and Professor of Medicine, Harvard Medical School, Boston, Massachusetts
As reported in late September, 577 patients were randomized 1:1:1 to receive the combination of encorafenib plus binimetinib, encorafenib alone, or vemurafenib alone. In the analysis of the primary endpoint, the median PFS for patients treated with the combination of encorafenib plus binimetinib ("combination") was 14.9 months versus 7.3 months for patients treated with vemurafenib; HR (0.54), [95% CI 0.41-0.71], p<0.001. Analysis of a secondary endpoint comparing the PFS of patients treated with combination to patients treated with encorafenib showed a median of 14.9 months versus 9.6 months with HR (0.75), [95% CI 0.56-1.00], p=0.051, which did not reach statistical significance. The combination was generally well-tolerated and reported adverse events were overall consistent with previous combination encorafenib plus binimetinib clinical trial results in BRAF-mutant melanoma patients.

ARRAY BIOPHARMA INVESTOR RECEPTION

Array will be hosting an investor reception immediately following the conclusion of SMR. The event will be held on Wednesday, November 9 from 1 – 3 pm ET in Boston and will include an encore presentation of the COLUMBUS results by Dr. Flaherty at 1 pm ET. The public is welcome to participate in the presentation through a webcast (live and replay): View Source

For questions regarding the reception, please contact Melissa Green/ConferenceSource at 303-325-8800 or [email protected].

About Metastatic Melanoma
Melanoma is the fifth most common cancer among men and the seventh most common cancer among women in the United States, with more than 76,000 new cases and over 10,000 deaths from the disease expected in 2016. Novel therapies that target the RAS/RAF/MEK/ERK pathway have a strong scientific rationale for activity in advanced melanoma, as up to 50 percent of patients with metastatic melanoma have activating BRAF mutations, the most common gene mutation in this patient population. Activating NRAS mutations are present in up to 20 percent of patients with metastatic melanoma, and is a poor prognostic indicator for these patients.

About Binimetinib & Encorafenib
MEK and BRAF are key protein kinases in the MAPK signaling pathway (RAS-RAF-MEK-ERK). Research has shown this pathway regulates several key cellular activities including proliferation, differentiation, survival and angiogenesis. Inappropriate activation of proteins in this pathway has been shown to occur in many cancers, such as melanoma, colorectal and thyroid cancers. Binimetinib is a late-stage small molecule MEK inhibitor and encorafenib is a late-stage small molecule BRAF inhibitor, both of which target key enzymes in this pathway.

Binimetinib and encorafenib are being studied in clinical trials in advanced cancer patients, including the recently initiated Phase 3 BEACON CRC trial that is evaluating encorafenib in combination with cetuximab with or without binimetinib in patients with BRAF V600E-mutant colorectal cancer. Array submitted a New Drug Application (NDA) for binimetinib in NRAS-mutant melanoma to the FDA at the end of June 2016. The FDA accepted the NDA with a target action date under the Prescription Drug User Fee Act (PDUFA) of June 30, 2017. Array also expects to submit an NDA for binimetinib and encorafenib in BRAF-mutant melanoma to the FDA in 2017.

Array BioPharma retains exclusive rights to binimetinib and encorafenib in key markets including the U.S., Japan, Canada, Korea and Israel. Pierre Fabre will have exclusive rights to commercialize both products in all other countries, including Europe, Asia and Latin America.

On October 24, 2016 Cellectar Biosciences, Inc. (Nasdaq:CLRB) (the "company"), an oncology-focused, clinical stage biotechnology company, reported that it will be presenting data from its Phase 1 clinical trial of CLR 131 in relapsed or refractory multiple myeloma at a poster session of the American Society of Hematology (ASH) (Free ASH Whitepaper) Meeting and Exposition in San Diego (Press release, Cellectar Biosciences, OCT 24, 2016, View Source [SID1234515977]).

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Poster: #4485, "Phase 1, Open-Label, Dose Escalation Study of I-131-CLR1404 in Patients with Relapsed or Refractory Multiple Myeloma (RRMM)"
Presenter: Sikander Ailawadhi, MD, vice chair, clinical practice, Division of Hematology/Oncology, Department of Medicine at the Mayo Clinic, Florida,
Session/Date/Time: #653 — "Myeloma: Therapy, Excluding Transplantation,"
December 5, 2016, 6:00pm — 8:00pm PT
Location: San Diego Convention Center in Hall GH

"The ASH (Free ASH Whitepaper) conference is an important and prestigious event that provides a unique opportunity to share some of the encouraging data from our ongoing Phase 1 study of CLR 131 for the treatment of relapsing or refractory multiple myeloma," said Jim Caruso, president and CEO of Cellectar Biosciences. "Relapse/refractory multiple myeloma is a difficult to manage hematologic cancer that continues to require new therapeutic approaches and CLR 131 potentially offers patients a novel treatment alternative."

Abstracts are expected to be available at www.hematology.org on November 3, 2016 at 9:00 AM ET. In addition, the abstracts will be published online in the December 3, 2016 supplemental volume of Blood.

About CLR 131
CLR 131 is an investigational compound under development for a range of hematologic malignancies. It is currently being evaluated in a Phase I clinical trial in patients with relapsed or refractory multiple myeloma. The company plans to initiate a Phase II clinical study to assess efficacy in a range of B-cell malignancies in the first half of 2017. Based upon pre-clinical and interim Phase I study data, treatment with CLR 131 provides patients with a novel approach to treating hematological diseases and may provide patients with an improvement in progression-free survival and overall quality of life. CLR 131 utilizes the company’s patented PDC tumor targeting delivery platform to deliver a cytotoxic radioisotope, iodine-131 directly to tumor cells. The FDA has granted Cellectar an orphan drug designation for CLR 131.

About Phospholipid Drug Conjugates (PDCs)
Cellectar’s product candidates are built upon its patented cancer cell-targeting delivery and retention platform of optimized phospholipid ether-drug conjugates (PDCs). Its phospholipid ether (PLE) carrier platform was deliberately designed to be coupled with a variety of payloads to facilitate both therapeutic and diagnostic applications. The basis for selective tumor targeting of our PDC compounds lies in the differences between the plasma membranes of cancer cells compared to those of normal cells. Cancer cell membranes are highly enriched in lipid rafts, which are glycolipoprotein microdomains of the plasma membrane of cells that contain high concentrations of cholesterol and sphingolipids, and serve to organize cell surface and intracellular signaling molecules. PDCs have been tested in over 70 different xenograft models of cancer.

About Relapsed or Refractory Multiple Myeloma
Multiple myeloma is the second most common blood or hematologic cancer with approximately 30,000 new cases in the United States every year. It affects a specific type of blood cells known as plasma cells. Plasma cells are white blood cells that produce antibodies to help fight infections. While treatable for a time, multiple myeloma is incurable and almost all patients will relapse or the cancer will become resistant/refractory to current therapies.

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on November 15, 2013, CTI BioPharma Corp. (the "Company") entered into a Development, Commercialization and License Agreement (as amended, the "License Agreement") with Baxter International Inc., Baxter Healthcare Corporation and Baxter Healthcare SA (collectively, "Baxter") on November 14, 2013 (Filing, 8-K, CTI BioPharma, OCT 24, 2016, View Source [SID1234516747]). Baxalta Incorporated and its affiliates (collectively, "Baxalta") were assigned Baxter’s rights and obligations under the License Agreement. Pursuant to the License Agreement, among other things, the Company granted to Baxalta, as successor to Baxter, a license with respect to pacritinib, Baxalta and the Company agreed to collaborate as to the development and commercialization of pacritinib, and the Company obtained the contingent right to receive certain milestone and royalty payments. As previously disclosed in a Current Report on Form 8-K filed with the SEC on June 9, 2015, the License Agreement was amended on June 5, 2015. Baxalta was subsequently acquired by Shire plc ("Shire"). As of June 3, 2016, Shire beneficially owned approximately 5.5% of the Company’s common stock.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on September 19, 2016, on September 19, 2016, the Company entered into a letter agreement (the "First Letter Agreement") amending the License Agreement. The First Letter Agreement provided that if the Company and Baxalta were unable to negotiate and execute within 30 days (the "Letter Agreement Deadline") a definitive agreement reflecting the terms contained within the non-binding term sheet agreed to between the parties on September 19, 2016 (the "Term Sheet") regarding the termination of the License Agreement and the return of the asset, then for purposes of computing any applicable termination periods and deadlines under Section 15.2 of the License Agreement, September 13, 2016 would have been deemed the effective date of the notice of termination of the License Agreement received by the Company from Baxalta on September 13, 2016. On October 19, 2016, the Company and Baxalta entered into a letter agreement (the "Second Letter Agreement") extending the Letter Agreement Deadline to 5:00pm Eastern Time on October 21, 2016.
Prior to the Letter Agreement Deadline, on October 21, 2016, the Company and Baxalta entered into an Asset Return and Termination Agreement (the "Termination Agreement"). Pursuant to the Termination Agreement, the Company has reacquired worldwide rights for the development and commercialization of pacritinib, and the License Agreement has been terminated in its entirety, provided that certain customary provisions in the License Agreement, including those pertaining to confidentiality and indemnification, survive termination. In addition, Baxalta will pay to the Company a one-time cash payment in the amount of approximately $10.3 million as reimbursement for certain expenses incurred or to be incurred.
The Company in exchange has agreed to provide a one-time payment to Baxalta, upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib, in the amount of approximately $10.3 million which represents certain amounts paid by Baxalta for the benefit of the pacritinib program manufacturing efforts. The Company has also agreed not to transfer, license, sublicense or otherwise grant rights with respect to intellectual property of pacritinib unless the transferee/licensee/sublicensee agrees to be bound by the terms of the Termination Agreement. The Company has not acquired a trademark owned by Shire.
The foregoing descriptions of the Second Letter Agreement and Termination Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Second Letter Agreement and Termination Agreement, copies of which are attached hereto as Exhibit 10.1 and 10.2 and incorporated herein by reference.

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