Seattle Genetics Announces More Than 30 Presentations at ASH 2018 Highlighting Progress with Broad ADCETRIS® (Brentuximab Vedotin) Development Program

On November 1, 2018 Seattle Genetics, Inc. (Nasdaq:SGEN) reported that 31 abstracts featuring data from the broad ADCETRIS (brentuximab vedotin) development program have been accepted for presentation at the 60th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition taking place from December 1-4, 2018 in San Diego, Calif (Press release, Seattle Genetics, NOV 1, 2018, View Source [SID1234530659]). ADCETRIS is an antibody-drug conjugate (ADC) directed to CD30, which is expressed on the surface of Hodgkin lymphoma (HL) cells and several types of non-Hodgkin lymphoma. ADCETRIS is being evaluated globally as the foundation of care for CD30-expressing lymphomas in more than 70 corporate- and investigator-sponsored clinical trials.

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Data accepted for presentation at the ASH (Free ASH Whitepaper) Annual Meeting include the following:

Data from the phase 3 ECHELON-2 clinical trial evaluating ADCETRIS in combination with chemotherapy in previously untreated patients with CD30-expressing peripheral T-cell lymphoma (PTCL) patients will be presented in an oral presentation on Monday, December 3, 2018 at 6:15 p.m. PT. Seattle Genetics and its partner Takeda Pharmaceutical Company Limited (Takeda) reported positive top-line results from the ECHELON-2 trial in October 2018. The trial demonstrated a statistically significant improvement in the primary endpoint of progression-free survival (PFS) of ADCETRIS in combination with CHP (cyclophosphamide, doxorubicin, prednisone) versus the control arm, CHOP (cyclophosphamide, doxorubicin, vincristine, prednisone). The ADCETRIS plus CHP arm also demonstrated superior overall survival (OS), a key secondary endpoint, compared to CHOP. The ECHELON-2 trial is the first trial to demonstrate an OS advantage in this difficult to treat type of non-Hodgkin lymphoma. Seattle Genetics expects to submit in November 2018 a supplemental Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for approval of ADCETRIS plus CHP in frontline CD30-expressing PTCL.
Several analyses from the phase 3 ECHELON-1 clinical trial evaluating ADCETRIS in combination with chemotherapy in frontline Stage III or IV classical HL adult patients, which formed the basis of FDA approval in this indication in March 2018, will be presented. Data presentations include additional analyses from the ECHELON-1 study, including PFS per investigator and outcomes in younger patients (18-30 years of age). These analyses are consistent with the previously reported modified PFS data and demonstrate improved outcomes in the ADCETRIS plus AVD (doxorubicin, vinblastine, dacarbazine) arm versus ABVD (doxorubicin, bleomycin, vinblastine, dacarbazine).
Preliminary results from a phase 2 study of ADCETRIS in combination with Opdivo (nivolumab) among patients with relapsed or refractory primary mediastinal large B-cell lymphoma (CHECKMATE 436 trial), as well as updated results from an ongoing phase 1/2 study evaluating the combination therapy in relapsed or refractory HL.
"There will be more than 30 data presentations from both corporate- and investigator-sponsored studies presented at the 2018 ASH (Free ASH Whitepaper) Annual Meeting evaluating ADCETRIS in a variety of CD30-expressing lymphoma settings. These presentations are reflective of a robust ADCETRIS clinical development program that we, in partnership with the oncology community, are conducting to improve the treatment outcomes for patients," said Roger Dansey, M.D., Chief Medical Officer of Seattle Genetics. "Importantly, and in collaboration with our partner Takeda, the results of the phase 3 ECHELON-2 clinical trial evaluating ADCETRIS in combination with CHP chemotherapy in frontline CD30-expressing peripheral T-cell lymphoma patients will be presented in an oral presentation on Monday, December 3rd. These data are the basis for our planned supplemental Biologics License Application to the FDA requesting approval of ADCETRIS in this setting, which we intend to submit in November 2018."

ADCETRIS is not currently approved for use in frontline PTCL or in combination with Opdivo.

Multiple corporate and investigator presentations will be featured at ASH (Free ASH Whitepaper). Abstracts can be found at www.hematology.org and include the following:

Saturday, December 1, 2018

Brentuximab Vedotin with Chemotherapy in Adolescents and Young Adults (AYA) with Stage III or IV Hodgkin Lymphoma: A Subgroup Analysis from the Phase 3 ECHELON-1 Study (Abstract #1647, poster presentation)
Older Patients (pts) with Previously Untreated Classical Hodgkin Lymphoma (cHL): A Detailed Analysis from the Phase 3 ECHELON-1 Study (Abstract #1618, poster presentation)
Phase 1/2 Study of Brentuximab Vedotin in Combination with Nivolumab in Patients with Relapsed or Refractory Classic Hodgkin lymphoma: Part 3 (Concurrent Dosing) Results and Updated Progression-Free Survival Results from Parts 1 and 2 (Staggered Dosing) (Abstract #1635, poster presentation)
Phase 1 Study of MDR1 Inhibitor Plus Brentuximab Vedotin in Relapsed/Refractory Hodgkin Lymphoma (Abstract #1636, poster presentation)
Real World Prevalence of Diagnostic Revision Among Patients with Peripheral T-cell Lymphomas (PTCL) in the US: Results of an Administrative Claims and Electronic Medical Record Analyses (Abstract #1633, poster presentation)
Superior Clinical Benefit of Brentuximab Vedotin in Mycosis Fungoides Versus Physician’s Choice Irrespective of CD30 Level of Large Cell Transformation Status in the Phase 3 ALCANZA Study (Abstract #1646, poster presentation)
A Phase II Study of Brentuximab Vedotin plus Adriamycin and Dacarbazine without Radiation in Non-Bulky Limited Stage Classical Hodgkin Lymphoma (Abstract #1654, poster presentation)
Treatment Patterns and Outcomes of Relapsed/Refractory Peripheral T-Cell Lymphoma (RR-PTCL) Patients Treated in the Community Oncology Setting (Abstract #1656, poster presentation)
Nivolumab Combined with Brentuximab Vedotin for Relapsed/Refractory Primary Mediastinal Large B-Cell Lymphoma: Preliminary Results From the Phase 2 CheckMate 436 Trial (Abstract #1691, poster presentation)
The Development and Validation of an Electronic Health Record (EHR)-Based Algorithm for Identifying Treatment Failure in Newly Diagnosed Hodgkin Lymphoma (HL) Treated in a US Community Oncology Setting (Abstract #2261, poster presentation)
Real World Evidence in Relapsed/Refractory Classical Hodgkin Lymphoma Patients Who Are Ineligible for Stem Cell Transplant in the United States (US) (Abstract #2268, poster presentation)
Toxicity Profile of Brentuximab Vedotin in Combination with Chemotherapy for Newly Diagnosed Patients with ALK+ ALCL: a Children’s Oncology Group Study ANHL12P1 (Abstract #1625, poster presentation)
Phase I Study of the Antibody-Drug Conjugate Brentuximab Vedotin Combined with Re-Induction Chemotherapy in Patients with CD30-Expressing Relapsed/Refractory Acute Myeloid Leukemia (Abstract #1431, poster presentation)
Phase 1 Results from a Phase 1/2 Study to Assess the Safety, Tolerability and Recommended Phase 2 Dose (RP2D) of Brentuximab Vedotin Plus Doxorubicin, Vinblastine and Dacarbazine (A+AVD) in Pediatric Patients (Pts) with Advanced Stage Newly Diagnosed Classical Hodgkin Lymphoma (cHL) (Abstract #1644, poster presentation)
Sunday, December 2, 2018

Brentuximab Vedotin Plus Chemotherapy in Patients with Advanced-Stage Classical Hodgkin Lymphoma (cHL): Evaluation of Modified Progression-Free Survival (mPFS) and Traditional PFS in the Phase 3 ECHELON-1 Study (Abstract #2904, poster presentation)
Resolution of Peripheral Neuropathy (PN) in Patients Who Received A+AVD or ABVD in the Phase 3 ECHELON-1 Trial (Abstract #2921, poster presentation)
Interim Analysis Results from an International, Multi-Centre, Non-Interventional Retrospective Study to Describe Treatment Pathways, Outcomes, and Resource Use in Patients with Classical Hodgkin Lymphoma: B-CD30+ Hodgkin Lymphoma International Multi-Centre Retrospective Study of Treatment Practices and Outcomes (B-HOLISTIC) (Abstract #2917, poster presentation)
Combining Brentuximab Vedotin with DHAP as Salvage Treatment in Relapsed/Refractory Hodgkin Lymphoma: the Phase II HOVON/LLPC Transplant BRaVE Study (Abstract #2923, poster presentation)
Peripheral T-Cell Lymphomas in Spain: Profiling Clinical, Phenotypic and Genetic Characteristics in Spanish Population (Abstract #2938, poster presentation)
Primary Mediastinal B-Cell Lymphoma: Evaluation of Clinicopathologic Diagnosis Compared to Gene Expression Based Diagnosis in a Clinical Trial with CD30+ B-Cell Lymphomas (Abstract #2959, poster presentation)
Utilization of a Novel Method of Detection of CD30 Expression in Diffuse Large B-cell Lymphoma (Abstract #2978, poster presentation)
Health-Related Quality of Life (HRQL) Trajectories during Treatment for Advanced Stage Pediatric Hodgkin Lymphoma (HL) (Abstract #3587, poster presentation)
Monday, December 3, 2018

The ECHELON-2 Trial: Results of a Randomized, Double-Blind, Active-Controlled Phase 3 Study of Brentuximab Vedotin and CHP (A+CHP) Versus CHOP in the Frontline Treatment of Patients with CD30+ Peripheral T-Cell Lymphomas (Abstract #997, oral presentation at 6:15 p.m. PT)
Longitudinal Adverse Event Assessment of the Combination of Ipilimumab, Nivolumab And Brentuximab Vedotin in Relapsed/Refractory Hodgkin Lymphoma: A Trial of the ECOG-ACRIN Cancer Research Group (E4412: Arms A-F) (Abstract #623, oral presentation at 8:00 a.m. PT)
A Phase I Study with an Expansion Cohort of the Combinations of Ipilimumab, Nivolumab and Brentuximab Vedotin in Patients with Relapsed/Refractory Hodgkin Lymphoma: A trial of the ECOG-ACRIN Research Group (E4412: Arms G-I) (Abstract #679, oral presentation at 10:30 a.m. PT)
B-CAP (brentuximab vedotin, cyclophosphamide, doxorubicin and predniso(lo)Ne) in Older Patients with Advanced-Stage Hodgkin Lymphoma: Results of a Phase II Intergroup Trial By the German Hodgkin Study Group (GHSG) and the Nordic Lymphoma Group (NLG) (Abstract #926, oral presentation at 4:45 p.m. PT)
Response-Adapted Therapy with Nivolumab and Brentuximab Vedotin (BV), Followed by BV and Bendamustine for Suboptimal Response, in Children, Adolescents, and Young Adults with Standard-Risk Relapsed/Refractory Classical Hodgkin Lymphoma (Abstract #927, oral presentation at 5:00 p.m. PT)
Productivity Loss Among Parent Caregivers is Associated with Poor Health-Related Quality of Life (HRQL) at the Initial Diagnosis Of Pediatric Advanced Stage Hodgkin Lymphoma (HL) (Abstract #975, oral presentation at 5:00 p.m. PT)
Baseline Tumor Transcriptome Characteristics Associated with the Response of Relapsed/Refractory Hodgkin Lymphoma Patients to Brentuximab Vedotin in Combination with Nivolumab (Abstract #2837, poster presentation)
Patient and Physician Preferences for First-Line Treatment of Classical Hodgkin Lymphoma in the United States (Abstract #4786, poster presentation)
Prolonged Overall Survival (OS) in a Subset of Responders to the Combination of Brentuximab Vedotin (Bv) and Bendamustine (B) in Heavily Treated Patients with Relapsed or Refractory Hodgkin Lymphoma (HL): Results of an International Multi-Center Phase I/II Experience (Abstract #2907, poster presentation)
About ADCETRIS (brentuximab vedotin)

ADCETRIS is being evaluated broadly in more than 70 clinical trials in CD30-expressing lymphomas. These include the recently completed phase 3 ECHELON-2 trial in frontline peripheral T-cell lymphomas (also known as mature T-cell lymphoma), the completed phase 3 ECHELON-1 trial in previously untreated Hodgkin lymphoma, the completed phase 3 ALCANZA trial in cutaneous T-cell lymphoma, and the ongoing CHECKMATE 812 trial of ADCETRIS in combination with Opdivo (nivolumab) for relapsed/refractory Hodgkin lymphoma.

ADCETRIS is an ADC comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent, monomethyl auristatin E (MMAE), utilizing Seattle Genetics’ proprietary technology. The ADC employs a linker system that is designed to be stable in the bloodstream but to release MMAE upon internalization into CD30-expressing tumor cells.

ADCETRIS injection for intravenous infusion has received FDA approval for five indications in adult patients with: (1) previously untreated Stage III or IV classical Hodgkin lymphoma (cHL), in combination with chemotherapy, (2) cHL at high risk of relapse or progression as post-autologous hematopoietic stem cell transplantation (auto-HSCT) consolidation, (3) cHL after failure of auto-HSCT or failure of at least two prior multi-agent chemotherapy regimens in patients who are not auto-HSCT candidates, (4) sALCL after failure of at least one prior multi-agent chemotherapy regimen, and (5) primary cutaneous anaplastic large cell lymphoma (pcALCL) or CD30-expressing mycosis fungoides (MF) who have received prior systemic therapy.

Health Canada granted ADCETRIS approval with conditions for relapsed or refractory Hodgkin lymphoma and sALCL in 2013, and non-conditional approval for post-autologous stem cell transplantation (ASCT) consolidation treatment of Hodgkin lymphoma patients at increased risk of relapse or progression.

ADCETRIS received conditional marketing authorization from the European Commission in October 2012. The approved indications in Europe are: (1) for the treatment of adult patients with relapsed or refractory CD30-positive Hodgkin lymphoma following ASCT, or following at least two prior therapies when ASCT or multi-agent chemotherapy is not a treatment option, (2) the treatment of adult patients with relapsed or refractory sALCL, (3) for the treatment of adult patients with CD30-positive Hodgkin lymphoma at increased risk of relapse or progression following ASCT, and (4) for the treatment of adult patients with CD30-positive cutaneous T-cell lymphoma (CTCL) after at least one prior systemic therapy.

ADCETRIS has received marketing authorization by regulatory authorities in 72 countries for relapsed or refractory Hodgkin lymphoma and sALCL. See select important safety information, including Boxed Warning, below.

Seattle Genetics and Takeda are jointly developing ADCETRIS. Under the terms of the collaboration agreement, Seattle Genetics has U.S. and Canadian commercialization rights and Takeda has rights to commercialize ADCETRIS in the rest of the world. Seattle Genetics and Takeda are funding joint development costs for ADCETRIS on a 50:50 basis, except in Japan where Takeda is solely responsible for development costs

MorphoSys to Present Data on Investigational Drugs MOR208 and MOR202 in Various Blood Cancer Indications at ASH 2018 Meeting

On November 1, 2018 MorphoSys AG (FSE: MOR; Prime Standard Segment; MDAX & TecDAX; Nasdaq: MOR) reported the presentation of data on its investigational hemato-oncological drug candidates MOR208 and MOR202 at the upcoming 60th American Society of Hematology (ASH) (Free ASH Whitepaper) 2018 Annual Meeting, taking place from December 1-4, 2018 in San Diego, California (Press release, MorphoSys, NOV 1, 2018, View Source [SID1234530482]). All three abstracts submitted to ASH (Free ASH Whitepaper) 2018 were accepted, resulting in two oral and one poster presentation.

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"This year’s ASH (Free ASH Whitepaper) Meeting will see a number of important updates from our investigational compounds in various blood cancer indications," said Dr. Malte Peters, Chief Development Officer of MorphoSys AG. "We are particularly excited that we have been selected to present updated preliminary results on all 81 enrolled patients in the L-MIND study, in an oral presentation at ASH (Free ASH Whitepaper). This study is designed to evaluate efficacy and safety of our Fc-enhanced CD19 antibody MOR208 in combination with lenalidomide in patients with relapsed or refractory diffuse large B cell lymphoma (r/r DLBCL). Based on the U.S. FDA breakthrough therapy designation received last year, we are committed to developing MOR208 plus lenalidomide as a new treatment option for patients with r/r DLBCL, where there is a particularly high unmet medical need."

Details about MorphoSys’s abstracts accepted for presentation at ASH (Free ASH Whitepaper) 2018:

Single-Arm Phase II Study of MOR208 Combined with Lenalidomide in Patients with Relapsed or Refractory Diffuse Large B-Cell Lymphoma: L-Mind

The oral presentation will include clinical data from all 81 patients enrolled in the ongoing phase 2 L-MIND study of the investigational Fc-enhanced CD19 antibody MOR208 plus lenalidomide in adult patients with r/r DLBCL who are not eligible for high-dose chemotherapy (HDC) and autologous stem cell transplantation (ASCT).

Abstract publication number: 227
Session name: 626. Aggressive Lymphoma (Diffuse Large B-Cell and Other Aggressive B-Cell Non-Hodgkin Lymphomas)-Results from Prospective Clinical Trials"
Session date and time: Saturday, December 1, 2018, 4:00pm-5:30pm PST
Presentation time: 5:00pm PST
Room: Marriot Marquis San Diego Marina, Pacific Ballroom 20, San Diego, California.

Two-Cohort Phase II Study in R/R CLL (COSMOS): First Preliminary Safety and Efficacy Results of anti-CD19 MOR208 Treatment in Combination with Venetoclax in Patients Who Discontinued Prior BTK Inhibitor Therapy

The poster presentation will include preliminary safety and efficacy results from the phase 2 trial COSMOS of the investigational Fc-engineered CD19 antibody MOR208 in combination with venetoclax in patients with relapsed/refractory CLL/SLL who discontinued a prior BTK inhibitor therapy.

Abstract publication number: 4433
Session name: 642. CLL: Therapy, excluding Transplantation: Poster III
Presentation date and time: Monday, December 3, 2018, 6:00pm-8:00pm PST
Location: San Diego Convention Center, Hall GH, San Diego, California.

MOR202 with Low-Dose Dexamethasone (Dex) or Pomalidomide/Dex or Lenalidomide/Dex in Relapsed or Refractory Multiple Myeloma (RRMM): Primary Analysis of a Phase I/IIa, Multicenter, Dose-Escalation Study

The oral presentation will include results from the phase 1/2a trial of the investigational CD38 antibody MOR202 alone, MOR202 in combination with pomalidomide and MOR202 in combination with lenalidomide, each together with low-dose dexamethasone, in relapsed/refractory multiple myeloma (MM).

Abstract publication number: 153
Session name: 653. Myeloma: Therapy, excluding Transplantation: Novel Antibody Combinations in Myeloma
Session date and time: Saturday, December 1, 2018, 12:00pm-1:30pm PST
Presentation Time: 12:30 pm PST
Room: Marriot Marquis San Diego Marina, Pacific Ballroom 7, San Diego, California.

In addition to the presentations, the abstracts will also be published online in the November supplemental issue of Blood. Additional information, including the abstracts can be found in the online meeting program at www.hematology.org.

MorphoSys will hold an investor & analyst event after the 60th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting 2018 on December 5, 2018, 10:00am EST (3:00pm GMT, 4:00pm CET) in New York. The presentation, a live webcast and a replay of the webcast will be made available at View Source

Athenex, Inc. to Report Third Quarter Earnings Results on November 14, 2018

On November 1, 2018 Athenex, Inc. (Nasdaq: ATNX), a global biopharmaceutical company dedicated to the discovery, development and commercialization of novel therapies for the treatment of cancer and related conditions, reported that it will release third quarter 2018 and nine months ended September 30, 2018 earnings results on November 14, 2018 before the market opens (Press release, Athenex, NOV 1, 2018, View Source;p=RssLanding&cat=news&id=2374672 [SID1234530501]). The Company will host a conference call and live audio webcast on Wednesday, November 14, 2018 at 8:00 a.m. Eastern Time to discuss the financial results and provide a business update.

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To participate in the call, dial 877-407-0784 (domestic) or 201-689-8560 (international) fifteen minutes before the conference call begins and reference the conference passcode 13683946. A replay of the call will be accessible two hours after its completion through November 21 by dialing 844-512-2921 (in the U.S.) or 412-317-6671 (outside the U.S.) and entering passcode 13683946. The live conference call and replay can also be accessed via audio webcast at the Investor Relations section of the Company’s website, located at www.athenex.com.

Karyopharm to Report Third Quarter 2018 Financial Results on November 8, 2018

On November 1, 2018 Karyopharm Therapeutics Inc. (Nasdaq:KPTI), a clinical-stage pharmaceutical company, reported that it will report third quarter 2018 financial results on Thursday, November 8, 2018 (Press release, Karyopharm, NOV 1, 2018, View Source [SID1234530517]). Karyopharm’s management team will host a conference call and audio webcast at 8:30 a.m. ET on Thursday, November 8, 2018 to discuss the financial results and recent business developments.

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To access the conference call, please dial (855) 437-4406 (local) or (484) 756-4292 (international) at least 10 minutes prior to the start time and refer to conference ID 7946498. A live audio webcast of the call will be available under "Events & Presentations" in the Investor section of the Company’s website, View Source An archived webcast will be available on the Company’s website approximately two hours after the event.

Teva Reports Third Quarter 2018 Financial Results

On November 1, 2018 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA, TASE: TEVA) reported results for the quarter ended September 30, 2018 (Press release, Teva, NOV 1, 2018, View Source;p=RssLanding&cat=news&id=2374693 [SID1234530533]).

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Mr. Kåre Schultz, Teva’s President and CEO, said, "I am very satisfied with our progress and we are meeting all our key targets. We received FDA approval for AJOVY in September for the preventive treatment of migraine and we are seeing very good signs of a successful launch. We continue to see strong growth for AUSTEDO, while COPAXONE continues to maintain its market share. Our restructuring plan has already resulted in a significant cost reduction of $1.8 billion in the first nine months of the year and we are on track to achieve a reduction of $3.0 billion by the end of 2019, while continuing to pay down our debt. Given the solid third quarter results, we have decided to raise our 2018 full year guidance. "

Third Quarter 2018 Consolidated Results

Revenues in the third quarter of 2018 were $4,529 million, a decrease of 19%, or 18% in local currency terms, compared to the third quarter of 2017, mainly due to generic competition to COPAXONE, price erosion in our U.S. generics business and loss of revenues following the divestment of certain products and discontinuation of certain activities.

Exchange rate differences between the third quarter of 2018 and the third quarter of 2017 negatively impacted our revenues and GAAP operating income by $80 million and $34 million, respectively. Our non-GAAP operating income was negatively impacted by $37 million.

GAAP gross profit was $2,021 million in the third quarter of 2018, a decrease of 24% compared to the third quarter of 2017. GAAP gross profit margin was 44.6% in the third quarter of 2018, compared to 47.2% in the third quarter of 2017. Non-GAAP gross profit was $2,305 million in the third quarter of 2018, a decline of 23% from the third quarter of 2017. Non-GAAP gross profit margin was 50.9% in the third quarter of 2018, compared to 53.1% in the third quarter of 2017. The decrease in gross profit margin, on both a GAAP and a non-GAAP basis, resulted primarily from a decline in COPAXONE revenues due to generic competition, price erosion in our U.S. generics business and the loss of revenue following the sale of our women’s health business.

Research and Development (R&D) expenses for the third quarter of 2018 were $311 million, a decrease of 41% compared to the third quarter of 2017. R&D expenses excluding equity compensation expenses and other expenses were $243 million, or 5.4% of quarterly revenues in the third quarter of 2018, compared to $367 million, or 6.5%, in the third quarter of 2017. The decrease in R&D expenses resulted primarily from pipeline optimization, phase 3 studies that have ended and related headcount reduction.

Selling and Marketing (S&M) expenses in the third quarter of 2018 were $743 million, a decrease of 12% compared to the third quarter of 2017. S&M expenses excluding amortization of purchased intangible assets, equity compensation expenses and other expenses were $678 million, or 15.0% of quarterly revenues, in the third quarter of 2018, compared to $788 million, or 14.0%, in the third quarter of 2017. The decrease was mainly due to cost reduction and efficiency measures as part of the restructuring plan.

General and Administrative (G&A) expenses in the third quarter of 2018 were $309 million, a decrease of 17% compared to the third quarter of 2017. G&A expenses excluding equity compensation expenses and other expenses were $284 million in the third quarter of 2018, or 6.3% of quarterly revenues, compared to $360 million, or 6.4% in the third quarter of 2017. The decrease was mainly due to cost reduction and efficiency measures as part of the restructuring plan.

GAAP other income in the third quarter of 2018 was $35 million compared to $4 million in the third quarter of 2017. Non-GAAP other income in the third quarter of 2018 was $4 million, same as in the third quarter of 2017.

GAAP operating income in the third quarter of 2018 was $16 million, compared to $378 million in the third quarter of 2017. Non-GAAP operating income in the third quarter of 2018 was $1,104 million, a decrease of 25% compared to the third quarter of 2017. Non-GAAP operating margin was 24.4% in the third quarter of 2018 compared to 26.2% in the third quarter of 2017.

EBITDA (non-GAAP operating income, which excludes amortization and certain other items, as well as depreciation expenses) was $1,253 million in the third quarter of 2018, a decrease of 23% compared to $1,618 million in the third quarter of 2017.

GAAP financial expenses for the third quarter of 2018 were $229 million, compared to $259 million in the third quarter of 2017. Non-GAAP financial expenses were $236 million in the third quarter of 2018, compared to $229 million in the third quarter of 2017.

In the third quarter of 2018, we recognized a tax benefit of $26 million, or 12%, on pre-tax loss of $213 million. In the third quarter of 2017, we recognized a tax benefit of $494 million, on pre-tax income of $119 million. Our tax rate for the third quarter of 2018 was mainly affected by the mix of products sold in different geographies. Non-GAAP income taxes for the third quarter of 2018 were $85 million, or 10%, on pre-tax non-GAAP income of $868 million. Non-GAAP income taxes in the third quarter of 2017 were $135 million, or 11%, on pre-tax non-GAAP income of $1,241 million.

We expect our annual non-GAAP tax rate for 2018 to be 14%, which is lower than our previous projection. This is due to changes in the geographical mix of income we expect to earn this year. Our non-GAAP tax rate for 2017 was 15%.

GAAP net loss attributable to ordinary shareholders and GAAP diluted loss per share in the third quarter of 2018 were $273 million and $0.27, respectively, compared to income of $530 million and $0.52 in the third quarter of 2017. Non-GAAP net income attributable to ordinary shareholders and non-GAAP diluted EPS in the third quarter of 2018 were $694 million and $0.68, respectively, compared to $1,012 million and $1.00 in the third quarter of 2017.

For the third quarter of 2018, the weighted average outstanding shares for the fully diluted EPS calculation on a GAAP basis was 1,018 million, compared to 1,017 million for the third quarter of 2017. The weighted average outstanding shares for the fully diluted EPS calculation on a non-GAAP basis was 1,022 million, compared to 1,017 million for the third quarter of 2017. Additionally, no account was taken of the potential dilution by the mandatory convertible preferred shares, amounting to 66 million shares (including shares that may be issued due to unpaid dividends to date) for the three months ended September 30, 2018 and 59 million shares for the three months ended September 30 2017, as well as for the convertible senior debentures for the respective periods, since both had an anti-dilutive effect on EPS.

As of September 30, 2018, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,111 million.

Non-GAAP information: Net non-GAAP adjustments in the third quarter of 2018 were $967 million. Non-GAAP net income and non-GAAP EPS for the third quarter were adjusted to exclude the following items:

Impairment of long-lived assets of $521 million comprised mainly of impairment of intangible assets of product rights and IPR&D assets related to the Actavis Generics acquisition;
Amortization of purchased intangible assets totaling $297 million, of which $246 million is included in cost of goods sold and the remaining $51 million in S&M expenses;
Restructuring expenses of $88 million;
In Process R&D of $60 million;
Equity compensation expenses of $45 million;
Contingent consideration of $29 million;
Other non-GAAP items of $38 million; and
Tax benefit of $111 million.
Teva believes that excluding such items facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operations during the third quarter of 2018 was $421 million, compared to $795 million in the third quarter of 2017. The decrease was mainly due to lower net income, higher beneficial interest collected in exchange for securitized trade receivables and higher payments related to the restructuring plan during the third quarter of 2018.

Free cash flow (cash flow generated from operations net of capital expenditures and deferred purchase price cash component collected for securitized trade receivables) was $704 million in the third quarter of 2018, compared to $920 million in the third quarter of 2017. The decrease was mainly due to lower net income.

As of September 30, 2018, our debt was $29,489 million, compared to $30,237 million as of June 30, 2018. The decrease was mainly due to the $405 million debt tender offer completed in September 2018 as well as repayment at maturity of our CHF 300 million 0.125% senior notes. The portion of total debt classified as short-term as of September 30, 2018 was 9%, compared to 4% as of June 30, 2018, due to a net increase in current maturities.

Segment Results for the Third Quarter 2018

Due to the organizational changes announced in November 2017, we began reporting our financial results under a new structure in the first quarter of 2018, consisting of the following segments:

a) North America segment, which includes the United States and Canada.

b) Europe segment, which includes the European Union and certain other European countries.

c) International Markets segment, which includes all countries other than those in our North America and Europe segments.

In addition to these three segments, we have other activities, primarily the sale of API to third parties and certain contract manufacturing services.

Segment profit is comprised of gross profit for the segment, less R&D, S&M, G&A expenses and other income related to each segment. Segment profit does not include amortization and certain other items.

North America Segment

Our North America segment includes the United States and Canada.

The following table presents revenues, expenses and profit for our North America segment for the three months ended September 30, 2018 and 2017:


Three months ended September 30,
2018 2017

(U.S.$ in millions / % of Segment Revenues)

Revenues $ 2,265 100% $ 3,043 100%
Gross profit 1,232 54.4% 1,833 60.2%
R&D expenses 158 7.0% 230 7.6%
S&M expenses 301 13.3% 325 10.7%
G&A expenses 128 5.7% 149 4.9%
Other income (4) § (1) §
Segment profit* $ 649 28.7% $ 1,130 37.1%

* Segment profit does not include amortization and certain other items. The data presented for prior periods have been conformed to reflect the changes to our segment reporting commencing in the first quarter of 2018.
§ Represents an amount less than 0.5%.

Revenues from our North America segment in the third quarter of 2018 were $2,265 million, a decrease of $778 million, or 26%, compared to the third quarter of 2017, mainly due to a decline in revenues of COPAXONE, as well as a decline in revenues in our U.S. generics business, a decline in revenues of ProAir and QVAR and the loss of revenues from the sale of our women’s health business, partially offset by higher revenues from AUSTEDO and our distribution business. Revenues in the United States, our largest market, were $2,125 million in the third quarter of 2018, a decrease of $772 million, or 27%, compared to the third quarter of 2017.

Revenues by Major Products and Activities

The following table presents revenues for our North America segment by major products and activities for the three months ended September 30, 2018 and 2017:


Three months ended
September 30, Percentage
Change

2018 2017 2017-2018
(U.S.$ in millions)

Generic products $ 922 $ 1,233 (25%)
COPAXONE 463 819 (43%)
BENDEKA / TREANDA 161 179 (10%)
ProAir 107 155 (31%)
QVAR 36 83 (57%)
AUSTEDO 62 6 870%
Distribution 333 294 13%

Generic products revenues in our North America segment in the third quarter of 2018 decreased by 25% to $922 million, compared to the third quarter of 2017, mainly due to price erosion in our U.S. generics business, additional competition to methylphenidate extended-release tablets (Concerta authorized generic) and portfolio optimization primarily as part of the restructuring plan.

In the third quarter of 2018, we led the U.S. generics market in total prescriptions and new prescriptions, with approximately 547 million total prescriptions, representing 14.1% of total U.S. generic prescriptions according to IQVIA data. COPAXONE revenues in our North America segment in the third quarter of 2018 decreased by 43% to $463 million, of which $446 million were generated in the United States, compared to the third quarter of 2017, mainly due to generic competition in the United States.

BENDEKA and TREANDA combined revenues in our North America segment in the third quarter of 2018 decreased by 10% to $161 million, compared to the third quarter of 2017, mainly due to lower volumes, partially offset by higher pricing.

ProAir revenues in our North America segment in the third quarter of 2018 decreased by 31% to $107 million, compared to the third quarter of 2017, mainly due to lower net pricing.

QVAR revenues in our North America segment in the third quarter of 2018 decreased by 57% to $36 million, compared to the third quarter of 2017. The decrease in sales was mainly due to lower volumes in this quarter following wholesaler stocking in the first quarter of 2018 in connection with the launch of QVAR RediHaler. QVAR maintained its second-place position in the inhaled corticosteroids category in the United States.

AUSTEDO revenues in our North America segment in the third quarter of 2018 were $62 million.

Distribution revenues in our North America segment in the third quarter of 2018 generated by Anda increased by 13% to $333 million, compared to the third quarter of 2017.

North America Gross Profit

Gross profit from our North America segment in the third quarter of 2018 was $1,232 million, a decrease of 33% compared to $1,833 million in the third quarter of 2017. The decrease was mainly due to lower revenues from COPAXONE and generic products.

Gross profit margin for our North America segment in the third quarter of 2018 decreased to 54.4%, compared to 60.2% in the third quarter of 2017. This decrease was mainly due to lower COPAXONE revenues.

North America Profit

Profit from our North America segment in the third quarter of 2018 was $649 million, a decrease of 43% compared to $1,130 million in the third quarter of 2017. The decrease was mainly due to lower revenues from COPAXONE and generic products, partially offset by cost reductions and efficiency measures as part of the restructuring plan.

Europe Segment

Our Europe segment includes the European Union and certain other European countries.

The following table presents revenues, expenses and profit for our Europe segment for the three months ended September 30, 2018 and 2017:


Three months ended September 30,
2018 2017

(U.S.$ in millions / % of Segment Revenues)

Revenues $ 1,212 100.0% $ 1,380 100%
Gross profit 683 56.4% 721 52.2%
R&D expenses 62 5.1% 101 7.3%
S&M expenses 249 20.5% 289 20.9%
G&A expenses 74 6.1% 90 6.5%
Other expenses 1 § - §
Segment profit* $ 297 24.5% 241 17.5%

* Segment profit does not include amortization and certain other items. The data presented for prior periods have been conformed to reflect the changes to our segment reporting commencing in the first quarter of 2018.

§ Represents an amount less than 0.5%.

Revenues from our Europe segment in the third quarter of 2018 were $1,212 million, a decrease of $168 million, or 12%, compared to the third quarter of 2017. In local currency terms, revenues decreased by 11%, mainly due to the loss of revenues from the closure of our distribution business in Hungary, the sale of our women’s health business and a decline in COPAXONE revenues, partially offset by new generic product launches.

Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the three months ended September 30, 2018 and 2017:


Three months ended
September 30, Percentage
Change

2018 2017 2017-2018
(U.S.$ in millions)

Generic products $ 845 $ 871 (3%)
COPAXONE 124 150 (17%)
Respiratory products 93 90 3%

Generic products revenues in our Europe segment in the third quarter of 2018, including OTC products, decreased by 3% to $845 million, compared to the third quarter of 2017. In local currency terms, revenues decreased by 1%, mainly due to the loss of revenues from the termination of the PGT joint venture and generic price reductions, partially offset by new generic product launches.

COPAXONE revenues in our Europe segment in the third quarter of 2018 decreased by 17% to $124 million, compared to the third quarter of 2017. In local currency terms, revenues decreased by 16%, mainly due to price reductions resulting from the entry of competing glatiramer acetate products.

Respiratory products revenues in our Europe segment in the third quarter of 2018 increased by 3% to $93 million, compared to the third quarter of 2017. In local currency terms, revenues increased by 4%, mainly due to the launch of BRALTUS in 2017.

Europe Gross Profit

Gross profit from our Europe segment in the third quarter of 2018 was $683 million, a decrease of 5% compared to $721 million in the third quarter of 2017. The decrease was mainly due to the loss of revenues from the sale of our women’s health business and a decline in COPAXONE revenues. Gross profit margin for our Europe segment in the third quarter of 2018 increased to 56.4%, compared to 52.2% in the third quarter of 2017. This increase was mainly due to the lower cost of goods and the closure of our distribution business in Hungary.

Europe Profit

Profit from our Europe segment in the third quarter of 2018 was $297 million, an increase of 23% compared to $241 million in the third quarter of 2017. The increase was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

International Markets Segment

Our International Markets segment includes all countries other than those in our North America and Europe segments. The key markets in this segment are Japan, Israel and Russia.

During the fourth quarter of 2017, we deconsolidated our subsidiaries in Venezuela from our financial results. Consequently, results of operations of our subsidiaries in Venezuela are not included in the third quarter of 2018.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended September 30, 2018 and 2017:


Three months ended September 30,
2018 2017

(U.S.$ in millions / % of Segment Revenues)

Revenues $ 726 100.0% $ 882 100%
Gross profit 301 41.5% 351 39.8%
R&D expenses 21 2.9% 35 4.0%
S&M expenses 120 16.5% 158 17.9%
G&A expenses 37 5.1% 51 5.8%
Other income - § (3) §
Segment profit* $ 123 16.9% $ 110 12.5%

* Segment profit does not include amortization and certain other items. The data presented for prior periods have been conformed to reflect the changes to our segment reporting commencing in the first quarter of 2018.

§ Represents an amount less than 0.5%.

Revenues from our International Markets segment in the third quarter of 2018 were $726 million, a decrease of $156 million, or 18%, compared to the third quarter of 2017. In local currency terms, revenues decreased 12% compared to the third quarter of 2017, mainly due to lower sales in Japan and Russia, the effect of the deconsolidation of our subsidiaries in Venezuela and the loss of revenues from the sale of our women’s health business.

Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the three months ended September 30, 2018 and 2017:


Three months ended
September 30, Percentage
Change

2018 2017 2017-2018
(U.S.$ in millions)

Generic products $ 498 $ 629 (21%)
COPAXONE 14 18 (24%)
Distribution 149 146 2%

Generic products revenues in our International Markets segment in the third quarter of 2018, which include OTC products, decreased by 21% to $498 million, compared to the third quarter of 2017. In local currency terms, revenues decreased by 15%, mainly due to lower sales in Japan resulting from regulatory pricing reductions and generic competition to off-patented products, lower sales in Russia and the effect of the deconsolidation of our subsidiaries in Venezuela.COPAXONE revenues in our International Markets segment in the third quarter of 2018 decreased by 24% to $14 million, compared to the third quarter of 2017. In local currency terms, revenues decreased by 2%.

Distribution revenues in our International Markets segment in the third quarter of 2018 increased by 2% to $149 million, compared to the third quarter of 2017. In local currency terms, revenues increased by 4%.

International Markets Gross Profit

Gross profit from our International Markets segment in the third quarter of 2018 was $301 million, a decrease of 14% compared to $351 million in the third quarter of 2017. Gross profit margin for our International Markets segment in the third quarter of 2018 increased to 41.5%, compared to 39.8% in the third quarter of 2017. The increase was mainly due to higher gross profit resulting from changes in the product mix in certain countries, mainly Israel, Russia and Mexico, as well as lower cost of goods, partially offset by the Venezuela deconsolidation and lower revenues in Japan.

International Markets Profit

Profit from our International Markets segment in the third quarter of 2018 was $123 million, compared to $110 million in the third quarter of 2017. The increase was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

Profit as a percentage of International Markets revenues in the third quarter of 2018 was 16.9%, compared to 12.5% in the third quarter of 2017. This increase was mainly due to lower operating expenses as part of the restructuring plan.

Other Activities

We have other sources of revenues, primarily the sale of API to third parties and certain contract manufacturing services. These other activities are not included in our North America, Europe or International Markets segments.

Our revenues from other activities in the third quarter of 2018 increased by 4% to $326 million, compared to the third quarter of 2017. In local currency terms, revenues increased by 7%.

API sales to third parties in the third quarter of 2018 were $171 million, flat compared to the third quarter of 2017. In local currency terms, revenues increased by 1%.

Updated 2018 Non-GAAP Results Outlook


Updated Guidance
November 2018

Guidance
August 2018

Revenues $18.6-19.0 billion $18.5-19.0 billion
Non-GAAP Operating Income $4.6-4.8 billion $4.3-4.6 billion
EBITDA $5.2-5.4 billion $5.0-5.3 billion
Non-GAAP EPS $2.80-2.95 $2.55-2.80
Weighted average number of shares 1,027 million 1,027 million
Free cash flow $3.6-3.8 billion $3.2-3.4 billion

These estimates reflect management’s current expectations for Teva’s performance in 2018. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP measures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.

See "Non-GAAP Financial Measures" below.

Conference Call

Teva will host a conference call and live webcast along with a slide presentation on Thursday, November 1, 2018 at 8:00 a.m. ET to discuss its third quarter 2018 results and overall business environment. A question & answer session will follow.

United States 1 (866) 966-1396

International +44 (0) 2071 928000

Israel 1 (809) 203-624

For a list of other international toll-free numbers, click here.

Passcode: 7193665

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 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 August 30, 2018, 9:00 a.m. ET by calling United States 1 (866) 331-1332 or International +44 (0) 3333009785; passcode: 7193665.