On October 25, 2018 Nordic Nanovector ASA (OSE: NANO) reported that Betalutin (177Lu-satetraxetan-lilotomab) has been granted a Promising Innovative Medicine (PIM) designation by the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) for the treatment of patients with advanced relapsed/refractory follicular lymphoma (R/R FL) (Press release, Nordic Nanovector, OCT 25, 2018, View Source [SID1234530218]). The designation was granted based on data from the first part of the Phase 1/2 LYMRIT 37-01 trial.

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Lisa Rojkjaer MD, Nordic Nanovector CMO, commented: "We are delighted by the MHRA’s decision to award PIM designation to Betalutin. This acknowledges the high unmet medical need of this patient population as well as the potential of Betalutin to offer therapeutic benefits to FL patients. Both the PIM and Fast Track designations (granted by the FDA in June) are very encouraging, as they provide opportunities for enhanced dialogue with health authorities and the potential to bring Betalutin to patients more quickly."

PIM designation constitutes Step 1 of the UK Early Access to Medicines Scheme (EAMS). EAMS aims to give patients in the UK early access to medicines that do not yet have a marketing authorisation but meet a medical need that is currently not being met. PIM designation means that a medicinal product is a promising candidate for the EAMS, for the treatment, diagnosis or prevention of life-threatening or seriously debilitating conditions with an unmet need.

On October 25, 2018 Taiho Oncology, Inc. reported that the United States Food and Drug Administration (FDA) has accepted and granted priority review for the supplemental New Drug Application (sNDA) for LONSURF (trifluridine/tipiracil, TAS-102) as a treatment for patients with previously treated, advanced or metastatic gastric adenocarcinoma, including cancer of the gastroesophageal junction (Press release, Taiho, OCT 25, 2018, View Source [SID1234530219]). The FDA has provided an anticipated Prescription Drug User Fee Act (PDUFA) action date of February 24, 2019.

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"We look forward to working with the FDA as they consider the application for LONSURF under priority review," said Martin Birkhofer, MD, senior vice president and Chief Medical Officer, Taiho Oncology, Inc.

The sNDA is based on data from the global, randomized, double blind pivotal Phase III (TAGS) trial evaluating LONSURF versus placebo and best supportive care in patients with heavily pretreated metastatic gastric/gastroesophageal junction (GEJ) adenocarcinoma that progressed or were intolerant to previous lines of therapy. The trial met its primary endpoint of prolonged overall survival (OS) and secondary endpoint measures of progression-free survival (PFS), as well as continuing to demonstrate LONSURF’s consistent safety and tolerability profile. Full results from this study were recently presented at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2018 Congress in Munich and published simultaneously in The Lancet Oncology.

LONSURF, in the United States, is indicated for the treatment of patients with metastatic colorectal cancer who have been previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF biological therapy and, if RAS wild-type, an anti-EGFR therapy.[1]

About TAGS
TAGS (TAS-102 Gastric Study) is a Taiho-sponsored pivotal Phase III, multinational, randomized, double-blind study evaluating trifluridine/tipiracil, also known as TAS-102, plus best supportive care (BSC) versus placebo plus BSC in patients with metastatic gastric cancer, including gastroesophageal junction cancer, refractory to standard treatments. The primary endpoint in the TAGS trial is overall survival (OS), and the main secondary endpoint measures include progression-free survival (PFS), and safety and tolerability, as well as quality of life.

TAGS enrolled 507 adult patients with metastatic gastric cancer who had previously received at least two prior regimens for advanced disease. The study was conducted in Japan, the United States, the European Union, Russia, Belarus, Israel, and Turkey.

For more information on TAGS, please visit www.ClinicalTrials.gov (View Source). The ClinicalTrials.gov Identifier is NCT02500043.

About Metastatic Gastric Cancer
Gastric cancer, also known as stomach cancer, is a disease in which malignant cells form in the lining of the stomach. It is the fifth most common cancer worldwide and the third most common cause of cancer-related death (after lung and liver cancer), with an estimated 723,000 deaths annually.[2] Approximately 50 percent of patients with gastric cancer have advanced disease at the time of diagnosis.[3]

Standard chemotherapy regimens for advanced gastric cancer include fluoropyrimidines, platinum derivatives, and taxanes (with ramucirumab), or irinotecan. The addition of trastuzumab to chemotherapy is standard of care for patients with HER2-neu-positive advanced gastric cancer. However, after failure of first- and second-line therapies, standard third-line treatments are limited.

About Gastroesophageal Junction Cancer
Gastroesophageal junction cancer is a type of cancer that begins in cells located near the GE junction, the area where the esophagus connects to the stomach.[4] It remains a significant clinical problem that is increasing in incidence, and is associated with a poor prognosis. The majority of patients present with advanced disease, and less than 50 percent undergo curative treatment.[5]

About LONSURF
LONSURF (trifluridine/tipiracil) is an oral anticancer drug, which utilizes the combination of trifluridine (FTD) and tipiracil (TPI), whose dual mechanism of action is designed to maintain clinical activity and differs from conventional fluoropyrimidines. FTD is an antineoplastic nucleoside analogue, which is incorporated directly into the DNA, thereby interfering with the function of DNA. The blood concentration of FTD is maintained via TPI, which is an inhibitor of the FTD-degrading enzyme, thymidine phosphorylase.

In Japan, Taiho Pharmaceutical has been marketing LONSURF for the treatment of unresectable advanced or recurrent colorectal cancer since 2014. In the United States, beginning in 2015, Taiho Oncology, Inc., a U.S. subsidiary of Taiho Pharmaceutical, began marketing the drug for the treatment of patients with mCRC who have been previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF biological therapy, and if RAS wild-type, an anti-EGFR therapy. In June 2015, Taiho Pharmaceutical and Servier entered into an exclusive license agreement for the co-development and commercialization of LONSURF in Europe and other countries outside of the United States, Canada, Mexico and Asia. In parts of Asia outside of Japan, Taiho Pharmaceutical’s business partner TYY Biopharm launched LONSURF in Taiwan in July 2018, and Jeil Pharmaceutical is preparing to bring the drug to market in South Korea.

As of October 2018, LONSURF has been approved as a treatment for advanced mCRC in 61 countries and regions worldwide.

Indications and Use1
LONSURF is a combination of trifluridine, a nucleoside metabolic inhibitor, and tipiracil, a thymidine phosphorylase inhibitor, indicated for the treatment of patients with metastatic colorectal cancer who have been previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF biological therapy, and if RAS wild-type, an anti-EGFR therapy.

Important Safety Information1

LONSURF may cause serious side effects, including:

Low blood counts. Low blood counts are common with LONSURF and can sometimes be severe and life‑threatening. LONSURF can cause a decrease in your white blood cells, red blood cells, and platelets. Low white blood cells can make you more likely to get serious infections that could lead to death. Your healthcare provider should do blood tests before you receive LONSURF, at day 15 during treatment with LONSURF, and as needed to check your blood cell counts. Your healthcare provider may lower your dose of LONSURF or stop LONSURF if you have low white blood cell or platelet counts
Tell your healthcare provider right away if you get any of the following signs and symptoms of infection during treatment with LONSURF: fever, chills, or body aches.

Before taking LONSURF, tell your healthcare provider about all of your medical conditions, including if you:

Have kidney or liver problems
Are pregnant or plan to become pregnant. LONSURF can harm your unborn baby
Females who can become pregnant should use effective birth control during treatment with LONSURF. Tell your healthcare provider immediately if you become pregnant
Males, while on treatment and for 3 months after your last dose of LONSURF, you should use a condom during sex with female partners who are able to become pregnant. Tell your healthcare provider right away if your partner becomes pregnant while you are taking LONSURF
Are breast‑feeding or plan to breast‑feed. It is not known if LONSURF passes into your breast milk. Do not breast‑feed during treatment with LONSURF and for 1 day after your last dose of LONSURF
Tell your healthcare provider about all the prescription and over‑the‑counter medicines, vitamins, and herbal supplements you take.

The most common side effects with LONSURF include tiredness, nausea, decreased appetite, diarrhea, vomiting, abdominal pain, and fever.

Tell your doctor if you have nausea, vomiting, or diarrhea that is severe or that does not go away.

These are not all of the possible side effects of LONSURF. For more information, ask your healthcare provider. Call your doctor for medical advice about side effects.

On October 24, 2018 Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) reported financial results for the third quarter of 2018 (Press release, Alexion, OCT 24, 2018, View Source [SID1234530306]). Total revenues in the third quarter were $1,026.5 million, a 20 percent increase compared to the same period in 2017. The negative impact of foreign currency on total revenues year-over-year was 1 percent, or $8.9 million, inclusive of hedging activities. On a GAAP basis, diluted earnings per share (EPS) in the quarter was $1.47 per share. The third quarter of 2018 included $18.2 million of restructuring and related expenses compared to $164.7 million in the third quarter of 2017. Non-GAAP diluted EPS for the third quarter of 2018 was $2.02 per share, a 40 percent increase versus the third quarter of 2017.

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"We continued to execute on our key objectives this quarter, further strengthening our core business and again delivering strong top and bottom-line growth," said Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion. "Following the groundbreaking Phase 3 results of eculizumab in NMOSD, we are moving quickly to prepare global regulatory submissions, which could make it the first approved therapy for patients with this devastating disease. Our teams continue to demonstrate launch excellence with sustained growth of Soliris in gMG. In addition, we made significant progress diversifying our portfolio with the anticipated acquisition of Syntimmune and our collaboration with Dicerna. We continue to look for additional opportunities while advancing internal programs to position us for further long-term growth."

Third Quarter 2018 Financial Highlights

Total net product sales were $1,026.5 million in the third quarter of 2018, compared to $1,044.7 million in the second quarter of 2018. Second quarter revenue benefited from favorable timing of orders from certain non-U.S. markets that access Alexion medicines through a tender process as well as approximately $18.2 million related to order timing ahead of the July 4th holiday in the United States, compared to the third quarter of 2018.
Soliris (eculizumab) net product sales were $888.0 million, compared to $755.4 million in the third quarter of 2017, representing an 18 percent increase. Soliris volume increased 24 percent year-over-year.
Strensiq (asfotase alfa) net product sales were $113.2 million, compared to $87.0 million in the third quarter of 2017, representing a 30 percent increase. Strensiq volume increased 37 percent year-over-year.
Kanuma (sebelipase alfa) net product sales were $25.3 million, compared to $16.4 million in the third quarter of 2017, representing a 54 percent increase. Kanuma volume increased 74 percent year-over-year.
GAAP cost of sales was $90.6 million, compared to $157.0 million in the same quarter last year. Non-GAAP cost of sales was $87.3 million, compared to $70.8 million in the same quarter last year.
GAAP R&D expense was $174.8 million, compared to $195.7 million in the same quarter last year. Non-GAAP R&D expense was $162.3 million, compared to $175.7 million in the same quarter last year.
GAAP SG&A expense was $258.7 million, compared to $270.6 million in the same quarter last year. Non-GAAP SG&A expense was $224.5 million, compared to $229.0 million in the same quarter last year.
GAAP income tax expense was $11.2 million, compared to an income tax benefit of $19.8 million in the same quarter last year. Non-GAAP income tax expense was $75.8 million, compared to $35.7 million in the same quarter last year. Both GAAP and non-GAAP income tax benefit /expense for the third quarter of 2017 included a benefit from the conclusion of a routine IRS audit for the 2013-2014 years.
GAAP diluted EPS was $1.47 per share, compared to $0.35 per share in the same quarter last year. The third quarter of 2018 included $18.2 million of restructuring and related expenses compared to $164.7 million in the third quarter of 2017. Non-GAAP diluted EPS was $2.02 per share, compared to $1.44 per share in the third quarter of 2017.
Research and Development

PHASE 3

Ultomiris TM – Paroxysmal Nocturnal Hemoglobinuria (PNH): Applications for the approval of UltomirisTM (also known as ALXN1210) in adults with PNH have been accepted by regulatory authorities in the U.S., the European Union (EU) and Japan. The U.S. Food and Drug Administration (FDA) has set a Prescription Drug User Fee Act (PDUFA) date of February 18, 2019, as part of an expedited eight-month review following the company’s use of a rare disease priority review voucher. The applications are supported by comprehensive data from two rigorous Phase 3 clinical studies. In September 2018, UltomirisTM was granted Orphan Drug Designation in Japan. In addition, a Phase 3 study of UltomirisTM in children and adolescents with PNH is currently underway.
ALXN1210 – Atypical Hemolytic Uremic Syndrome (aHUS): Enrollment is complete in the Phase 3 trial of ALXN1210 administered intravenously every eight weeks in complement inhibitor treatment-naïve adolescent and adult patients with aHUS. Results from this study are expected in early 2019. Alexion intends to file for regulatory approval in aHUS following approval in PNH. A Phase 3 study of ALXN1210 in children with aHUS is currently underway.
ALXN1210 – Subcutaneous: In late 2018, Alexion plans to initiate a single, PK-based Phase 3 study of ALXN1210 delivered subcutaneously once per week to support registration in PNH and aHUS.
Eculizumab – Relapsing Neuromyelitis Optica Spectrum Disorder (NMOSD): In September 2018, Alexion announced positive results from the Phase 3 PREVENT study, in which patients with anti-aquaporin-4 (AQP4) auto antibody-positive NMOSD received eculizumab or placebo on top of stable standard-of-care therapy. The study met its primary endpoint of time to first adjudicated on-trial relapse, demonstrating that treatment with eculizumab reduced the risk of relapse by 94.2 percent compared to placebo (p<0.0001). At 48 weeks, 97.9 percent of patients receiving eculizumab were free of relapse compared to 63.2 percent of patients receiving placebo. No cases of meningococcal infection were observed. Eculizumab was generally well tolerated with a safety profile consistent with that seen in previous clinical studies and real-world use in its three approved indications. Based on the significant need for an approved treatment, the company is rapidly preparing regulatory submissions in the U.S., EU and Japan, and expects to submit applications in early 2019.
WTX101 – Wilson Disease: Enrollment is underway in a Phase 3 study of WTX101 in Wilson disease, a rare genetic disorder with devastating hepatic and neurological consequences. The study is now powered for superiority. WTX101 is a first-in-class oral copper-binding agent with a unique mechanism of action to access and bind to serum copper and promote its removal from the liver.
PHASE 1/2

SYNT001: In September 2018, Alexion announced an agreement to acquire Syntimmune. Pending relevant regulatory approvals, the acquisition is expected to close in the fourth quarter of 2018. The acquisition will add anti-FcRn antibody SYNT001 to the company’s clinical pipeline. SYNT001 is currently in Phase 1b/2a development in patients with warm autoimmune hemolytic anemia (WAIHA) and in patients with pemphigus vulgaris (PV) or pemphigus foliaceus (PF). In 2019, the company plans to initiate two pivotal trials – one in WAIHA following successful completion of the current Phase 1b/2a study, and one in an undisclosed indication.
ALXN1810 – Subcutaneous: Alexion initiated a Phase 1 study of subcutaneous ALXN1210 co-administered with Halozyme’s ENHANZE drug-delivery technology, PH20, in the third quarter of 2018. Pending co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810 and has the potential to further extend the dosing interval to once every two weeks or once per month.
PRE-CLINICAL

Dicerna – GalXC TM : In October 2018, Alexion began a collaboration with Dicerna Pharmaceuticals, Inc. to jointly discover and develop up to four subcutaneously delivered GalXCTM RNA interference (RNAi) candidates, currently in pre-clinical development, for the treatment of complement-mediated diseases.
Complement Pharma – CP010: Alexion is collaborating with Complement Pharma to co-develop CP010, a pre-clinical C6 inhibitor that has the potential to treat multiple neurological disorders.
2018 Financial Guidance

A foreign currency headwind, net of hedging activities, of approximately $10 million.
Unfavorable Soliris revenue impact of $90 to $110 million from ALXN1210 and other clinical trial recruitment versus prior year.
GAAP guidance reflects the preliminary financial impact of the announced agreement to acquire Syntimmune and the recently announced collaboration with Dicerna. Alexion expects to account for Syntimmune as an asset acquisition during the fourth quarter of 2018. In addition, non-GAAP financial guidance includes the preliminary impact of operating expenses for Syntimmune.
GAAP effective tax rate of 70 to 150 percent impacted by non-deductible pre-tax acquisition charges; non-GAAP effective tax rate of 14 to 15 percent.
Alexion expects to incur additional restructuring and related expenses in 2018 of up to approximately $125 million related to the Company’s 2017 restructuring activities.

Alexion’s financial guidance is based on current foreign exchange rates net of hedging activities and does not include the effect of acquisitions, license and collaboration agreements, intangible asset impairments, litigation charges, changes in fair value of contingent consideration or restructuring and related activity outside of the previously announced activities that may occur after the issuance of this press release.

Conference Call/Webcast Information:

Alexion will host a conference call/audio webcast to discuss the third quarter 2018 results today at 8:00 a.m. Eastern Time. To participate in the call, dial 866-762-3111 (USA) or 210-874-7712 (International), conference ID 5947065 shortly before 8:00 a.m. Eastern Time. A replay of the call will be available for a limited period following the call. The audio webcast can be accessed on the Investor page of Alexion’s website at: View Source

On October 24, 2018 Myovant Sciences (NYSE: MYOV) reported it has completed patient enrollment in its pivotal Phase 3 clinical trial, HERO, which is evaluating the safety and efficacy of relugolix for the treatment of men with advanced prostate cancer (Press release, Myovant Sciences, OCT 24, 2018, http://investors.myovant.com/news-releases/2018/10-24-2018-133055538 [SID1234530139]). The HERO study is designed to support approval by the U.S. Food and Drug Administration (FDA), the European Medicines Agency (EMA) and the Japanese Pharmaceuticals and Medical Devices Agency.

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"Completion of enrollment in HERO is a critical milestone for our prostate cancer program," said Lynn Seely, M.D., President and CEO of Myovant. "We look forward to reporting top-line efficacy and safety data for HERO in the fourth quarter of 2019. Relugolix is the only oral gonadotropin-releasing hormone, or GnRH, receptor antagonist in development to lower testosterone and prostate-specific antigen, or PSA, in men with prostate cancer."

Pending positive Phase 3 results, Myovant expects to submit a New Drug Application for relugolix with the FDA in early 2020. If approved, relugolix has the potential to be the first oral GnRH receptor antagonist approved for the treatment of advanced prostate cancer. Relugolix is administered as one pill once-daily and has been shown to decrease testosterone and PSA levels within days in Phase 1 and 2 clinical studies.

About the HERO Study
This randomized, open-label, parallel-group, international Phase 3 clinical trial is evaluating the safety and efficacy of relugolix in men with androgen-sensitive advanced prostate cancer who require at least one year of continuous androgen deprivation therapy. Patients enrolled in the study were randomized 2:1 to receive a single loading dose of relugolix 360 mg followed by relugolix 120 mg once daily or to treatment with leuprolide acetate 3-month depot injection, respectively. The primary efficacy outcome of the study is the ability of relugolix to achieve and maintain serum testosterone suppression to castrate levels (≤50 ng/dL [1.7 nmol/L]) for 48 weeks. A total of 934 patients have been enrolled in the HERO study in North and South America, Europe and the Asia-Pacific region.

About Advanced Prostate Cancer
Prostate cancer is the second most prevalent form of cancer in men and the second leading cause of death due to cancer in men in the United States. According to the National Cancer Institute, approximately 2.9 million men in the United States are currently living with prostate cancer, and approximately 165,000 men are estimated to be newly diagnosed in 2018. Treatment for advanced prostate cancer typically involves treatment with androgen deprivation therapy, which reduces testosterone to very low levels, commonly referred to as castration levels. GnRH agonists, such as leuprolide depot, or slow-release injections are the current standard of care for medical castration. However, GnRH agonists may be associated with mechanism-of-action limitations, including the potentially detrimental initial rise in testosterone levels that can exacerbate clinical symptoms, which is known as clinical or hormonal flare, and delayed testosterone recovery if the drug is discontinued.

On October 24, 2018 LabCorp (or the Company) (NYSE: LH) reported results for the third quarter ended September 30, 2018, and updated its 2018 guidance (Press release, LabCorp, OCT 24, 2018, View Source;p=RssLanding&cat=news&id=2373135 [SID1234530177]).

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"We are pleased with our performance in the quarter, highlighted by excellent results in our Covance Drug Development business and solid results in LabCorp Diagnostics," said David P. King, chairman and chief executive officer. "Covance delivered growth in net orders, a strong book to bill and significant margin expansion, while Diagnostics continued its consistent organic revenue and volume growth. In addition, we made progress on our three strategic objectives, and initiated LaunchPad Phase II in Diagnostics to continue streamlining the business and reducing the fixed cost base. Despite the dynamically changing market, we have two strong businesses, outstanding cash flow and a strong balance sheet, positioning us well to deliver growth for the balance of this year and in the years ahead."

Effective January 1, 2018, the Company adopted the FASB-issued converged standard on revenue recognition (ASC 606), using the full retrospective method. Unless otherwise indicated, all financial results in 2017 and comparisons to financial results in 2017 have been restated in this press release as if the Company had adopted ASC 606 on January 1, 2017.

Consolidated Results

Third Quarter Results

Revenue for the quarter was $2.83 billion, an increase of 8.0% compared to $2.62 billion in the third quarter of 2017. The increase in revenue was primarily due to growth from acquisitions of 6.5% and organic growth of 2.8%, partially offset by the negative impact from the disposition of businesses of 1.1% and foreign currency translation of approximately 30 basis points. Revenue growth was negatively impacted by approximately 50 basis points due to the ransomware attack and Hurricane Florence (hereinafter "Business Disruptions") during the quarter.

Operating income for the quarter was $343.4 million, or 12.1% of revenue, compared to $326.7 million, or 12.5%, in the third quarter of 2017. The increase in operating income was primarily due to acquisitions, organic revenue growth, the Company’s LaunchPad business process improvement initiative, and fewer restructuring charges and special items. These drivers were partially offset by lower Medicare pricing as a result of the implementation of PAMA, costs related to the ransomware attack, the disposition of businesses, and personnel costs. The Company recorded restructuring charges, special items, and amortization which together totaled $85.8 million in the quarter, compared to $105.2 million during the same period in 2017. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $429.2 million, or 15.2% of revenue, compared to $431.9 million, or 16.5%, in the third quarter of 2017. The decline in adjusted operating margin was primarily due to the implementation of PAMA, the negative impact from the Business Disruptions, as well as the mix impact from the acquisition of Chiltern.

Net earnings in the quarter were $318.8 million, compared to $171.6 million in the third quarter of 2017. Diluted EPS were $3.10 in the quarter, an increase of 187.9% compared to $1.65 in the same period in 2017. Net earnings and diluted EPS in the quarter benefitted from the net gain on disposition of businesses of $125.3 million and $1.22 per share, respectively. Adjusted EPS (excluding amortization, restructuring charges, special items, and the net gain on disposition of businesses) were $2.74 in the quarter, an increase of 15.6% compared to $2.37 in the third quarter of 2017. The Company’s adjusted earnings in the quarter were reduced by approximately $0.10 per diluted share due to the impact from the Business Disruptions, primarily due to lower volume.

Operating cash flow for the quarter was $251.9 million, down from $350.5 million in the third quarter of 2017, as the benefit of higher cash earnings was more than offset by an increase in working capital, a discretionary pension contribution, and the impact from the Business Disruptions. Capital expenditures totaled $97.9 million, compared to $75.3 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $154.0 million, compared to $275.2 million in the third quarter of 2017.

At the end of the quarter, the Company’s cash balance and total debt were $892.6 million and $6.5 billion, respectively. During the quarter, the Company repurchased $150.0 million of stock representing approximately 0.8 million shares. The Company had $843.5 million of authorization remaining under its share repurchase program at the end of the quarter.

Year-To-Date Results

Revenue was $8.55 billion, an increase of 13.0% over last year’s $7.56 billion. The increase in revenue was due to growth from acquisitions of 10.0%, organic growth of 2.7%, and the benefit from foreign currency translation of approximately 60 basis points, partially offset by the impact from the disposition of businesses of 0.4%.

Operating income was $1,018.0 million, or 11.9% of revenue, compared to $974.7 million, or 12.9%, in the first nine months of 2017. The increase in operating income was primarily due to acquisitions, organic revenue growth, and the Company’s LaunchPad initiative, partially offset by the implementation of PAMA, costs related to the ransomware attack, and personnel costs. The decline in operating margin was primarily due to the implementation of PAMA, the negative impact from the Business Disruptions, as well as the mix impact from the acquisition of Chiltern. The Company recorded restructuring charges, special items, and amortization which together totaled $310.4 million in the first nine months of the year, compared to $265.1 million during the same period in 2017. This increase was primarily due to higher amortization expense, and the payment of a one-time bonus to non-bonus-eligible employees following the implementation of the Tax Cuts and Jobs Act of 2017. Adjusted operating income (excluding amortization, restructuring charges, and special items) was $1.33 billion, or 15.5% of revenue, compared to $1.24 billion, or 16.4%, in the first nine months of 2017.

Net earnings in the first nine months of 2018 were $725.8 million, or $7.04 per diluted share, compared to $539.4 million, or $5.19 per diluted share, last year. Net earnings and diluted EPS in the first nine months of 2018 benefitted from the net gain on disposition of businesses of $125.3 million and $1.22 per share, respectively. Adjusted EPS (excluding amortization, restructuring, special items, and the net gain on disposition of businesses) were $8.50, an increase of 22.7% compared to $6.93 in the first nine months of 2017.

Operating cash flow was $819.0 million, compared to $933.1 million in the first nine months of 2017, as the benefit of higher cash earnings was more than offset by an increase in working capital, a discretionary pension contribution, and the impact from the Business Disruptions. Capital expenditures totaled $257.6 million, compared to $216.8 million during the same period in 2017. As a result, free cash flow (operating cash flow less capital expenditures) was $561.4 million, compared to $716.3 million in the first nine months of 2017.

***

The following segment results reflect the Company’s retrospective adoption of ASC 606 on January 1, 2017, and exclude amortization, restructuring charges, special items and unallocated corporate expenses.

Third Quarter Segment Results

LabCorp Diagnostics

Revenue for the quarter was $1.75 billion, a decrease of 0.2% from $1.75 billion in the third quarter of 2017. Revenue benefitted from acquisitions and organic volume (measured by requisitions), offset by the negative impact from the disposition of businesses (described below) and the implementation of PAMA. In addition, foreign currency translation reduced revenue by approximately 20 basis points.

The Company’s Food Solutions business was divested on August 1, 2018, and the Company’s UK-based forensic laboratory testing business was divested on August 7, 2018. These divested businesses contributed $14.6 million in revenue in the quarter, compared to $43.0 million during the third quarter of 2017. Excluding the disposition of businesses, revenue for the quarter would have been $1.74 billion, an increase of 1.4% over $1.71 billion last year.

Excluding the disposition of businesses, revenue per requisition decreased by 0.4% and total volume (measured by requisitions) increased by 2.0%, of which organic volume was 1.3% and acquisition volume was 0.8%. Volume growth was negatively impacted by 0.6% due to the Business Disruptions.

Adjusted operating income (excluding amortization, restructuring charges and special items) for the quarter was $331.5 million, or 18.9% of revenue, compared to $374.3 million, or 21.3%, in the third quarter of 2017. Operating income and margin declined primarily due to the negative impact from PAMA, the ransomware attack, the disposition of businesses, and personnel costs, partially offset by acquisitions and organic volume growth.

Covance Drug Development

Revenue for the quarter was $1.08 billion, an increase of 24.7% over $867 million in the third quarter of 2017. The increase in revenue was primarily due to growth from acquisitions of 17.9%, and organic growth of 7.3%, partially offset by the impact from foreign currency translation of approximately 50 basis points.

Adjusted operating income (excluding amortization, restructuring charges and special items) for the quarter was $131.3 million, or 12.1% of revenue, compared to $93.8 million, or 10.8%, in the third quarter of 2017. The increase in operating income and margin were primarily due to organic demand, LaunchPad savings and acquisitions, partially offset by personnel costs. The Company expects to deliver $150 million of net savings from LaunchPad by the end of 2020, and $30 million of cost synergies from the integration of Chiltern by the end of 2019.

Net orders and net book-to-bill during the trailing twelve months were $5.26 billion and 1.25, respectively. Backlog at the end of the quarter was $9.40 billion compared to $8.97 billion last quarter, and the Company expects approximately $3.8 billion of its backlog to convert into revenue in the next twelve months.

Outlook for 2018

In the following guidance, all financial results in 2017 and comparisons to financial results in 2017 have been restated in this press release as if the Company had adopted ASC 606 on January 1, 2017. The guidance assumes foreign exchange rates effective as of September 30, 2018 for the remainder of the year, and includes capital allocation.

Revenue growth of 10.5% to 11.0% over 2017 revenue of $10.31 billion, which includes the benefit of approximately 40 basis points of foreign currency translation. This is a narrowing of the range from the prior guidance of 10.5% to 11.5%, and includes the impact from Business Disruptions of 10 basis points, as well as the 10 basis point unfavorable change in currency translation.
Revenue growth in LabCorp Diagnostics of 3.0% to 3.5% over 2017 revenue of $6.86 billion, which includes the negative impact of PAMA as well as the benefit of approximately 10 basis points of foreign currency translation. This is a narrowing of the range from the prior guidance of 3.0% to 4.5%, and now includes the impact from the Business Disruptions of 20 basis points, and the 10 basis point unfavorable change in currency translation.
Revenue growth in Covance Drug Development of 24.0% to 26.0% over 2017 revenue of $3.45 billion, which includes the benefit of approximately 110 basis points of foreign currency translation. This is a narrowing of the range from the prior guidance of 23.0% to 26.0%.
Adjusted EPS of $11.25 to $11.45, which is an increase of approximately 22.3% to 24.4% over 2017 adjusted EPS of $9.20. This is lower than the prior guidance of $11.35 to $11.65 primarily due to the negative impact from the Business Disruptions of $0.10 per share as well as third quarter performance.
Free cash flow (operating cash flow less capital expenditures) of $975 million to $1,025 million, compared to $1.1 billion in 2017. This is lower than the prior guidance of $1.1 billion to $1.2 billion primarily due to the upcoming tax payment of approximately $125 million related to the disposition of the Food Solutions business, which was not included in the prior guidance.
Use of Adjusted Measures

The Company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted EPS, adjusted operating income, free cash flow, and certain segment information. The Company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s operational performance. The Company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the Company’s financial results with the financial results of other companies. However, the Company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the tables accompanying this press release.

The Company today is furnishing a Current Report on Form 8-K that will include additional information on its business and operations. This information will also be available in the investor relations section of the Company’s website at View Source." target="_blank" title="View Source." rel="nofollow">View Source Analysts and investors are directed to the Current Report on Form 8-K and the website to review this supplemental information.

A conference call discussing LabCorp’s quarterly results will be held today at 9:00 a.m. EDT and is available by dialing 844-634-1444 (615-247-0253 for international callers). The access code is 7398818. A telephone replay of the call will be available through November 7, 2018, and can be heard by dialing 855-859-2056 (404-537-3406 for international callers). The access code for the replay is 7398818. A live online broadcast of LabCorp’s quarterly conference call on October 24, 2018, will be available at View Source or at View Source beginning at 9:00 a.m. EDT. This webcast will be archived and accessible through October 18, 2019.