CAMBREX REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS

On May 3, 2018 Cambrex Corporation (NYSE: CBM), a leading manufacturer of small molecule innovator and generic Active Pharmaceutical Ingredients (APIs), reported its results for the first quarter ended March 31, 2018 (Press release, Cambrex, MAY 3, 2018, View Source [SID1234526020]).

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Highlights

Net revenue increased 34% to $141.1 million compared to $105.0 million in the same quarter last year. Excluding the impact of adopting the new revenue standard, ASC 606 – Revenue from Contracts with Customers, net revenue decreased 1%.

GAAP Diluted EPS from continuing operations increased 14% to $0.72 per share from $0.63 per share in the same quarter last year. Excluding the impact of adopting ASC 606, Diluted EPS from continuing operations was $0.32 per share.

EBITDA increased 9% to $37.9 million compared to $34.8 million in the same quarter last year. Adjusted EBITDA, which excludes the impact of adopting ASC 606, decreased to $21.3 million from $34.8 million in the same quarter last year (see table at the end of this release).

Net cash was $187.6 million at the end of the quarter, an increase of $4.3 million during the quarter.

The Company continues to expect full year 2018 Adjusted net revenue growth, which excludes the impact of foreign currency and adoption of ASC 606, to be between -2% and 2% compared to 2017 and Adjusted EBITDA to be between $150 and $160 million. (see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).

"In the first quarter, we expanded our innovator portfolio with the addition of two new late-stage projects, both with the potential to generate more than $10 million in peak API sales. We also saw an increase in orders for generic APIs. We are committed to investing in additional manufacturing and laboratory capacity to meet growing demand, and our ongoing expansion

projects are progressing according to plan," commented Steven M. Klosk, President and Chief Executive Officer.

"Our first quarter financial performance was in line with our expectations and the outsourcing market continues to benefit from favorable market dynamics and strong fundamentals. We are confident that we will meet our financial guidance for the year."

Basis of Reporting

The Company has provided a reconciliation of GAAP amounts to adjusted (i.e. Non-GAAP) amounts at the end of this press release. Cambrex management believes that the adjusted amounts provide useful information to investors due to the magnitude and nature of certain amounts recorded in the GAAP amounts.

First Quarter 2018 Operating Results – Continuing Operations

Net revenue was $141.1 million, an increase of $36.1 million, or 34%, compared to the first quarter of 2017. Excluding a 3% favorable impact of foreign exchange compared to the first quarter of 2017, net revenue increased 31%. The increase primarily reflects higher volumes and the adoption of ASC 606, which accelerated revenue recognition for a portion of Cambrex’s portfolio, enabling revenues for certain products to be recognized over time, rather than upon delivery to the customer. Cambrex elected the modified retrospective method which did not require prior periods to be restated. Excluding the impact of adopting ASC 606, net revenue decreased 1%.

Gross margin decreased to 36% from 45% compared to the same quarter last year. The decrease was primarily driven by certain inventory charges due to batch failures, unfavorable manufacturing variances and product mix. Excluding the impact of adopting ASC 606, gross margin was 33%.

Selling, general and administrative expenses were $16.9 million, compared to $15.4 million in the same quarter last year. This increase was primarily due to certain consulting costs, foreign currency and due diligence costs related to mergers and acquisition activities.

Research and development expenses were $3.6 million, compared to $3.9 million in the same quarter last year. This decrease was primarily driven by higher absorption of expenses into inventory and cost of goods sold as a result of increased revenue generating activity, partially offset by higher personnel costs.

Operating profit was $30.4 million compared to $27.6 million in the same quarter last year. Excluding the impact of adopting ASC 606, operating profit was $13.8 million. The decrease was primarily the result of lower gross profit and higher operating expenses as described above. Adjusted EBITDA was $21.3 million compared to $34.8 million in the same quarter last year (see table at the end of this press release).

Income tax expense was $5.8 million resulting in an effective tax rate of 19% compared to $5.8 million and an effective tax rate of 22% in the same quarter last year. The favorable impact of immediately recognizing certain effects of share-based compensation was negligible in the current quarter, but significant in the prior year. The adoption of ASC 606 had a negligible impact on the effective tax rate.

Income from continuing operations was $24.2 million or $0.72 per share compared to $21.1 million or $0.63 per share in the same quarter last year. Excluding the impact of adopting ASC 606, Diluted EPS from continuing operations was $0.32 per share.

Adjusted income from continuing operations was $12.5 million or $0.37 per share, compared to $20.0 million or $0.60 per share in the same quarter last year (see table at the end of this press release).

Capital expenditures were $23.8 million and depreciation and amortization was $7.5 million compared to $12.2 million and $7.2 million, respectively, in the same quarter last year.

Net cash was $187.6 million at the end of the first quarter, an increase of $4.3 million during the quarter.

Consistent with the Company’s usual guidance practices, these financial expectations are for continuing operations and exclude the impact of any potential acquisitions, divestitures, restructuring activities, outcomes of tax disputes and the adoption of ASC 606 which became effective January 1, 2018. Adjusted net revenue growth expectations exclude the impact of foreign exchange and adoption of ASC 606. EBITDA, Adjusted EBITDA and Adjusted income from continuing operations per share for 2018 will be computed on a basis consistent with the reconciliation of the first quarter financial results in the tables at the end of this press release. Free cash flow is defined as the change in debt, net of cash during the year. Adjusted effective tax rate excludes certain effects of share-based payments that were possibly deferred under the previous guidance. The tax rate will be sensitive to the Company’s geographic mix of income, changes in the tax laws or rates within the countries in which the Company operates and the effects of certain share-based payments.

The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the Company’s Form 10-Q for first quarter 2018 is filed with the SEC.

Conference Call and Webcast

A conference call to discuss the Company’s first quarter 2018 results will begin at 8:30 a.m. Eastern Time on May 3, 2018 and can be accessed by calling 1-877-260-1479 for domestic and +1-334-323-0522 for international. Please use the passcode 5093025 and call approximately 10 minutes prior to the start time. A webcast will be available in the Investors section on the Cambrex website located at www.cambrex.com. A telephone replay of the conference call will be available through May 10, 2018 by calling 1-888-203-1112 for domestic and +1-719-457-0820 for international. Please use the passcode 5093025 to access the replay.

European Medicines Agency Validates Bristol-Myers Squibb’s Type II Variation Application for Opdivo Plus Yervoy Combination for Treatment of First-Line Metastatic Non-Small Cell Lung Cancer (NSCLC)

On May 3, 2018 Bristol-Myers Squibb Company (NYSE: BMY) reported that the European Medicines Agency (EMA) validated a type II variation application for the Opdivo (nivolumab) plus Yervoy (ipilimumab) combination for treatment in adult patients with first-line metastatic non-small cell lung cancer (NSCLC) who have tumor mutational burden (TMB) ≥10 mutations/megabase (mut/Mb) (Press release, Bristol-Myers Squibb, MAY 3, 2018, View Source [SID1234526048]). Validation of the application confirms the submission is complete and begins the EMA’s centralized review process.

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Sabine Maier, M.D., development lead, thoracic cancers, Bristol-Myers Squibb, commented, "Europe has one of the highest incidence rates of advanced lung cancer, currently accounting for 20% of all cancer deaths. The Opdivo plus low-dose Yervoy combination has the potential to offer first-line NSCLC patients with TMB ≥10 mut/Mb a chemotherapy-sparing I-O/I-O regimen. The validation of our application by the EMA is a step forward in the regulatory review process, and we will continue to work with urgency to bring precision immunotherapy to patients with lung cancer in the European Union."

The application is based on data from Part 1 of CheckMate -227, a global Phase 3 study evaluating Opdivo-based regimens versus chemotherapy in patients with first-line advanced NSCLC across squamous and non-squamous histologies. Initial results from this study were presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2018 and simultaneously published in The New England Journal of Medicine.

About CheckMate -227

CheckMate -227 is an open-label Phase 3 trial evaluating Opdivo-based regimens versus platinum-doublet chemotherapy in patients with first-line advanced non-small cell lung cancer (NSCLC) across non-squamous and squamous tumor histologies. This program is comprised of three parts:

Part 1a: Opdivo plus low-dose Yervoy or Opdivo monotherapy versus chemotherapy in patients whose tumors express PD-L1
Part 1b: Opdivo plus low-dose Yervoy or Opdivo plus chemotherapy versus chemotherapy in patients whose tumors do not express PD-L1
Part 2: Opdivo plus chemotherapy versus chemotherapy in a broad population, regardless of PD-L1 or TMB status
There are two co-primary endpoints in Part 1 for the Opdivo plus Yervoy combination (versus chemotherapy): overall survival (OS) in patients whose tumors express PD-L1 (assessed in patients enrolled in Part 1a, which is ongoing and continues to final analysis) and progression-free survival (PFS) in patients with tumor mutational burden (TMB) ≥10 mut/Mb across the PD-L1 spectrum (assessed in patients enrolled across Parts 1a and 1b). The primary endpoint in Part 2 is OS.

In Part 1 of this study, patients were randomized 1:1:1 to Opdivo 3 mg/kg every two weeks plus low-dose Yervoy 1 mg/kg every six weeks; histology-based platinum-doublet chemotherapy every three weeks for up to four cycles; and Opdivo 240 mg every two weeks (Part 1a) or Opdivo 360 mg plus histology-based platinum-doublet chemotherapy every three weeks for up to four cycles, followed by Opdivo monotherapy (Part 1b).

About Tumor Mutational Burden (TMB)

Over time, cancer cells accumulate mutations that are not seen in normal cells of the body. Tumor mutational burden, or TMB, is a quantitative biomarker that reflects the total number of mutations carried by tumor cells. Tumor cells with high TMB have higher levels of neoantigens, which are thought to help the immune system recognize tumors and incite an increase in cancer-fighting T cells and an anti-tumor response. TMB is one type of biomarker that may help predict the likelihood a patient responds to immunotherapies.

About Lung Cancer

Lung cancer is the leading cause of cancer deaths globally, resulting in nearly 1.7 million deaths each year, according to the World Health Organization. In Europe alone, lung cancer is responsible for an estimated 353,000 deaths from the disease every year – more than breast cancer, colorectal and prostate cancers combined.

Non-small cell lung cancer (NSCLC) is one of the most common types of lung cancer and accounts for approximately 85% of diagnoses. About 25% to 30% of all lung cancers are squamous cell carcinomas, and non-squamous NSCLC accounts for approximately 50% to 65% of all lung cancer diagnoses. Survival rates vary depending on the stage and type of the cancer when diagnosed.

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

At Bristol-Myers Squibb, patients are at the center of everything we do. Our vision for the future of cancer care is focused on researching and developing transformational Immuno-Oncology (I-O) medicines for hard-to-treat cancers that could potentially improve outcomes for these patients.

We are advancing the scientific understanding of I-O through our extensive portfolio of investigational compounds and approved agents. Our differentiated clinical development program is studying broad patient populations across more than 50 types of cancers with 24 clinical-stage molecules designed to target different immune system pathways. Our deep expertise and innovative clinical trial designs position us to advance I-O/I-O, I-O/chemotherapy, I-O/targeted therapies and I-O/radiation therapies across multiple tumors and potentially deliver the next wave of therapies with a sense of urgency. Through our leading translational capabilities, we are pioneering immune biology research and identifying a number of potentially predictive biomarkers, including PD-L1, TMB, MSI-H/dMMR and LAG-3, advancing the possibility of precision medicine for more patients with cancer.

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

About Opdivo

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

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

In July 2014, Opdivo was the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world. Opdivo is currently approved in more than 60 countries, including the United States, the European Union and Japan. In October 2015, the Company’s Opdivo and Yervoy combination regimen was the first Immuno-Oncology combination to receive regulatory approval for the treatment of metastatic melanoma and is currently approved in more than 50 countries, including the United States and the European Union.

U.S. FDA-APPROVED INDICATIONS FOR OPDIVO

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

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

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

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

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

OPDIVO (nivolumab), in combination with YERVOY (ipilimumab), is indicated for the treatment of patients with intermediate or poor-risk, previously untreated advanced renal cell carcinoma (RCC).

OPDIVO (nivolumab) is indicated for the treatment of adult patients with classical Hodgkin lymphoma (cHL) that has relapsed or progressed after autologous hematopoietic stem cell transplantation (HSCT) and brentuximab vedotin or after 3 or more lines of systemic therapy that includes autologous HSCT. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) with disease progression on or after platinum-based therapy.

OPDIVO (nivolumab) is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of adult and pediatric (12 years and older) patients with microsatellite instability high (MSI-H) or mismatch repair deficient (dMMR) metastatic colorectal cancer (CRC) that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of patients with hepatocellular carcinoma (HCC) who have been previously treated with sorafenib. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO (nivolumab) is indicated for the adjuvant treatment of patients with melanoma with involvement of lymph nodes or metastatic disease who have undergone complete resection.

OPDIVO (10 mg/mL) is an injection for intravenous (IV) use.

IMPORTANT SAFETY INFORMATION

WARNING: IMMUNE-MEDIATED ADVERSE REACTIONS

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

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

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

Immune-Mediated Pneumonitis

OPDIVO can cause immune-mediated pneumonitis. Fatal cases have been reported. Monitor patients for signs with radiographic imaging and for symptoms of pneumonitis. Administer corticosteroids for Grade 2 or more severe pneumonitis. Permanently discontinue for Grade 3 or 4 and withhold until resolution for Grade 2. In patients receiving OPDIVO monotherapy, fatal cases of immune-mediated pneumonitis have occurred. Immune-mediated pneumonitis occurred in 3.1% (61/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, immune-mediated pneumonitis occurred in 6% (25/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, immune-mediated pneumonitis occurred in 4.4% (24/547) of patients.

In Checkmate 205 and 039, pneumonitis, including interstitial lung disease, occurred in 6.0% (16/266) of patients receiving OPDIVO. Immune-mediated pneumonitis occurred in 4.9% (13/266) of patients receiving OPDIVO: Grade 3 (n=1) and Grade 2 (n=12).

Immune-Mediated Colitis

OPDIVO can cause immune-mediated colitis. Monitor patients for signs and symptoms of colitis. Administer corticosteroids for Grade 2 (of more than 5 days duration), 3, or 4 colitis. Withhold OPDIVO monotherapy for Grade 2 or 3 and permanently discontinue for Grade 4 or recurrent colitis upon re-initiation of OPDIVO. When administered with YERVOY, withhold OPDIVO and YERVOY for Grade 2 and permanently discontinue for Grade 3 or 4 or recurrent colitis. In patients receiving OPDIVO monotherapy, immune-mediated colitis occurred in 2.9% (58/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, immune-mediated colitis occurred in 26% (107/407) of patients including three fatal cases. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, immune-mediated colitis occurred in 10% (52/547) of patients.

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

Immune-Mediated Hepatitis

OPDIVO can cause immune-mediated hepatitis. Monitor patients for abnormal liver tests prior to and periodically during treatment. Administer corticosteroids for Grade 2 or greater transaminase elevations. For patients without HCC, withhold OPDIVO for Grade 2 and permanently discontinue OPDIVO for Grade 3 or 4. For patients with HCC, withhold OPDIVO and administer corticosteroids if AST/ALT is within normal limits at baseline and increases to >3 and up to 5 times the upper limit of normal (ULN), if AST/ALT is >1 and up to 3 times ULN at baseline and increases to >5 and up to 10 times the ULN, and if AST/ALT is >3 and up to 5 times ULN at baseline and increases to >8 and up to 10 times the ULN. Permanently discontinue OPDIVO and administer corticosteroids if AST or ALT increases to >10 times the ULN or total bilirubin increases >3 times the ULN. In patients receiving OPDIVO monotherapy, immune-mediated hepatitis occurred in 1.8% (35/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, immune-mediated hepatitis occurred in 13% (51/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, immune-mediated hepatitis occurred in 7% (38/547) of patients.

In Checkmate 040, immune-mediated hepatitis requiring systemic corticosteroids occurred in 5% (8/154) of patients receiving OPDIVO.

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

Immune-Mediated Neuropathies

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

Immune-Mediated Endocrinopathies

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

In patients receiving OPDIVO monotherapy, hypophysitis occurred in 0.6% (12/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, hypophysitis occurred in 9% (36/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, hypophysitis occurred in 4.6% (25/547) of patients In patients receiving OPDIVO monotherapy, adrenal insufficiency occurred in 1% (20/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, adrenal insufficiency occurred in 5% (21/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, adrenal insufficiency occurred in 7% (41/547) of patients. In patients receiving OPDIVO monotherapy, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 9% (171/1994) of patients. Hyperthyroidism occurred in 2.7% (54/1994) of patients receiving OPDIVO monotherapy. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 22% (89/407) of patients. Hyperthyroidism occurred in 8% (34/407) of patients receiving this dose of OPDIVO with YERVOY. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 22% (119/547) of patients. Hyperthyroidism occurred in 12% (66/547) of patients receiving this dose of OPDIVO with YERVOY. In patients receiving OPDIVO monotherapy, diabetes occurred in 0.9% (17/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, diabetes occurred in 1.5% (6/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, diabetes occurred in 2.7% (15/547) of patients.

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

Immune-Mediated Nephritis and Renal Dysfunction

OPDIVO can cause immune-mediated nephritis. Monitor patients for elevated serum creatinine prior to and periodically during treatment. Administer corticosteroids for Grades 2-4 increased serum creatinine. Withhold OPDIVO for Grade 2 or 3 and permanently discontinue for Grade 4 increased serum creatinine. In patients receiving OPDIVO monotherapy, immune-mediated nephritis and renal dysfunction occurred in 1.2% (23/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, immune-mediated nephritis and renal dysfunction occurred in 2.2% (9/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, immune-mediated nephritis and renal dysfunction occurred in 4.6% (25/547) of patients.

Immune-Mediated Skin Adverse Reactions and Dermatitis

OPDIVO can cause immune-mediated rash, including Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), some cases with fatal outcome. Administer corticosteroids for Grade 3 or 4 rash. Withhold for Grade 3 and permanently discontinue for Grade 4 rash. For symptoms or signs of SJS or TEN, withhold OPDIVO and refer the patient for specialized care for assessment and treatment; if confirmed, permanently discontinue. In patients receiving OPDIVO monotherapy, immune-mediated rash occurred in 9% (171/1994) of patients. In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg, immune-mediated rash occurred in 22.6% (92/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, immune-mediated rash occurred in 16.6% (91/547) of patients.

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

Immune-Mediated Encephalitis

OPDIVO can cause immune-mediated encephalitis. Evaluation of patients with neurologic symptoms may include, but not be limited to, consultation with a neurologist, brain MRI, and lumbar puncture. Withhold OPDIVO in patients with new-onset moderate to severe neurologic signs or symptoms and evaluate to rule out other causes. If other etiologies are ruled out, administer corticosteroids and permanently discontinue OPDIVO for immune-mediated encephalitis. In patients receiving OPDIVO monotherapy, encephalitis occurred in 0.2% (3/1994) of patients. Fatal limbic encephalitis occurred in one patient after 7.2 months of exposure despite discontinuation of OPDIVO and administration of corticosteroids. Encephalitis occurred in one patient receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg (0.2%) after 1.7 months of exposure. Encephalitis occurred in one patient receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg (0.2%) after approximately 4 months of exposure.

Other Immune-Mediated Adverse Reactions

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

If uveitis occurs in combination with other immune-mediated adverse reactions, consider a Vogt-Koyanagi-Harada-like syndrome, which has been observed in patients receiving OPDIVO and may require treatment with systemic steroids to reduce the risk of permanent vision loss.

Infusion Reactions

OPDIVO can cause severe infusion reactions, which have been reported in <1.0% of patients in clinical trials. Discontinue OPDIVO in patients with Grade 3 or 4 infusion reactions. Interrupt or slow the rate of infusion in patients with Grade 1 or 2. In patients receiving OPDIVO monotherapy as a 60-minute infusion, infusion-related reactions occurred in 6.4% (127/1994) of patients. In a separate study in which patients received OPDIVO monotherapy as a 60-minute infusion or a 30-minute infusion, infusion-related reactions occurred in 2.2% (8/368) and 2.7% (10/369) of patients, respectively. Additionally, 0.5% (2/368) and 1.4% (5/369) of patients, respectively, experienced adverse reactions within 48 hours of infusion that led to dose delay, permanent discontinuation or withholding of OPDIVO. In patients receiving OPDIVO 1 mg/kg with ipilimumab 3 mg/kg every 3 weeks, infusion-related reactions occurred in 2.5% (10/407) of patients. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg, infusion-related reactions occurred in 5.1% (28/547) of patients.

Complications of Allogeneic HSCT after OPDIVO

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

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

Embryo-Fetal Toxicity

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

Lactation

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

Serious Adverse Reactions

In Checkmate 037, serious adverse reactions occurred in 41% of patients receiving OPDIVO (n=268). Grade 3 and 4 adverse reactions occurred in 42% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions reported in 2% to <5% of patients receiving OPDIVO were abdominal pain, hyponatremia, increased aspartate aminotransferase, and increased lipase. In Checkmate 066, serious adverse reactions occurred in 36% of patients receiving OPDIVO (n=206). Grade 3 and 4 adverse reactions occurred in 41% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of patients receiving OPDIVO were gamma-glutamyltransferase increase (3.9%) and diarrhea (3.4%). In Checkmate 067, serious adverse reactions (73% and 37%), adverse reactions leading to permanent discontinuation (43% and 14%) or to dosing delays (55% and 28%), and Grade 3 or 4 adverse reactions (72% and 44%) all occurred more frequently in the OPDIVO plus YERVOY arm (n=313) relative to the OPDIVO arm (n=313). The most frequent (≥10%) serious adverse reactions in the OPDIVO plus YERVOY arm and the OPDIVO arm, respectively, were diarrhea (13% and 2.6%), colitis (10% and 1.6%), and pyrexia (10% and 0.6%). In Checkmate 017 and 057, serious adverse reactions occurred in 46% of patients receiving OPDIVO (n=418). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, pulmonary embolism, dyspnea, pyrexia, pleural effusion, pneumonitis, and respiratory failure. In Checkmate 025, serious adverse reactions occurred in 47% of patients receiving OPDIVO (n=406). The most frequent serious adverse reactions reported in ≥2% of patients were acute kidney injury, pleural effusion, pneumonia, diarrhea, and hypercalcemia. In Checkmate 214, serious adverse reactions occurred in 59% of patients receiving OPDIVO plus YERVOY and in 43% of patients receiving sunitinib. The most frequent serious adverse reactions reported in at least 2% of patients were diarrhea, pyrexia, pneumonia, pneumonitis, hypophysitis, acute kidney injury, dyspnea, adrenal insufficiency, and colitis; in patients treated with sunitinib, they were pneumonia, pleural effusion, and dyspnea. In Checkmate 205 and 039, adverse reactions leading to discontinuation occurred in 7% and dose delays due to adverse reactions occurred in 34% of patients (n=266). Serious adverse reactions occurred in 26% of patients. The most frequent serious adverse reactions reported in ≥1% of patients were pneumonia, infusion-related reaction, pyrexia, colitis or diarrhea, pleural effusion, pneumonitis, and rash. Eleven patients died from causes other than disease progression: 3 from adverse reactions within 30 days of the last OPDIVO dose, 2 from infection 8 to 9 months after completing OPDIVO, and 6 from complications of allogeneic HSCT. In Checkmate 141, serious adverse reactions occurred in 49% of patients receiving OPDIVO (n=236). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, dyspnea, respiratory failure, respiratory tract infection, and sepsis. In Checkmate 275, serious adverse reactions occurred in 54% of patients receiving OPDIVO (n=270). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were urinary tract infection, sepsis, diarrhea, small intestine obstruction, and general physical health deterioration. In Checkmate 040, serious adverse reactions occurred in 49% of patients (n=154). The most frequent serious adverse reactions reported in at least 2% of patients were pyrexia, ascites, back pain, general physical health deterioration, abdominal pain, and pneumonia. In Checkmate 238, Grade 3 or 4 adverse reactions occurred in 25% of OPDIVO-treated patients (n=452). The most frequent Grade 3 and 4 adverse reactions reported in at least 2% of OPDIVO-treated patients were diarrhea and increased lipase and amylase. Serious adverse reactions occurred in 18% of OPDIVO-treated patients.

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO (n=268) was rash (21%). In Checkmate 066, the most common adverse reactions (≥20%) reported with OPDIVO (n=206) vs dacarbazine (n=205) were fatigue (49% vs 39%), musculoskeletal pain (32% vs 25%), rash (28% vs 12%), and pruritus (23% vs 12%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO plus YERVOY arm (n=313) were fatigue (59%), rash (53%), diarrhea (52%), nausea (40%), pyrexia (37%), vomiting (28%), and dyspnea (20%). The most common (≥20%) adverse reactions in the OPDIVO (n=313) arm were fatigue (53%), rash (40%), diarrhea (31%), and nausea (28%). In Checkmate 017 and 057, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=418) were fatigue, musculoskeletal pain, cough, dyspnea, and decreased appetite. In Checkmate 025, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=406) vs everolimus (n=397) were fatigue (56% vs 57%), cough (34% vs 38%), nausea (28% vs 29%), rash (28% vs 36%), dyspnea (27% vs 31%), diarrhea (25% vs 32%), constipation (23% vs 18%), decreased appetite (23% vs 30%), back pain (21% vs 16%), and arthralgia (20% vs 14%). In Checkmate 214, the most common adverse reactions (≥20%) reported in patients treated with OPDIVO plus YERVOY (n=547) vs sunitinib (n=535) were fatigue (58% vs 69%), rash (39% vs 25%), diarrhea (38% vs 58%), musculoskeletal pain (37% vs 40%), pruritus (33% vs 11%), nausea (30% vs 43%), cough (28% vs 25%), pyrexia (25% vs 17%), arthralgia (23% vs 16%), and decreased appetite (21% vs 29%). In Checkmate 205 and 039, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=266) were upper respiratory tract infection (44%), fatigue (39%), cough (36%), diarrhea (33%), pyrexia (29%), musculoskeletal pain (26%), rash (24%), nausea (20%) and pruritus (20%). In Checkmate 141, the most common adverse reactions (≥10%) in patients receiving OPDIVO (n=236) were cough and dyspnea at a higher incidence than investigator’s choice. In Checkmate 275, the most common adverse reactions (≥ 20%) reported in patients receiving OPDIVO (n=270) were fatigue (46%), musculoskeletal pain (30%), nausea (22%), and decreased appetite (22%). In Checkmate 040, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=154) were fatigue (38%), musculoskeletal pain (36%), abdominal pain (34%), pruritus (27%), diarrhea (27%), rash (26%), cough (23%), and decreased appetite (22%). In Checkmate 238, the most common adverse reactions (≥20%) reported in OPDIVO-treated patients (n=452) vs ipilimumab-treated patients (n=453) were fatigue (57% vs 55%), diarrhea (37% vs 55%), rash (35% vs 47%), musculoskeletal pain (32% vs 27%), pruritus (28% vs 37%), headache (23% vs 31%), nausea (23% vs 28%), upper respiratory infection (22% vs 15%), and abdominal pain (21% vs 23%). The most common immune-mediated adverse reactions were rash (16%), diarrhea/colitis (6%), and hepatitis (3%). The most common adverse reactions (≥20%) in patients who received OPDIVO as a single agent were fatigue, rash, musculoskeletal pain, pruritus, diarrhea, nausea, asthenia, cough, dyspnea, constipation, decreased appetite, back pain, arthralgia, upper respiratory tract infection, pyrexia, headache, and abdominal pain.

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

Checkmate Trials and Patient Populations

Checkmate 067–advanced melanoma alone or in combination with YERVOY (ipilimumab); Checkmate 037 and 066–advanced melanoma; Checkmate 017–squamous non-small cell lung cancer (NSCLC); Checkmate 057–non-squamous NSCLC; Checkmate 025–renal cell carcinoma; Checkmate 205/039–classical Hodgkin lymphoma; Checkmate 141–squamous cell carcinoma of the head and neck; Checkmate 275–urothelial carcinoma; Checkmate 040–hepatocellular carcinoma, Checkmate 238–adjuvant treatment of melanoma.

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

About the Bristol-Myers Squibb and Ono Pharmaceutical Co., Ltd. Collaboration

In 2011, through a collaboration agreement with Ono Pharmaceutical Co., Ltd. (Ono), Bristol-Myers Squibb expanded its territorial rights to develop and commercialize Opdivo globally except in Japan, South Korea and Taiwan, where Ono had retained all rights to the compound at the time. On July 23, 2014, Bristol-Myers Squibb and Ono further expanded the companies’ strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies – as single agents and combination regimens – for patients with cancer in Japan, South Korea and Taiwan

Iovance Biotherapeutics to Host First Quarter 2018 Financial Results Conference Call and Webcast on Thursday, May 10, 2018

On May 3, 2018 Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), a biotechnology company developing novel cancer immunotherapies based on tumor-infiltrating lymphocyte (TIL) technology, reported that it will report its first quarter 2018 financial and operating results on Thursday, May 10, 2018 (Press release, Iovance Biotherapeutics, MAY 3, 2018, View Source;p=RssLanding&cat=news&id=2346765 [SID1234526075]). Management will host a conference call and live audio webcast to discuss these results and provide a corporate update at 4:30 p.m. ET.

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!

In order to participate in the conference call, please dial 1-844-646-4465 (domestic) or 1-615-247-0257 (international) and reference the access code 2995797. The live webcast can be accessed under "News & Events" in the "Investors" section of the Company’s website at View Source or you may use the link: View Source

A replay of the call will be available from May 10, 2018 at 7:30 p.m. ET to May 17, 2018 at 8:30 p.m. ET. To access the replay, please dial 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and reference the access code 2995797. The archived webcast will be available for thirty days in the Investors section of Iovance Biotherapeutics’ website at View Source.

Teva Reports First Quarter 2018 Financial Results

On May 3, 2018 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA, TASE: TEVA) reported results for the quarter ended March 31, 2018 (Press release, Teva, MAY 3, 2018, View Source;p=RssLanding&cat=news&id=2346698 [SID1234526094]).

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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!

Mr. Kåre Schultz, Teva’s President and CEO, said "2018 is off to a solid start. Our restructuring program is proceeding well, and we are on track to meet our cost reduction targets of $1.5 billion in 2018 and $3.0 billion by the end of 2019. During this quarter, our strong cash flow allowed us to continue to reduce our outstanding debt, and together with our recent debt issuance and covenant amendment, has placed Teva on a more stable financial footing. We have also benefited this quarter from the durability of COPAXONE and a steady flow of generic launches in the U.S. Our strong first quarter performance, along with our confidence in executing the restructuring program, gives us a solid foundation to raise our guidance for the year."

First Quarter 2018 Consolidated Results

Revenues in the first quarter of 2018 were $5.1 billion, a decrease of 10%, or 15% in local currency terms, compared to the first quarter of 2017, mainly due to adverse market dynamics in the U.S. generics market, generic competition to COPAXONE and loss of revenues following our divestment of certain products and discontinuation of certain activities.

Exchange rate differences between the first quarter of 2018 and the first quarter of 2017 positively impacted our revenues by $240 million, our GAAP operating income by $37 million and our non-GAAP operating income by $46 million.

GAAP gross profit was $2.3 billion in the first quarter of 2018, down 17% compared to the first quarter of 2017. GAAP gross profit margin was 46.4% in the first quarter of 2018, compared to 50.2% in the first quarter of 2017.

Non-GAAP gross profit was $2.7 billion in the first quarter of 2018, a decline of 18% from the first quarter of 2017. Non-GAAP gross profit margin was 52.3% in the first quarter of 2018, compared to 56.9% in the first quarter of 2017. The decrease in gross profit margin, on both a GAAP and a non-GAAP basis, was mainly the result of lower profitability in our North America segment due to lower COPAXONE sales and adverse market dynamics in the U.S. generics market.

Research and Development (R&D) expenses for the first quarter of 2018 were $317 million, down 27% compared to the first quarter of 2017. R&D expenses excluding equity compensation expenses and other R&D expenses were $289 million, or 5.7% of quarterly revenues in the first quarter of 2018, compared to $420 million, or 7.4%, in the first quarter of 2017. The decrease in R&D expenses primarily resulted from pipeline optimization, project terminations, phase 3 studies that ended and related headcount reductions.

Selling and Marketing (S&M) expenses in the first quarter of 2018 were $771 million, a decrease of 20% compared to the first quarter of 2017. S&M expenses excluding amortization of purchased intangible assets and equity compensation expenses were $715 million, or 14.1% of revenues, in the first quarter of 2018, compared to $894 million, or 15.8% of revenues, in the first quarter of 2017. The decrease was mainly due to cost reduction and efficiency measures as part of the restructuring plan.

General and Administrative (G&A) expenses in the first quarter of 2018 were $329 million, a decrease of 10% compared to the first quarter of 2017. G&A expenses excluding equity compensation expenses and other items were $322 million in the first quarter of 2018, or 6.4% of quarterly revenues, compared to $353 million, or 6.2% in the first quarter of 2017. The decrease was mainly due to cost reduction and efficiency measures as part of the restructuring plan.

GAAP other income in the first quarter of 2018 was $203 million, an increase of 182% compared to $72 million in the first quarter of 2017. Non-GAAP other income in the first quarter of 2018 was $110 million, an increase of 53% compared to $72 million in the first quarter of 2017. The increase in other income was primarily the result of higher Section 8 recoveries in Canada and a $93 million net gain related to the divestment of our women’s health business, which was excluded from our non-GAAP results.

GAAP operating income in the first quarter of 2018 was $1.5 billion, compared to $895 million in the first quarter of 2017. Non-GAAP operating income in the first quarter of 2018 was $1.4 billion, a decrease of 11% compared to the first quarter of 2017. GAAP operating margin was 30.0% in the first quarter of 2018 compared to 15.8% in the first quarter of 2017. Non-GAAP operating margin was 28.3% in the first quarter of 2018 compared to 28.7% in the first quarter of 2017.

EBITDA (non-GAAP operating income, which excludes amortization and certain other items, as well as excluding depreciation expenses) was $1.6 billion in the first quarter of 2018, down 10% compared to $1.8 billion in the first quarter of 2017.

GAAP financial expenses for the first quarter of 2018 were $271 million, compared to $207 million in the first quarter of 2017. Non-GAAP financial expenses were $203 million in the first quarter of 2018, compared to $235 million in the first quarter of 2017. The decrease in our non-GAAP financial expenses was mainly due to an increased gain in our hedging and derivatives activities and lower interest expenses resulting from reduced overall debt, partially offset by an increase in interest and foreign exchange rates.

GAAP income taxes for the first quarter of 2018 were $46 million, or 4%, on pre-tax income of $1.3 billion. In the first quarter of 2017, GAAP income taxes were $54 million, or 8%, on pre-tax income of $688 million. Our tax rate for the first quarter of 2018 was mainly affected by one-time legal settlements and divestments that had a low corresponding tax effect. Non-GAAP income taxes for the first quarter of 2018 were $211 million on pre-tax non-GAAP income of $1.2 billion, for a quarterly tax rate of 17%. Non-GAAP income taxes in the first quarter of 2017 were $240 million on pre-tax non-GAAP income of $1.4 billion, for a quarterly tax rate of 17%.

GAAP net income attributable to ordinary shareholders and GAAP diluted EPS in the first quarter of 2018 were $1.1 billion and $1.03, respectively, compared to $580 million and $0.57, respectively, in the first quarter of 2017. Non-GAAP net income attributable to ordinary shareholders and non-GAAP diluted EPS in the first quarter of 2018 were $954 million and $0.94, respectively, compared to $1.1 billion and $1.06 in the first quarter of 2017.

For the first quarter of 2018, the weighted average outstanding shares for the fully diluted EPS calculation on both a GAAP and a non-GAAP basis was 1,020 million, compared to 1,017 million on a GAAP and non-GAAP basis for the first quarter of 2017. Additionally, no account was taken of the potential dilution by the mandatory convertible preferred shares, amounting to 64 million (including shares that may be issued due to unpaid dividends to date) for the three months ended March 31, 2018 and 59 million for the three months ended March 31, 2017, as well as for the convertible senior debentures for the respective periods, since both had an anti-dilutive effect on EPS.

Non-GAAP information: Net non-GAAP adjustments in the first quarter of 2018 were positive $101 million. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:

Impairments of $612 million, mainly a goodwill impairment related to Rimsa, impairment of intangible assets of product rights and IPR&D assets related to the Actavis Generics acquisition, as well as impairment for closure of manufacturing sites and other fixed assets. The impairment also includes $56 million related to a plant located in India in connection with the termination of PGT Healthcare joint venture.
Impairments of equity investments of $94 million due to termination of PGT Healthcare joint venture.
Amortization of purchased intangible assets totaling $310 million, of which $264 million is included in cost of goods sold and the remaining $46 million in S&M expenses;
Restructuring expenses of $247 million;
Financial expenses of $68 million mainly related to early redemption fees;
Other non-GAAP items of $104 million;
Divestment benefit of $93 million related to capital gain from the sales of our women health business;
Tax benefit of $165 million; and
Benefits from legal settlements of $1.3 billion mainly related to the Allergan working capital adjustments, the Rimsa settlement and the reversal of the carvedilol judgement against Teva.
Teva believes that excluding such items facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operations during the first quarter of 2018 was $1.5 billion, compared to $0.1 billion in the first quarter of 2017. The increase was mainly due to proceeds from the working capital adjustment with Allergan and the legal settlement with Rimsa, compared to payments made to the SEC and DOJ in connection with the FCPA resolution in the first quarter of 2017.

Free cash flow, excluding net capital expenditures and beneficial interest collected in exchange for securitized trade receivables, was $1.9 billion in the first quarter of 2018, compared to $0.3 billion in the first quarter of 2017. The increase was mainly due to the increase in cash flow from operations as well as lower net capital expenditures investments and higher securitized account receivables.

As of March 31, 2018, our total gross debt was $30.8 billion, compared to $32.5 billion as of December 31, 2017. The decrease was mainly due to $6.5 billion in debt prepayments, partially offset by our March 2018 issuance of an aggregate principal amount of $4.4 billion of senior notes, as well as exchange rate fluctuations. The portion of total debt classified as short-term as of March 31, 2018 was 4%, compared to 11% as of December 31, 2017.

Segment Results for the First Quarter 2018

Due to the organizational changes announced in November 2017, our financial results are now being reported under new segments. Our new reportable segments are:

a) North America segment, which includes the United States and Canada.

b) Europe segment, which includes the European Union and certain other European countries.

c) Growth Markets segment, which includes all countries other than those in our North America and Europe segments.

In addition to these three segments, we have other activities, primarily our API third party manufacturing business and certain contract manufacturing services.

Segment profit is comprised of gross profit for the segment, less R&D, S&M, G&A expenses and other income related to each segment. Segment profit does not include amortization and certain other items.

North America Segment

Our North America segment includes the United States and Canada.

The following table presents revenues, expenses and profit for our North America segment for the three months ended March 31, 2018 and 2017:

Generic products revenues in our North America segment in the first quarter of 2018 decreased by 23% to $1.1 billion, compared to the first quarter of 2017, mainly due to lower volumes and price erosion.

In the first quarter of 2018, we led the U.S. generics market in total prescriptions and new prescriptions, with approximately 584 million total prescriptions, representing 15% of total U.S. generic prescriptions according to IQVIA data.

COPAXONE revenues in our North America segment in the first quarter of 2018 decreased by 40% to $476 million compared to the first quarter of 2017, mainly due to generic competition in the United States. COPAXONE revenues in the United States were $462 million in the first quarter of 2018.

BENDEKA and TREANDA combined revenues in our North America segment in the first quarter of 2018 increased by 16% to $181 million, compared to the first quarter of 2017, mainly due to higher volumes resulting from supply stabilization.

ProAir revenues in our North America segment in the first quarter of 2018 increased by 7% to $130 million, compared to the first quarter of 2017, mainly due to higher volumes.

QVAR revenues in our North America segment in the first quarter of 2018 increased by 27% to $107 million, compared to the first quarter of 2017. We launched QVAR RediHaler in the first quarter of 2018. The increase in sales in the first quarter of 2018 was mainly due to slightly higher wholesaler stocking for all QVAR family products in connection with the launch. QVAR maintained its second-place position in the inhaled corticosteroids category in the United States.

AUSTEDO revenues in our North America segment in the first quarter of 2018 were $30 million. AUSTEDO was approved by the FDA for the treatment of chorea associated with Huntington disease and was launched in the United States in April 2017. In August 2017, the FDA approved AUSTEDO for the treatment of tardive dyskinesia.

Distribution revenues in our North America segment which are generated by Anda increased by 12% to $331 million in the first quarter of 2018, compared to the first quarter of 2017, mainly due to the severe cold, cough and influenza season in the first quarter of 2018, which increased demand for certain medicines.

North America Gross Profit

Gross profit from our North America segment in the first quarter of 2018 was $1.4 billion, a decrease of 31% compared to $2.1 billion in the first quarter of 2017. The decrease was mainly due to lower revenues from COPAXONE and generic products.

Gross profit margin for our North America segment in the first quarter of 2018 decreased to 56.6%, compared to 64.2% in the first quarter of 2017. This decrease was mainly due to lower COPAXONE revenues and continued price erosion of generic products.

North America Profit

Profit from our North America segment in the first quarter of 2018 was $915 million, a decrease of 30% compared to $1.3 billion in the first quarter of 2017. The decrease was mainly due to lower revenues due to generic competition for COPAXONE and continued price erosion in the U.S. generics market, partially offset by cost reduction and higher other income.

Europe Segment

Our Europe segment includes the European Union and certain other European countries.

Segment profit does not include amortization and certain other items. The data presented for prior periods have

been conformed to reflect the changes to our segment reporting commencing in the first quarter of 2018.

Revenues from our Europe segment in the first quarter of 2018 were $1.4 billion, an increase of $101 million or 8%, compared to the first quarter of 2017. In local currency terms, revenues decreased by 6%, mainly due to the loss of revenues from the closure of our distribution business in Hungary and the sale of our women’s health business, partially offset by new generic product launches.

Revenues by Major Products and Activities

Generic products revenues in our Europe segment in the first quarter of 2018, including OTC products, increased by 17% to $997 million, compared to the first quarter of 2017. In local currency terms, revenues increased by 2%, mainly due to new product launches and volume growth in OTC, partially offset by price reductions.

COPAXONE revenues in our Europe segment in the first quarter of 2018 increased by 1% to $153 million, compared to the first quarter of 2017. In local currency terms, revenues decreased by 13%, mainly due to price reductions resulting from the entry of generic competition.

Respiratory products revenues in our Europe segment in the first quarter of 2018 increased by 35% to $113 million, compared to the first quarter of 2017. In local currency terms, revenues increased by 18%, mainly due to the launch of BRALTUS in 2017.

Europe Gross Profit

Gross profit from our Europe segment in the first quarter of 2018 was $797 million, an increase of 9% compared to $734 million in the first quarter of 2017. The increase was mainly due to the positive impact of currency fluctuations, partially offset by the loss of revenues from the sale of our women’s health business.

Gross profit margin for our Europe segment in the first quarter of 2018 increased to 55.3%, compared to 54.7% in the first quarter of 2017. This increase was mainly due to the closure of our distribution business in Hungary, partially offset by other production costs.

Europe Profit

Profit from our Europe segment in the first quarter of 2018 was $377 million, an increase of 41% compared to $268 million in the first quarter of 2017. The increase was mainly due to higher revenues as well as cost reductions and efficiency measures as part of the restructuring plan.

Growth Markets Segment

Our Growth Markets segment includes all countries other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel.

Segment profit does not include amortization and certain other items. The data presented for prior periods have

been conformed to reflect the changes to our segment reporting commencing in the first quarter of 2018.

Revenues from our Growth Markets segment in the first quarter of 2018 were $750 million, an increase of $32 million, or 4%, compared to the first quarter of 2017. In local currency terms, revenues were flat compared to the first quarter of 2017, mainly due to higher sales in Israel, Japan and Russia, partially offset by the effect of the deconsolidation of our subsidiaries in Venezuela and the loss of revenues from the sale of our women’s health business.

Revenues by Major Products and Activities

Generic products revenues in our Growth Markets segment in the first quarter of 2018, which includes OTC products, were flat compared to the first quarter of 2017. In local currency terms, revenues decreased by 3%, mainly due to the effect of the deconsolidation of our subsidiaries in Venezuela.

COPAXONE revenues in our Growth Markets segment in the first quarter of 2018 decreased by 24% to $16 million, compared to the first quarter of 2017. In local currency terms, revenues decreased by 20%.

Distribution revenues in our Growth Markets segment in the first quarter of 2018 increased by 22%, compared to the first quarter of 2017. In local currency terms, revenues increased by 13%.

Growth Markets Gross Profit

Gross profit from our Growth Markets segment in the first quarter of 2018 was $313 million, an increase of 7% compared to $292 million in the first quarter of 2017. The increase was mainly due to higher revenues in Japan, including Azilect approval payment from Takeda, and Israel, partially offset by the deconsolidation of our subsidiaries in Venezuela and the loss of revenues from the sale of our women’s health business.

Gross profit margin for our Growth Markets segment in the first quarter of 2018 increased to 41.7%, compared to 40.7% in the first quarter of 2017. This increase was mainly due to higher gross profit in Japan, partially offset by the deconsolidation of our subsidiaries in Venezuela.

Growth Markets Profit

Profit from our Growth Markets segment in the first quarter of 2018 was $122 million, compared to $40 million in the first quarter of 2017. The increase was mainly due to higher revenues, as well as cost reductions and efficiency measures as part of the restructuring plan.

During the fourth quarter of 2017, we deconsolidated our subsidiaries in Venezuela from our financial results. Consequently, results of operations of our subsidiaries in Venezuela are not included in our financial results for the first quarter of 2018.

Other Activities

We have other sources of revenues, primarily our API manufacturing business and certain contract manufacturing services. These other activities are not included in our North America, Europe or Growth Markets segments.

Our revenues from other activities in the first quarter of 2018 decreased by 2.6% to $342 million. In local currency terms, revenues decreased by 8%, mainly due to lower API sales to third parties.

API sales to third parties in the first quarter of 2018 decreased by 9% to $179 million. In local currency terms, revenues decreased by 10%, mainly due to the timing of certain shipments in the first quarter of 2018.

R&D Pipeline Update

fremanezumab – We do not expect to receive FDA approval on our Biologics License Applications (BLA) for fremanezumab on the mid-June PDUFA date. We are engaged in a constructive dialogue with the FDA in close collaboration with our partner Celltrion, Inc. We expect an FDA pre-approval inspection to take place in the coming months and to receive FDA approval and launch before the end of 2018.

These estimates reflect management’s current expectations for Teva’s performance in 2018. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP measures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.

See "Non-GAAP Financial Measures" below.

Conference Call

Teva will host a conference call and live webcast along with a slide presentation on Thursday, May 3, 2018 at 8:00 a.m. ET to discuss its first quarter 2018 results and overall business environment. A question & answer session will follow.

In order to participate, please dial the following numbers (at least 15 minutes before the scheduled start time):

United States 1-866-254-0808

International 44 (0) 1452 541003

for a list of other international toll-free numbers, click here.

Passcode: 9496209

A live webcast of the call will also be available on Teva’s website at: www.ir.tevapharm.com. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva’s website. The replay can also be accessed until May 31, 2018, 9:00 a.m. ET by calling United States 1-866-247-4222 or International 44(0)1452550000; passcode: 9496209.

Dr Iain Frame appointed CEO of the National Cancer Research Institute

Dr Iain Frame has been appointed as the new CEO of the National Cancer Research Institute (link is external) (NCRI), (Press release, Cancer Research UK, MAY 3, 2018, View Source [SID1234526021]).

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Dr Iain Frame will take over from Dr Karen Kennedy, who is leaving the role after more than four years at the helm.

"The NCRI’s five-year strategy is clear – we want to accelerate progress in research – and I’m looking forward to working with the NCRI Partners and Executive team to ensure that we deliver." – Dr Iain Frame.
The NCRI is a UK-wide Partnership of research funders whose purpose is to improve health and quality of life by accelerating progress in cancer-related research through collaboration.

Dr Frame is currently Director of Research at Prostate Cancer UK (link is external), an NCRI Partner organisation, and is an NCRI trustee. He leads the charity’s bold and ambitious research strategy underpinning Ten Years to Tame Prostate Cancer. Iain was previously Research Director at Diabetes UK, where he advanced the quality of studies funded as well as working with the fundraising teams to help almost double the organisation’s research spend. Iain has also worked at the Wellcome Trust and before that as a researcher investigating molecular biology in parasites.

Dr Iain Frame, said: "I am delighted to be taking on the role of CEO at NCRI. With increasing technologies, big data and advances in immunotherapy, these are exciting and challenging times for cancer research. Crucially, the NCRI will be pivotal in ensuring that, by working in partnership, across different funders and different types of cancers, we can speed up the pace of discovery and, in turn, survival from the disease. The NCRI’s five-year strategy is clear – we want to accelerate progress in research – and I’m looking forward to working with the NCRI Partners and Executive team to ensure that we deliver."

Baroness Delyth Morgan, said: "The NCRI has made great strides over the last four and a half years under Karen’s direction. I would like to say an enormous thank you to her for leaving NCRI in such a strong position. Over the next four years our focus will be on working together to accelerate cancer research. We’re very excited for Iain to be joining us – the depth and breadth of experience he brings will provide the leadership necessary to ensure we deliver our goals. I very much look forward to working with him."

Dr Karen Kennedy is moving to a new role as Director of a new Strategic Partnerships Office at the University of Cambridge.

She said: "I believe passionately in the role that NCRI plays and it has been a privilege to lead the NCRI Executive over the past four and a half years. I have no doubt the fast pace of research will continue through collaboration. I would like to say thank you to all the NCRI Partners, members of the cancer research community and the consumers that I have worked alongside – it has been a pleasure to work with you all."