On February 6, 2018 Myriad Genetics, Inc. (NASDAQ:MYGN), a global leader in molecular diagnostics and personalized medicine, reported financial results for its fiscal second-quarter 2018, provided an update on recent business highlights, raised its fiscal year 2018 financial guidance, and issued fiscal third-quarter 2018 financial guidance (Press release, Myriad Genetics, FEB 6, 2018, View Source [SID1234523763]).

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"We exceeded our financial expectations in the first half of fiscal year 2018 as a result of strong hereditary cancer volume trends, solid GeneSight revenue growth, and significant progress on our Elevate 2020 profitability program," said Mark C. Capone, president and CEO, Myriad Genetics. "Based upon this strong performance we are increasing our financial guidance for fiscal 2018. We remain highly encouraged that our strategy to build upon the solid foundation of our hereditary cancer business with diversified revenues from our industry-leading pipeline of new products will deliver significant future revenue and earnings growth."

Business Highlights

• Hereditary Cancer

Achieved the fourth consecutive quarter of year-over-year volume growth and again exceeded our three percent fiscal 2018 volume growth target.
Presented pivotal validation data for riskScore at the San Antonio Breast Cancer Symposium (SABCS) with data from over 1,617 women. The results show that riskScore is a highly statistically significant predictor of the 5-year and lifetime risk of breast cancer (p=5.2×10-39 and p=4.1×10-35, respectively).
Successful commercial launch of riskScore led to an acceleration in preventive care hereditary cancer test volumes.
• GeneSight

Announced data from 1,200 patient prospective randomized controlled trial showing GeneSight led to a highly statistically significant improvement in the gold-standard outcomes of response and remission (p<0.01 and p=0.01 respectively).
GeneSight revenue increased 46 percent year-over-year with double-digit, sequential volume growth.
Announced top-line data from 2,000 patient IMPACT study demonstrating that with GeneSight primary care physicians saw even better outcomes when compared to psychiatrists.
Announced the PRIME Care study in conjunction with the Department of Veterans Affairs, which will be a randomized controlled trial enrolling over 2,000 patients with major depressive disorder at 21 VA medical centers. The Department of Veterans Affairs has committed over $12 million to fund the study, which will evaluate how the GeneSight test influences the key endpoints of remission, response, and symptom improvement relative to patients receiving standard of care therapy.
• Vectra DA

Presented data at the American College of Rheumatology (ACR) meeting demonstrating that Vectra DA was more than three times better at predicting radiographic progression compared to conventional measures of disease activity.
Presented new clinical utility data from 60,596 patients demonstrating that physicians use Vectra DA scores to change treatment decisions appropriately. The study found that in patients who were naive to biologics, rheumatologists were 118 percent more likely to recommend a biologic for patients with a high Vectra DA score when compared to patients with a low Vectra DA score. For patients already on a biologic, rheumatologists were 158 percent more likely to change therapy for those with high Vectra DA scores compared to those with low Vectra DA scores.
Submitted a new publication on Vectra DA showing the change in Vectra DA scores required to recommend a modification in treatment. This clinical utility data will be utilized to add a medical management protocol to the Vectra DA test report.
Published clinical utility study for a new indication in the Annals of Rheumatic Diseases demonstrating that in over 70,000 Medicare patients there was a strong link between Vectra DA score and cardiovascular disease.
• Prolaris

Finalized Medicare Local Coverage Decision (LCD) for favorable intermediate prostate cancer patients.
Prolaris volumes grew in the double-digits on a year-over-year basis.
• EndoPredict

United States test volumes increased over 70 percent on a sequential basis.
Presented chemopredictive data at SABCS demonstrating the ability of EndoPredict to predict response to neoadjuvant therapy in 217 women with HR+ breast cancer. The study found that patients with a low EndoPredict score were significantly more responsive to endocrine therapy (p=0.015) and women with a high EndoPredict score were significantly more responsive to neoadjuvant chemotherapy (p=0.0001).
• Companion Diagnostics

Received FDA approval for BRACAnalysis CDx as a companion diagnostic in conjunction with AstraZeneca’s Lynparza (olaparib) for HER2- metastatic breast cancer.
Pfizer presented positive data from the phase 3 EMBRACA trial in metastatic breast cancer using talazoparib, Pfizer’s investigational PARP inhibitor and Myriad’s BRACAnalysis CDx test as a companion diagnostic. Myriad plans to submit a supplementary premarket approval application to the U.S. Food and Drug Administration under its existing PMA for BRACAnalysis CDx to include talazoparib.
Announced an expanded research agreement with AstraZeneca using the company’s myChoice HRD Plus test in an exploratory analysis to identify women with advanced ovarian cancer who may benefit from maintenance treatment with Lynparza (olaparib) and Avastin (bevacizumab).
• Impact of Tax Reform

The company estimates that the tax reform legislation will positively benefit our fiscal 2018 full year adjusted earnings per share by approximately $0.06 with $0.02 recorded in the fiscal second quarter, and the remaining $0.04 benefit anticipated across the second half of fiscal year 2018.

Conference Call and Webcast

A conference call will be held today, Tuesday, February 6, 2018, at 4:30 p.m. ET to discuss Myriad’s financial results for the fiscal second-quarter, business developments and financial guidance. The dial-in number for domestic callers is 1-800-699-0623. International callers may dial 1-303-223-4362. All callers will be asked to reference reservation number 21879835. An archived replay of the call will be available for seven days by dialing (800) 633-8284 and entering the reservation number above. The conference call along with a slide presentation will also will be available through a live webcast at www.myriad.com.

On February 6,2018 Redx (AIM: REDX), the drug discovery and development company focused on cancer and fibrosis, reported that it has commenced its Phase 1/2a study for the Porcupine inhibitor RXC004 with the first patient having now been dosed at The Christie in Manchester (Press release, Redx Pharma, FEB 6, 2018, View Source [SID1234524741]).

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RXC004 is a novel, oral, potent small molecule Porcupine inhibitor, which targets the Wnt pathway, an embryonic signalling pathway that is implicated in the maintenance of cancer stem cells in multiple cancer types. This pathway is associated with tumorigenesis, metastasis, recurrence and resistance in cancer. RXC004 has now progressed into the dose-finding Phase 1 element of the study in patients with cancer. Once completed, the selected dose will then be used as a monotherapy in a larger number of patients with difficult to treat cancers (Phase 2a). In addition, the Company will look to explore the potential of RXC004 in combination with a PD-1 checkpoint inhibitor following the completion of the safety and tolerability phase of this first in man clinical trial.

As mentioned at the time of the publication of the Company’s strategic update on 6 November 2017, Redx expects initial data from the 1a segment of this trial in H2 2018.

Iain Ross, Chairman of Redx Pharma plc, commented, "We are very excited by the potential of RXC004 to make a major difference in cancer treatment, and intend to progress RXC004 initially as a monotherapy and thereafter in combination with a (PD-1) checkpoint inhibitor through clinical development. We believe that RXC004 has great potential to treat some very challenging cancers that currently have very poor prognosis and we look forward to updating the market on our progress."

On February 6, 2018 Incyte Corporation (Nasdaq:INCY) reported that it will present at the 2018 RBC Capital Markets Global Healthcare Conference on Wednesday, February 21, 2018 at 11:00 am (ET) in New York (Press release, Incyte, FEB 6, 2018, View Source;p=RssLanding&cat=news&id=2330505 [SID1234523744]).

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The presentation and Q&A session will be webcast live and can be accessed at www.incyte.com in the Investors section under "Events and Presentations." Investors interested in listening to the live webcast should log on before the start time in order to download any software required.

On February 6, 2018 Neurocrine Biosciences, Inc. (NASDAQ: NBIX) reported that it will report fourth quarter and year-end 2017 financial results after the Nasdaq market closes on Tuesday, Feb. 13, 2018 (Press release, Neurocrine Biosciences, FEB 6, 2018, View Source;p=RssLanding&cat=news&id=2330675 [SID1234523767]). Neurocrine will then host a conference call and webcast to discuss its financial results and provide a Company update that day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

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Participants can access the live conference call by dialing 888-632-3389 (US) or 785-424-1673 (International) using the conference ID: NBIX. The webcast can also be accessed on Neurocrine’s website under Investors at View Source A replay of the webcast will be available on the website approximately one hour after the conclusion of the event and will be archived for one month.

On February 6, 2018 LabCorp (or the Company) (NYSE: LH) reported results for the fourth quarter and year ended December 31, 2017, and provided 2018 guidance (Press release, LabCorp, FEB 6, 2018, View Source [SID1234523745]).

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"We achieved outstanding full year results, highlighted by revenue over $10 billion, adjusted EPS at the high end of our guidance range, and free cash flow in excess of $1.1 billion," said David P. King, chairman and CEO. "Our performance in the quarter demonstrated our multi-faceted growth platform, as our Diagnostics and Drug Development businesses each delivered excellent performance through a combination of strategic acquisitions, organic initiatives, and margin improvement. We are well positioned for another year of strong performance in 2018 driven by momentum in our businesses, expansion of our capabilities and talent base, broadened geographic presence, and delivery of innovative solutions that only LabCorp can offer."

Consolidated Results

Fourth Quarter Results
Net revenue for the quarter was $2.70 billion, an increase of 13.2% compared to $2.39 billion in the fourth quarter of 2016. The increase in net revenue was due to growth from acquisitions of 10.0%, organic growth (net revenue growth less revenue from acquisitions for the first twelve months after the close of each acquisition) of 2.6%, and the benefit from foreign currency translation of approximately 60 basis points.

Operating income for the quarter was $354.2 million, or 13.1% of net revenue, compared to $323.4 million, or 13.5%, in the fourth quarter of 2016. The increase in operating income was primarily due to acquisitions, organic revenue growth, and the Company’s LaunchPad business process improvement initiative. The decline in operating margin was primarily due to restructuring charges, special items, and amortization which together totaled $102.0 million in the quarter, compared to $64.4 million during the same period in 2016. Adjusted operating income (excluding amortization of $62.9 million, as well as restructuring charges and special items of $39.1 million) for the quarter was $456.2 million, or 16.9% of net revenue, compared to $387.8 million, or 16.2%, in the fourth quarter of 2016.

Net earnings in the quarter were $706.8 million, compared to $184.4 million in the fourth quarter of 2016. Diluted EPS were $6.81 in the quarter, compared to $1.75 in the same period in 2016. During the quarter, the Company recorded a net benefit of $519.0 million in net earnings, or $5.00 per diluted share, due to the implementation of the Tax Cuts and Jobs Act of 2017 (TCJA), which resulted in a favorable re-valuation of deferred taxes, partially offset by the deemed repatriation tax. Given the significant changes resulting from the TCJA, the estimated financial impact in the quarter is provisional and subject to further clarification, which could result in changes to these estimates during 2018.

Adjusted EPS (excluding tax reform, amortization, restructuring charges and special items) were $2.45 in the quarter, an increase of 14.0% compared to $2.15 in the fourth quarter of 2016.

Operating cash flow for the quarter was $564.0 million, compared to $448.9 million in the fourth quarter of 2016. The increase in operating cash flow was due to higher cash earnings and improved working capital. Capital expenditures totaled $96.1 million, compared to $74.3 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $467.9 million, compared to $374.6 million in the fourth quarter of 2016.

At the end of the quarter, the Company’s cash balance and total debt were $316.7 million and $6.8 billion, respectively. During the quarter, the Company invested $83.3 million in acquisitions, paid down $443.0 million of debt, and repurchased $40.0 million of stock representing approximately 0.3 million shares. The Company had $407.4 million of authorization remaining under its share repurchase program at the end of the quarter.

Full Year Results
Net revenue was $10.21 billion, an increase of 8.2% over last year’s $9.44 billion. The increase in net revenue was due to growth from acquisitions of 5.8%, and organic growth of 2.4%.

Operating income was $1.4 billion, or 13.4% of net revenue, compared to $1.3 billion, or 13.9%, in 2016. The increase in operating income was primarily due to acquisitions, organic revenue growth, and the LaunchPad business process improvement initiative, partially offset by higher personnel costs. The decline in operating margin was primarily due to higher amortization, restructuring charges, and special items. Adjusted operating income (excluding amortization of $216.5 million, as well as restructuring charges and special items of $150.7 million) for the year was $1.7 billion, or 17.0% of net revenue, compared to $1.6 billion, or 16.9%, last year.

Net earnings for 2017 were $1.3 billion, or $12.21 per diluted share, compared to $732.1 million, or $7.02 per diluted share, in 2016. As previously noted, the Company recorded a provisional net benefit of $519.0 million in net earnings in the fourth quarter, or $5.00 per diluted share, due to the implementation of the TCJA. Adjusted EPS (excluding tax reform, amortization, restructuring charges and special items) were $9.60, an increase of 8.7% compared to $8.83 in 2016.

Operating cash flow was $1.5 billion, compared to $1.2 billion in 2016, due to higher cash earnings and improved working capital. Capital expenditures totaled $312.9 million, compared to $278.9 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $1,146.5 million, compared to $897.0 million in 2016.

During the year, the Company invested approximately $1.9 billion in acquisitions, and repurchased $338.1 million of stock representing approximately 2.4 million shares.

The following segment results exclude amortization, restructuring charges, special items and unallocated corporate expenses.

Fourth Quarter Pro Forma Segment Results

LabCorp Diagnostics
Net revenue for the quarter was $1.82 billion, an increase of 8.6% over $1.67 billion in the fourth quarter of 2016. The increase in net revenue was driven by acquisitions, organic volume (measured by requisitions excluding those from acquisitions for the first twelve months after the close of each acquisition), and the benefit from foreign currency translation of approximately 30 basis points. Total volume (measured by requisitions) increased by 6.6%, of which organic volume was 2.9% and acquisition volume was 3.7%. Revenue per requisition increased by 1.8%.

Adjusted operating income (excluding amortization, restructuring charges and special items) for the quarter was $356.5 million, or 19.6% of net revenue, compared to $317.8 million, or 19.0%, in the fourth quarter of 2016. The increase in operating income and margin were primarily due to strong revenue growth and LaunchPad savings.

Covance Drug Development
Net revenue for the quarter was $886.1 million, an increase of 23.8% over $715.6 million in the fourth quarter of 2016. The increase was primarily due to the acquisition of Chiltern, as well as organic growth and the benefit from foreign currency translation of approximately 140 basis points.

Adjusted operating income (excluding amortization, restructuring charges and special items) for the quarter was $134.9 million, or 15.2% of net revenue, compared to $106.5 million, or 14.9%, in the fourth quarter of 2016. The increase in operating income and margin were primarily due to the acquisition of Chiltern, organic revenue growth,
and LaunchPad savings, partially offset by higher personnel costs. The Company remains on track to deliver cost synergies from the integration of Chiltern of $30 million within three years of the acquisition.

Net orders and net book-to-bill during the trailing twelve months were $4.14 billion and 1.36, respectively. Backlog at the end of the quarter was $7.13 billion, and the Company expects approximately $2.8 billion of this backlog to convert into revenue in the next twelve months.

The Company commenced the LaunchPad initiative in Covance Drug Development in mid-2017, focused on right-sizing the business, re-engineering Covance’s drug development solutions, integrating new tools and technology, and sustainably enhancing the employee and customer experience. The Company expects the initiative to achieve additional net savings of $130 million over the three-year period ending in 2020.

Outlook for 2018

The following guidance includes the estimated impact from adoption of the new revenue recognition accounting standard (ASC 606) as of January 1, 2018, the implementation of the TCJA, and currently anticipated capital allocation. The following guidance also assumes foreign exchange rates effective as of December 31, 2017 for the full year. In addition, to support the comparison of year-on-year results, the Company has provided a preliminary reconciliation that restates revenue in 2017 to show the impact of the new revenue recognition accounting standard for illustrative purposes. This calculation will be finalized upon adoption in the first quarter of 2018 and the amounts are therefore subject to change.

Revenue growth of 9.5% to 11.5% over 2017 restated revenue of $10.42 billion, which includes the benefit of approximately 60 basis points of foreign currency translation and equates to constant currency revenue growth of 8.9% to 10.9%.

Revenue growth in LabCorp Diagnostics of 3.0% to 5.0% over 2017 restated revenue of $6.86 billion, which includes the negative impact of the Protecting Access to Medicare Act (PAMA) as well as the benefit of approximately 20 basis points of foreign currency translation. This outlook equates to constant currency revenue growth of 2.8% to 4.8%.

Revenue growth in Covance Drug Development of 20.0% to 24.0% over 2017 restated revenue of $3.56 billion, which includes the benefit of approximately 140 basis points of foreign currency translation and equates to constant currency revenue growth of 18.6% to 22.6%.

Adjusted EPS of $11.30 to $11.70, an increase of approximately 17.7% to 21.9% as compared to $9.60 in 2017. The expected growth in adjusted EPS includes the benefit of an assumed lower tax rate in 2018 of 25%, contributing approximately $1.30 in adjusted EPS over 2017.

Free cash flow (operating cash flow less capital expenditures) of $1.1 billion to $1.2 billion, compared to $1.1 billion in 2017.

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 www.labcorp.com. 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. Eastern Time and is available by dialing 844-634-1444 (615-247-0253 for international callers). The access code is 3587888. A telephone replay of the call will be available through February 20, 2018 and can be heard by dialing 855-859-2056 (404-537-3406 for international callers). The access code for the replay is 3587888. A live online broadcast of LabCorp’s quarterly conference call on February 6, 2018 will be available at View Source or at View Source beginning at 9:00 a.m. Eastern Time. This webcast will be archived and accessible through February 1, 2019.