On October 31, 2018 PRA Health Sciences, Inc. ("PRA," "we," "us" or the "Company") (NASDAQ: PRAH) reported financial results for the quarter ended September 30, 2018 (Press release, PRA Health Sciences, OCT 31, 2018, View Source;p=RssLanding&cat=news&id=2374565 [SID1234530527]).

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For the three months ended September 30, 2018, revenue was $717.6 million, which represents growth of 23.3%, or $135.6 million, compared to the third quarter of 2017 at actual foreign exchange rates. On a constant currency basis, revenue grew $139.7 million, an increase of 24.0% compared to the third quarter of 2017. On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," or ASC 606, using the modified retrospective method for all contracts that were not completed as of January 1, 2018. Prior periods have not been restated under this guidance and remain as previously reported. The primary impact of applying this new guidance on our statement of operations is that (i) we now recognize reimbursements from our customers for payments to investigators as revenue, whereas these payments and costs were previously recorded on a net basis, and (ii) we include all reimbursed costs in the total project costs when measuring our progress under our research contracts instead of recording these amounts on a separate basis.

Excluding the impact of the adoption of ASC 606 and reimbursement revenue, revenue increased $78.4 million, which represents growth of 15.8% at actual foreign exchange rates and 16.3% on a constant currency basis. Organic revenue growth, excluding the adoption of ASC 606, reimbursement revenue and revenue attributable to our Data Solutions segment, was 7.7% at actual foreign exchange rates and 8.2% on a constant currency basis.

Net new business for our Clinical Research segment for the quarter ended September 30, 2018 was $657.2 million, representing a net book-to-bill ratio of 1.28 for the period. Our calculation of the net book-to-bill ratio excludes the revenue impact of adopting ASC 606, excludes reimbursement revenue and excludes $60.6 million of revenue from our Data Solutions segment. Net new business during the quarter contributed to an ending backlog of $4.1 billion at September 30, 2018.

"We are delighted to have delivered another quarter with strong financial results on many fronts" said Colin Shannon, PRA’s Chief Executive Officer. "Our key financial metrics continue to improve, as highlighted by our new business wins, our strong revenue growth and our expanding margins. Our financial performance reflects our commitment to client delivery and the efforts of our employees."

Direct costs were $371.4 million during the three months ended September 30, 2018 compared to $326.9 million for the third quarter of 2017. The increase in direct costs was primarily due to an increase in labor-related costs of $11.1 million in our Clinical Research segment as we continue to hire billable staff to ensure appropriate staffing levels. In addition, our Data Solutions segment resulted in $29.4 million of incremental direct costs when compared to the third quarter of 2017. We also had a favorable impact of $6.1 million from fluctuation in foreign currency exchange rates during the three months ended September 30, 2018. Excluding the impact of the adoption of ASC 606 and reimbursement revenue, direct costs were 64.8% of revenue during the third quarter of 2018 compared to 66.1% of revenue during the third quarter of 2017.

Selling, general and administrative expenses were $92.6 million during the three months ended September 30, 2018 compared to $79.3 million for the third quarter of 2017. Excluding the impact of the adoption of ASC 606 and reimbursement revenue, selling, general and administrative costs were 16.2% of revenue during the third quarter of 2018 compared to 16.0% of revenue during the third quarter of 2017.

GAAP net income was $1.5 million for the three months ended September 30, 2018, or $0.02 per share on a diluted basis, compared to GAAP net income of $48.2 million for the three months ended September 30, 2017, or $0.73 per share on a diluted basis.

EBITDA was $64.4 million for the three months ended September 30, 2018, representing an increase of 6.7% compared to the third quarter of 2017. Adjusted EBITDA was $120.9 million for the three months ended September 30, 2018, representing growth of 29.6% compared to the third quarter of 2017.

Adjusted net income was $74.8 million for the three months ended September 30, 2018, representing growth of 29.3% compared to the third quarter of 2017. Adjusted net income per diluted share was $1.13 for the three months ended September 30, 2018, representing growth of 28.4% compared to the third quarter of 2017.

A reconciliation of our non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted net income, adjusted net income per diluted share and our 2018 guidance, to the corresponding GAAP measures is included in this press release.

Nine Months Ended September 30, 2018 Financial Highlights

For the nine months ended September 30, 2018, revenue was $2,142.3 million, which represents growth of 33.6%, or $538.8 million, compared to the nine months ended September 30, 2017 at actual foreign exchange rates. On a constant currency basis, revenue grew $520.3 million, representing growth of 32.4% compared to the nine months ended September 30, 2017.

Excluding the impact of the adoption of ASC 606 and reimbursement revenue, revenue increased $328.3 million, which represents growth of 23.8% at actual foreign exchange rates and 22.8% on a constant currency basis. Organic revenue growth, excluding the adoption of ASC 606, reimbursement revenue and revenue attributable to our Data Solutions segment, was 12.6% at actual foreign exchange rates and 11.6% on a constant currency basis.

Reported GAAP income from operations was $184.6 million, reported GAAP net income was $82.5 million and reported GAAP net income per diluted share was $1.24 for the nine months ended September 30, 2018.

Adjusted Net Income was $197.2 million for the nine months ended September 30, 2018, an improvement of 31.4% compared to the same period in 2017. Adjusted Net Income per diluted share was $2.98 for the nine months ended September 30, 2018, up 30.7% compared to the same period in 2017.

Guidance

The Company is maintaining its 2018 revenue guidance of between $2.87 billion and $2.92 billion, representing as reported growth of 47% to 50%, constant currency growth of 18% to 20% excluding the impact of adopting ASC 606 and reimbursement revenue, and constant currency organic growth of 10% to 12% excluding the impact of adopting ASC 606 and reimbursement revenue. We are updating our GAAP net income per diluted share to between $2.21 and $2.26 and Adjusted Net Income per diluted share to between $4.22 and $4.27. We continue to estimate our annual effective income tax rate at approximately 24%, which includes the expected impact of the U.S. Tax Cuts and Jobs Act. Our effective tax rate may differ from this estimate, due to, among other things, changes to estimates of the geographic allocation of our pre-tax income as well as changes in guidance from regulatory agencies related to interpretation, analysis and guidance of the U.S. Tax Cuts and Jobs Act.

Our guidance assumes a EURO rate of 1.17 and a GBP rate of 1.33. All other foreign currency exchange rates are as of September 30, 2018.

Conference Call Details

PRA will host a conference call at 9:00 a.m. ET on November 1, 2018, to discuss the contents of this release and other relevant topics. To participate, please dial (877) 930-8062 within the United States or (253) 336-7647 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 9668676. The conference call will also be accessible, live via audio broadcast, on the Investor Relations section of the PRA website at investors.prahs.com. A replay of the conference call will be available online at investors.prahs.com. In addition, an audio replay of the call will be available for one week following the call and can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside the United States. The replay ID is 9668676.

Additional Information

A financial supplement with third quarter 2018 results, which should be read in conjunction with this press release, may be found in the Investor Relations section of our website at investors.prahs.com in a document titled "Q3 2018 Earnings Presentation."

On October 31, 2018 Epigenomics AG (FSE: ECX, OTCQX: EPGNY) reported the Veterans Administration New York Harbor Healthcare System (VA-Manhattan) is commencing a study to assess the adherence impact of offering a blood-based colorectal cancer screening test and colonoscopy completion in patients who have refused colonoscopy and fecal immunochemical test (FIT) (Press release, Epigenomics, OCT 31, 2018, View Source [SID1234530405]).

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The VA-Manhattan has received grants from the American Society for Gastrointestinal Endoscopy (ASGE) and New York Society for Gastrointestinal Endoscopy (NYSGE) to assist in the performance of this study. The study will be managed through The Narrows Institute. Epigenomics will provide testing and budgetary support for testing.

Colorectal cancer (CRC) is the fourth most common cancer and the second deadliest cancer in the US. However, CRC is a preventable condition with screening being one of the most impactful public health contributions to prevention. Screening rates are suboptimal due to patient barriers to colonoscopy or stool-based testing. Unscreened patients contribute to approximately 43% of new CRC cases, 70% of CRC deaths, and 76% of CRC treatment expenditures.

The goal of the VA-Manhattan study is to assess the potential of a blood-based test as an acceptable alternative for these screen-resistant individuals. If the proposed study shows high acceptance of the blood test as well as reliable colonoscopy follow up for positive tests, then the blood test could play an important adjunctive role in improving overall screening rates.

"Some people simply don’t want colonoscopy or stool-based colorectal cancer screening, so we need to understand how effective alternative methods such as a blood-based test are at engaging these individuals," said Dr. Peter Liang, the study principal investigator and a gastroenterologist at the VA-Manhattan.

"Unscreened patients contribute significantly to new CRC cases, deaths, and treatment costs," said Greg Hamilton, CEO of Epigenomics AG. "Addressing the unscreened challenge with a blood test could unquestionably have an impact to colorectal cancer management. We look forward to the study outcomes as they have the potential to support the use of a blood test on screening-resistant patients."

On October 31, 2019 Calithera Biosciences, Inc. (Nasdaq: CALA), a clinical-stage pharmaceutical company focused on discovering and developing novel small molecule drugs directed against tumor metabolism and tumor immunology targets for the treatment of cancer, reported that the Company’s third quarter 2018 financial results will be released on Wednesday, November 7, 2018 (Press release, Calithera Biosciences, OCT 31, 2018, View Source [SID1234535233]). Company management will host a conference call on Wednesday, November 7, 2018 at 2:00 p.m. Pacific Time/ 5:00 p.m. Eastern Time to discuss the financial results and other recent corporate highlights.

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The press release and live audio webcast can be accessed via the Investor section of the Company’s website at www.calithera.com. The conference call can be accessed by dialing (855) 783-2599 (domestic) or (631) 485-4877 (international) and refer to conference ID 9368596. Please log in approximately 5-10 minutes before the event to ensure a timely connection. The archived webcast will remain available for replay on Calithera’s website for 30 days.

On October 31, 2018 Aeterna Zentaris Inc. (NASDAQ:AEZS) (TSX: AEZS) reported that it will announce its third quarter 2018 financial and operating results after market close on Tuesday, November 6, 2018 (Press release, AEterna Zentaris, OCT 31, 2018, View Source [SID1234530472]). The Company will host a conference call to discuss these results on Wednesday, November 7, 2018 at 8:30 a.m. Eastern Time.

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Participants may access the conference call by telephone using the following numbers:

Toll-Free: 877-407-8029, Confirmation #13684540
Toll: 201-689-8029, Confirmation # 13684540
A replay will also be available on the Company’s website for a period of 30 days.

On October 30, 2018 Mirati Therapeutics, Inc. (NASDAQ: MRTX), a clinical stage targeted oncology company, reported that it has submitted an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) to initiate a Phase 1/2 trial with the initial goal to evaluate safety, tolerability and pharmacokinetics of the Company’s KRAS G12C inhibitor, MRTX849, in patients with advanced solid tumors (Press release, Mirati, OCT 30, 2018, View Source [SID1234530351]). The trial will utilize an accelerated titration design with single patient cohorts and intra-patient dose escalation to rapidly achieve an active dose level for MRTX849. Phase 2 expansion cohorts will enroll patients whose tumors are driven by KRAS G12C positive mutations. The Phase 2 portion of the trial in patients with non-small cell lung cancer (NSCLC) or colorectal cancer (CRC) may provide proof of concept and the basis for accelerated approval.

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"MRTX849, is a potent, highly selective inhibitor of G12C positive mutations. These mutations occur in large patient populations with NSCLC and CRC tumors, and are also present in patients with other solid tumors, such as pancreatic cancer. We submitted the IND on October 29th, 2018 and plan to begin enrolling patients soon after FDA approval is received. The trial is designed to enable early clinical efficacy data in 2019," said Charles Baum, M.D., Ph.D., President and Chief Executive Officer, Mirati Therapeutics, Inc. "KRAS has long been one of the most difficult targets in all of oncology and this program has the potential to be a breakthrough for patients with G12C positive mutations."

"KRAS has been an elusive target for researchers for more than 30 years. It’s exciting to see an IND filing that would potentially provide a therapy for patients with G12C mutations, which were once considered undruggable and who have had no viable treatment options," said Channing J. Der, Ph.D., the Sarah Graham Kenan Professor of Pharmacology at the University of North Carolina at Chapel Hill Lineberger Comprehensive Cancer Center.

About MRTX849

MRTX849 is an orally-available small molecule that potently and selectively inhibits a form of KRAS which harbors a substitution mutation (G12C). KRAS G12C mutations are present in approximately 14% of NSCLC adenocarcinoma patients and 5% of colorectal cancer patients. Tumors characterized by KRAS G12C mutations are commonly associated with poor prognosis and resistance to therapy, and patients with these mutations have few treatment options. MTRX849 has demonstrated broad-spectrum tumor regression in a large cohort of KRAS G12C-positive pre-clinical in-vivo human tumor models. MRTX849 demonstrated complete regression of tumors in a subset of models at well-tolerated dose levels. Early proof-of-concept clinical data is anticipated in 2019.