On April 24, 2018 Illumina, Inc. (NASDAQ:ILMN) reported its financial results for the first quarter of fiscal year 2018 (Press release, Illumina, APR 24, 2018, View Source [SID1234525639]).

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First quarter 2018 results:

Revenue of $782 million, a 31% increase compared to $598 million in the first quarter of 2017

GAAP net income attributable to Illumina stockholders for the quarter of $208 million, or $1.41 per diluted share, compared to $367 million, or $2.48 per diluted share, for the first quarter of 2017; the prior year period included the impact of a pre-tax gain of $453 million as a result of the GRAIL repurchase of shares from Illumina

Non-GAAP net income attributable to Illumina stockholders for the quarter of $214 million, or $1.45 per diluted share, compared to $94 million, or $0.64 per diluted share, for the first quarter of 2017 (see the table entitled "Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders" for a reconciliation of these GAAP and non-GAAP financial measures)

Cash flow from operations of $255 million compared to $168 million in the first quarter of 2017

Free cash flow (cash flow from operations less capital expenditures) of $165 million for the quarter, compared to $85 million in the first quarter of 2017

Gross margin in the first quarter of 2018 was 68.8% compared to 61.5% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 69.8% for the first quarter of 2018 compared to 66.4% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2018 were $137 million compared to $145 million in the prior year period. Non-GAAP R&D expenses as a percentage of revenue were 17.5%, including 0.8% attributable to Helix. This compares to non-GAAP R&D expenses as a percentage of revenue of 23.3% in the prior year period, including 2.1% attributable to GRAIL and Helix.

Selling, general and administrative (SG&A) expenses for the first quarter of 2018 were $183 million compared to $171 million in the prior year period. Excluding restructuring and amortization of acquired intangible assets, SG&A expenses as a percentage of revenue were 22.9%, including 1.1% attributable to Helix. This compares to 25.6% in the prior year period, including 1.5% attributable to GRAIL and Helix.

Depreciation and amortization expenses were $39 million and capital expenditures for free cash flow purposes were $90 million during the first quarter of 2018. At the close of the quarter, the company held $2.4 billion in cash, cash equivalents and short-term investments, compared to $2.1 billion as of December 31, 2017.

"Our strong first quarter, with momentum across both our sequencing and microarray businesses, was driven by the growing adoption of applications spanning oncology, clinical and non-clinical research, population genomics and personal genomics," said Francis deSouza, President and CEO. "Genomic information is more valuable and actionable than ever before and we believe that we are in the earliest stages of a genomics revolution."

Updates since our last earnings release:

Released the NovaSeq S1 flow cell-reagent kit for the NovaSeq 6000 System

Received a product approval certificate for the NextSeq 550Dx instrument with the Ministry of Food and Drug Safety (MFDS) in South Korea

Announced a collaboration with Bristol-Myers Squibb to utilize Illumina’s next-generation sequencing (NGS) technology to develop and globally commercialize in-vitro diagnostic (IVD) assays in support of Bristol-Myers Squibb’s oncology portfolio

Announced a partnership with Loxo Oncology to develop and commercialize a multi-gene panel for broad tumor profiling, targeting a distributable, NGS-based companion diagnostic (CDx) with a pan-cancer indication

Launched a study with Harvard Pilgrim Health Care, a not-for-profit health services company, designed to gather data intended to support wider average-risk patient access and reimbursement of NGS for non-invasive prenatal testing

Appointed Dr. Phil Febbo to the position of Senior Vice President and Chief Medical Officer

Financial outlook and guidance

The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2018, the company now projects 15% to 16% revenue growth, GAAP earnings per diluted share attributable to Illumina stockholders of $4.45 to $4.55 and non-GAAP earnings per diluted share attributable to Illumina stockholders of $4.75 to $4.85.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, April 24, 2018. Interested parties may access the live teleconference through the Investor Relations section of Illumina’s web site under the "company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing 800-708-4539, or 1-847-619-6396 outside North America, both with passcode 46755682.

A replay of the conference call will be available from 4:30 pm Pacific Time (7:30 pm Eastern Time) on April 24, 2018 through May 1, 2018 by dialing 888-843-7419, or 1-630-652-3042 outside North America, both with passcode 46755682.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

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 its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

Use of forward-looking statements

This release contains forward-looking statements that involve risks and uncertainties, including our financial outlook and guidance for fiscal 2018 and expectations regarding the development and commercialization of new products. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: (i) challenges inherent in developing, manufacturing, and launching new products and services, including expanding manufacturing operations and reliance on third-party suppliers for critical components; (ii) the timing and mix of customer orders among our products and services; (iii) the impact of recently launched or pre-announced products and services on existing products and services; (iv) our ability to further develop and commercialize our instruments and consumables and to deploy new products, services, and applications, and expand the markets, for our technology platforms; (v) our ability to manufacture robust instrumentation and consumables; (vi) the success of products and services competitive with our own; (vii) our ability to successfully identify and integrate acquired technologies, products, or businesses; (viii) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; and (ix) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.

On April 24, 2018 Takeda Pharmaceutical reported that it has come back with an improved bid for Shire for $64 billion, making it the fifth round of talks (Press release, Takeda, APR 24, 2018, View Source [SID1234525662]). Shire is willing to recommend to the board to accept the offer with an extended deal deadline of May 8.

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"Following several offers from Takeda, the board requested that the advisers of Shire and Takeda enter into a dialogue to discuss whether a further, more attractive proposal may be forthcoming," said Susan Kilsby, Shire’s chairman, at the annual shareholder meeting in Dublin, which lasted only 15 minutes. "As of today the board can confirm that it is reviewing that offer. As of now we can only say that discussions between the advisers of Shire and Takeda are ongoing."

In late March, Takeda expressed an interest in acquiring Shire, although at that time no official bid had been made. Per UK law, Takeda had to make an official offer by 5:00 p.m. (London time) on April 25, 2018. On April 19, Takeda made an official bid of about $66.20 (U.S.) per share, which has a value of around $60 billion (U.S.). Shire rejected the bid, arguing that it undervalued the company.

Shortly afterwards, news broke that Allergan was in talks to acquire Shire, but several hours later Allergan announced it was no longer interested. On April 20, Takeda raised the bid.

In the middle of this, Shire sold its oncology business to France’s Servier for $2.4 billion. Oncology was a very small part of Shire’s portfolio, bringing in only $262 million in 2017. The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.

According to Bloomberg, Takeda and Shire have been negotiating a price and a preliminary announcement may occur today. Under the UK acquisition rules, Takeda must announce a firm offer by Wednesday evening or abandon the approach. However, the companies can seek an extension to finalize a deal.

Aside from overall price, part of the sticking point appears to be amount of cash. The bid last Friday included 21 pounds a share in cash and 26 pounds in new stock for Shire.

Several Japanese lenders, including Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, have agreed to finance the takeover, gathering together 1 trillion yen, or $9.3 billion. Shire’s market value is about $51 billion. Takeda’s market value is about $36 billion. At the end of 2017, Shire reported debt of around $19 billion.

In 2017, Takeda acquired ARIAD Pharmaceuticals for $5.2 billion. In January 2018, Takeda acquired Belgium’s TiGenix NV.

Most analysts expected Takeda to increase the cash portion of the deal, but didn’t see much room for maneuvering.

If the acquisition is completed, it would boost Takeda’s presence in cancer, gastrointestinal, neurology and rare diseases. Christophe Weber, Takeda’s chief executive officer, is pushing for overseas growth in the face of patent expirations and a shrinking domestic population. Bloomberg notes, "Acquiring Shire would vault Takeda, which has few late-stage experimental drugs in its own pipeline, into the ranks of the world’s top pharmaceutical companies. The Japanese company last week raised its offer to 47 pounds a share and lifted the cash portion of the bid after three prior proposals were rejected."

Analysts expect Takeda will seek short-term bank loans first, then replace them with longer-term funds by way of bond sales. S&P Global Ratings suggests that the acquisition would hurt the Japanese company’s credit score. Bloomberg writes, "If the firm borrows all of the cash portion, its ratio of net debt to earnings before interest, taxes, depreciation and amortization could temporarily worsen to 5.4 times, Mizuho Securities Co. estimates."

Atsushi Seki, an analyst at UBS Securities Japan Co., told Bloomberg, "Takeda’s credit could be downgraded to junk temporarily, probably just for the short-term—six months or one year," if the deal is completed.

On April 23, 2018 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported taht it will webcast management presentations as follows (Press release, Regeneron, APR 23, 2018, View Source [SID1234525592]):

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J.P. Morgan 2018 Spring Biotech Conference Call Series at 10:00 a.m. Eastern Time on Tuesday, May 8, 2018
Bank of America Merrill Lynch 2018 Healthcare Conference at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) on Wednesday, May 16, 2018
Barclays 2018 Biopharmaceuticals CEO/CFO Conference Call Series at 11:00 a.m. Eastern Time on Friday, June 1, 2018
The sessions may be accessed from the "Investors & Media" page of Regeneron’s website at View Source Replays of the conference calls and webcasts will be archived on the Company’s website and will be available for 30 days.

On April 23, 2018 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) reported that it will release its first quarter 2018 financial results on Thursday, May 3, 2018 at 7:00 a.m. ET (Press release, Teva, APR 23, 2018, View Source;p=RssLanding&cat=news&id=2343903 [SID1234525573]).

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Teva will host a conference call and live webcast on the same day, at 8:00 a.m. ET to discuss its first quarter 2018 results and overall business environment. A Question & Answer session will follow this discussion.

In order to participate, please dial the following numbers (at least 10 minutes before the scheduled start time):

United States 1-866-254-0808
International 44 (0) 1452 541003
for a list of other international toll-free numbers, click here.
Passcode: 9496209
A live webcast of the call will also be available on Teva’s website at: ir.tevapharm.com Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software.

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

On April 23, 2018 Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a biotechnology Company with fully integrated commercial and drug development operations with a primary focus in Hematology and Oncology, reported a publication entitled, "Mechanisms and clinical activity of an EGFR and HER2 exon 20–selective kinase inhibitor in non–small cell lung cancer (Press release, Spectrum Pharmaceuticals, APR 23, 2018, View Source [SID1234525593])." The publication appears in the April 23, 2018 online issue at View Source and will be published in a future print issue of Nature Medicine.

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"We are honored to have data from poziotinib published in this prestigious journal," said Joe Turgeon, President and CEO of Spectrum Pharmaceuticals. "The excitement around poziotinib is palpable among the medical community. For cancer patients that have exon 20 mutations, physicians have very few options. The publication shows that poziotinib has a strong potential to be a promising therapy for such patients. We are collaborating with the medical community, regulatory agencies and corporate partners to expedite the rapid development of this drug."

The Nature Medicine publication summarizes the current preclinical and clinical data with poziotinib for EGFR and HER2 exon 20 mutations. MD Anderson utilized in silico, in vitro, and in vivo testing to model structural alterations induced by exon 20 mutations and identify potentially effective inhibitors. 3-D modeling indicated alterations restricted the size of the drug binding pocket, limiting the binding of large, rigid inhibitors. It was found that poziotinib, due to its small size and flexibility, can circumvent these steric changes, and is a potent inhibitor of the most common EGFR and HER2 exon 20 mutants. Poziotinib demonstrated greater activity than approved EGFR TKIs in vitro and in EGFR or HER2 exon 20 mutant patient-derived xenograft models, and genetically engineered mouse models of NSCLC.

According to the Nature Medicine publication, the first 11 NSCLC patients with EGFR exon 20 mutations receiving poziotinib in MD Anderson’s Phase 2 clinical trial had a confirmed objective response rate of 64%. At the time of the publication, the median progression-free survival had not been reached, with a median follow up of 6.6 months. 55% of patients received a dose reduction, with the two most common adverse events being known EGFR inhibitor-related toxicities: skin rash and diarrhea. At the World Conference on Lung Cancer in October 2017, MD Anderson presented that all of the 11 patients had a radiologic improvement in their disease, and 8 out of the 11 patients had a partial response (73% objective response rate). In the Nature Medicine publication it was reported that 7 out of those 11 patients had confirmed partial response (64% objective response rate).

The MD Anderson Phase 2 clinical trial is nearing completion of enrollment in the EGFR cohort, and the Spectrum Phase 2 study is enrolling at approximately 20 centers in the United States today, with further study center expansion in the U.S. and other countries in progress.

About Poziotinib

Poziotinib is a novel, Epidermal Growth Factor Receptor Tyrosine Kinase Inhibitor (EGFR TKI) that inhibits the tyrosine kinase activity of EGFR as well as HER2 and HER4. Importantly this, in turn, leads to the inhibition of the proliferation of tumor cells that overexpress these receptors. Mutations or overexpression/amplification of EGFR family receptors have been associated with a number of different cancers, including non-small cell lung cancer (NSCLC), breast cancer, and gastric cancer. Spectrum received exclusive license to develop, manufacture, and commercialize worldwide excluding Korea and China from Hanmi Pharmaceuticals. Poziotinib is currently being investigated by Spectrum and Hanmi in several mid-stage trials in multiple solid tumor indications