On January 7, 2019 Diplomat Pharmacy, Inc. (NYSE: DPLO), is reported its 2018 financial guidance and providing a preliminary 2019 outlook in connection with its presentation today at the JP Morgan Healthcare Conference in San Francisco (Press release, Diplomat Speciality Pharmacy, JAN 7, 2019, View Source [SID1234532529]).

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Diplomat now expects 2018 revenue to be at the lower end of the previously communicated $5.5 to $5.7 billion range and adjusted EBITDA to be at the higher end of the previously communicated $164 to $170 million range.

2018 revenue is expected to be within the range of $5.5 billion and $5.6 billion.
2018 adjusted EBITDA is now expected to be within the range of $167 million and $170 million, an increase of at least 64% based on the low end of the 2018 range vs. 2017.
Diluted GAAP EPS 2018 is expected to range from ($0.08) to $0.00.
Net debt, including contingent consideration at December 31, 2018 is expected to be approximately $630 million.
The company also announced that Joel Saban, president of Diplomat, and Albert Thigpen, president and chief operating officer of CastiaRx, are leaving the company effective immediately. The company has initiated searches for their replacements. Chairman and CEO Brian Griffin will directly oversee CastiaRx and the operational review of that business pending completion of the search.

Griffin commented, "Diplomat delivered strong revenue and EBITDA growth in 2018 despite challenges in our CastiaRx PBM segment. Solid specialty growth, robust infusion performance, and better than expected synergy capture following completion of the PBM integration drove 2018 results, and investments we have made in sales, systems, processes and facilities are expected to drive future growth and profitability, positioning the company well for 2019 and beyond."

Griffin noted that Diplomat has been selected by Hospitality Rx as the exclusive provider of specialty pharmacy services for its UNITE HERE HEALTH (UHH) plan members. UHH is a multiemployer union plan that provides health benefits to approximately 250,000 members across the nation.

In addition, Diplomat announced a partnership today with CSI Specialty Group, a globally recognized specialty pharmacy consulting firm. Diplomat will provide limited-distribution drugs and specialty care management solutions to health system clients.

"These recent contract awards are evidence that the payer sales strategy launched in early 2018 is gaining traction," said Griffin. "Payers are increasingly interested in Diplomat’s specialty and infusion services on a carve-out basis as they focus on improved patient care and driving down total healthcare costs. We continue to see interest and are in discussions with mid and large-tier health plans looking to enhance the management of not only their specialty pharmacy benefit, but also their specialty medical drug benefit. We expect to announce additional awards in the coming months as we leverage coordinated sales and clinical efforts across specialty and infusion."

Preliminary 2019 Outlook

In 2019, Diplomat expects:

Revenue in the range of $5.6 billion to $5.8 billion, representing an approximate 3 percent year-over-year increase based on the midpoints of 2018 and 2019 guidance ranges.
Flat to low-single-digit percent year-over-year adjusted EBITDA growth compared to the mid-point of updated 2018 guidance.
Achievement of net debt/EBITDA below 3.0x by the end of 2019.
Griffin commented, "We expect 2019 to be characterized by continued growth in specialty and infusion given our payer-focused strategy, and actions we are taking to return our PBM business to growth." In 2019, Diplomat also expects:

Continued sales growth in specialty pharmacy, supported by further penetration in the payer space, particularly with health plans, as the company leverages coordinated sales and clinical efforts across specialty and infusion.
Specialty infusion growth should also benefit from growth in key therapeutic areas, additional sales resources added in 2018, further traction from biosimilars, and new limited-distribution drugs, with the potential to expand therapeutic areas and geographically via tuck-in acquisitions.
A realignment of the PBM to increase win rates and offset lost business. The company expects to significantly expand experienced sales and account management resources to drive business wins and position the business to return to growth in 2020.
The preliminary 2019 outlook assumes a revenue contribution from CastiaRx of $450 million to $500 million. The revenue range expected to be generated by CastiaRx includes approximately $200 million in previously disclosed Medicare Part D contract losses, an additional $120 million combined revenue impact from client losses impacting 2019 and the pricing impact of contract renewals, $35 million in January 1, 2019 new business, as well as further awards given a strong pipeline for the remainder of 2019.

Management Changes and CastiaRx Review

"While we’ve been seeing some positive signs for the CastiaRx brand and value proposition, there is no question that this segment disappointed in 2018," said Griffin. "We are looking at this business very closely and are taking decisive steps to address its challenges, including key senior management changes. We have also engaged an external consultant with deep PBM operational experience to help implement operational performance improvement initiatives. We expect this review to be completed over the next several weeks and expect to provide an update on the review as part of our Q4 earnings call."

Commenting on the departures of Saban and Thigpen, "They have contributed much to Diplomat during their tenure and we wish them the best for the future."

"2019 will be a critical year for CastiaRx to demonstrate positive momentum and I will be personally leading the CastiaRx business on an interim basis, while we evaluate options for permanent leadership. We are focused on finding the right talent to maximize value for patients, payers and shareholders," concluded Griffin.

Presentation Information

As previously announced, Brian Griffin, Chairman and CEO, and Atul Kavthekar, CFO of Diplomat Pharmacy, Inc., are scheduled to present at the 37th Annual J.P. Morgan Healthcare conference on Monday, Jan. 7, 2019, at 8:00 a.m. PT. The related presentation materials are available on the investor relations section of Diplomat’s website at ir.diplomat.is. A live audio webcast of the presentation will also be available on the investor relations section of Diplomat’s website at ir.diplomat.is. An archived audio recording and related presentation materials will be online for 90 days at the same URL.

On January 7, 2019 Novocure (NASDAQ: NVCR) reported operating statistics and preliminary, unaudited net revenues and cash balances for the fourth quarter and full year 2018 (Press release, NovoCure, JAN 7, 2019, View Source [SID1234532545]). Novocure plans to discuss these results with investors at the 37th Annual J.P. Morgan Healthcare Conference in San Francisco. The company also highlighted anticipated clinical and regulatory milestones, announced national reimbursement in Sweden and confirmed a Contractor Advisory Committee (CAC) meeting date set by the durable medical equipment (DME) Medicare Administrative Contractors (MACs).

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Novocure announces fourth quarter and full year 2018 operating statistics, preliminary net revenues and provides company update

(1) An "active patient" is a patient who is on Optune under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days.

(2) A "prescription received" is a commercial order for Optune that is received from a physician certified to treat patients with Optune for a patient not previously on Optune. Orders to renew or extend treatment are not included in this total.

(3) The preliminary, unaudited results described in this press release are estimates only and are subject to revision until the company reports its full financial results for the fourth quarter 2018 on Feb. 28, 2019.

"We continued to drive Optune adoption in the fourth quarter with full year 2018 preliminary net revenues of $248.0 million, representing annual growth of more than 40 percent. Prescriptions for patients with newly diagnosed GBM grew to approximately 950 in the fourth quarter, driving our 16th consecutive quarter of active patient growth since the initial presentation of our EF-14 data," said William Doyle, Novocure’s Executive Chairman. "Notably, we also expanded our geographic reach with national reimbursement in Sweden and Zai Lab’s recent launch of Optune in Hong Kong."

"At Novocure, we are working to extend survival in some of the most aggressive forms of cancer by developing and commercializing our innovative therapy," continued Mr. Doyle. "With an application at the FDA for mesothelioma and ongoing or planned phase 3 pivotal trials in brain metastases, non-small cell lung cancer, pancreatic cancer and ovarian cancer, we believe GBM represents just the tip of the iceberg for Tumor Treating Fields. We look forward to providing a full company update and discussing our 2018 financial results on our February conference call."

Fourth quarter 2018 operating statistics and preliminary financial highlights

There were 2,383 active patients on Optune at December 31, 2018, representing 30 percent growth compared to December 31, 2017, and 6 percent growth compared to September 30, 2018.

In the United States, there were 1,637 active patients on Optune at December 31, 2018, representing 24 percent growth compared to December 31, 2017.
In Germany and other EMEA markets, there were 654 active patients on Optune at December 31, 2018, representing 28 percent growth compared to December 31, 2017.
In Japan, there were 92 active patients on Optune at December 31, 2018, representing 4,500 percent growth compared to December 31, 2017.
Additionally, 1,315 prescriptions were received in the quarter ended December 31, 2018, representing 21 percent growth compared to the same period in 2017, and 6 percent growth compared to the quarter ended September 30, 2018. Prescriptions for newly diagnosed GBM continued to grow, with approximately 950 Optune prescriptions in the fourth quarter written for patients with newly diagnosed GBM.

In the United States, 941 prescriptions were received in the quarter ended December 31, 2018, representing 16 percent growth compared to the same period in 2017.
In Germany and other EMEA markets, 322 prescriptions were received in the quarter ended December 31, 2018, representing 15 percent growth compared to the same period in 2017.
In Japan, 52 prescriptions were received in the quarter ended December 31, 2018, representing 5,100 percent growth compared to the same period in 2017.
On a preliminary, unaudited basis, for the quarter ended December 31, 2018, net revenues were $69.6 million, representing 30 percent growth compared to the fourth quarter 2017, and full year 2018 net revenues were $248.0 million, representing annual growth of more than 40 percent compared to 2017.

At December 31, 2018, on a preliminary, unaudited basis, Novocure had $140.6 million in cash and cash equivalents and $105.3 million in short-term investments, for a total balance of $245.9 million in cash, cash equivalents and short-term investments. This represents an increase of $18.2 million in cash and investments since September 30, 2018.

Anticipated clinical and regulatory milestones

FDA approval for unresectable malignant pleural mesothelioma (2019)
Initiation of phase 3 pivotal trial in recurrent ovarian cancer (2019)
Zai Labs initiation of phase 2 pilot trial in gastric cancer (2019)
Data from phase 2 pilot HEPANOVA trial in advanced liver cancer (2020)
Interim analysis of phase 3 pivotal LUNAR trial in non-small cell lung cancer (2020)
Data from phase 3 pivotal METIS trial in brain metastases (2021)
Interim analysis of phase 3 pivotal PANOVA-3 trial in locally advanced pancreatic cancer (2021)
Final data from phase 3 pivotal LUNAR trial in non-small cell lung cancer (2021)
Interim analysis of phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer (2022)
Novocure has received initial comments from the FDA on its October 2018 Humanitarian Device Exemption (HDE) application for approval in malignant pleural mesothelioma and is currently preparing its response.

Other company updates

Novocure announced today that it has finalized a pricing and reimbursement agreement for Optune in Sweden. Reimbursement decisions in Sweden are supported by a comprehensive health technology assessment. With defined reimbursement now established in Sweden, Novocure’s efforts will turn to building adoption.

Novocure also announced today that the DME MACs will host a CAC meeting on March 6, 2019. The CAC meeting is intended to provide a formal mechanism for healthcare professionals to be informed of and participate in the development of the local coverage determination (LCD) for Optune for the treatment of newly diagnosed GBM. Following the CAC meeting, the DME MACs will draft and publish a proposed LCD for public comment.

Fourth quarter and full year 2018 financial results conference call

Novocure will host a conference call and webcast to discuss fourth quarter and full year 2018 financial results on Thursday, Feb. 28, 2019 at 8 a.m. EDT. Analysts and investors can participate in the conference call by dialing 855-442-6895 for domestic callers and 509-960-9037 for international callers, using the conference ID 3956899.

The webcast, earnings slides presented during the webcast and the corporate presentation can be accessed live from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for at least 14 days following the call.

On January 7, 2019 Sanofi (EURONEXT: SAN, NASDAQ: SNY) and Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported that they have restructured their global Immuno-oncology Discovery and Development Agreement for new immuno-oncology cancer treatments (Press release, Sanofi, JAN 7, 2019, View Source [SID1234532561]). The 2015 Agreement was scheduled to end in approximately mid-2020, and this revision provides for ongoing collaborative development of two clinical-stage bispecific antibody programs. This provides Sanofi increased flexibility to advance its early-stage immuno-oncology pipeline independently while Regeneron retains all rights to its other immuno-oncology discovery and development programs.

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Under the terms of the restructured Agreement:

Sanofi will pay Regeneron $462 million representing the balance of payments due under the original Immuno-oncology Agreement, which covers the Sanofi share of the immuno-oncology discovery program costs for the last quarter of 2018 and up to $120 million in development costs for the two selected clinical-stage bispecific antibodies, plus the termination fee for the other programs under the original immuno-oncology agreement.
Sanofi secures the right to opt-in to the BCMAxCD3 and MUC16xCD3 bispecific programs when proof of concept is achieved or when the allocated funding is expended.
Regeneron will commit up to $70 million to further develop the BCMAxCD3 bispecific antibody for multiple myeloma and up to $50 million to further develop the MUC16xCD3 bispecific for mucin-16 expressing cancers.
Post opt-in, Sanofi will lead development and commercialization of the BCMAxCD3 bispecific and fund 100 percent of development costs, with Regeneron reimbursing up to 50 percent out of its share of collaboration profits. Sanofi and Regeneron will share global profits equally.
Post-opt-in, Regeneron will lead MUC16xCD3 bispecific development and lead commercialization in the U.S. The companies will share development costs and global profits equally. Sanofi will lead commercialization outside the U.S.
The companies’ ongoing collaboration for the development and commercialization of Libtayo (cemiplimab-rwlc), a PD1 antibody, is unaffected by the amended Discovery and Development Agreement.
Regeneron retains full rights to its other immuno-oncology programs.
Under the Immuno-Oncology License and Collaboration Agreement, the companies have developed and received U.S. Food and Drug Administration approval of Libtayo for advanced cutaneous squamous cell carcinoma (CSCC). A regulatory application for Libtayo has also been submitted in the EU. An ongoing joint clinical program is investigating Libtayo in multiple other cancers, and includes potentially pivotal trials in lung, cervical and skin cancers. Libtayo’s safety and efficacy has not been fully evaluated by any regulatory authority for indications beyond advanced CSCC.

On January 7, 2019 Integral Molecular, the industry leader in membrane protein solutions, reported that it has entered into a collaboration to discover new therapeutic targets in immuno-oncology (I-O) with Daiichi Sankyo Co., Ltd. Integral Molecular will use its Membrane Proteome Array (MPA) platform to identify novel membrane proteins that regulate the human immune system’s ability to recognize and destroy cancer cells (Press release, Integral Molecular, JAN 7, 2019, https://www.integralmolecular.com/integral-molecular-enters-immuno-oncology-target-discovery-collaboration-with-daiichi-sankyo/ [SID1234533985]). Daiichi Sankyo will use the identified I-O targets to develop new therapeutics. Specific financial terms of the agreement have not been disclosed.

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The MPA platform contains 5,300 different human membrane proteins, each individually expressed in live human cells. Each protein is screened for ligand binding and biological function using unfixed cells and flow cytometry, enabling high-sensitivity detection and high success rates. These features, particularly the ability to detect functional interactions in live cells, make the MPA ideally suited to the discovery of new therapeutic targets.

"By discovering new targets without preconceived biases, the MPA platform overcomes the disadvantages of current approaches for identifying novel immunomodulatory proteins," said Benjamin Doranz, President and CEO at Integral Molecular. "We have already discovered more than a dozen novel I-O interactions and confirmed that several of these interactions regulate T cells. We are looking forward to a successful collaboration with Daiichi Sankyo."

On January 6, 2019 GE Healthcare and Vanderbilt University Medical Center (VUMC) reported a five-year partnership to enable safer and more precise cancer immunotherapies (Press release, GE Healthcare, JAN 6, 2019, View Source [SID1234532487]). Multiple diagnostic tools will be developed to help predict both the efficacy of an immunotherapy treatment and its adverse effects for a specific patient before the therapy is administered. This would allow physicians to better target immunotherapies to the right patients and avoid potentially damaging, ineffective and costly courses of treatments.

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Immunotherapies use the immune system to recognize and attack cancer cells and can be more effective than traditional treatments, but response rates are often low and side effects can be severe1. GE Healthcare and VUMC will retrospectively analyze and correlate the immunotherapy treatment response of thousands of VUMC cancer patients, with their anonymized demographic, genomic, tumor, cellular, proteomic and imaging data. They will then develop AI-powered apps that draw on this data to help physicians identify the most suitable treatment for each individual patient.

Simultaneously, GE Healthcare and VUMC will develop new positron-emission tomography (PET) imaging tracers, which together with the apps, will help physicians to stratify cancer patients for clinical trials. It currently takes an average of 12 years2 and costs almost $2bn3 to bring a drug to market. In many cases, inappropriate patients are recruited to participate in immunotherapy trials, incurring unnecessary expense and slowing down approvals of new therapies. It is hoped that the PET tracers will ultimately also be used to monitor the efficacy of immunotherapies in everyday practice.

"Immunotherapy offers tremendous promise but given the current unpredictability of some patients’ reactions to treatments, it is also associated with increased morbidity and cost. This partnership provides the opportunity to leverage strengths of both of our organizations to further personalize cancer care by creating new tools that allow clinicians to more accurately predict how patients will respond to a specific therapy," said Jeff Balser, MD, PhD, President and Chief Executive Officer, Vanderbilt University Medical Center and Dean of the Vanderbilt University School of Medicine.

"GE Healthcare and Vanderbilt will combine their data science, genomic, imaging and cellular analysis capabilities to help improve clinical decision making. This partnership is a great example of the increasing convergence of the tools, technologies and data used by therapy innovators and healthcare providers," said Kieran Murphy, President and Chief Executive Officer, GE Healthcare.

GE Healthcare and the Vanderbilt-Ingram Cancer Center, a world-renowned stem cell transplant facility, will also collaborate on methods to improve productivity, efficiency and cost of stem cell transplant processing operations by automating processes, digitizing workflows, improving throughput and industrializing operations.

The first analytics application prototype will be available by the end of 2019 and the PET tracer proof-of-concept by the end of 2020.