On July 31, 2018 Hologic, Inc. (Nasdaq: HOLX) reported the Company’s financial results for the fiscal third quarter ended June 30, 2018 (Press release, Hologic, JUL 31, 2018, View Source [SID1234528280]).

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"We posted good financial results in the third quarter, with both revenue and EPS exceeding our guidance," said Steve MacMillan, Hologic’s Chairman, President and Chief Executive Officer. "Our Breast Health and international businesses continued their strong recent performance. And Surgical and Cynosure both showed sequential improvement, in line with our expectations."

Recent Highlights

Global revenue growth was driven by the Breast Health and international businesses.
Breast health revenue of $307.9 million increased 8.5%, or 7.4% in constant currency, compared to the prior year period.
International revenue, excluding the acquired Cynosure business, increased 20.2%, or 14.5% in constant currency, to $163.8 million.
Completed today the acquisition of Faxitron Bioptics, a privately-held leader in digital specimen radiography, for approximately $85 million.
Announced that Chief Financial Officer Bob McMahon will depart to join Agilent; Chief Accounting Officer Karleen Oberton promoted to CFO.
Continued to advance research and development pipeline, launching several new products; ThinPrep Integrated Imager in the United States; Panther Fusion MRSA assay in Europe; Panther Fusion respiratory assays in Canada; and TempSure Vitalia in North America.
Repurchased 2.2 million shares of common stock for $80.8 million. The Company’s Board of Directors also approved a new $500 million share repurchase plan to replace the previous authorization.

Throughout this press release, all dollar figures are in millions, except EPS. Some totals may not foot due to rounding. Unless otherwise noted, all results are compared to the corresponding prior year period. Non-GAAP results exclude certain cash and non-cash items as discussed under "Use of Non-GAAP Financial Measures." Constant currency percentage changes show current period revenue results as if the foreign exchange rates were the same as those in the prior year period.

Other Financial Highlights

U.S. revenue of $616.8 million decreased (0.3%). Total international revenue of $207.2 million increased 10.5%, or 5.5% in constant currency.
Gross margin was 52.9% on a GAAP basis, and 62.6% on a non-GAAP basis. GAAP gross margin increased 210 basis points, while non-GAAP declined 50 basis points, primarily due to geographic and product sales mix.
GAAP net income of $112.9 million increased 89.7%. Adjusted non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) was $261.7 million, an increase of 0.4%.
Total debt outstanding at the end of the quarter was $3.2 billion. The Company ended the quarter with cash and equivalents of $575.4 million, and a net leverage ratio (net debt over adjusted EBITDA) of 2.6 times.
On a trailing 12 months basis, adjusted Return on Invested Capital (ROIC) of 12.4% declined 20 basis points.
Financial Guidance for Fiscal 2018

Based on the Company’s strong performance in the fiscal third quarter, Hologic is increasing its full-year 2018 revenue guidance and raising its EPS guidance slightly at the midpoint.

Hologic’s financial guidance for the fourth quarter and full fiscal year 2018 is shown in the tables immediately below. The guidance is based on a full year non-GAAP tax rate of approximately 23%, and diluted shares outstanding of approximately 278 to 279 million for the full year. As a reminder, percentage changes versus the prior year are affected by the blood screening divestiture and the Cynosure acquisition, both of which closed in the second quarter of fiscal 2017. Constant currency guidance assumes that foreign exchange rates are the same in fiscal 2018 as in fiscal 2017. Current guidance assumes that recent foreign exchange rates persist for all of fiscal 2018.

Use of Non-GAAP Financial Measures

The Company has presented the following non-GAAP financial measures in this press release: constant currency revenues; non-GAAP gross profit; non-GAAP gross margin; non-GAAP operating expenses; non-GAAP income from operations; non-GAAP operating margin; non-GAAP interest expense; non-GAAP pre-tax income; non-GAAP tax rate; non-GAAP net margin; non-GAAP net income; non-GAAP diluted EPS; adjusted EBITDA; and adjusted ROIC. Constant currency presentations show reported period revenue results as if the foreign exchange rates were the same as those in effect in the comparable prior year period. The Company defines its non-GAAP net income, EPS, and other non-GAAP financial measures to exclude, as applicable: (i) the amortization of intangible assets; (ii) impairment of goodwill and intangible assets; (iiI) additional depreciation expense from acquired fixed assets and accelerated depreciation related to business consolidation and closure of facilities; (iv) additional expense resulting from the purchase accounting adjustment to record inventory at fair value; (v) non-cash interest expense related to amortization of the debt discount from the equity conversion option of convertible notes; (vi) restructuring and divestiture charges, facility closure and consolidation charges and costs incurred to integrate acquisitions (including retention, transaction bonuses, legal and professional consulting services) and separate divested businesses from existing operations; (vii) transaction related expenses for divestitures and acquisitions; (viii) gain on disposal of business; (ix) debt extinguishment losses and related transaction costs; (x) the unrealized (gains) losses on the mark-to-market of forward foreign currency contracts for which the Company has not elected hedge accounting; (xi) litigation settlement charges (benefits) and non-income tax related charges (benefits); (xii) other-than-temporary impairment losses on investments and realized (gains) losses resulting from the sale of investments; (xiii) the one-time discrete impact of tax reform primarily related to remeasuring net deferred tax liabilities and providing taxes for the deemed repatriation of foreign earnings (xiv) other one-time, non-recurring, unusual or infrequent charges, expenses or gains that may not be indicative of the Company’s core business results as detailed in our reconciliations of such adjustments; and (xv) income taxes related to such adjustments. The Company defines adjusted EBITDA as its non-GAAP net income plus net interest expense, income taxes, and depreciation and amortization expense included in its non-GAAP net income.

These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others.

The non-GAAP financial measures used in this press release adjust for specified items that can be highly variable or difficult to predict. The Company generally uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of Hologic’s historical operating results, comparison to competitors’ operating results and determination of management incentive compensation. These non-GAAP financial measures reflect an additional way of viewing aspects of the company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting Hologic’s business.

Because non-GAAP financial measures exclude the effect of items that increase or decrease the company’s reported results of operations, management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this release.

Future Non-GAAP Adjustments

Future GAAP EPS may be affected by changes in ongoing assumptions and judgments, and may also be affected by non-recurring, unusual or unanticipated charges, expenses or gains, which are excluded in the calculation of the Company’s non-GAAP EPS guidance as described in this press release.

Conference Call and Webcast

Hologic’s management will host a conference call at 4:30 p.m. ET today to discuss its financial results for the third quarter of fiscal 2018. Approximately 10 minutes before the call, dial 888-224-1005 (in the U.S.) or +1 323-794-2551 (international) and enter access code 9960251. A replay will be available approximately two hours after the call ends through Friday, August 24, 2018. The replay numbers are 888-203-1112 (U.S.) or +1 719-457-0820 (international), access code 9960251. The Company will also provide a live webcast of the call at View Source

On July 31, 2018 Laekna Inc., a biotechnology company headquartered in Shanghai, reported the signing of an agreement with Novartis Pharma AG for exclusive global rights to develop and commercialize two oral Novartis clinical-stage oncology assets (Press release, Laekna Therapeutics, JUL 31, 2018, View Source;article_id=32 [SID1234530438]). The candidates are oral pan-Akt kinase inhibitors. Over ten clinical Phase I/II studies for afuresertib (ASB183) and uprosertib (UPB795) have been conducted in several cancer indications including ovarian and gastric cancer, multiple myeloma, melanoma, and other indications. These trials demonstrated positive proof-of-concept results for clinical efficacy and tolerable safety profiles in cancer patients. Novartis will have an equity stake in Laekna, along with upfront and development milestone payments, and royalties on future sales. Details of the terms of the agreement were not disclosed.

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The Pten/PI3K/Akt signaling axis is one of the most critical oncogenic pathways driving cancer growth. Inhibiting this axis has been proven to be effective for many cancer patients, and early clinical results for afuresertib and uprosertib are extremely promising. Laekna has mapped out several clear registration paths for NDA approval potentially as the first in class medicine.

In 2017, Laekna struck its first deal with Novartis, acquiring global rights to develop a CYP17 inhibitor (CFG920), an oral androgen inhibitor, to treat prostate cancer. Before the in-licensing, Novartis had reported positive results from a proof-of-concept study of CFG920 in patients with metastatic castration-resistant prostate cancer.

"Novartis is a global leader in oncology drug innovation. This is the second licensing agreement between Laekna and Novartis, adding to the previous licensing of CFG920 less than a year ago", says Dr. Chris Lu, founder and CEO of Laekna. "We have demonstrated to Novartis that Laekna is a valuable collaborator with our strong commitment, experienced team and financing support from the top investment partners."

"We are dedicated to developing these products rapidly through the regulatory process and into commercialization, with the goal of ultimately benefitting patients around the world," added Amy Xie, VP Operations at Laekna.

On July 31, 2018 Neurocrine Biosciences, Inc. (NASDAQ: NBIX) reported its financial results for the quarter ended June 30, 2018, and provided an update on the launch of INGREZZA (valbenazine), the U.S. Food and Drug Administration (FDA) approval for ORILISSA (elagolix), and its clinical development programs (Press release, Neurocrine Biosciences, July 31, 2018, View Source [SID1234528000]).

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"Neurocrine is making great progress with the continued adoption of INGREZZA by physicians and patients, the recent FDA approval of ORILISSA for endometriosis, and the advancement of our clinical development programs," said Kevin Gorman, Ph.D., Chief Executive Officer of Neurocrine Biosciences. "AbbVie’s approval of ORILISSA marks the second FDA-approved drug discovered by scientists at Neurocrine and is a testament to our discovery and development capabilities. We remain committed toward our goal of having four commercial products with six indications, four years from now, to help patients with significant unmet medical needs."

Financial Results

Neurocrine reported net product sales for INGREZZA of $96.9 million for the three months ended June 30, 2018 compared to $6.3 million for the three months ended June 30, 2017. For the six months ended June 30, 2018 and 2017, Neurocrine reported net product sales for INGREZZA of $168.0 million and $6.3 million, respectively. INGREZZA was made available for commercial distribution on May 1, 2017.

For the second quarter of 2018, the Company reported a net loss of $5.9 million, or $0.07 loss per share, compared to a net loss of $60.0 million, or $0.68 loss per share, for the same period in 2017. For the six months ended June 30, 2018, the Company reported a net loss of $47.7 million, or $0.53 loss per share, compared to a net loss of $138.3 million, or $1.58 loss per share, for the same period in 2017.

Research and development (R&D) expenses were $37.0 million during the second quarter of 2018 compared to $21.9 million for the second quarter of 2017. The increase in R&D expense is principally due to the advancement of our Tourette clinical program and activity preparing for our intended opicapone New Drug Application (NDA) submission in the first half of 2019. For the six months ended June 30, 2018, R&D expenses were $85.9 million, compared to $73.8 million for the same period last year. The increase from the prior year is primarily due to the ongoing progression of our clinical pipeline, an approximately $8 million non-recurring share-based compensation charge, and a $10 million event-based payment to BIAL – Portela & CA, S.A. (BIAL) resulting from the ability to submit the opicapone NDA based on the existing clinical dataset, partially offset by a $30 million payment in 2017 to BIAL for the exclusive licensing of opicapone.

Sales, general and administrative (SG&A) expenses increased to $60.9 million for the second quarter of 2018 from $41.7 million for the second quarter of 2017. For the six months ended June 30, 2018, SG&A expenses were $119.6 million, compared to $69.7 million for the same period last year. The increase in SG&A expense for both periods is primarily due to the hiring of our sales force and commercialization activities for INGREZZA, which launched in the second quarter of 2017.

The Company’s balance sheet at June 30, 2018 reflected assets of $841.3 million, including cash, investments and receivables of $806.3 million, compared with total assets balances at March 31, 2018 and December 31, 2017 of $806.4 million and $817.6 million, respectively.

Pipeline Highlights

INGREZZA (valbenazine) Update

INGREZZA received U.S. Food and Drug Administration (FDA) approval on April 11, 2017, becoming the first medicine approved in the United States for the treatment of adults with tardive dyskinesia.

Valbenazine is being investigated in Tourette syndrome and has been granted Orphan Drug Designation by the FDA for the treatment of pediatric patients with Tourette syndrome. Orphan Drug Designation is granted by the FDA to drugs that are intended to treat rare diseases or conditions in the United States.

In the fourth quarter of 2017, the Company initiated T-Force GOLD, a Phase IIb study of valbenazine in pediatric patients with Tourette syndrome. This study is a multicenter, randomized, double-blind, placebo-controlled, parallel-group, which will evaluate the safety, tolerability, efficacy and optimized dosing of once-daily valbenazine in up to 120 pediatric patients with moderate to severe Tourette syndrome over 12 weeks of treatment. The primary endpoint of this study is the comparison of the change from baseline of the Yale Global Tic Severity Scale between placebo and active treatment groups at the end of week 12. Top-line data are expected in late 2018.

The Company also recently started T-Force PLATINUM, a double-blind, placebo-controlled, randomized withdrawal study of valbenazine in pediatric patients with Tourette syndrome. This study is designed to evaluate longer term efficacy and safety in patients who initially respond to open-label therapy with optimized doses of valbenazine. Approximately 180 patients will participate in the study with top-line data expected in late 2019.

In March 2015, the Company announced that it had entered into an exclusive collaboration and licensing agreement for the development and commercialization of INGREZZA in Japan and other select Asian markets with Mitsubishi Tanabe Pharma Corporation (MTPC). In 2017, MTPC initiated a pivotal trial of INGREZZA in Japan for the treatment of tardive dyskinesia.

ORILISSA (elagolix) Update

On July 24, 2018, AbbVie, in collaboration with Neurocrine, announced FDA approval for ORILISSA for the management of endometriosis with associated moderate to severe pain. The FDA granted priority review to ORILISSA. The FDA grants priority review designation to medicines that, if approved, would provide a significant improvement in the safety or effectiveness of treatment of a serious condition. AbbVie intends to commercialize ORILISSA in August 2018. With this FDA approval, a $40 million event-based payment will be made by AbbVie under our collaboration agreement and recognized as revenue in the third quarter of 2018.

During the first quarter of 2018, AbbVie provided positive top-line efficacy data from two Phase III studies in women with uterine fibroids. The ELARIS UF-I and UF-II studies of elagolix met all primary and ranked secondary endpoints at month six. These replicate Phase III studies were randomized, parallel, double-blind, placebo-controlled clinical trials evaluating elagolix alone or in combination with low-dose hormone (add-back) therapy in women with heavy uterine bleeding associated with uterine fibroids. The studies enrolled approximately 400 patients each for an initial six-month placebo-controlled dosing period. At the end of the six months of placebo-controlled evaluation, patients were eligible to enter an additional six-month safety extension study. The primary efficacy endpoint of the study was an assessment of the change in menstrual blood loss utilizing the alkaline hematin method comparing baseline to month six. Additional secondary efficacy endpoints were evaluated including the change in fibroid volume and hemoglobin. Bone mineral density was assessed via dual-energy x-ray absorptiometry (DEXA) scan at baseline, at the conclusion of dosing, and at six months post-dosing. Results from these studies will form the basis for an anticipated 2019 supplemental NDA submission to the FDA for the approval of elagolix in the treatment of uterine fibroids.

Opicapone Update

In February 2017, the Company entered into an exclusive licensing agreement with BIAL for the development and commercialization of opicapone in the United States and Canada. Opicapone is a once-daily, peripherally-acting, highly-selective catechol-O-methyltransferase inhibitor, being developed as an adjunct therapy to preparations of levodopa/DOPA decarboxylase inhibitors for adult patients with Parkinson’s disease and motor fluctuations. The Company met with the FDA in January and based upon the BIPARK-I and BIPARK-II pivotal Phase III studies conducted by BIAL, the FDA did not require additional Phase III trials to form an NDA submission. The Company is in the process of preparing for an NDA submission which it anticipates will occur during the first half of 2019.

Congenital Adrenal Hyperplasia (CAH) Program (NBI-74788) Update

In the second quarter of 2017, the Company successfully completed the Phase I, Investigational New Drug (IND)-opening study of NBI-74788 in healthy volunteer participants. The study was a randomized, open-label, two-period crossover study to evaluate the pharmacokinetics (PK), the effect of food on PK, and the safety of NBI-74788 in a total of 16 healthy adults.

The Company began recruitment for a Phase II, proof-of-concept study examining the PK, pharmacodynamics, and safety of NBI-74788 in adult males and females with classic, 21-hydroxylase deficiency CAH in November of 2017. The study will evaluate the relationship between NBI-74788 exposures and specific steroid hormone levels in these patients. Data are expected to be available later in 2018.

Conference Call and Webcast Today at 4:30 PM Eastern Time

Neurocrine will hold a live conference call and webcast today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants can access the live conference call by dialing 877-876-9177 (US) or 785-424-1669 (International) using the conference ID: NBIX. The call can also be accessed via the webcast through the Company’s website at View Source

About INGREZZA (valbenazine) Capsules

INGREZZA, a selective vesicular monoamine transporter 2 (VMAT2) inhibitor, is the first FDA-approved product indicated for the treatment of adults with tardive dyskinesia, a condition associated with uncontrollable, abnormal and repetitive movements of the trunk, extremities and/or face.

INGREZZA is thought to work by reducing the amount of dopamine released in a region of the brain that controls movement and motor function, helping to regulate nerve signaling in adults with tardive dyskinesia. VMAT2 is a protein in the brain that packages neurotransmitters, such as dopamine, for transport and release in presynaptic neurons. INGREZZA, developed in Neurocrine’s laboratories, is novel in that it selectively inhibits VMAT2 with no appreciable binding affinity for VMAT1, dopaminergic (including D2), serotonergic, adrenergic, histaminergic, or muscarinic receptors. Additionally, INGREZZA can be taken for the treatment of tardive dyskinesia as one capsule, once-daily, together with psychiatric medications such as antipsychotics or antidepressants.

Important Safety Information

Warnings & Precautions

Somnolence

INGREZZA can cause somnolence. Patients should not perform activities requiring mental alertness such as operating a motor vehicle or operating hazardous machinery until they know how they will be affected by INGREZZA.

QT Prolongation

INGREZZA may prolong the QT interval, although the degree of QT prolongation is not clinically significant at concentrations expected with recommended dosing. INGREZZA should be avoided in patients with congenital long QT syndrome or with arrhythmias associated with a prolonged QT interval. For patients at increased risk of a prolonged QT interval, assess the QT interval before increasing the dosage.

Adverse Reactions

The most common adverse reaction (≥5% and twice the rate of placebo) is somnolence. Other adverse reactions (≥2% and >placebo) include: anticholinergic effects, balance disorders/falls, headache, akathisia, vomiting, nausea, and arthralgia.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit MedWatch at www.fda.gov/medwatch or call 1-800-FDA-1088.

On July 31, 2018 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) reported that the company will host its second quarter 2018 investor conference call and webcast at 8:30 am ET on Tuesday, August 7, 2018 (Press release, Merrimack, JUL 31, 2018, View Source [SID1234528281]).

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The call will provide an update on Merrimack’s recent progress as well as a summary of its second quarter 2018 financial results. A press release detailing the information to be discussed on the call will be issued the morning of Tuesday, August 7, 2018. Investors and the general public are invited to listen to the call by dialing (877) 564-1301 (domestic) or (224) 357-2394 (international) five minutes prior to the start of the call and providing the passcode 6476538.

A listen-only webcast of the call will be available in the Investors section of Merrimack’s website, investors.merrimack.com, and a replay of the call will be archived there for six weeks.

Apellis Pharmaceuticals has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission .

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