8-K – Current report

On February 28, 2017 Portola Pharmaceuticals, Inc. (NASDAQ: PTLA) reported a corporate update and reported its financial results for the fourth quarter and year ended December 31, 2016today provided (Filing, Q4/Annual, Portola Pharmaceuticals, 2016, FEB 28, 2017, View Source [SID1234517963]).
"We are working towards gaining approval of both betrixaban, our investigational oral Factor Xa inhibitor, and andexanet alfa, our investigational antidote for oral Factor Xa inhibitors, in the United States and Europe over the next year," said Bill Lis, chief executive officer of Portola. "Each has the potential to become the first product approved for their respective indications and both are highly anticipated by the medical community. We are confident in the robust clinical data for both products, and are focused on addressing the regulatory risks that remain."
Recent Achievements, Upcoming Events and Milestones
Betrixaban – an oral Factor Xa inhibitor anticoagulant in development for extended prophylaxis of venous thromboembolism (VTE) in acute medically ill patients with risk factors for VTE; designated Fast Track status by the U.S. Food and Drug Administration (FDA)

• The FDA accepted the New Drug Application (NDA), granted priority review, and established a Prescription Drug User Fee Act (PDUFA) action date of June 24, 2017

• FDA informed Portola at the mid-cycle review that it does not plan to schedule an Advisory Committee meeting to discuss the NDA

• The European Medicines Agency (EMA) validated the Marketing Authorization Application (MAA) under a standard 210-day review period; the Committee for Medicinal Products for Human Use (CHMP) opinion is expected by the end of the year
AndexXa (andexanet alfa) – a Factor Xa inhibitor antidote in development for patients treated with a Factor Xa inhibitor when reversal of anticoagulation is needed due to life-threatening or uncontrolled bleeding; designated a Breakthrough Therapy and an Orphan Drug by the FDA

• Expanded the existing agreement with Daiichi Sankyo; Portola received a $15 million upfront payment and is eligible to receive up to an additional $10 million upon meeting certain milestones; upon AndexXa’s approval, Daiichi will be eligible to receive a capped royalty

• Resubmission of the Biologics License Application (BLA) is anticipated in the second quarter of 2017

• Continued to enroll patients in the ongoing Phase 3b/4 ANNEXA-4 Study in patients with acute major bleeding; the Data and Safety Monitoring Board (DSMB) successfully completed its third review
Cerdulatinib – an oral, dual Syk/JAK inhibitor in development to treat resistant or relapsed hematologic cancer patients

• Continued to enroll patients in a Phase 2a study evaluating the safety and efficacy of cerdulatinib in patients with relapsed/refractory B-cell malignancies who have failed multiple therapies

• Entered into an exclusive worldwide licensing agreement with Dermavant Sciences for the development and commercialization of cerdulatinib in topical applications beyond oncology; Portola retains full rights to all non-topical formulations of cerdulatinib, including oral formulations
Corporate

• Entered into a $50 million loan agreement with Bristol-Myers Squibb Company and Pfizer Inc. for continued development and clinical studies of andexanet alfa

• Entered into a $150 million royalty agreement in the first quarter of 2017 with HealthCare Royalty Partners in exchange for a tiered, mid-single-digit royalty based on worldwide andexanet alfa sales
Fourth Quarter and Year-End Financial Results
Collaboration and license revenue earned under Portola’s collaboration and license agreements with Bristol-Myers Squibb Company and Pfizer, Bayer Pharma and Janssen Pharmaceuticals, Daiichi Sankyo and Dermavant Sciences was $13.7 million for the fourth quarter of 2016 compared with $4.4 million for the fourth quarter of 2015. Collaboration and license revenue for the year ended December 31, 2016, was $35.5 million compared with $12.1 million for the year ended December 31, 2015.
Total operating expenses for the fourth quarter of 2016 were $68.9 million compared with $70.7 million for the same period in 2015. Total operating expenses for the fourth quarter of 2016 included $7.9 million in stock-based compensation expense compared with $6.8 million for the same period in 2015. Total operating expenses for the year ended December 31, 2016, were $305.1 million compared with $239.2 million for 2015. Total operating expenses for the full year ended December 31, 2016, included $30.4 million in stock-based compensation expense compared with $22.9 million for 2015.
Research and development expenses for the fourth quarter of 2016 were $56.0 million compared with $59.8 million for the same period in 2015. Research and development expenses were $246.9 million for the year ended December 31, 2016, compared with $200.4 million for 2015. The increase in R&D expenses was primarily due to increased program costs to advance andexanet alfa of $64.7 million, including a $27.3 million one-time charge to write off certain prepaid manufacturing costs and increased program costs to support cerdulatinib and early research programs of $3.8 million, partially offset by decreased program costs related to betrixaban of $22.0 million following the completion of the APEX clinical trial enrollment.
Selling, general and administrative expenses for the fourth quarter of 2016 were $12.9 million compared with $10.9 million for the same period in 2015. Selling, general and administrative expenses for the year ended December 31, 2016, were $58.2 million compared with $38.9 million for 2015. The increase in SG&A expenses was primarily due to increased headcount-related costs, commercial launch preparation activities and business development-related costs, and costs associated with professional and accounting fees of $2.0 million.
For the fourth quarter of 2016, Portola reported a net loss of $53.8 million, or $0.95 net loss per share, compared with a net loss of $66.1 million, or $1.23 net loss per share, for the same period in 2015. Shares used to compute net loss per share attributable to common stockholders
were 56.5 million for the fourth quarter of 2016 compared with 53.6 million for the same period in 2015. Net loss for the year ended December 31, 2016, was $269.0 million, or $4.76 net loss per share, compared with a net loss of $226.5 million, or $4.36 net loss per share, for the same period in 2015. Shares used to compute net loss per share attributable to common stockholders were 56.5 million for 2016 compared with 52.0 million for 2015.
Cash, cash equivalents and investments at December 31, 2016, totaled $318.8 million compared with cash, cash equivalents and investments of $460.2 million as of December 31, 2015.
2017 Annual Financial Guidance
For the fiscal year 2017, Portola expects total GAAP operating expenses to be between $323 million and $344 million. For the fiscal year 2017, Portola expects total pro-forma operating expenses to be between $290 million and $310 million, excluding stock-based compensation. These expenses will be primarily for manufacturing of both andexanet and betrixaban, support of ongoing clinical trials and preparation for the potential commercial launches of betrixaban and AndexXa.

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TESARO Announces Fourth-Quarter 2016 Operating Results

On February 28, 2017 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported operating results for fourth-quarter 2016 and provided an update on the Company’s development programs (Press release, TESARO, FEB 28, 2017, View Source [SID1234517988]).

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"2017 is poised to be an eventful year for TESARO as we prepare for four product launches across the United States and Europe," said Lonnie Moulder, CEO of TESARO. "2016 was an important year for the Company, highlighted by the landmark NOVA trial results for niraparib, which were published in the New England Journal of Medicine and presented in a presidential session at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) annual meeting. We intend to build upon these successes in 2017 with the planned launch of niraparib in the U.S. during the first half of this year and in Europe by year end. Looking beyond ovarian and breast cancer, we aim to finalize our registration program for niraparib in lung cancer in the first half of this year. Lastly, we are excited about the progress in our immuno-oncology pipeline, and expect to initiate a registrational program for TSR-042 in the coming months."

Recent Business Highlights

The U.S. launch of VARUBI continues, with sequential unit volume growth for the fourth quarter of 2016. For the month of December, VARUBI achieved greater than 40% market share in the oral NK-1 market in the U.S., which represents the market-leading position in the category.
The European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) rendered a positive opinion for the marketing authorization application (MAA) for VARUBY for the prevention of delayed nausea and vomiting associated with highly and moderately emetogenic cancer chemotherapy in adults.
In January, TESARO received a Complete Response Letter regarding the rolapitant IV New Drug Application (NDA) for the prevention of delayed nausea and vomiting associated with initial and repeat courses of emetogenic cancer chemotherapy. TESARO expects to be able to address the questions from the U.S. Food and Drug Administration (FDA) and resubmit the NDA to enable approval in the first half of 2017.
The NDA for niraparib was accepted for review by the FDA for patients with recurrent ovarian cancer following response to platinum-based chemotherapy. The FDA granted priority review for the niraparib NDA and established a Prescription Drug User Fee Act (PDUFA) goal date of June 30, 2017.
An expanded access program (EAP) for niraparib opened in the U.S. in January, through which niraparib is being made available for eligible women with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer following a complete or partial response to platinum-based chemotherapy. An EAP for niraparib is planned to open in Europe in the first half of 2017, and will be initiated on a country-by-country basis.
Enrollment continues in the Phase 3 PRIMA trial of niraparib for patients with first-line ovarian cancer, the Phase 3 BRAVO trial for patients with germline BRCA-mutated, metastatic breast cancer, and in the QUADRA trial of niraparib for the treatment of patients with ovarian cancer who have received three or more prior lines of chemotherapy.
Based upon the anti-tumor activity observed in Phase 1 of the TOPACIO trial of niraparib plus KEYTRUDA (pembrolizumab) in patients with ovarian cancer or with triple negative breast cancer, the trial has expanded to Phase 2 and is enrolling patients. Initial data are expected at an upcoming medical meeting.
Following the presentation of data at ASCO (Free ASCO Whitepaper) in 2016, the Phase 2 portion of the AVANOVA trial of niraparib plus bevacizumab in patients with ovarian cancer continues to enroll, and updated data are expected in 2H 2017.
Dose escalation and identification of a fixed dose and schedule was completed for the Phase 1 trial of TSR-042, an anti-PD-1 antibody candidate, and a registration trial is planned to begin in 1H 2017.
Enrollment continues in the Phase 1 dose escalation study of TSR-022, an anti-TIM-3 antibody candidate.
A lead PD-1/LAG-3 bi-specific antibody candidate was identified.
Fourth Quarter 2016 Financial Results

TESARO reported revenue of $4.2 million for the fourth quarter of 2016, compared to revenue of $0.2 million for the fourth quarter of 2015. Net product revenue for the fourth quarter of 2016 totaled $2.5 million and included sales of VARUBI from specialty pharmacy customers to patients and from specialty distributors to providers that were made during the fourth quarter. License, collaboration and other revenue for the fourth quarter of 2016 totaled $1.8 million and included amortization of up-front payments and shipments of clinical materials under our license agreements with Hengrui and Janssen.

Research and development expenses increased to $71.5 million for the fourth quarter of 2016, compared to $42.9 million for the fourth quarter of 2015, driven primarily by higher costs related to the ongoing registration trials of niraparib, manufacturing and other research and development costs related to niraparib, advancement of our immuno-oncology portfolio, and increased headcount.

Selling, general and administrative expenses increased to $54.5 million for the fourth quarter of 2016, compared to $27.9 million for the fourth quarter of 2015, primarily due to commercial activities in support of the launch of VARUBI, pre-launch activities related to niraparib, expansion of the European commercial organization, increased headcount and higher professional service fees.

Acquired in-process research and development expenses totaled $9.0 million for the fourth quarter of 2016 and included milestone payments related to niraparib, compared to $1.0 million for the fourth quarter of 2015, which included a milestone payment related to our immuno-oncology portfolio.

Operating expenses, as described above, include total non-cash, stock-based compensation expense of $14.4 million for the fourth quarter of 2016, compared to $8.4 million for the fourth quarter of 2015.

Net loss totaled $136.9 million, or ($2.60) per share, for the fourth quarter of 2016, compared to a net loss of $75.8 million, or ($1.89) per share, for the fourth quarter of 2015.

As of December 31, 2016, TESARO had approximately $785.9 million in cash and cash equivalents and approximately 53.6 million outstanding shares of common stock. Excluding the proceeds from the November 2016 financing, our cash and cash equivalents balance declined $95.7 million in the fourth quarter.

Full-Year 2016 Financial Results

TESARO reported revenue of $44.8 million for 2016, compared to revenue of $0.3 million for 2015. Net product revenue for 2016 totaled $6.9 million and included sales of VARUBI from specialty pharmacy customers to patients and from specialty distributors to providers through December 31, 2016. License, collaboration and other revenue for 2016 totaled $37.9 million and included amortization of up-front payments and shipments of clinical materials under our license agreements with Hengrui and Janssen.

Research and development expenses increased to $235.1 million for 2016, compared to $155.4 million for 2015, driven primarily by three ongoing registration trials of niraparib, increased headcount, and advancement of our immuno-oncology portfolio.

Selling, general and administrative expenses increased to $158.6 million for 2016, compared to $78.7 million for 2015, primarily due to increased headcount, commercial and pre-launch activities in support of VARUBI and niraparib, expansion of the European commercial organization, and higher professional service fees.

Acquired in-process research and development expenses totaled $18.9 million for 2016 and included milestone payments related to niraparib and our immuno-oncology portfolio, compared to $2.0 million for 2015, which included milestone payments related to our immuno-oncology portfolio.

Operating expenses, as described above, include total non-cash, stock-based compensation expense of $48.5 million for 2016, compared to $25.9 million for 2015.

Net loss totaled $387.5 million, or ($8.13) per share, for 2016, compared to a net loss of $251.4 million, or ($6.38) per share, for 2015.

In anticipation of four product launches in 2017, TESARO will continue to invest in pre-launch inventory manufacturing and development of supply chain capabilities and capacity, in addition to making milestone payments for regulatory submissions. TESARO expects its cash and cash equivalents balance to decline by approximately $110 to $120 million on average, per quarter, during the first half of 2017, excluding one-time regulatory milestones of $35 million expected to be paid at the time of the first commercial sale of VARUBY oral in Europe and approval of niraparib in the U.S.

2017 Corporate Objectives

TESARO anticipates achieving the following key objectives:

VARUBI (rolapitant):

Launch VARUBI IV into the U.S. market in mid-2017, pending FDA approval; and
Launch VARUBY oral in Europe in 2Q 2017, pending EMA approval.
Niraparib:

Continue commercial preparations in support of the launches of niraparib in the U.S. in 1H 2017 and Europe by year-end 2017, pending regulatory approvals;
Report initial data from TOPACIO trial at upcoming medical meeting;
Report QUADRA data in 2H 2017;
Report Phase 3 BRAVO data in 2H 2017;
Continue to enroll the Phase 3 PRIMA trial throughout 2017;
Finalize a potential lung cancer registration strategy in 1H 2017 and initiate the development program;
Update AVANOVA data in 2H 2017; and
Describe the potential registration strategy for niraparib plus TSR-042 in ovarian and other cancers in 2H 2017.
Immuno-Oncology Portfolio:

Identify a dose and schedule for TSR-022 (anti-TIM-3 antibody) by mid-2017;
Submit an IND for TSR-033 (anti-LAG-3 antibody) in 2Q 2017;
Finalize the TSR-042 registration strategy and initiate a registration program in 1H 2017;
Identify the first clinical candidate within the MD Anderson collaboration in 1H 2017; and
Initiate a Phase 1 clinical trial of TSR-022 in combination with an anti-PD-1 antibody in mid-2017.

VALEANT REPORTS FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS
AND PROVIDES 2017 GUIDANCE

On February 28, 2017 Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) ("Valeant" or the "Company" or "We") reported fourth quarter and full year 2016 financial results (Filing, Q4/Annual, Valeant, 2016, FEB 28, 2017, View Source [SID1234517994]).

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"Today, we announced financial results that delivered on expectations and demonstrated our commitment to creating the new Valeant," said Joseph C. Papa, Chairman and Chief Executive Officer. "Over the past few months, our teams worked to stabilize and strengthen our core businesses, resolve legacy issues, improve operational processes, launch new products, and improve the balance sheet and capital structure. We paid all 2017 amortizations and reduced debt by $519 million in the fourth quarter. We agreed to divest a number of assets, including several skincare brands, our Dendreon business and smaller international interests. The U.S. Food and Drug Administration (FDA) approved our new psoriasis treatment, SILIQ, and we resubmitted our glaucoma treatment, latanoprostene bunod in February 2017.

"Bill Humphries recently joined our Dermatology business as Executive Vice President and we believe he has the talent and experience to grow the business. With our Walgreens fulfillment arrangement, we continue to see improvements in average sales prices (ASP) that are encouraging to us. We have worked to stabilize our sales force, while also expanding it to include primary care physicians to help us reach patients whose lives we believe can be improved with our healthcare products. We are pleased to report that the remediation at the Bausch + Lomb manufacturing site in Tampa was recently completed. Now, more than ever, we believe that with the right people, products and processes in place, we are well poised for a turnaround in 2017; we have a lot to look forward to and are excited about the future."

Total Revenues
Total Revenues in the fourth quarter of 2016 were $2,403 million as compared to $2,758 million in the fourth quarter of 2015, reflecting a decline of 13%. The decrease was primarily driven by a reduction in product sales from the existing business (excluding effects from acquisitions, foreign currency and divestitures and discontinuations) of $310 million and the negative impact of foreign currency exchange of $43 million, most notably from the Egyptian pound, which was significantly devalued in November 2016. Revenues in the quarter were further impacted by a drop in realized pricing by 3%, along with divestitures and discontinuations of $16 million. These declines were partially offset by incremental product sales of $13 million from acquisitions.

Total Revenues for the full year 2016 were $9,674 million as compared to $10,447 million for 2015, reflecting a decrease of 7%. The decrease was primarily driven by a decline in product sales from our existing business (excluding effects from acquisitions, foreign currency and divestitures and discontinuations) of $1,277 million, the unfavorable impact of foreign currencies on our existing business of $137 million, the impact of divestitures and discontinuations of $80 million, and a decline in other revenues of $15 million. These decreases were offset by incremental product sales of $735 million from acquisitions.

Segment Revenues
The Bausch + Lomb / International Segment
The Bausch + Lomb/International segment reported fourth quarter 2016 revenues of $1,176 million as compared to $1,187 million in the fourth quarter of 2015. Fourth quarter results reflected incremental revenue gains and slight volume increases from the U.S. Consumer business and Asia Pacific region that were offset by declines in other business units within the segment, as well as by the negative impact of foreign exchange.

Full year 2016 revenues in the Bausch + Lomb/International segment were $4,607 million as compared to $4,603 million for 2015. The segment, which contributed 48% of total company revenues in 2016, reflected product sales of $239 million from acquisitions in 2015, a net increase in product sales revenue from our existing businesses (excluding effects from acquisitions, foreign currency, and divestitures and discontinuations), driven by volume of $31 million.

Increased volumes driven by gains in U.S. Consumer and China were partially offset by declines in Europe resulting from our targeted inventory reductions in Poland and Russia.

During 2016, the segment was also impacted by the unfavorable impact of foreign currencies of $126 million, a net decrease in product sales revenue from our existing business driven by a decrease in average realized pricing of $98 million and a negative impact from divestitures and discontinuations of $36 million.

The Branded Rx Segment
The Branded Rx segment delivered fourth quarter 2016 revenues of $829 million as compared to $1,002 million in the fourth quarter of 2015. The shortfall in quarterly revenues as compared to the same period in the prior year was due to declines driven mainly by our Salix and Dermatology business. Results in the quarter also reflected lower average realized pricing impacted by managed care rebates, and increased generic competition.

Full year 2016 revenues in the Branded Rx segment were $3,148 million as compared to $3,582 million for 2015. The segment, which contributed 33% of total company revenues in 2016, reflected a decline in product sales revenue from our existing business, driven by a decrease in average realized pricing of $431 million and a decrease in volume of $357 million. These factors were partially offset by product revenues of $383 million from acquisitions in 2015, primarily the acquisition of Salix Pharmaceuticals, Ltd. (the "Salix Acquisition") and the acquisition of certain assets of Dendreon Corporation.

The decrease in average realized pricing was primarily attributable to higher managed care rebates and lower price appreciation credits particularly in the Dermatology and Salix businesses, and the fulfillment arrangement with Walgreens. The decrease in volumes was driven by the Dermatology business, most notably by Jublia, Solodyn and Ziana, which have experienced lower volumes since the change in our fulfillment model. Generic competition was also a factor in volume declines as certain products lost exclusivity, such as Glumetza and Zegerid in our Salix business unit and Ziana in our Dermatology business unit.

During 2016, the segment was also impacted by a decrease associated with divestitures and discontinuations of $22 million and the unfavorable impact of foreign currencies on our existing Canadian business of $11 million.

The U.S. Diversified Products Segment
The U.S. Diversified Products segment reported fourth quarter 2016 revenues of $398 million as compared to $568 million in the fourth quarter of 2015. The shortfall in quarterly revenues as compared to the prior year was primarily driven by lower volumes in Neurology. Results in the quarter also reflected declines in average realized pricing as a result of higher managed care rebates, as well as increased generic competition.

Full year 2016 revenues for the U.S. Diversified Products segment were $1,919 million as compared to $2,262 million for 2015. The segment, which contributed 19% of total company revenues in 2016, reflected a decline in product sales revenue from our existing business of $422 million, primarily driven by a decrease in volume of $299 million, and a decrease in average realized pricing of $123 million. These factors were partially offset by incremental product sales revenue in 2016, related to the 2015 acquisition of certain assets of Marathon Pharmaceuticals, LLC (mainly driven by Isuprel and Nitropress product sales) and other acquisitions of $113 million.

The decrease in volume was mainly driven by generic competition to our Neurology products (Xenazine, Mestinon, Ammonul and Sodium Edecrin). The decrease in average realized pricing was attributable to our Neurology products and is the result of higher managed care rebates, lower price appreciation credits, and higher group purchasing organization chargebacks on Nitropress and Isuprel. The segment was also affected by a decrease in contribution associated with divestitures and discontinuations of $22 million.

Operating Expenses
Cost of Goods Sold (COGS)
Total GAAP COGS was $665 million for the fourth quarter 2016 as compared to $730 million in the fourth quarter of 2015. Full year 2016 total GAAP COGS was $2,611 million as compared to $2,585 million for 2015.
As a percentage of total revenues, GAAP COGS was 28% in the fourth quarter of 2016, as compared to 26% in the same period in 2015, an increase of 2%. Full year 2016 GAAP COGS as a percentage of total revenues came in at 27% as compared to 25% in 2015, an increase of 2%.
Adjusted COGS (non-GAAP) for the fourth quarter came in at $666 million as compared to $672 million in 2015. Full year 2016 Adjusted COGS (non-GAAP) were $2,557 million as compared to $2,402 million for 2015, an increase of $155 million, or 6%.
As a percentage of total revenues, Adjusted COGS (non-GAAP) was 28% in the fourth quarter of 2016, as compared to 24% in the same period in 2015, an increase of 4%. Full year 2016 Adjusted COGS (non-GAAP) as a percentage of total revenues were 26% as compared to 23% in 2015, an increase of 3%.
For both GAAP COGS and Adjusted COGS (non-GAAP), the increase in year-over-year expenses, as a percentage of total revenues, was primarily driven by a decrease in average realized pricing across all of our segments. The increase was also attributable to an unfavorable change in product mix, as, in 2016, a greater percentage of our revenue was attributable to the Bausch + Lomb/International segment, which generally has lower gross margins than the balance of the Company’s product portfolio.
These increases were partially offset by lower acquisition accounting related adjustments to inventory expensed in 2015, primarily related to the fair value step-up in inventories acquired in the Salix Acquisition and other acquisitions.
Selling, General and Administrative (SG&A)
Total GAAP SG&A was $665 million for the fourth quarter of 2016 as compared to $743 million in the fourth quarter of 2015. Full year 2016 total GAAP SG&A was $2,810 million as compared to $2,700 million for 2015.
As a percentage of total revenues, GAAP SG&A was 28% in the fourth quarter of 2016, as compared to 27% in the same period in 2015, an increase of 1%. Full year 2016 GAAP SG&A as a percentage of total revenues were 29% as compared to 26% in 2015, an increase of 3%.
Adjusted SG&A (non-GAAP) expenses in the fourth quarter of 2016 came in at $658 million as compared to $682 million in the fourth quarter of 2015. Full year 2016 Adjusted SG&A (non-GAAP) was $2,698 million as compared to $2,611 million for 2015.
As a percentage of total revenues, Adjusted SG&A (non-GAAP) was 27% in the fourth quarter of 2016, as compared to 25% in the same period in 2015, an increase of 2%. Full year 2016 Adjusted SG&A (non-GAAP) as a percentage of total revenues were 28% as compared to 25% in 2015, an increase of 3%.
For both GAAP SG&A and Adjusted SG&A (non-GAAP), the increase in expenses, as a percentage of total revenues, were primarily driven by expenses related to acquisitions, severance payments to former employees as well as fees related to the recruiting and on boarding of new staff. The increase also reflected professional fees in connection with recent legal and governmental proceedings, investigations and information requests relating to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices, and increases in legal and professional fees in connection with ongoing corporate and business matters.
These factors were partially offset by a net decrease in advertising and selling expenses, primarily driven by decreases in promotion and advertising in our Dermatology and Salix businesses and partially offset by an increase to our reserve for sales returns and allowances recorded in the fourth quarter.
Research and Development (R&D)
Total GAAP R&D was $93 million for the fourth quarter of 2016 as compared to $95 million in the fourth quarter of 2015. Full year 2016 total GAAP R&D was $421 million as compared to $334 million for 2015.
As a percentage of total revenues, GAAP R&D was 4% in the fourth quarter of 2016, as compared to 3% in the same period in 2015, an increase of 1%. Full year 2016 GAAP R&D as a percentage of total revenues were 4% as compared to 3% in 2015, an increase of 1%.
Adjusted R&D (non-GAAP) expenses for the fourth quarter of 2016 were $93 million as compared to $95 million in the fourth quarter of 2015. Full year 2016 Adjusted R&D (non-GAAP) expenses were $404 million as compared to $333 million for 2015.
As a percentage of total revenues, Adjusted R&D (non-GAAP) was 4% in the fourth quarter of 2016, as compared to 3% in the same period in 2015, an increase of 1%. Full year 2016 Adjusted R&D (non-GAAP) as a percentage of total revenues were 4% as compared to 3% in 2015, an increase of 1%.
For both GAAP R&D and Adjusted R&D (non-GAAP), the year-over-year increases in expenses, as a percentage of total revenues, was driven by our focus to maximize the value of our core segments. To bring out additional value in our core Branded Rx segment, we dedicated additional resources to enhance our Dermatology and Gastrointestinal (GI) portfolios. To bring out additional value in our core Bausch + Lomb/International segment, we dedicated additional resources to enhance our eye health and vision care portfolios.
GAAP Operating Income (Loss)
Operating income for the fourth quarter of 2016 was $151 million as compared to $168 million for the fourth quarter of 2015. Fourth quarter operating income reflected a decrease in contribution margin as a result of the decline in product sales from the existing business, the unfavorable impact of foreign currency, net incremental goodwill impairment charges, and the impact of divestitures and discontinuations.
Full year 2016 operating loss was $566 million as compared to operating income for 2015 of $1,527 million, a decrease of $2,093 million. Full year 2016 results reflected a decrease in contribution from our existing business, which was partially offset by incremental contribution from acquisitions. Operating income was further impacted in 2016 by an increase in SG&A and R&D expenses, an increase in amortization of intangible assets and goodwill impairments, a decrease in restructuring and integration costs, a decrease in in-process R&D costs and post-combination expenses.
GAAP Net Income (Loss)
Net loss for the fourth quarter of 2016 was $(515) million as compared to a net loss of $(385) million in the fourth quarter of 2015, an increase of $130 million. In addition to the increase in our operating loss of $17 million, the increase in Net loss was primarily driven by increases in interest expense of $34 million, foreign exchange loss and other of $43 million, and provisions for income taxes of $33 million.
For full year 2016, Net loss was $2,409 million as compared to $292 million in 2015, an increase of $2,120 million. The increase is primarily attributable to the increase in loss before income taxes of $2,280 million. The 2016 net loss includes a recovery of income taxes of $27 million while the 2015 net loss includes a provision for income taxes of $133 million.
Adjusted EBITDA(non-GAAP)
Adjusted EBITDA (non-GAAP) for the fourth quarter of 2016 came in at $1,045 million as compared to $1,374 million for the fourth quarter of 2015. Full year 2016 Adjusted EBITDA (non-GAAP) was $4,305 million as compared to $5,369 million in 2015.
Adjusted Net Income (non-GAAP)
Adjusted net income (non-GAAP) in the fourth quarter of 2016 was $441 million as compared to $542 million in the fourth quarter of 2015. Full year 2016 Adjusted net income (non-GAAP) was $1,916 million as compared to $2,841 million in 2015.
GAAP Earnings Per Share (EPS)
GAAP EPS for the fourth quarter of 2016 came in at $(1.47) as compared to $(1.12) in the fourth quarter of 2015. Full year 2016 GAAP EPS were $(6.94) as compared to $(0.85) for 2015.
Adjusted EPS (non-GAAP)
Adjusted EPS (non-GAAP) for the fourth quarter of 2016 came in at $1.26 as compared to $1.55 in the fourth quarter of 2015. Full year 2016 Adjusted EPS (non-GAAP) were $5.47 as compared to $8.14 for 2015.
GAAP Cash Flow from Operations
Net cash provided by operating activities for the fourth quarter of 2016 was $513 million as compared to $598 million for the fourth quarter of 2015, reflecting a decline of 14%. The decrease was primarily driven by the decrease in contribution margin as a result of the decline in product sales from our existing business partially offset by lower cash operating expenses.
Full year 2016 net cash provided by operating activities was $2,087 million as compared to $2,257 million in 2015 respectively, reflecting a decline of 8%. The decrease was primarily driven by lower operating cash flows generated from our existing business primarily attributable to a decrease in contribution in the Branded Rx segment and the U.S. Diversified segment and was primarily attributable to lower average realized pricing and lower volumes from our existing business of $652 million and $625 million, respectively, which was partially offset by incremental product sales from acquisitions of $735 million.
Results were further impacted by an increase in interest paid of $449 million due to higher borrowings, primarily resulting from the issuances of debt in connection with the Salix Acquisition and an increase in interest rates applicable to our term loans and borrowings under our revolving credit facility under our senior secured credit facilities as a result of amendments in 2016.

2017 Full Year Guidance:
Valeant has provided guidance for 2017 as follows:
GAAP Total Revenues in the range $8.90 billion – $9.10 billion,
Adjusted EBITDA (non-GAAP) in the range of $3.55 billion – $3.70 billion
Other than with respect to GAAP Total Revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. In periods where there are not expected to be significant acquisitions or divestitures, the Company believes it might have a basis for forecasting the GAAP equivalent for certain costs, such as amortization, that would otherwise be treated as non-GAAP to calculate projected GAAP net income (loss). However, because other deductions (such as restructuring, gain or loss on extinguishment of debt and litigation settlements) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP). The Company is no longer providing guidance with respect to Adjusted Net Income or Adjusted EPS.

10-K – Annual report [Section 13 and 15(d), not S-K Item 405]

Emergent BioSolutions has filed a 10-K – Annual report [Section 13 and 15(d), not S-K Item 405] with the U.S. Securities and Exchange Commission (Filing, 10-K, Emergent BioSolutions, FEB 27, 2017, View Source [SID1234517859]).

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Exelixis and Bristol-Myers Squibb Enter Clinical Collaboration for Late-Stage Combination Trial in First-Line Renal Cell Carcinoma

On February 27, 2017 Exelixis, Inc. (Nasdaq:EXEL) and Bristol-Myers Squibb Company (NYSE:BMY) reported the companies have entered into a clinical development collaboration to evaluate CABOMETYX (cabozantinib), Exelixis’ small molecule inhibitor of receptor tyrosine kinases, with Opdivo (nivolumab), Bristol-Myers Squibb’s PD-1 immune checkpoint inhibitor, either alone or in combination with Yervoy (ipilimumab) (Press release, Exelixis, FEB 27, 2017, View Source;p=RssLanding&cat=news&id=2249567 [SID1234517834]). The clinical development program, which will be co-funded by the companies, is expected to include a phase 3 pivotal trial in first-line renal cell carcinoma, with additional trials planned in bladder cancer, hepatocellular carcinoma (HCC), and potentially other tumor types.

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"The safety and efficacy data from the phase 1 clinical trial evaluating CABOMETYX in combination with Opdivo are consistent with the preclinical scientific rationale for combining these two therapeutic modalities," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. "This clinical development collaboration will provide the resources and collaborative framework to fully evaluate the potential for this combination, with and without Yervoy, in both late-stage pivotal and exploratory trials in a variety of forms of cancer. We look forward to working with Bristol-Myers Squibb to further understand the role these combination therapies may play in helping patients on a global basis."

"Combining our Immuno-Oncology portfolio with promising agents which target different and complementary pathways is a key component of our strategy to improve treatment outcomes for patients," said Fouad Namouni, M.D., head of Development, Oncology, Bristol-Myers Squibb. "We look forward to working with Exelixis, bringing together our knowledge and experience in oncology, to evaluate the potential clinical value of combining these therapies to treat multiple tumors."

The clinical development collaboration builds upon previously published preclinical and clinical data that provide a scientific rationale for combining CABOMETYX with immunotherapies, including phase 1 data of CABOMETYX in combination with Opdivo in patients with previously treated genitourinary tumors that were presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Congress. Updated results from this part of the study as well as results from a second part evaluating the combination of CABOMETYX, Opdivo and Yervoy were presented during the poster discussion session (Abstract #293) on February 17 at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2017 Genitourinary Cancers Symposium, which was held in Orlando, Florida, February 16 – 18, 2017.

CABOMETYX and Opdivo have both received approval in the United States and European Union for specific uses in previously treated renal cell carcinoma, and both compounds are the subject of ongoing, global phase 3 pivotal trials in hepatocellular carcinoma. Opdivo is approved in the United States for previously treated bladder cancer.

About Exelixis’ Collaboration with Ipsen

On February 29, 2016, Exelixis and Ipsen jointly announced an exclusive licensing agreement for the commercialization and further development of cabozantinib indications outside of the United States, Canada and Japan. On December 21, 2016, this agreement was amended to include commercialization rights for Ipsen in Canada. Ipsen, Exelixis’ global partner for cabozantinib in all geographies outside the United States and Japan, has opted in to participate in the phase 3 pivotal trial in first-line renal cell carcinoma and will have access to the results to support potential future regulatory submissions. They may also participate in future studies at their choosing.

About Exelixis’ Collaboration with Takeda

On January 30, 2017, Exelixis and Takeda jointly announced an exclusive licensing agreement for the commercialization and further development of cabozantinib indications in Japan. Takeda may also participate in these and future studies and have access to the results to support potential future regulatory submissions in their territories, if they opt into their funding obligations under the respective collaboration agreements.

Exelixis holds the exclusive rights to develop and commercialize cabozantinib in the United States.

About CABOMETYX (cabozantinib)

CABOMETYX is the tablet formulation of cabozantinib. Its targets include MET, AXL and VEGFR-1, -2 and -3. In preclinical models, cabozantinib has been shown to inhibit the activity of these receptors, which are involved in normal cellular function and pathologic processes such as tumor angiogenesis, invasiveness, metastasis and drug resistance.

CABOMETYX is available in 20 mg, 40 mg or 60 mg doses. The recommended dose is 60 mg orally, once daily.

On April 25, 2016, the FDA approved CABOMETYX tablets for the treatment of patients with advanced renal cell carcinoma who have received prior anti-angiogenic therapy. On September 9, 2016, the European Commission approved CABOMETYX tablets for the treatment of advanced renal cell carcinoma in adults who have received prior vascular endothelial growth factor (VEGF)-targeted therapy in the European Union, Norway and Iceland.

About the Opdivo Clinical Development Program

Bristol-Myers Squibb’s global development program founded on scientific expertise in the field of Immuno-Oncology includes a broad range of clinical trials studying Opdivo, across all phases, including Phase 3, in a variety of tumor types. To date, the Opdivo clinical development program has enrolled more than 25,000 patients.

About the Bristol-Myers Squibb and Ono Pharmaceutical Collaboration

In 2011, through a collaboration agreement with Ono Pharmaceutical Co., Bristol-Myers Squibb expanded its territorial rights to develop and commercialize Opdivo globally except in Japan, South Korea and Taiwan, where Ono had retained all rights to the compound at the time. On July 2014, Ono and Bristol-Myers Squibb further expanded the companies’ strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies – as single agents and combination regimens – for patients with cancer in Japan, South Korea and Taiwan.

CABOMETYX U.S. Important Safety Information

Hemorrhage: Severe hemorrhage occurred with CABOMETYX. The incidence of Grade ≥3 hemorrhagic events was 2.1% in CABOMETYX-treated patients and 1.6% in everolimus-treated patients. Fatal hemorrhages also occurred in the cabozantinib clinical program. Do not administer CABOMETYX to patients that have or are at risk for severe hemorrhage.

Gastrointestinal (GI) Perforations and Fistulas: Fistulas were reported in 1.2% (including 0.6% anal fistula) of CABOMETYX-treated patients and 0% of everolimus-treated patients. GI perforations were reported in 0.9% of CABOMETYX-treated patients and 0.6% of everolimus-treated patients. Fatal perforations occurred in the cabozantinib clinical program. Monitor patients for symptoms of fistulas and perforations. Discontinue CABOMETYX in patients who experience a fistula that cannot be appropriately managed or a GI perforation.

Thrombotic Events: CABOMETYX treatment results in an increased incidence of thrombotic events. Venous thromboembolism was reported in 7.3% of CABOMETYX-treated patients and 2.5% of everolimus-treated patients. Pulmonary embolism occurred in 3.9% of CABOMETYX-treated patients and 0.3% of everolimus-treated patients. Events of arterial thromboembolism were reported in 0.9% of CABOMETYX-treated patients and 0.3% of everolimus-treated patients. Fatal thrombotic events occurred in the cabozantinib clinical program. Discontinue CABOMETYX in patients who develop an acute myocardial infarction or any other arterial thromboembolic complication.

Hypertension and Hypertensive Crisis: CABOMETYX treatment results in an increased incidence of treatment-emergent hypertension. Hypertension was reported in 37% (15% Grade ≥3) of CABOMETYX-treated patients and 7.1% (3.1% Grade ≥3) of everolimus-treated patients. Monitor blood pressure prior to initiation and regularly during CABOMETYX treatment. Withhold CABOMETYX for hypertension that is not adequately controlled with medical management; when controlled, resume CABOMETYX at a reduced dose. Discontinue CABOMETYX for severe hypertension that cannot be controlled with anti-hypertensive therapy. Discontinue CABOMETYX if there is evidence of hypertensive crisis or severe hypertension despite optimal medical management.

Diarrhea: Diarrhea occurred in 74% of patients treated with CABOMETYX and in 28% of patients treated with everolimus. Grade 3 diarrhea occurred in 11% of CABOMETYX-treated patients and in 2% of everolimus-treated patients. Withhold CABOMETYX in patients who develop intolerable Grade 2 diarrhea or Grade 3-4 diarrhea that cannot be managed with standard antidiarrheal treatments until improvement to Grade 1; resume CABOMETYX at a reduced dose. Dose modification due to diarrhea occurred in 26% of patients.

Palmar-Plantar Erythrodysesthesia Syndrome (PPES): Palmar-plantar erythrodysesthesia syndrome (PPES) occurred in 42% of patients treated with CABOMETYX and in 6% of patients treated with everolimus. Grade 3 PPES occurred in 8.2% of CABOMETYX-treated patients and in <1% of everolimus-treated patients. Withhold CABOMETYX in patients who develop intolerable Grade 2 PPES or Grade 3 PPES until improvement to Grade 1; resume CABOMETYX at a reduced dose. Dose modification due to PPES occurred in 16% of patients.

Reversible Posterior Leukoencephalopathy Syndrome (RPLS): RPLS, a syndrome of subcortical vasogenic edema diagnosed by characteristic finding on MRI, occurred in the cabozantinib clinical program. Perform an evaluation for RPLS in any patient presenting with seizures, headache, visual disturbances, confusion, or altered mental function. Discontinue CABOMETYX in patients who develop RPLS.

Embryo-fetal Toxicity: CABOMETYX can cause fetal harm when administered to a pregnant woman. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with CABOMETYX and for 4 months after the last dose.

Adverse Reactions: The most commonly reported (≥25%) adverse reactions are: diarrhea, fatigue, nausea, decreased appetite, PPES, hypertension, vomiting, weight decreased, and constipation.

Drug Interactions: Strong CYP3A4 inhibitors and inducers: Reduce the dosage of CABOMETYX if concomitant use with strong CYP3A4 inhibitors cannot be avoided. Increase the dosage of CABOMETYX if concomitant use with strong CYP3A4 inducers cannot be avoided.

Lactation: Advise a lactating woman not to breastfeed during treatment with CABOMETYX and for 4 months after the final dose.

Reproductive Potential: Contraception―Advise females of reproductive potential to use effective contraception during treatment with CABOMETYX and for 4 months after the final dose. Infertility ―CABOMETYX may impair fertility in females and males of reproductive potential.

Hepatic Impairment: Reduce the CABOMETYX dose in patients with mild (Child-Pugh score [C-P] A) or moderate (C-P B) hepatic impairment. CABOMETYX is not recommended for use in patients with severe hepatic impairment.

Please see full Prescribing Information at View Source

OPDIVO AND YERVOY INDICATIONS & IMPORTANT SAFETY INFORMATION

INDICATIONS

OPDIVO (nivolumab) as a single agent is indicated for the treatment of patients with BRAF V600 mutation-positive unresectable or metastatic melanoma. This indication is approved under accelerated approval based on progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO (nivolumab) as a single agent is indicated for the treatment of patients with BRAF V600 wild-type unresectable or metastatic melanoma.

OPDIVO (nivolumab), in combination with YERVOY (ipilimumab), is indicated for the treatment of patients with unresectable or metastatic melanoma. This indication is approved under accelerated approval based on progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of patients with metastatic non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving OPDIVO.

OPDIVO (nivolumab) is indicated for the treatment of patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy.

OPDIVO (nivolumab) is indicated for the treatment of patients with classical Hodgkin lymphoma (cHL) that has relapsed or progressed after autologous hematopoietic stem cell transplantation (HSCT) and post-transplantation brentuximab vedotin. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO (nivolumab) is indicated for the treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) with disease progression on or after platinum-based therapy.

OPDIVO (nivolumab) is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

IMPORTANT SAFETY INFORMATION

WARNING: IMMUNE-MEDIATED ADVERSE REACTIONS

YERVOY can result in severe and fatal immune-mediated adverse reactions. These immune-mediated reactions may involve any organ system; however, the most common severe immune-mediated adverse reactions are enterocolitis, hepatitis, dermatitis (including toxic epidermal necrolysis), neuropathy, and endocrinopathy. The majority of these immune-mediated reactions initially manifested during treatment; however, a minority occurred weeks to months after discontinuation of YERVOY.

Assess patients for signs and symptoms of enterocolitis, dermatitis, neuropathy, and endocrinopathy and evaluate clinical chemistries including liver function tests (LFTs), adrenocorticotropic hormone (ACTH) level, and thyroid function tests at baseline and before each dose.

Permanently discontinue YERVOY and initiate systemic high-dose corticosteroid therapy for severe immune-mediated reactions.

Immune-Mediated Pneumonitis

OPDIVO can cause immune-mediated pneumonitis. Fatal cases have been reported. Monitor patients for signs with radiographic imaging and for symptoms of pneumonitis. Administer corticosteroids for Grade 2 or more severe pneumonitis. Permanently discontinue for Grade 3 or 4 and withhold until resolution for Grade 2. In patients receiving OPDIVO monotherapy, fatal cases of immune-mediated pneumonitis have occurred. Immune-mediated pneumonitis occurred in 3.1% (61/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated pneumonitis occurred in 6% (25/407) of patients.

In Checkmate 205 and 039, pneumonitis, including interstitial lung disease, occurred in 4.9% (13/263) of patients receiving OPDIVO. Immune-mediated pneumonitis occurred in 3.4% (9/263) of patients receiving OPDIVO: Grade 3 (n=1) and Grade 2 (n=8).

Immune-Mediated Colitis

OPDIVO can cause immune-mediated colitis. Monitor patients for signs and symptoms of colitis. Administer corticosteroids for Grade 2 (of more than 5 days duration), 3, or 4 colitis. Withhold OPDIVO monotherapy for Grade 2 or 3 and permanently discontinue for Grade 4 or recurrent colitis upon re-initiation of OPDIVO. When administered with YERVOY, withhold OPDIVO and YERVOY for Grade 2 and permanently discontinue for Grade 3 or 4 or recurrent colitis. In patients receiving OPDIVO monotherapy, immune-mediated colitis occurred in 2.9% (58/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated colitis occurred in 26% (107/407) of patients including three fatal cases.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal (diarrhea of ≥7 stools above baseline, fever, ileus, peritoneal signs; Grade 3-5) immune-mediated enterocolitis occurred in 34 (7%) patients. Across all YERVOY-treated patients in that study (n=511), 5 (1%) developed intestinal perforation, 4 (0.8%) died as a result of complications, and 26 (5%) were hospitalized for severe enterocolitis.

Immune-Mediated Hepatitis

OPDIVO can cause immune-mediated hepatitis. Monitor patients for abnormal liver tests prior to and periodically during treatment. Administer corticosteroids for Grade 2 or greater transaminase elevations. Withhold for Grade 2 and permanently discontinue for Grade 3 or 4 immune-mediated hepatitis. In patients receiving OPDIVO monotherapy, immune-mediated hepatitis occurred in 1.8% (35/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated hepatitis occurred in 13% (51/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal hepatotoxicity (AST or ALT elevations >5x the ULN or total bilirubin elevations >3x the ULN; Grade 3-5) occurred in 8 (2%) patients, with fatal hepatic failure in 0.2% and hospitalization in 0.4%.

Immune-Mediated Neuropathies

In a separate Phase 3 study of YERVOY 3 mg/kg, 1 case of fatal Guillain-Barré syndrome and 1 case of severe (Grade 3) peripheral motor neuropathy were reported.

Immune-Mediated Endocrinopathies

OPDIVO can cause immune-mediated hypophysitis, immune-mediated adrenal insufficiency, autoimmune thyroid disorders, and Type 1 diabetes mellitus. Monitor patients for signs and symptoms of hypophysitis, signs and symptoms of adrenal insufficiency, thyroid function prior to and periodically during treatment, and hyperglycemia. Administer hormone replacement as clinically indicated and corticosteroids for Grade 2 or greater hypophysitis. Withhold for Grade 2 or 3 and permanently discontinue for Grade 4 hypophysitis. Administer corticosteroids for Grade 3 or 4 adrenal insufficiency. Withhold for Grade 2 and permanently discontinue for Grade 3 or 4 adrenal insufficiency. Administer hormone-replacement therapy for hypothyroidism. Initiate medical management for control of hyperthyroidism. Withhold OPDIVO for Grade 3 and permanently discontinue for Grade 4 hyperglycemia.

In patients receiving OPDIVO monotherapy, hypophysitis occurred in 0.6% (12/1994) of patients. In patients receiving OPDIVO with YERVOY, hypophysitis occurred in 9% (36/407) of patients. In patients receiving OPDIVO monotherapy, adrenal insufficiency occurred in 1% (20/1994) of patients. In patients receiving OPDIVO with YERVOY, adrenal insufficiency occurred in 5% (21/407) of patients. In patients receiving OPDIVO monotherapy, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 9% (171/1994) of patients. Hyperthyroidism occurred in 2.7% (54/1994) of patients receiving OPDIVO monotherapy. In patients receiving OPDIVO with YERVOY, hypothyroidism or thyroiditis resulting in hypothyroidism occurred in 22% (89/407) of patients. Hyperthyroidism occurred in 8% (34/407) of patients receiving OPDIVO with YERVOY. In patients receiving OPDIVO monotherapy, diabetes occurred in 0.9% (17/1994) of patients. In patients receiving OPDIVO with YERVOY, diabetes occurred in 1.5% (6/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe to life-threatening immune-mediated endocrinopathies (requiring hospitalization, urgent medical intervention, or interfering with activities of daily living; Grade 3-4) occurred in 9 (1.8%) patients. All 9 patients had hypopituitarism, and some had additional concomitant endocrinopathies such as adrenal insufficiency, hypogonadism, and hypothyroidism. 6 of the 9 patients were hospitalized for severe endocrinopathies.

Immune-Mediated Nephritis and Renal Dysfunction

OPDIVO can cause immune-mediated nephritis. Monitor patients for elevated serum creatinine prior to and periodically during treatment. Administer corticosteroids for Grades 2-4 increased serum creatinine. Withhold OPDIVO for Grade 2 or 3 and permanently discontinue for Grade 4 increased serum creatinine. In patients receiving OPDIVO monotherapy, immune-mediated nephritis and renal dysfunction occurred in 1.2% (23/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated nephritis and renal dysfunction occurred in 2.2% (9/407) of patients.

Immune-Mediated Skin Adverse Reactions and Dermatitis

OPDIVO can cause immune-mediated rash, including Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), some cases with fatal outcome. Administer corticosteroids for Grade 3 or 4 rash. Withhold for Grade 3 and permanently discontinue for Grade 4 rash. For symptoms or signs of SJS or TEN, withhold OPDIVO and refer the patient for specialized care for assessment and treatment; if confirmed, permanently discontinue. In patients receiving OPDIVO monotherapy, immune-mediated rash occurred in 9% (171/1994) of patients. In patients receiving OPDIVO with YERVOY, immune-mediated rash occurred in 22.6% (92/407) of patients.

In a separate Phase 3 study of YERVOY 3 mg/kg, severe, life-threatening, or fatal immune-mediated dermatitis (eg, Stevens-Johnson syndrome, toxic epidermal necrolysis, or rash complicated by full thickness dermal ulceration, or necrotic, bullous, or hemorrhagic manifestations; Grade 3-5) occurred in 13 (2.5%) patients. 1 (0.2%) patient died as a result of toxic epidermal necrolysis. 1 additional patient required hospitalization for severe dermatitis.

Immune-Mediated Encephalitis

OPDIVO can cause immune-mediated encephalitis. Evaluation of patients with neurologic symptoms may include, but not be limited to, consultation with a neurologist, brain MRI, and lumbar puncture. Withhold OPDIVO in patients with new-onset moderate to severe neurologic signs or symptoms and evaluate to rule out other causes. If other etiologies are ruled out, administer corticosteroids and permanently discontinue OPDIVO for immune-mediated encephalitis. In patients receiving OPDIVO monotherapy, encephalitis occurred in 0.2% (3/1994) of patients. Fatal limbic encephalitis occurred in one patient after 7.2 months of exposure despite discontinuation of OPDIVO and administration of corticosteroids. Encephalitis occurred in one patient receiving OPDIVO with YERVOY (0.2%) after 1.7 months of exposure.

Other Immune-Mediated Adverse Reactions

Based on the severity of adverse reaction, permanently discontinue or withhold treatment, administer high-dose corticosteroids, and, if appropriate, initiate hormone-replacement therapy. Across clinical trials of OPDIVO the following clinically significant immune-mediated adverse reactions occurred in <1.0% of patients receiving OPDIVO: uveitis, iritis, pancreatitis, facial and abducens nerve paresis, demyelination, polymyalgia rheumatica, autoimmune neuropathy, Guillain-Barré syndrome, hypopituitarism, systemic inflammatory response syndrome, gastritis, duodenitis, sarcoidosis, histiocytic necrotizing lymphadenitis (Kikuchi lymphadenitis), myositis, myocarditis, rhabdomyolysis, motor dysfunction, vasculitis, and myasthenic syndrome.

Infusion Reactions

OPDIVO can cause severe infusion reactions, which have been reported in <1.0% of patients in clinical trials. Discontinue OPDIVO in patients with Grade 3 or 4 infusion reactions. Interrupt or slow the rate of infusion in patients with Grade 1 or 2. In patients receiving OPDIVO monotherapy, infusion-related reactions occurred in 6.4% (127/1994) of patients. In patients receiving OPDIVO with YERVOY, infusion-related reactions occurred in 2.5% (10/407) of patients.

Complications of Allogeneic HSCT after OPDIVO

Complications, including fatal events, occurred in patients who received allogeneic HSCT after OPDIVO. Outcomes were evaluated in 17 patients from Checkmate 205 and 039, who underwent allogeneic HSCT after discontinuing OPDIVO (15 with reduced-intensity conditioning, 2 with myeloablative conditioning). Thirty-five percent (6/17) of patients died from complications of allogeneic HSCT after OPDIVO. Five deaths occurred in the setting of severe or refractory GVHD. Grade 3 or higher acute GVHD was reported in 29% (5/17) of patients. Hyperacute GVHD was reported in 20% (n=2) of patients. A steroid-requiring febrile syndrome, without an identified infectious cause, was reported in 35% (n=6) of patients. Two cases of encephalitis were reported: Grade 3 (n=1) lymphocytic encephalitis without an identified infectious cause, and Grade 3 (n=1) suspected viral encephalitis. Hepatic veno-occlusive disease (VOD) occurred in one patient, who received reduced-intensity conditioned allogeneic HSCT and died of GVHD and multi-organ failure. Other cases of hepatic VOD after reduced-intensity conditioned allogeneic HSCT have also been reported in patients with lymphoma who received a PD-1 receptor blocking antibody before transplantation. Cases of fatal hyperacute GVHD have also been reported. These complications may occur despite intervening therapy between PD-1 blockade and allogeneic HSCT.

Follow patients closely for early evidence of transplant-related complications such as hyperacute GVHD, severe (Grade 3 to 4) acute GVHD, steroid-requiring febrile syndrome, hepatic VOD, and other immune-mediated adverse reactions, and intervene promptly.

Embryo-Fetal Toxicity

Based on their mechanisms of action, OPDIVO and YERVOY can cause fetal harm when administered to a pregnant woman. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with an OPDIVO- or YERVOY- containing regimen and for at least 5 months after the last dose of OPDIVO.

Lactation

It is not known whether OPDIVO or YERVOY is present in human milk. Because many drugs, including antibodies, are excreted in human milk and because of the potential for serious adverse reactions in nursing infants from an OPDIVO-containing regimen, advise women to discontinue breastfeeding during treatment. Advise women to discontinue nursing during treatment with YERVOY and for 3 months following the final dose.

Serious Adverse Reactions

In Checkmate 037, serious adverse reactions occurred in 41% of patients receiving OPDIVO (n=268). Grade 3 and 4 adverse reactions occurred in 42% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions reported in 2% to <5% of patients receiving OPDIVO were abdominal pain, hyponatremia, increased aspartate aminotransferase, and increased lipase. In Checkmate 066, serious adverse reactions occurred in 36% of patients receiving OPDIVO (n=206). Grade 3 and 4 adverse reactions occurred in 41% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of patients receiving OPDIVO were gamma-glutamyltransferase increase (3.9%) and diarrhea (3.4%). In Checkmate 067, serious adverse reactions (73% and 37%), adverse reactions leading to permanent discontinuation (43% and 14%) or to dosing delays (55% and 28%), and Grade 3 or 4 adverse reactions (72% and 44%) all occurred more frequently in the OPDIVO plus YERVOY arm (n=313) relative to the OPDIVO arm (n=313). The most frequent (≥10%) serious adverse reactions in the OPDIVO plus YERVOY arm and the OPDIVO arm, respectively, were diarrhea (13% and 2.6%), colitis (10% and 1.6%), and pyrexia (10% and 0.6%). In Checkmate 017 and 057, serious adverse reactions occurred in 46% of patients receiving OPDIVO (n=418). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, pulmonary embolism, dyspnea, pyrexia, pleural effusion, pneumonitis, and respiratory failure. In Checkmate 025, serious adverse reactions occurred in 47% of patients receiving OPDIVO (n=406). The most frequent serious adverse reactions reported in ≥2% of patients were acute kidney injury, pleural effusion, pneumonia, diarrhea, and hypercalcemia. In Checkmate 205 and 039, among all patients (safety population [n=263]), adverse reactions leading to discontinuation (4.2%) or to dosing delays (23%) occurred. The most frequent serious adverse reactions reported in ≥1% of patients were infusion-related reaction, pneumonia, pleural effusion, pyrexia, rash and pneumonitis. Ten patients died from causes other than disease progression, including 6 who died from complications of allogeneic HSCT. Serious adverse reactions occurred in 21% of patients in the safety population (n=263) and 27% of patients in the subset of patients evaluated for efficacy (efficacy population [n=95]). In Checkmate 141, serious adverse reactions occurred in 49% of patients receiving OPDIVO. The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, dyspnea, respiratory failure, respiratory tract infections, and sepsis. In Checkmate 275, serious adverse reactions occurred in 54% of patients receiving OPDIVO (n=270). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were urinary tract infection, sepsis, diarrhea, small intestine obstruction, and general physical health deterioration.

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO (n=268) was rash (21%). In Checkmate 066, the most common adverse reactions (≥20%) reported with OPDIVO (n=206) vs dacarbazine (n=205) were fatigue (49% vs 39%), musculoskeletal pain (32% vs 25%), rash (28% vs 12%), and pruritus (23% vs 12%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO plus YERVOY arm (n=313) were fatigue (59%), rash (53%), diarrhea (52%), nausea (40%), pyrexia (37%), vomiting (28%), and dyspnea (20%). The most common (≥20%) adverse reactions in the OPDIVO (n=313) arm were fatigue (53%), rash (40%), diarrhea (31%), and nausea (28%). In Checkmate 017 and 057, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=418) were fatigue, musculoskeletal pain, cough, dyspnea, and decreased appetite. In Checkmate 025, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=406) vs everolimus (n=397) were asthenic conditions (56% vs 57%), cough (34% vs 38%), nausea (28% vs 29%), rash (28% vs 36%), dyspnea (27% vs 31%), diarrhea (25% vs 32%), constipation (23% vs 18%), decreased appetite (23% vs 30%), back pain (21% vs 16%), and arthralgia (20% vs 14%). In Checkmate 205 and 039, among all patients (safety population [n=263]) and the subset of patients in the efficacy population (n=95), respectively, the most common adverse reactions (≥20%) were fatigue (32% and 43%), upper respiratory tract infection (28% and 48%), pyrexia (24% and 35%), diarrhea (23% and 30%), and cough (22% and 35%). In the subset of patients in the efficacy population (n=95), the most common adverse reactions also included rash (31%), musculoskeletal pain (27%), pruritus (25%), nausea (23%), arthralgia (21%), and peripheral neuropathy (21%). In Checkmate 141, the most common adverse reactions (≥10%) in patients receiving OPDIVO were cough and dyspnea at a higher incidence than investigator’s choice. In Checkmate 275, the most common adverse reactions (≥ 20%) reported in patients receiving OPDIVO (n=270) were fatigue (46%), musculoskeletal pain (30%), nausea (22%), and decreased appetite (22%).

In a separate Phase 3 study of YERVOY 3 mg/kg, the most common adverse reactions (≥5%) in patients who received YERVOY at 3 mg/kg were fatigue (41%), diarrhea (32%), pruritus (31%), rash (29%), and colitis (8%).

Checkmate Trials and Patient Populations

Checkmate 067 – advanced melanoma alone or in combination with YERVOY; Checkmate 037 and 066 – advanced melanoma; Checkmate 017 – squamous non-small cell lung cancer (NSCLC); Checkmate 057 – non-squamous NSCLC; Checkmate 025 – renal cell carcinoma; Checkmate 205/039 – classical Hodgkin lymphoma; Checkmate 141 – squamous cell carcinoma of the head and neck; Checkmate 275 – urothelial carcinoma.

Please see U.S. Full Prescribing Information for OPDIVO and YERVOY, including Boxed WARNING regarding immune-mediated adverse reactions for YERVOY.