On May 14, 2018 Zymeworks Inc. (NYSE/TSX: ZYME), a clinical-stage biopharmaceutical company developing multifunctional therapeutics, and Daiichi Sankyo Company, Limited (Daiichi Sankyo) reported that they entered into a new license agreement, building upon their 2016 cross-licensing and collaboration agreement (Press release, Zymeworks, MAY 14, 2018, View Source [SID1234526590]).

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"With a successful track record and our first bispecific antibody incorporating the Azymetric and EFECT technology having achieved a key research milestone in 2017, we look forward to adding two more bispecific compounds to our pipeline," said Antoine Yver, MD, MSc, Executive Vice President and Global Head, Oncology Research and Development, Daiichi Sankyo. "We are exceptionally impressed with the robust impact that Zymeworks’ technology brings to antibody development."

Under the terms of the second agreement, Daiichi Sankyo will acquire licenses to Zymeworks’ Azymetric and EFECT technology platforms to develop two additional bispecific antibody therapeutics. In exchange, Zymeworks will receive an upfront technology access fee of US$18 million and may receive up to US$466.7 million in potential clinical, regulatory and commercial milestone payments. In addition, Zymeworks will receive up to double-digit tiered royalties on global product sales.

"Expanding our relationship with a leading global pharmaceutical partner like Daiichi Sankyo is extremely satisfying as it underscores the power, versatility, and attractiveness of our technology platforms," said Ali Tehrani, Ph.D., President and CEO of Zymeworks. "Having already used our platforms to discover one bispecific antibody, Daiichi Sankyo now has increased access to our technology to create additional therapeutic candidates. We are pleased to be working with a healthcare pioneer with a proven track record of over 100 years of innovation leading to major breakthroughs in patient care."

Zymeworks and Daiichi Sankyo began working together in September 2016 through an agreement to develop one bispecific antibody therapeutic for which Zymeworks is eligible to receive preclinical, clinical, and commercial milestones payments, as well as up to double-digit tiered royalties on global product sales. Additionally, Zymeworks obtained a license to certain immuno-oncology antibodies from Daiichi Sankyo, with the right to research, develop, and commercialize multiple bispecific products globally in exchange for royalties on global product sales

On May 14, 2018 Tocagen Inc. (Nasdaq: TOCA), a clinical-stage, cancer-selective gene therapy company, reported preclinical data on Toca 521, a retroviral replicating vector (RRV) expressing a single-chain variable fragment targeting PD-L1, will be presented at the 2018 Annual Meeting of The American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper), held May 16-19 in Chicago (Press release, Tocagen, MAY 14, 2018, View Source;p=RssLanding&cat=news&id=2348847 [SID1234526566]).

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In a preclinical study, Toca 521 reversed PD-1/PD-L1 mediated immune suppression, resulting in robust, durable and highly selective anti-tumor activity that was superior to systemically administered anti-PD-1 or anti-PD-L1 monoclonal antibodies. Tocagen expects to advance Toca 521 into investigational new drug application (IND) enabling studies this year.

In addition, previously disclosed clinical data and new preclinical results from an ovarian cancer model will be presented.

Summaries are provided below for new data sets, for which full posters will be placed on Tocagen’s website following the presentation.

Presentation Type: Poster (Abstract: 111)
Title: PD-L1 Checkpoint Blockade Using a Single-Chain Variable Fragment Targeting PD-L1 Delivered by Retroviral Replicating Vector Enhances Anti-Tumor Effect in Cancer Models
Presenter: Amy Lin, Ph.D., associate director of experimental virology at Tocagen
Date and Time: Wednesday, May 16, 5:30 p.m. CT
Summary:

A RRV expressing a single-chain variable fragment targeting PD-L1, called Toca 521, was developed using Tocagen’s proprietary cancer-selective gene therapy platform technology.
Preclinical results demonstrated Toca 521 reversed PD-1/PD-L1 mediated immune suppression in a human in vitro cell culture system, and conferred robust, durable and highly selective anti-tumor activity compared to systemically administered anti-PD-1 or anti-PD-L1 monoclonal antibodies.
These results indicate further development of Toca 521 is warranted to investigate the potential for improved safety and efficacy profiles compared to systemic monoclonal antibodies against the same checkpoint target. Toca 521 could also be useful in combination with other agents, including immuno-oncology therapies.
Presentation Type: Oral presentation (Abstract: 344)
Title: Treatment of Recurrent HGG Patients with the Retroviral Replicating Vector Toca 511 and Toca FC Resulted in Durable Responses and Survival Lasting 3 Years or Longer: Immune Mechanisms and Molecular Analyses of Tumors
Presenter: Douglas Jolly, Ph.D., executive vice president of research and pharmaceutical development at Tocagen
Date and Time: Thursday, May 17, 9:20-9:40 a.m. CT

Presentation Type: Poster (Abstract: 428)
Title: Toca 511-Mediated Prodrug Activator Gene Therapy: A Promising Therapeutic Strategy for Ovarian Cancer
Presenter: Sara Collins, Ph.D., assistant scientist in the department of cell biology at the University of Miami Miller School of Medicine. These studies were performed in the laboratory of Noriyuki Kasahara, M.D., Ph.D., professor of cell biology and pathology at the University of Miami.
Date and Time: Thursday, May 17, 5:15 p.m. CT
Summary:

Preclinical studies evaluating Toca 511 and 5-FC in a mouse model of ovarian cancer were conducted.
Increased survival and reduced tumor burden was observed in mice with pre-existing tumors receiving Toca 511 followed by 5-FC, as compared to untreated controls.
About Toca 511 & Toca FC

Tocagen’s lead product candidate is a two-part cancer-selective immunotherapy comprised of an investigational biologic, Toca 511 and an investigational small molecule, Toca FC. Toca 511 (vocimagene amiretrorepvec) is a retroviral replicating vector (RRV) that selectively infects cancer cells and delivers a gene for the enzyme, cytosine deaminase (CD). Through this targeted delivery, infected cancer cells carry the CD gene and produce CD. Toca FC is an orally administered, extended-release formulation of the prodrug, 5-fluorocytosine (5-FC), which is converted into an anti-cancer drug, 5-fluorouracil (5-FU), when it encounters CD. 5-FU kills cancer cells and immune-suppressive myeloid cells in the tumor microenvironment resulting in anti-cancer immune activation and subsequent tumor killing.

On May 14, 2018 Eli Lilly and Company (NYSE: LLY) reported an agreement to acquire AurKa Pharma, Inc., a company established by TVM Capital Life Science to develop oncology compound AK-01, an Aurora kinase A inhibitor that was originally discovered at Lilly (Press release, Eli Lilly, MAY 14, 2018, View Source [SID1234526591]). The compound is a potential first-in-class asset that AurKa Pharma is studying in Phase 1 clinical trials in multiple types of solid tumors.

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Aurora kinases are believed to play a crucial role in cellular division by controlling chromosomal segregation. Defects in segregation can cause genetic instability, a condition highly associated with the formation of tumors. Aurora kinases, consisting of Aurora A, Aurora B and Aurora C, are key mitotic regulators required for genome stability and are frequently overexpressed in cancerous tumors. AurKa Pharma’s asset, AK-01, has been shown to be highly selective for Aurora A, with potential clinical benefit observed in Phase 1 studies. Future studies will seek to determine if the selectivity profile of AK-01 can improve efficacy while limiting toxicity risks to a manageable level.

After a review of its clinical pipeline priorities in 2016, Lilly sold the compound to TVM Capital Life Science, which then established AurKa as part of the TVM Life Science Ventures VII fund. The fund is a novel investment model that seeks to develop early-stage pharmaceutical assets in a capital-efficient manner. As part of its innovation strategy, Lilly actively participates with venture capital firms to source early stage opportunities.

"The acquisition of AurKa Pharma supports Lilly’s external innovation strategy, in which we seek to partner with leading life science venture capital firms in order to identify, support and access promising innovation in areas of unmet medical need," said Darren Carroll, senior vice president of corporate business development at Lilly. "We are excited with the value TVM created for this compound through its early-Phase studies, and we look forward to more opportunities in the future."

"Lilly Oncology is focused on the development of innovative cancer therapies that can make a meaningful difference for patients," said Levi Garraway, M.D., Ph.D., senior vice president, global development and medical affairs, Lilly Oncology. "The acquisition of AurKa Pharma expands our pipeline with a promising oncology compound targeting a distinct cell cycle pathway. The work done by AurKa will allow Lilly to leverage emerging data about cancers in which this molecule might be effective, and determine if it can be beneficial to people living with various forms of cancer."

"Through the unique healthcare venture capital model pioneered by TVM Capital Life Science, companies such as AurKa have been established to more quickly and efficiently bring promising compounds to clinical proof-of-concept," said Luc Marengere, Ph.D., Managing Partner at TVM Capital Life Science. "We are pleased that the scientific advances made by AurKa could contribute to the development of AK-01 and hopefully help deliver a potential new medicine for cancer patients."

Under the terms of the agreement, Lilly will acquire all shares of AurKa Pharma. In return, AurKa Pharma shareholders will receive an upfront payment of $110 million. AurKa Pharma shareholders are also eligible to receive up to $465 million in regulatory and sales milestones should AK-01 gain approval in the U.S. and other markets, and achieve certain sales levels.

This transaction will be reflected in Lilly’s reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP), and is subject to customary closing conditions. There will be no change to Lilly’s 2018 non-GAAP earnings per share guidance as a result of this transaction.

Baird is acting as financial advisor to AurKa in this transaction.

On May 14, 2018 Alkermes plc (Nasdaq: ALKS) reported that its corporate presentation will be webcast live at the UBS Global Healthcare Conference on Monday, May 21, 2018 at 2:00 p.m. ET (7:00 p.m. BST) from New York the UBS Global Healthcare Conference on Monday, May 21, 2018. The presentation may be accessed under the Investors tab on www.alkermes.com and will be archived for 14 days.

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Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines for the treatment of central nervous system (CNS) diseases. The company has a diversified commercial product portfolio and a substantial clinical pipeline of product candidates for chronic diseases that include schizophrenia, depression, addiction and multiple sclerosis. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. For more information, please visit Alkermes’ website at www.alkermes.com.

Contact:
Jennifer Zibuda
Investor Relations
+1 781 609 6129

On May 14, 2018 FY2017 performance reflects superior execution (Press release, Takeda, May 14, 2018, View Source [SID1234526592])
– Underlying results: Revenue +5.5%, Core Earnings +40.2%, Core EPS +44.8%
– Takeda will maintain its underlying growth momentum in FY2018

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Underlying Revenue growth +5.5% led by Takeda’s Growth Drivers
• Underlying Revenue grew +5.5%, with Takeda’s Growth Drivers (Gastroenterology, Oncology, Neuroscience and Emerging Markets) posting strong underlying revenue growth of +12.8%.
• Broad based revenue performance was led by double digit growth in the U.S. (U.S. +13.5%, Japan -0.2%, Europe & Canada +6.7%, Emerging Markets +2.0%; Japan growth was +7.0% excluding returned portfolio)
• Reported revenue grew +2.2%, with underlying growth (+5.5%) and positive currency impact (+2.5pp), partly offset by the impact of divestitures (-5.8pp).

Stellar EPS growth reflects strong revenue growth and progress of Global Opex Initiative
• Underlying Core Earnings grew +40.2%, with the Core Earnings margin increasing by 420bps due to product mix improvement and strong cost discipline (+280bps gross margin; +160bps from OPEX margin). Reported operating profit was up +55.1%, mainly driven by Core Earnings growth. In FY2017, Takeda booked a large one-time gain of 106.3 billion yen from the sale of Wako; however, higher one-time expenses resulted in total other income/expenses being less favorable than prior year by-27.8 billion yen.
• Underlying Core EPS was up +44.8%, in-line with underlying Core Earnings growth. Reported EPS was 239 yen, an increase of +62.7% from 147 yen in the prior year, benefitting also from a lower tax rate due to re-measurement of deferred tax liabilities as a result of the U.S. tax reform.

Significant pipeline progress leveraging therapeutic area expertise
• 17 New Molecular Entity clinical stage-ups in FY2017, compared with 5 in the same period of the previous year. Important events included European Commission approval of ALOFISEL (darvadstrocel) in the area of GI, a label update for TRINTELLIX in neuroscience, and the initiation of Phase 3 for pevonedistat in oncology.
• Further strengthened innovation network with 56 new collaborations with academia and bio-tech/bio-ventures.

Net leverage improved due to continued strong progress on cash flow
• Operating Free Cash Flow was up +52.9% to 242.9 billion yen, higher than the dividend payment for the third consecutive year. Non-core asset sales generated an additional 164.4 billion yen of cash.
• Strong cash generation allowed rapid de-leveraging with the net debt/EBITDA ratio improving from 2.7x in March 2017 to 1.8x in March 2018.

Christophe Weber, President and Chief Executive Officer of Takeda, commented:

"Takeda’s transformation is delivering superior results as we execute against our key mid-term priorities of growing the portfolio, strengthening the pipeline, and boosting profitability. In FY2017, our Growth Drivers maintained their strong momentum, which together with disciplined cost management under the Global Opex Initiative resulted in industry-leading revenue and earnings growth. We also made significant progress in R&D, with 17 New Molecular Entity clinical trial stage-ups, and 56 new collaborations to strengthen our innovation network.
The strength of the underlying business means we expect to maintain revenue and earnings growth momentum in FY2018, and I am confident that through strategic focus and superior execution, Takeda will continue to deliver long-term value to patients and shareholders."

Core Earnings is calculated by deducting SG&A expenses and R&D expenses from reported Gross Profit. In addition, certain other items that are non-core in nature and significant in value may also be adjusted.

2 Underlying growth compares two periods of financial results on a common basis, showing the ongoing performance of the business excluding the impact of foreign exchange and divestitures.
3 Attributable to the owners of the company.

FY2018 Management Guidance: Maintaining underlying growth momentum
• Underlying revenue continues to grow despite negative headwinds of -4.4pp that include Velcade decline due to competitor entry (-3.5pp) and portfolio changes (-0.9pp).
• Continued product mix improvement and execution of the Global Opex Initiative will underpin margin improvement. Underlying Core Earnings margin to expand at lower end of the +100-200bps range bringing the 2-year margin expansion to more than 500 basis points.
• Underlying Core Earnings will grow high single digit, despite Velcade decline which negatively impacts Core Earnings growth by over 18 percentage points.
• Annual dividend of 180 yen per share, in-line with Takeda’s well-established dividend policy of being strongly committed to shareholder returns with the dividend as a key component.

FY2018 Reported Forecast: Underlying strength lessens impact of significant decline in one-time items
• Underlying revenue growth momentum offset by Forex and divestitures.
• Excluding the negative impact of Forex and divestitures, Core Earnings growth is forecast to be high single digit.
• Reported operating profit is impacted by lower other income (-40.9pp, especially the 106.3 billion yen gain on the sale of Wako in FY2017) and the impact of divestitures (-9.6pp).

Takeda is currently in an offer period (as defined in the City Code on Takeovers and Mergers (the "Code")) with respect to Shire plc. Pursuant to Rule 28 of the Code, statements made regarding Takeda’s guidance for FY2018 (including statements regarding forecasts for FY2018 revenue, Core Earnings, Operating profit, Profit before income taxes, Net profit attributable to owners of the Company, Basic earnings per share, R&D expenses, Amortisation and impairment and other income/expense, Underlying Revenue, Underlying Core Earnings and Underlying Core EPS) constitute a profit forecast for the year ending March 31, 2019 (the "Takeda Profit Forecast"). For additional information regarding the Takeda Profit Forecast and the required statement by its Directors that such profit forecast is valid and has been properly compiled on the basis of the assumptions stated and that the basis of accounting used in consistent with Takeda’s accounting policies, please see page 21 of Takeda’s Financial Results (Tanshin) for the Fiscal Year Ended March 31, 2018, dated May 14, 2018.

Raising our objectives for non-core asset disposals by the end of FY2018
• Revised objective is to unlock 190 billion yen of cash by the end of FY2018 from real estate disposals and the sale of securities, increased from 130 billion yen guidance given in May 2017.