On February 13, 2019 Cambrex Corporation (NYSE: CBM), a leading provider of development, manufacturing, testing and technology services for small molecules, reported results for the fourth quarter and full year ended December 31, 2018 (Press release, Cambrex, FEB 13, 2019, View Source [SID1234533280]).

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Fourth Quarter 2018 Highlights

Announced the acquisition of Avista Pharma Solutions ("Avista"), an early clinical phase Contract Development, Manufacturing and Testing Organization, for approximately $252 million in total cash consideration. This transaction closed on January 2, 2019.
Net revenue was $134.3 million under current U.S. GAAP, ASC 606 ("ASC 606"). Under ASC 605, the previous revenue recognition standard, and the only standard under which fourth quarter 2017 results were reported, Net revenue increased 16% compared to the same quarter last year.
Under current U.S. GAAP, Income from continuing operations was $1.3 million and Diluted EPS was $0.04 per share. This reflects the impacts of the timing of certain tax charges related to tax reform in New Jersey. Under previous U.S. GAAP utilizing ASC 605, Income from continuing operations would have been $32.3 million and Diluted EPS from continuing operations would have been $0.96 per share compared to Income from continuing operations of $40.2 million and Diluted EPS of $1.20 in the same quarter last year. Adjusted Income from continuing operations was $48.7 million and Diluted EPS was $1.44, compared to $42.3 million and $1.26, respectively, for the same quarter last year (see table at the end of this press release).
Under ASC 606, EBITDA was $33.5 million. Adjusted EBITDA, which excludes the impact of adopting ASC 606, Halo’s results and Acquisition and Integration costs, was $70.7 million compared to $65.1 million in the same quarter last year (see table at the end of this press release).
Net debt was $204.1 million at the end of the quarter, a decrease of $23.7 million during the quarter primarily driven by cash flows from operations.
The Company expects full year 2019 Net revenue, which excludes the impact of foreign currency, to be between 21% and 25% higher than 2018 Net revenue as recorded under ASC 606 for both years. Adjusted EBITDA is expected to be between $150 and $160 million(see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).
"We’re very excited to add the early stage development and testing capabilities of Avista Pharma, which when added to the drug product capabilities of Halo Pharma, which we acquired a few months ago, and Cambrex’s legacy drug substance capabilities, makes us a leading global provider of end to end integrated services for small molecules. Combining Cambrex, Halo and Avista will allow us to follow a small molecule from pre-clinical through commercialization and leverage hundreds of new customers and molecule opportunities across a much broader services and manufacturing platform. Integration efforts are well under way with the goal of building a best-in-class fully integrated contract development and manufacturing organization," commented Steven M. Klosk, President and Chief Executive Officer of Cambrex.

"Looking forward, we continue to see strong market conditions in the sectors that we serve. This is especially true in early stage development and testing, where we expect continued strong growth, creating the potential for a large funnel of molecules for which we hope to deliver a broad range of services all the way through commercial approval."

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

Fourth Quarter 2018 Operating Results – Consolidated, Continuing Operations
Net revenue under ASC 606 was $134.3 million. Under ASC 605, the revenue recognition standard for which 2017 results were reported, Net revenue increased to $212.3 million, or 16%, from $182.3 million in the same quarter last year. Results under ASC 605 include a 2% unfavorable impact of foreign exchange compared to the fourth quarter of 2017. Net revenue during the fourth quarter of 2018 includes the acquisition of Halo, now our finished dosage form segment, which contributed revenue of $23.4 million under ASC 606 and $23.2 millionunder ASC 605. Excluding finished dosage form Net revenues, higher sales of controlled substances was the primary driver of the increase under ASC 605 compared to the same quarter last year.

Gross margin under ASC 606 was 36% for the fourth quarter of 2018. Under ASC 605, Gross margin was 41% compared to 43% in the same quarter last year. Excluding the finished dosage form segment and the unfavorable impact of foreign exchange, ASC 605 Gross margin during the quarter was 42%.

Selling, general and administrative expenses were $21.5 million, compared to $18.3 million in the same quarter last year. The increase was mainly due to higher amortization expense related to purchased intangible assets of $3.0 million within the finished dosage form segment.

Research and development expenses were $3.6 million, compared to $4.3 million in the same quarter last year. The decrease is primarily due to lower expenses related to the development of generic drug products.

Acquisition and Integration expenses of $3.4 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista. The acquisition of Avista closed on January 2, 2019.

Operating profit under ASC 606 was $19.8 million for the fourth quarter of 2018. Under ASC 605, Operating profit was $58.8 millioncompared to $56.3 million in the same quarter last year. The increase was primarily the result of higher gross profit partially offset by higher operating expenses as described above. Adjusted EBITDA was $70.7 million compared to $65.1 million in the same quarter last year (see table at the end of this press release).

Income tax expense under ASC 606 was $17.5 million resulting in an effective tax rate of 93% compared to $15.6 million and an effective tax rate of 28% in the same quarter last year. Income tax expense during the quarter reflects $11.4 million of expense primarily for a state valuation allowance due to New Jersey tax reform enacted during the fourth quarter of 2018. The fourth quarter of 2018 also includes the immediate recognition of certain effects of share-based compensation, acquisition and integration expenses, amortization of purchased intangibles, unrealized gain on investment in equity securities and the finalization of the U.S. tax reform toll charge on undistributed foreign earnings. Under ASC 605 and excluding these items, the effective tax rate would have been approximately 22% during the quarter.

Income from continuing operations under ASC 606 was $1.3 million. Under ASC 605, Income from continuing operations was $32.3 million, or $0.96 per diluted share, compared to $40.2 million, or $1.20 per diluted share, in the same quarter last year.

Adjusted Income from continuing operations, calculated under ASC 605, to be comparable to the prior year results, and including other adjustments described in the table at the end of this press release, was $48.7 million or $1.44 per share, compared to $42.3 million or $1.26per share in the same quarter last year.

Capital expenditures were $19.1 million and depreciation and amortization was $13.7 million compared to $13.9 million and $8.8 million, respectively, in the same quarter last year.

Net debt was $204.1 million at the end of the quarter, a decrease of $23.7 million during the quarter primarily driven by cash flows from operations.

As a result of the Halo acquisition in September 2018, and to be in alignment with how the business is managed, the Company’s operating segments were aggregated to form two reportable segments, Active Pharmaceutical Ingredients ("APIs") and Finished Dosage Form ("FDF"). The API segment consists of four operating segments which manufactures APIs. The FDF segment consists of one operating segment which manufactures and develops finished dosage form products.

Fourth Quarter 2018 Operating Results – Active Pharmaceutical Ingredients ("API") segment
Net revenue was $110.9 million under ASC 606. Under ASC 605, net revenue was $189.1 million compared to $182.3 in the same quarter last year, a 3.7% increase. Results under ASC 605 include a 2% unfavorable impact of foreign exchange compared to the fourth quarter of 2017. Higher sales of controlled substances was the primary driver of the increase under ASC 605 compared to the same quarter last year.

Gross profit in the fourth quarter of 2018 was $42.6 million. Under ASC 605, Gross profit would have been $81.8 million compared to $78.9 million in the same quarter last year. Gross margins decreased to 38% from 43% in the same quarter last year. Excluding the impact of the new revenue recognition standard, gross margins would have been 43%.

Selling, general and administrative ("SG&A") expenses were $10.2 million in the fourth quarter 2018, compared to $14.0 million in the same quarter last year. The decrease was mainly due to lower personnel related costs and consulting expenses.

Operating profit was $29.3 million under ASC 606 in the fourth quarter 2018. Under ASC 605, operating profit was $68.6 million compared to $61.9 in the fourth quarter 2017. The increase in operating profit under ASC 605 was due to higher gross profit and lower operating expenses.

Fourth Quarter 2018 Operating Results – Finished Dosage Form ("FDF") segment
Results on an ASC 605 basis were not materially different than the reported results under ASC 606.

FDF Net revenue in the fourth quarter of 2018 was $23.4 million under ASC 606.

Gross profit was $5.7 million and gross margin was 24% under ASC 606 in the fourth quarter of 2018.

Selling, general and administrative expenses were $5.4 million in the fourth quarter of 2018 including amortization of purchased intangibles of $3.0 million.

Acquisition and Integration expenses of $1.1 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista.

Operating loss under ASC 606 was $0.7 million. Operating loss includes $1.1 million in integration costs and approximately $3.3 million of increased depreciation and amortization expense resulting from the application of purchase accounting.

Fourth Quarter 2018 Operating Results – Corporate Headquarters
Selling, general and administrative expenses were $5.9 million in the fourth quarter of 2018 compared to $4.3 million in the same quarter last year. The increase is primarily related to higher personnel related expenses.

Acquisition and Integration expenses of $2.3 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista.

Operating loss in the fourth quarter 2018 was $8.8 million compared to $5.6 million in the same quarter last year.

Financial Expectations – Continuing Operations
The following table shows the Company’s current expectations for its full year 2019 financial performance. The expectations in the table below reflect expected results from the business including the recent acquisitions of Halo and Avista. All expectations for 2019, including growth relative to 2018, are based on actual and expected ASC 606 results for both years.

Consistent with the Company’s usual guidance practices, these financial expectations are for continuing operations and exclude the impact of any potential future acquisitions and related transaction and integration expenses, including those related to the recent acquisitions of Halo Pharma and Avista Pharma Solutions, divestitures, restructuring activities, certain tax items discussed below, and the impact of foreign currency on Net revenue.

EBITDA, Adjusted EBITDA and Adjusted Income from continuing operations per share for 2019 will be computed on a basis consistent with the reconciliation of the current quarter financial results in the tables at the end of this press release, except that all 2019 results will be on an ASC 606 basis. Free cash flow is defined as the change in debt, net of cash during the year. Adjusted effective tax rate excludes the immediate recognition of certain benefits of share-based compensation and certain other items adjusted for in the non-GAAP reconciliation tables at the end of this release.

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. Reconciliations of these measures to measures calculated in accordance with GAAP are not available without unreasonable effort due to the unavailability of certain information needed to calculate certain reconciling items, including interest expense and income tax expense.

We expect M&A and related integration expenses for 2019 to be between $9 and $11 million. These amounts are excluded from our consolidated Adjusted EBITDA and Adjusted income from continuing operations per share guidance included above. These expenses consist of approximately $4.5 million of transaction expenses paid in conjunction with our acquisition of Avista in early January and the remainder will consist of integration expenses incurred across most functional areas throughout 2019. This estimate also includes certain immediate and one-time expenses related to IT systems, but does not include costs to upgrade the two newly acquired businesses to SAP, our ERP software, which will likely happen over the course of 2019 and 2020.

Expectations above include preliminary estimates for Depreciation expense associated with purchase accounting for the Avista acquisition. We expect to finalize the purchase accounting for Avista during the first half of 2019. As a result, expected Depreciation expense and its impact on expected Adjusted Income from continuing operations per share in the table below will likely change when purchase accounting is finalized.

Refer to the tables at the end of this press release which includes items typically adjusted to arrive at the Company’s non-GAAP results.

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

Conference Call and Webcast
A conference call to discuss the Company’s fourth quarter and full year 2018 results will begin at 8:30 a.m. Eastern Time on February 13, 2019and can be accessed by calling 1-877-260-1479 for domestic and +1-334-323-0522 for international. Please use the passcode 2955208 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 February 20, 2019 by calling 1-888-203-1112 for domestic and +1-719-457-0820 for international. Please use the passcode 2955208 to access the replay.

On February 12, 2019 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the fourth quarter and full year 2018 and provided an update on progress toward fulfilling its key corporate objectives, as well as commercial and clinical development milestones (Press release, Exelixis, FEB 12, 2019, View Source [SID1234533262]).

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The company reported total revenues of $228.6 million in the fourth quarter and $853.8 million for the full year 2018. Total revenues included cabozantinib net product revenues of $176.2 million for the fourth quarter and $619.3 million for the full year 2018. Total revenues for the fourth quarter and full year 2018 also included the recognition of $29.6 million and $164.4 million, respectively, of milestones from the company’s commercial collaboration partners, Ipsen Pharma SAS (Ipsen), Takeda Pharmaceutical Company Ltd. and Daiichi Sankyo Company, Limited (Daiichi Sankyo).

The company reported GAAP net income of $360.1 million, or $1.15 per diluted share, for the fourth quarter and $690.1 million, or $2.21 per diluted share, for the full year 2018. The company reported non-GAAP net income of $116.0 million, or $0.37 per diluted share, for the fourth quarter and $446.0 million, or $1.43 per diluted share, for full year 2018. Non-GAAP net income includes the current-period income tax provision of $0.4 million for the fourth quarter and $6.1 million for the full year 2018, but excludes the non-cash income tax benefit of $244.1 million recorded during the fourth quarter 2018 related to the release of substantially all of the valuation allowance associated with the company’s deferred tax assets as of December 31, 2018.

"Exelixis achieved strong financial performance in 2018, with solid growth in cabozantinib net product revenue, total revenue, and importantly, earnings per share and cash on hand," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. "With cabozantinib now a global and growing oncology franchise, we have the resources to match our commitment to expand the opportunity for the medicine with a new wave of pivotal trials, including COSMIC-311 and COSMIC-312, and numerous additional studies we anticipate will initiate in 2019. During the past year, we also started to build out our early-stage pipeline by signing in-licensing agreements with StemSynergy Therapeutics and Invenra, and advanced our in-house discovery activities, culminating with today’s announcement of the initiation of phase 1 clinical evaluation of XL092, the first Exelixis compound to emerge from our reinitiated drug discovery operations at our new Alameda headquarters."

Dr. Morrissey continued: "This momentum has continued as we’ve headed into 2019. CABOMETYX received its latest FDA approval to treat patients with hepatocellular cancer who have received prior sorafenib, and our team is hard at work bringing this important new treatment option to patients. In addition, MINNEBRO, a Daiichi Sankyo product that was discovered through a collaboration with Exelixis, was approved in Japan to treat hypertension, providing us with yet another source of future milestone and royalty revenue. As Exelixis enters its twenty-fifth year, I’m proud to say we’ve moved through challenging times to come full circle: we are back to our research roots, paired now with our proven development and fully realized commercial engines. Our business — and commitment to improving the lives of patients with cancer — has never been stronger."

Fourth Quarter and Full Year 2018 Financial Results

Total revenues for the quarter ended December 31, 2018 were $228.6 million, compared to $120.1 million for the comparable period in 2017. Total revenues for the year ended December 31, 2018 were $853.8 million, compared to $452.5 million for the comparable period in 2017.

Total revenues included net product revenues of $176.2 million and $619.3 million for the quarter and year ended December 31, 2018, respectively, compared to $95.7 million and $349.0 million for the comparable periods in 2017. The increase in net product revenues reflected the continued growth of CABOMETYX (cabozantinib) in the U.S. for the treatment of advanced renal cell carcinoma (RCC).

Total revenues also include collaboration revenues of $52.4 million and $234.5 million for the quarter and year ended December 31, 2018, respectively, compared to $24.4 million and $103.5 million for the comparable periods in 2017. Collaboration revenues for the quarter and year ended December 31, 2018 included the recognition of milestone related revenues of $29.6 million and $164.4 million, respectively, compared to $10.0 million and $57.5 million for the comparable periods in 2017. Collaboration revenues also included additional license, research and development, royalty, and product supply revenues that were recognized from the company’s collaboration agreements, totaling $22.8 million and $70.1 million for the quarter and year ended December 31, 2018, respectively, compared to $14.4 million and $46.0 million for the comparable periods in 2017.

Research and development expenses for the quarter and year ended December 31, 2018 were $57.3 million and $182.3 million, respectively, compared to $32.2 million and $112.2 million for the comparable periods in 2017. The increase in research and development expenses was primarily related to increases in clinical trial costs and personnel expenses. The increase in clinical trial costs was primarily due to costs associated with: CheckMate 9ER, a phase 3 pivotal trial of cabozantinib plus nivolumab in patients with previously untreated RCC that is being conducted with Bristol-Myers Squibb Company; COSMIC-311, a phase 3 pivotal trial of cabozantinib in patients with radioiodine (RAI)-refractory differentiated thyroid cancer (DTC) who have progressed after prior VEGFR-targeted therapy; COSMIC-021, a phase 1b dose escalation study that is evaluating the safety and tolerability of cabozantinib in combination with Roche’s atezolizumab in patients with locally advanced or metastatic solid tumors; COSMIC-312, a phase 3 pivotal trial evaluating cabozantinib in combination with atezolizumab versus sorafenib in previously untreated advanced hepatocellular carcinoma (HCC); and the preparation for further phase 3 pivotal trials that are expected to be initiated in the coming months. The increase in personnel expenses was primarily due to increases in headcount to support the company’s expanded development and discovery efforts.

Selling, general and administrative expenses for the quarter and year ended December 31, 2018 were $52.4 million and $206.4 million, respectively, compared to $46.3 million and $159.4 million for the comparable periods in 2017. The increase in selling, general and administrative expenses was primarily related to increases in expenses for personnel, marketing and stock-based compensation. The increase in personnel expenses was primarily due to increases in general and administrative headcount to support the company’s commercial and research and development organizations. The increase in marketing expenses was primarily due to increases in marketing activities in support of the expanded RCC indication and the anticipated launch in HCC. The increase in stock-based compensation was primarily due to the increase in headcount.

Income tax benefit (provision) for the quarter and year ended December 31, 2018 was $243.7 million and $238.0 million, respectively, compared to $(0.4) million and $(4.4) million for the comparable periods in 2017. The change in income taxes was primarily related to the fourth quarter 2018 release of substantially all of the valuation allowance against the company’s deferred tax assets. The decision to release the valuation allowance was made after the company determined that it was more likely than not that these deferred tax assets would be realized. Due to the release of the valuation allowance in 2018, starting in 2019, the company will record income taxes on GAAP income using an estimated effective tax rate (see "2019 Financial Guidance" below).

GAAP net income for the quarter ended December 31, 2018 was $360.1 million, or $1.20 per share, basic and $1.15 per share, diluted, compared to GAAP net income of $38.5 million, or $0.13 per share, basic and $0.12 per share, diluted, for the comparable period in 2017. Net income for the year ended December 31, 2018 was $690.1 million, or $2.32 per share, basic and $2.21 per share, diluted, compared to $154.2 million, or $0.52 per share, basic and $0.49 per share, diluted, for the comparable period in 2017. The increase in net income for the quarter is primarily related to the income tax benefit associated with the release of substantially all of the valuation allowance against the deferred tax assets described above in addition to increases in net product and collaboration revenues, offset by increases in research and development and selling, general and administrative expenses. In addition to the income tax benefit, the increase in net income for the full year 2018 was primarily the result of increases in net product and collaboration revenues, partially offset by increases in research and development and selling, general and administrative expenses.

Non-GAAP net income for the quarter and year ended December 31, 2018 was $116.0 million, or $0.39 per share, basic and $0.37 per share, diluted and $446.0 million or $1.50 per share, basic and $1.43 per share, diluted, respectively. Non-GAAP net income includes the current-period income tax provision of $0.4 million for the fourth quarter and $6.1 million for the full year 2018, but excludes the non-cash income tax benefit related to the release of substantially all of the valuation allowance against the company’s deferred tax assets described above.

Cash and cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totaled $851.6 million at December 31, 2018, compared to $457.2 million at December 31, 2017.

Non-GAAP Financial Measures

The company believes that the presentation of non-GAAP measures is useful to investors because it excludes a non-cash tax benefit that resulted from the release of substantially all of the valuation allowance against the company’s deferred tax assets. Management believes that presentation of operating results that excludes this item provides useful supplemental information to investors and facilitates the analysis of the company’s core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the company’s past and future operating performance.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand the company’s business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

2019 Financial Guidance

The company is providing the following financial guidance for 2019. Cost of goods sold are expected to be between 4 percent and 5 percent of net product revenues. Research and development (R&D) expenses are expected to be between $285 million and $315 million and includes non-cash expenses related to stock-based compensation of $20 million. Selling, general and administrative (SG&A) expenses are expected to be between $220 million and $240 million and includes non-cash expenses related to stock-based compensation of $35 million. Guidance for the effective tax rate in 2019 is between 21 percent and 23 percent.

Cabozantinib Highlights

Strong Growth in Cabozantinib Franchise Net Revenues. Net product revenues generated by the cabozantinib franchise were $176.2 million during the quarter ended December 31, 2018, an increase of 84 percent year-over-year. During the fourth quarter of 2018, CABOMETYX generated $171.6 million in net product revenues and COMETRIQ (cabozantinib) capsules for the treatment of patients with progressive, metastatic medullary thyroid cancer generated an additional $4.6 million in net product revenues. Net product revenues for the year ended December 31, 2018 were $619.3 million, an increase of 77 percent year-over-year.

Initiation of COSMIC-311, a Phase 3 Pivotal Trial of Cabozantinib in Patients with RAI-refractory DTC. In October, Exelixis announced the initiation of COSMIC-311, a multicenter, randomized, double-blind, placebo-controlled phase 3 pivotal trial designed to enroll approximately 300 patients at approximately 150 sites globally. The co-primary endpoints of the trial are progression-free survival (PFS) and objective response rate. The American Cancer Society estimates that approximately 54,000 new cases of thyroid cancer will be diagnosed in the United States in 2018.1 DTC accounts for approximately 90 percent of all thyroid cancers.2 Approximately 5 to 15 percent of differentiated thyroid tumors are resistant to RAI treatment.3

Cabozantinib Data at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2018 Congress. In October, data from clinical trials of cabozantinib were featured in 13 presentations at the ESMO (Free ESMO Whitepaper) 2018 Congress in Munich, Germany. Notable results included further analyses from the CELESTIAL phase 3 pivotal trial, as well as single-agent and combination data for cabozantinib in a variety of tumor types and disease settings. One poster presentation highlighted results from the dose-escalation stage of the phase 1b COSMIC-021 study of cabozantinib in combination with atezolizumab in previously-untreated advanced RCC, demonstrating that this therapy combination was well-tolerated and showed encouraging anti-tumor activity in advanced RCC. A second poster discussion detailed the effect of PD-L1 status on clinical outcomes with cabozantinib in advanced RCC in the CABOSUN and METEOR trials, showing improved outcomes regardless of PD-L1 expression relative to sunitinib or everolimus, the respective comparator arms for each trial. Another poster presentation evaluated the activity of cabozantinib in patients with advanced RCC who had progressed on immune checkpoint inhibitor (ICI) therapy, finding that cabozantinib was active in patients previously treated with ICIs, either alone or in combination with anti-VEGF or other therapies.

CABOMETYX as a Treatment for Advanced RCC Approved in Brazil and Taiwan. In October, Ipsen received approvals from both the Agência Nacional de Vigilância Sanitária in Brazil for CABOMETYX as a treatment for both previously treated and previously untreated advanced RCC and from the Taiwan Food and Drug Administration for CABOMETYX as a treatment for patients with advanced RCC who have received prior anti-angiogenic therapy.

European Commission (EC) Approves CABOMETYX for the Treatment of HCC in Patients Previously Treated with Sorafenib. In November, Ipsen announced approval by the EC of CABOMETYX as a monotherapy for the treatment of HCC in adults who have previously been treated with sorafenib. This approval allows for the marketing of CABOMETYX in this indication in all 28 member states of the European Union (EU), Norway and Iceland. Under the terms of the collaboration agreement with Ipsen, Exelixis received a milestone payment of $40.0 million for this approval in January 2019. The EC approval is based on results from the CELESTIAL trial of CABOMETYX in patients with advanced HCC who received prior sorafenib. In this phase 3 pivotal trial, CABOMETYX demonstrated a statistically significant and clinically meaningful improvement in overall survival (OS) versus placebo.

Initiation of COSMIC-312, a Phase 3 Pivotal Trial of Cabozantinib in Combination with Atezolizumab versus Sorafenib in Patients with Previously Untreated Advanced HCC. In December, Exelixis and Ipsen announced the initiation of COSMIC-312, a multicenter, randomized, controlled phase 3 pivotal trial that is designed to enroll approximately 640 patients at up to 200 sites globally. The co-primary endpoints of the trial are PFS and OS. An exploratory arm will also evaluate cabozantinib monotherapy in this first-line setting. HCC is the most common form of liver cancer, making up about three-fourths of the estimated nearly 42,000 new cases in the U.S. in 2018 and is the fastest-rising cause of cancer-related death in the U.S.4,5

U.S. Food and Drug Administration (FDA) Approval of CABOMETYX Tablets for Previously Treated HCC. In January 2019, Exelixis announced the FDA approval of CABOMETYX for the treatment of patients with HCC who have been previously treated with sorafenib. As with the EC’s approval in the EU, the FDA’s approval of CABOMETYX was based on results from the CELESTIAL phase 3 pivotal trial of CABOMETYX in patients with advanced HCC who received prior sorafenib.

Cabozantinib Data at the 2019 American Society for Clinical Oncology Gastrointestinal Cancers Symposium (ASCO-GI). In January 2019, data from clinical trials of cabozantinib were featured in five presentations at ASCO (Free ASCO Whitepaper)-GI in San Francisco, including further analyses from the CELESTIAL phase 3 pivotal trial.

Corporate Highlights

MINNEBRO Receives Regulatory Approval for the Treatment of Hypertension in Japan. In January 2019, Exelixis’ partner Daiichi Sankyo announced that MINNEBRO (esaxerenone) tablets had received approval from the Japanese Ministry of Health, Labour and Welfare as a treatment for patients with hypertension. MINNEBRO is a compound identified during the prior research collaboration between Exelixis and Daiichi Sankyo, which the companies entered into in March 2006, and has been subsequently developed by Daiichi Sankyo. Per the collaboration agreement, Exelixis will receive a $20.0 million milestone payment upon the first commercial sale of MINNEBRO in Japan. Exelixis is eligible for additional commercialization milestone payments, as well as low double-digit royalties on sales of MINNEBRO.

Exelixis Files Investigational New Drug Application (IND) and Is Initiating Phase 1 Development of XL092. Today Exelixis announced it has submitted an IND to the FDA for XL092, a next-generation small molecule tyrosine kinase inhibitor targeting VEGF receptors, MET, and other kinases implicated in cancer’s growth and spread. Following FDA’s acceptance of the IND filing, the company plans to initiate a phase 1 dose escalation trial evaluating the pharmacokinetics, safety and tolerability of XL092 in patients with advanced solid tumors, with the primary objective of determining a dose for daily oral administration of XL092 suitable for further evaluation. Assuming positive data from the initial phase of the trial, the expansion phase is designed to further explore the selected dose of XL092 in individual tumor cohorts, where safety, tolerability, and initial clinical activity would be evaluated. XL092 is the first clinical candidate to emerge from Exelixis’ in-house laboratories since the company resumed its drug discovery activities.

Basis of Presentation

Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31st. For convenience, references in this press release as of and for the fiscal periods ended December 28, 2018 and December 29, 2017 are indicated as being as of and for the periods ended December 31, 2018 and December 31, 2017, respectively.

Conference Call and Webcast

Exelixis management will discuss the company’s financial results for the fourth quarter and full year 2018 and provide a general business update during a conference call beginning at 5:00 p.m. EST / 2:00 p.m. PST today, Tuesday, February 12, 2019.

To access the webcast link, log onto www.exelixis.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. Alternatively, please call 855-793-2457 (domestic) or 631-485-4921 (international) and provide the conference call passcode 6681209 to join by phone.

A telephone replay will be available until 8:00 p.m. EST on February 14, 2019. Access numbers for the telephone replay are: 855-859-2056 (domestic) and 404-537-3406 (international); the passcode is 6681209. A webcast replay will also be archived on www.exelixis.com for one year.

On February 12, 2019 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported that it will report its 2018 fourth quarter and full year financial results on Tuesday, February 26, 2019, after the close of the financial markets (Press release, Jazz Pharmaceuticals, FEB 12, 2019, View Source [SID1234533263]). Company management will host a live audio webcast immediately following the announcement at 4:30 p.m. EST/9:30 p.m. GMT to discuss fourth quarter and full year 2018 financial results and provide a business and financial update and guidance for 2019 financial results.

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

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Interested parties may access the live audio webcast via the Investors section of the Jazz Pharmaceuticals website at View Source Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary to listen to the webcast. A replay of the webcast will be archived on the website for at least one week.

Audio webcast/conference call:
U.S. Dial-In Number: +1 855 353 7924
International Dial-In Number: +1 503 343 6056
Passcode: 7095707

A replay of the conference call will be available through March 5, 2019 and accessible through one of the following telephone numbers, using the passcode below:

Replay U.S. Dial-In Number: +1 855 859 2056
Replay International Dial-In Number: +1 404 537 3406
Passcode: 7095707

On February 12, 2019 BerGenBio ASA (OSE: BGBIO), a clinical-stage biopharmaceutical company developing novel, selective AXL kinase inhibitors for multiple cancer indications, reported its results for the fourth quarter and full year 2018 (Press release, BerGenBio, FEB 12, 2019, View Source [SID1234533282]). A presentation of the results by the Company’s management will take place today at 10.00 am CET in Oslo – details below.

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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

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Richard Godfrey, Chief Executive Officer of BerGenBio, commented: "BerGenBio made important progress in 2018 and met all its key operational milestones. The strength of the clinical data coupled with correlation with AXL biomarker expression has allowed us to confirm our clinical development strategy in AML and NSCLC. In 2019 we will focus on initiating late stage clinical trials in these indications and we look forward to providing further details and updates during the coming year."

Highlights – Fourth Quarter 2018
Superior monotherapy efficacy of bemcentinib in relapsed/refractory (R/R) AML/MDS patients reported at ASH (Free ASH Whitepaper) 2018 – a possible first registration path

43% ORR with bemcentinib monotherapy in AXL-biomarker-positive R/R AML/MDS patients
Enrolment complete into the phase II combination cohort of the study testing bemcentinib and decitabine in first-line AML, top-line results anticipated in 1Q 2019
Superior progression-free-survival (PFS) and response rate (ORR) in AXL positive advanced NSCLC patients receiving bemcentinib/KEYTRUDA combination presented as late breaking abstract at SITC (Free SITC Whitepaper) 2018

5.9 months median PFS in AXL-positive vs. 3.3 months in AXL-negative patients
40% ORR & 70% clinical benefit rate in AXL-positive patients, including PD-L1 negative patients for whom KEYTRUDA monotherapy is not expected to work
Stage 2 of the two-part trial open and enrolling
Novel tissue- and blood-based biomarkers of AXL expression identified and qualified across multiple clinical trials with bemcentinib: potential for development as companion diagnostics

Selected as a poster discussion at ESMO (Free ESMO Whitepaper) and presented as poster at SITC (Free SITC Whitepaper) 2018
Clinical development team strengthened

Team strengthened and expanded, particularly in key medical, clinical operations and regulatory functions in preparation for advancing bemcentinib into the next stages of clinical development
Financial Highlights
(Figures in brackets = same period 2017 unless otherwise stated)

Total operating expenses for the fourth quarter were NOK 53.2 million (NOK 47.5 million). Total operating expenses for the full year 2018 amounted to NOK 196.9 million (NOK 183.7 million)
Research and development expenses accounted for 78.1 % of total operating expenses in Q4, and 73.7 % for the full year 2018
Comprehensive loss for the fourth quarter amounted to NOK 51.1 million (loss of NOK 47.6 million). Comprehensive loss for the full year 2018 was NOK 191.7 million (loss of NOK 182.2 million)
Cash and cash equivalents amounted to NOK 360.4 million at the end of December 2018 (NOK 398.2 million at 30 September 2018 and NOK 370.3 million at 31 December 2017)
Presentation and Webcast Details
A presentation by BerGenBio’s senior management team will take place at 10.00 am CET at: Hotel Continental, Stortingsgaten 24/26, 0117 Oslo

The presentation will webcast live and the link will be available at www.bergenbio.com in the section Investors/ Financial Reports. A recording will be available shortly after the webcast has finished.

The results report and the presentation will be available at www.bergenbio.com in the section: Investors/ Financial Reports from 7:00 am CET the same day.

END

About AXL
AXL kinase is cell membrane receptor and an essential mediator of the biological mechanisms that drive aggressive and life-threatening diseases. In cancer, AXL drives tumour survival, treatment resistance and spread, as well as suppressing the body’s immune response to tumours. AXL expression has been established as a negative prognostic factor in many cancers. AXL inhibitors, therefore, have potential value at the centre of cancer combination therapy, addressing significant unmet medical needs and multiple high-value market opportunities.

On February 12, 2019 Ascletis Pharma Inc. (Ascletis, 1672.HK) and 3-V Biosciences, Inc. (3-V Biosciences) jointly reported that Ascletis, through its subsidiary, and 3-V Biosciences have entered into an exclusive license agreement for 3-V Biosciences’ FASN (fatty acid synthase) inhibitor TVB-2640 (Ascletis code: ASC40), a first-in-class, Phase 2-ready drug candidate for non-alcoholic steatohepatitis (NASH), in Greater China (Press release, Ascletis, FEB 12, 2019, View Source [SID1234577322]).

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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

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In conjunction with the license agreement, 3-V Biosciences raised US$18 million in a Series E financing led by new investor Ascletis, through its subsidiary. Ascletis is joined in this financing by new investor Qianhai Ark (Cayman) Investment Co. Limited and existing investors New Enterprise Associates, Inc. (NEA) and Kleiner Perkins (KP). All investors have committed to fund an additional US$7 million in a subsequent financing. 3-V Biosciences expects to use the proceeds of the financing to support the continued development of TVB-2640, including its Phase 2 trials for NASH in the United States and China.

Under the terms of the license agreement, 3-V Biosciences granted Ascletis an exclusive license to develop, manufacture and commercialize ASC40 (TVB-2640) and related compounds in Greater China. 3-V Biosciences is eligible to receive development and commercial milestones as well as tiered royalties on future net sales of ASC40 (TVB-2640).

"We are excited about this strategic collaboration with 3-V Biosciences. Results from the phase 1b trial showed significant decrease in liver fat synthesis and indicate that ASC40 (TVB-2640) may be a promising treatment for NASH," said Jinzi J. Wu, PhD, Founder, Chairman and CEO of Ascletis, "There are no approved therapies today for NASH in China and globally. We’re thrilled to develop ASC40 (TVB-2640) for NASH in Greater China and support 3-V Biosciences’ Phase 2 multi-center trials in the United States and China."

"3-V Biosciences is excited about our partnership with Ascletis; Ascletis brings expertise and capabilities that can accelerate the advancement of TVB-2640 (ASC40) on a global scale for this important emerging disease," said George Kemble, PhD, CEO of 3-V Biosciences.

"The partnership with Ascletis, a leading expert in liver diseases, will accelerate the development of TVB-2640. We are delighted to welcome Dr. Wu to the board, and I look forward to working with him," said Beth Seidenberg, MD, board director of 3-V Biosciences and managing director of KP, an existing shareholder.

According to Dr. Rohit Loomba, MD of Univ. California San Diego, Director, NAFLD Research Center, and Principal Investigator of the upcoming Phase 2 study of TVB-2640, "I am excited to see the advancement of this compound; lipid synthesis is an important driver of NASH. This study will evaluate the impact of TVB-2640 on liver fat using advanced imaging techniques that are expected to predict the ability of this drug to address this unmet medical need."

"In 2016, there were approximately 243 million people in China with non-alcoholic fatty liver disease (NAFLD). By 2030, this is expected to increase to approximately 314 million people, of which 2.3 million will have cirrhosis," said Professor Wei Lai, MD, Director, Peking University Hepatology Institute, Chair, NAFLD and Alcoholic Liver Disease Special Interest Group (ALD SIG), Past-immediate President, Chinese Society of Hepatology of the Chinese Medical Association. "Inhibition of FASN is a promising mechanism of action for NASH. It is encouraging that Chinese biotech takes on the challenge to develop the first-in-class drug for such unmet medical need."

About TVB-2640 (ASC40).

TVB-2640 is an orally bioavailable, first-in-class inhibitor of FASN. FASN is a key enzyme in the de novo lipogenesis (DNL) pathway and catalyzes the biosynthesis of palmitate, which can then undergo further modifications into other fatty acids and complex lipids. Dysregulation of FASN activity is found in a number of different diseases, including liver diseases and cancer. NAFLD and the more advanced disease of NASH can progress to significant liver diseases, including cirrhosis and hepatocellular carcinoma.