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Reata Pharmaceuticals, Inc. to Report First Quarter 2019 Financials and to Provide an Update on Development Programs on May 9, 2019

On May 2, 2019 Reata Pharmaceuticals, Inc. (Nasdaq: RETA), a clinical-stage biopharmaceutical company, reported that it will report financial results and provide an update on recent progress on its development programs on Thursday, May 9th, 2019 at 8:00 a.m. ET before the market opens (Press release, Reata Pharmaceuticals, MAY 2, 2019, View Source [SID1234535566]).

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The conference call will be accessible by dialing (844)348-3946 (toll-free domestic) or (213)358-0892 (international) using the access code: 5177169. The webcast link is View Source

First quarter financial results to be discussed during the call will be included in an earnings press release that will be available on the company’s website shortly before the call at View Source and will be available for 12 months after the call. The audio recording and webcast will be accessible for at least 90 days after the event through the Investors section of the company’s website at View Source

MEDIGENE PRESENTED DATA ON FAVORABLE SAFETY PATTERN OF PRAME-SPECIFIC TCR ON NEURONAL CELLS AT 2019 ASGCT MEETING

On May 2, 2019 Medigene AG (FSE: MDG1, Prime Standard), a clinical stage immuno-oncology company focusing on the development of T cell immunotherapies, reported that Dr. Maja Buerdek, Director Cellular Tools, gave an oral presentation on in vitro assays to evaluate potential TCR-mediated toxicity against neuronal cells at the American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) Annual Meeting in Washington, DC (Press release, MediGene, MAY 2, 2019, View Source [SID1234535565]).

Before TCR-transgenic T cells (TCR-Ts) enter clinical studies for adoptive immunotherapy of cancer, they need to be systematically tested for possible toxic effects against healthy tissues. Toxicity can be due either to on-target/off-tumor or off-target recognition by TCR-Ts.

Medigene has developed physiologically relevant 2-dimensional and 3-dimensional in vitro models to assess potential TCR-T-mediated toxicities against a variety of healthy tissues, whereby neuronal toxicity represents a special case due to paucity of non-malignant cell lines and fresh brain tissue samples. Therefore, assessments for neurotoxicity were made using inhibitory GABA neurons and astrocytes derived from induced pluripotent stem cells (iPSCs). Neither neuronal cell type was found to express PRAME antigen as determined by direct qPCR studies in vitro. Furthermore, extensive in silico data of PRAME RNA and protein expression as well as in vitro studies of RNA in a specialized panel of 24 brain tissues failed to detect PRAME expression. Thereby, these cell types theoretically should not represent direct targets for PRAME-specific TCR-Ts through on-target/off-tumor recognition since they lack specific endogenous PRAME expression. Nevertheless, neuronal cells could potentially still be recognized via PRAME-specific TCR-Ts due to off-target toxicity, based on TCR cross-reactivity for an undefined target.

Importantly, cell surface expression of HLA-A2 on neurons, a precondition for recognition by HLA-A2-restricted PRAME-specific TCR-Ts, could only be measured after treatment with interferon gamma, mimicking a pro-inflammatory environment. Therefore, to demonstrate general susceptibility to recognition and killing via TCR-Ts, and to directly assess both on target/off-tumor and off-target toxicity, the neuronal cells were pre-treated with interferon gamma and loaded exogenously with PRAME peptide and then tested with PRAME-specific TCR-Ts. The neuronal cells were recognized and killed, demonstrating that specific recognition could be detected in this 2D assay system. Importantly, non-peptide-loaded neuronal cells survived in the presence of PRAME-specific TCR-Ts in 2D co-cultures assaying for specific cytokine release and killing. Thus, both cell types were not found to be susceptible to on-target/off-tumor toxicity, as predicted, nor were they susceptible to off-target toxicity.

Since neuronal cells could show different characteristics in vivo based on tissue-like structures, 3D neuro-spheroids were generated and utilized in co-culture assays with PRAME-specific TCR-Ts. The results confirmed those described for the 2D system, whereby 3D neuro-spheroids were not killed by the PRAME-specific TCR-Ts, whereas exogenous loading of 3D neuro-spheroids with PRAME peptide led to an efficient killing of the neurons by the PRAME-specific TCR-Ts.

Dr Maja Buerdek, Director Cellular Tools at Medigene, commented: "Medigene has added these new functional in vitro assays for evaluation of TCR-T toxicity against neuronal cells to enlarge our extensive preclinical toolbox that allows for systematic assessment of TCR-T specificity, safety and pre-clinical efficacy in vitro. The PRAME-specific TCR-Ts analyzed in these studies showed a favorable safety pattern against both iPSC-derived astrocytes and GABA neurons in vitro using 2D and 3D co-culture models."

vTv Therapeutics Announces 2019 First Quarter Financial Results and Update

On May 2, 2019 vTv Therapeutics Inc. (Nasdaq:VTVT) reported financial results for the first quarter that ended March 31, 2019, and provided an update on recent achievements and upcoming events (Press release, vTv Therapeutics, MAY 2, 2019, View Source;p=irol-newsArticle&ID=2396694 [SID1234535564]).

"We continue to make significant progress with our operational plans and look forward to announcing in the second quarter results from part 1 of our phase 2 Simplici-T1 trial in patients with type 1 diabetes, and the initiation of a phase 2 clinical trial of azeliragon in patients with mild-Alzheimer’s disease (AD) and type 2 diabetes," said Steve Holcombe, chief executive officer, vTv Therapeutics.

Recent Achievements and Outlook

Simplici-T1 Study enrolling patients with type 1 diabetes. We completed enrollment of part 1 of the phase 2 Simplici-T1 Study, a 12-week study to evaluate TTP399 as an add-on to insulin therapy for patients with type 1 diabetes, and expect to report results in June 2019. We also began screening patients in the part 2 confirmatory phase 2 and expect to report results for that portion of the study in the latter part of the first quarter of 2020. In the previous AGATA Study, a phase 2 study in type 2 diabetes patients, TTP399 demonstrated statistically significant reductions in HbA1c levels. Importantly, TTP399 has been well tolerated in all clinical studies to date with negligible incidences of hypoglycemia and hyperlipidemia and no occurrences of ketoacidosis.
Screening for Phase 2 clinical trial of azeliragon expected to begin in June 2019. We are performing start-up activities for a clinical trial to evaluate azeliragon as a potential treatment of mild-AD in patients with type 2 diabetes that consists of sequential phase 2 and phase 3 studies operationally conducted under a single clinical trial protocol. The phase 2 study is designed to enroll approximately 100 patients to evaluate the impact of six months of treatment with azeliragon on cognitive performance as measured by the change from baseline in the Alzheimer’s Disease Assessment Scale – Cognitive Subscale ("ADAS-COG14"). We expect to begin screening patients in June 2019 for the phase 2 clinical trial and to report top-line results from the phase 2 study by the end of the fourth quarter of 2020. The phase 3 study is designed to enroll approximately 200 patients to evaluate the efficacy of 18 months of treatment with azeliragon on cognition and global function as measured by the change from baseline in the ADAS-COG14 and Clinical Dementia Rating Scale Sum of Boxes. The design of the phase 3 study may be adapted based on the results of the phase 2 study.
Publication of paper discussing the discovery and development of TTP399. In the first quarter, we announced the publication of a paper in Science Translational Medicine showcasing the discovery and development of TTP399. The paper reviewed the scientific rationale underpinning the development of TTP399 and detailed its progression from preclinical to clinical development.
First Quarter 2019 Financial Results

Cash Position: Cash and cash equivalents as of March 31, 2019, were $5.0 million compared to $1.7 million as of December 31, 2018.
R&D Expenses: Research and development expenses were $2.8 million in each of the first quarter of 2019 and the fourth quarter of 2018.
G&A Expenses: General and administrative expenses were $2.4 million and $2.1 million in the first quarter of 2019 and the fourth quarter of 2018, respectively.
Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $4.0 million for the first quarter of 2019 compared to net loss before non-controlling interest of $2.3 million for the fourth quarter of 2018.
Net Loss Per Share: GAAP net loss per share was $0.26 and $0.10 for the three months ended March 31, 2019 and December 31, 2018, respectively, based on weighted-average shares of 22.9 million and 17.6 million for the three month periods ended March 31, 2019 and December 31, 2018, respectively. Adjusted pro forma net loss per fully exchanged share was $0.09 and $0.06 for the three months ended March 31, 2019 and December 31, 2018, respectively, based on adjusted pro forma fully exchanged weighted-average shares of 46.0 million and 40.7 million for the three months ended March 31, 2019 and December 31, 2018, respectively.

Agios Announces FDA Approval of Supplemental New Drug Application (sNDA) for TIBSOVO® as Monotherapy for Newly Diagnosed Adult Patients with IDH1 Mutant Acute Myeloid Leukemia (AML) Not Eligible for Intensive Chemotherapy

On May 2, 2019 Agios Pharmaceuticals, Inc. (NASDAQ:AGIO), a leader in the field of cellular metabolism to treat cancer and rare genetic diseases, reported the U.S. Food and Drug Administration (FDA) approved a supplemental New Drug Application (sNDA) to update the U.S. Prescribing Information for TIBSOVO, an isocitrate dehydrogenase-1 (IDH1) inhibitor, to include adult patients with newly diagnosed acute myeloid leukemia (AML) with a susceptible IDH1 mutation as detected by an FDA-approved test who are ³ 75 years old or who have comorbidities that preclude use of intensive induction chemotherapy (Press release, Agios Pharmaceuticals, MAY 2, 2019, View Source [SID1234535563]). The sNDA was granted Priority Review and accepted under the FDA’s Real-Time Oncology Review pilot program, which aims to make the review of oncology drugs more efficient by allowing the FDA access to clinical trial data before the information is formally submitted to the agency. TIBSOVO received initial FDA approval in July 2018 for adult patients with relapsed or refractory (R/R) AML and an IDH1 mutation1.

"Despite several new AML medicines approved in the last two years, many newly diagnosed patients are still not eligible for existing therapies or combination regimens because of age and other comorbidities," said Chris Bowden, M.D., chief medical officer at Agios. "With today’s additional TIBSOVO approval, we are now able to provide a targeted, oral therapy to patients with an IDH1 mutation who may not have other treatment options. In addition, we are continuing our work to expand the utility of TIBSOVO in newly diagnosed AML patients in ongoing Phase 3 trials in combination with both intensive chemotherapy and azacitidine. I would like to thank the patients, nurses, physicians and caregivers who participated in the clinical trial, as well as the tremendous employees at Agios whose focus on patients made this possible."

AML is a cancer of the blood and bone marrow marked by rapid disease progression and is the most common acute leukemia affecting adults with approximately 20,000 new cases estimated in the U.S. each year2,3. AML patients are typically older or have comorbidities that preclude the use of intensive chemotherapy4. These patients typically have a worse prognosis and poor outcomes5. The majority of patients with AML eventually relapse6. The five-year survival rate is approximately 28%2. For 6 to 10 percent of AML patients, the mutated IDH1 enzyme blocks normal blood stem cell differentiation, contributing to the genesis of acute leukemia7. IDH1 mutations have been associated with negative prognosis in AML8,9.

LOGO

"The Phase 1 results for TIBSOVO demonstrated that this oral, single agent therapy can induce durable responses in newly diagnosed AML patients with an IDH1 mutation," said Gail J. Roboz, M.D., Professor of Medicine, Director of the Leukemia Program and a member of the Sandra and Edward Meyer Cancer Center at Weill Cornell Medicine and NewYork-Presbyterian/Weill Cornell Medical Center*. "Many patients included in the study had features associated with particularly aggressive and challenging forms of AML, including secondary disease, adverse risk genetics and prior treatment with hypomethylating agents."

TIBSOVO Safety and Efficacy Data1

The efficacy of TIBSOVO was evaluated in an open-label, single-arm, multicenter clinical trial

(Study AG120-C-001, NCT02074839) that included 28 adult patients with newly diagnosed AML with an IDH1 mutation who were assigned to receive a 500 mg daily dose. The cohort included patients who were age 75 or older or had comorbidities that precluded the use of intensive induction chemotherapy (baseline Eastern Cooperative Oncology Group [ECOG] performance status of ³2, severe cardiac or pulmonary disease, hepatic impairment with bilirubin >1.5 times the upper limit of normal, or creatinine clearance <45 mL/min). Patients had a median age of 77 years (range of 64 to 87) and 68% had AML with myelodysplasia-related changes. The primary endpoint is the combined complete remission (CR) and complete remission with partial hematologic improvement (CRh) rate. CRh is defined as <5% of blasts in the bone marrow, no evidence of disease and partial recovery of peripheral blood counts (platelets >50,000/microliter and ANC >500/microliter).

In this trial, TIBSOVO demonstrated:

•
CR+CRh rate of 42.9% (12 of 28 patients) (95% CI: 24.5, 62.8).

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The CR rate was 28.6% (8 of 28 patients) (95% CI 13.2, 48.7) and the CRh rate was 14.3% (4 of 28 patients) (95% CI 4.0, 32.7).

•
Median durations of CR and CR+CRh were not estimable, with 5 patients (41.7%) who achieved CR or CRh remaining on TIBSOVO treatment (treatment duration range: 20.3 to 40.9 months) as of the data cutoff.

•
58.3% (7 of 12) of patients who achieved CR or CRh were in remission at 1 year after receiving treatment.

•
For patients who achieved a CR or CRh, the median time to best response of CR or CRh was 2.8 months (range, 1.9 to 12.9 months).

•
Among the 17 patients who were dependent on red blood cell (RBC) and/or platelet transfusions at baseline, 7 (41.2%) became independent of RBC and platelet transfusions during any 56-day post-baseline period.

•
Of the 11 patients who were independent of both RBC and platelet transfusions at baseline, 6 (54.5%) remained transfusion independent during any 56-day post-baseline period.

LOGO

The safety profile of single-agent TIBSOVO was evaluated in 28 patients with newly diagnosed AML with an IDH1 mutation treated with a dose of 500 mg daily. The median duration of exposure to TIBSOVO was 4.3 months (range, 0.3 to 40.9 months). In the clinical trial, 25% (7 of 28) of patients treated with TIBSOVO experienced differentiation syndrome, which can be fatal if not treated. Of the 7 patients with newly diagnosed AML who experienced differentiation syndrome, 6 (86%) patients recovered. QTc interval prolongation occurred in patients treated with TIBSOVO. The most common adverse reactions (³20%) of any grade in patients with newly diagnosed AML were diarrhea, fatigue, decreased appetite, edema, nausea, leukocytosis, arthralgia, abdominal pain, dyspnea, myalgia, constipation, differentiation syndrome, dizziness, electrocardiogram QT prolonged, mucositis and vomiting.

About TIBSOVO (ivosidenib)

TIBSOVO is indicated for the treatment of acute myeloid leukemia (AML) with a susceptible isocitrate dehydrogenase-1 (IDH1) mutation as detected by an FDA-approved test in:

•
Adult patients with newly-diagnosed AML who are ³75 years old or who have comorbidities that preclude use of intensive induction chemotherapy.

•
Adult patients with relapsed or refractory AML.

IMPORTANT SAFETY INFORMATION

WARNING: DIFFERENTIATION SYNDROME

Patients treated with TIBSOVO have experienced symptoms of differentiation syndrome, which can be fatal if not treated. Symptoms may include fever, dyspnea, hypoxia, pulmonary infiltrates, pleural or pericardial effusions, rapid weight gain or peripheral edema, hypotension, and hepatic, renal, or multi-organ dysfunction. If differentiation syndrome is suspected, initiate corticosteroid therapy and hemodynamic monitoring until symptom resolution.

WARNINGS AND PRECAUTIONS

Differentiation Syndrome: See Boxed WARNING. In the clinical trial, 25% (7/28) of patients with newly diagnosed AML and 19% (34/179) of patients with relapsed or refractory AML treated with TIBSOVO experienced differentiation syndrome. Differentiation syndrome is associated with rapid proliferation and differentiation of myeloid cells and may be life-threatening or fatal if not treated. Symptoms of differentiation syndrome in patients treated with TIBSOVO included noninfectious leukocytosis, peripheral edema, pyrexia, dyspnea, pleural effusion, hypotension, hypoxia, pulmonary edema, pneumonitis, pericardial effusion, rash, fluid overload, tumor lysis syndrome, and creatinine increased. Of the 7 patients with newly diagnosed AML who experienced differentiation syndrome, 6 (86%) patients recovered. Of the 34 patients with relapsed or refractory AML who experienced differentiation syndrome, 27 (79%) patients recovered after treatment or after dose interruption of TIBSOVO. Differentiation syndrome occurred as early as 1 day and up to 3 months after TIBSOVO initiation and has been observed with or without concomitant leukocytosis.

LOGO

If differentiation syndrome is suspected, initiate dexamethasone 10 mg IV every 12 hours (or an equivalent dose of an alternative oral or IV corticosteroid) and hemodynamic monitoring until improvement. If concomitant noninfectious leukocytosis is observed, initiate treatment with hydroxyurea or leukapheresis, as clinically indicated. Taper corticosteroids and hydroxyurea after resolution of symptoms and administer corticosteroids for a minimum of 3 days. Symptoms of differentiation syndrome may recur with premature discontinuation of corticosteroid and/or hydroxyurea treatment. If severe signs and/or symptoms persist for more than 48 hours after initiation of corticosteroids, interrupt TIBSOVO until signs and symptoms are no longer severe.

QTc Interval Prolongation: Patients treated with TIBSOVO can develop QT (QTc) prolongation and ventricular arrhythmias. One patient developed ventricular fibrillation attributed to TIBSOVO. Concomitant use of TIBSOVO with drugs known to prolong the QTc interval (e.g., anti-arrhythmic medicines, fluoroquinolones, triazole anti-fungals, 5-HT3 receptor antagonists) and CYP3A4 inhibitors may increase the risk of QTc interval prolongation. Conduct monitoring of electrocardiograms (ECGs) and electrolytes. In patients with congenital long QTc syndrome, congestive heart failure, or electrolyte abnormalities, or in those who are taking medications known to prolong the QTc interval, more frequent monitoring may be necessary.

Interrupt TIBSOVO if QTc increases to greater than 480 msec and less than 500 msec. Interrupt and reduce TIBSOVO if QTc increases to greater than 500 msec. Permanently discontinue TIBSOVO in patients who develop QTc interval prolongation with signs or symptoms of life-threatening arrhythmia.

Guillain-Barré Syndrome: Guillain-Barré syndrome occurred in <1% (2/258) of patients treated with TIBSOVO in the clinical study. Monitor patients taking TIBSOVO for onset of new signs or symptoms of motor and/or sensory neuropathy such as unilateral or bilateral weakness, sensory alterations, paresthesias, or difficulty breathing. Permanently discontinue TIBSOVO in patients who are diagnosed with Guillain-Barré syndrome.

ADVERSE REACTIONS

The most common adverse reactions including laboratory abnormalities (³20%) were hemoglobin decreased (60%), fatigue (43%), arthralgia (39%), calcium decreased (39%), sodium decreased (39%), leukocytosis (38%), diarrhea (37%), magnesium decreased (36%), edema (34%), nausea (33%), dyspnea (32%), uric acid increased (32%), potassium decreased (32%), alkaline phosphatase increased (30%), mucositis (28%), aspartate aminotransferase increased (27%), phosphatase decreased (25%), electrocardiogram QT prolonged (24%), rash (24%), creatinine increased (24%), cough (23%), decreased appetite (22%), myalgia (21%), constipation (20%), and pyrexia (20%).

In patients with newly diagnosed AML, the most frequently reported Grade ³3 adverse reactions (³5%) were fatigue (14%), differentiation syndrome (11%), electrocardiogram QT prolonged (11%), diarrhea (7%), nausea (7%), and leukocytosis (7%). Serious adverse reactions (³5%) were differentiation syndrome (18%), electrocardiogram QT prolonged (7%), and fatigue (7%). There was one case of posterior reversible encephalopathy syndrome (PRES).

In patients with relapsed or refractory AML, the most frequently reported Grade ³3 adverse reactions (³5%) were differentiation syndrome (13%), electrocardiogram QT prolonged (10%), dyspnea (9%), leukocytosis (8%), and tumor lysis syndrome (6%). Serious adverse reactions (³5%) were differentiation syndrome (10%), leukocytosis (10%), and electrocardiogram QT prolonged (7%). There was one case of progressive multifocal leukoencephalopathy (PML).

DRUG INTERACTIONS

Strong or Moderate CYP3A4 Inhibitors: Reduce TIBSOVO dose with strong CYP3A4 inhibitors. Monitor patients for increased risk of QTc interval prolongation.

Strong CYP3A4 Inducers: Avoid concomitant use with TIBSOVO.

Sensitive CYP3A4 Substrates: Avoid concomitant use with TIBSOVO.

QTc Prolonging Drugs: Avoid concomitant use with TIBSOVO. If co-administration is unavoidable, monitor patients for increased risk of QTc interval prolongation.

LACTATION

Because many drugs are excreted in human milk and because of the potential for adverse reactions in breastfed children, advise women not to breastfeed during treatment with TIBSOVO and for at least 1 month after the last dose.

Please see full Prescribing Information, including Boxed WARNING.

About Acute Myelogenous Leukemia (AML)

About myAgios Patient Support Services

myAgios Patient Support Services is an expansive program that helps patients with access, reimbursement, and financial assistance for TIBSOVO (ivosidenib). Healthcare providers and pharmacists can enroll patients at myAgios.com/enroll.

CAMBREX REPORTS FIRST QUARTER 2019 FINANCIAL RESULTS

On May 2, 2019 Cambrex Corporation (NYSE: CBM), the leading small molecule company providing drug substance, drug product and analytical services across the entire drug lifecycle, reported results for the first quarter ended March 31, 2019 (Press release, Cambrex, MAY 2, 2019, View Source [SID1234535561]).

First Quarter 2019 Highlights

Completed the acquisition of Avista Pharma Solutions ("Avista"), an early clinical phase contract development, manufacturing and testing organization, for approximately $252 million in total cash consideration. This transaction closed on January 2, 2019.

Net revenue was $159.5 million, an increase of 13% compared to the same quarter last year. Excluding the impact of currency, net revenue increased 17%.

Income from continuing operations was $10.5 million and Diluted EPS was $0.31 per share compared to $24.2 million and $0.72 per share, respectively, for the same quarter last year. Adjusted Income from continuing operations and Diluted EPS were $20.2 million and $0.60 per share compared to $25.8 million and $0.77 per share, respectively, for the same quarter last year (see table at the end of this press release).

Adjusted EBITDA was $41.1 million compared to $37.9 million in the same quarter last year (see table at the end of this press release).

Net debt excluding lease obligations was $430.0 million at the end of the quarter compared to $204.1 million at December 31, 2018. The change during the quarter was primarily the result of acquiring Avista and related expenses, positively offset by $28.7 million of Free cash flow. The Company entered into an $800 million amended credit facility in January of 2019 in connection with the Avista acquisition.

The Company continues to expect full year 2019 Net revenue, which excludes the impact of foreign currency, to be between 21% and 25% higher than 2018 Net revenue. Adjusted EBITDA is still expected to be between $150 and $160 million (see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).

"The first quarter was a very productive quarter for Cambrex. Our financial performance was in line with our full year expectations, and we saw many examples of the synergies we anticipated when we acquired Halo and Avista. While there is still much work to be done, we took significant steps towards realizing our vision of building the leading fully integrated global small molecule CDMO. As our commercial team gains experience selling all of our services, and awareness of the full scope of our offering grows with existing and prospective customers, we expect the synergies to become more and more significant moving forward," commented Steven M. Klosk, President and Chief Executive Officer.

"We continue to invest in our facilities to ensure we have world class capabilities that position us to take advantage of ongoing positive CDMO market trends. During the quarter, we announced several new investments in our business including expanded cGMP liquid filling capacity at our Mirabel, Quebec facility, and expanded laboratories to facilitate increased generic API development capabilities at our site outside of Milan, Italy. In April, we completed construction of a new production area to manufacture highly potent drug substances at our Charles City, Iowa facility, and expect to begin production during the second quarter of 2019."

Basis of Reporting

The Company has provided a reconciliation of GAAP to adjusted (i.e. Non-GAAP) amounts at the end of this press release. Cambrex management believes that the adjustments provide useful information to investors due to the magnitude and nature of certain amounts recorded under GAAP.

As a result of the recent Halo and Avista acquisitions and consistent with how the business is managed, the Company has three reportable segments, Drug Substance ("DS"), which includes the legacy Cambrex API business excluding the High Point, North Carolina facility, Drug Product ("DP"), which includes the former Halo business, and Early Stage Development and Testing ("ESDT"), which includes the former Avista business in addition to the High Point facility.

First Quarter 2019 Operating Results – Consolidated, Continuing Operations

Net revenue was $159.5 million, an increase of $18.4 million, or 13%, from $141.1 million in the same quarter last year. Results include a 4% unfavorable impact of foreign exchange compared to the first quarter of 2018. Net revenue during the first quarter of 2019 includes the acquisitions of Halo and Avista. Compared to the same quarter last year, the Drug Substance segment revenues declined due to lower volumes.

Gross margin was 34% for the first quarter of 2019 compared to 36% in the same quarter last year.

Operating profit was $20.3 million for the first quarter of 2019 compared to $30.4 million in the same quarter last year. Operating profit for 2019 includes a $4.2 million increase in amortization expense for purchased intangibles and $6.1 million in acquisition and integration expenses. Adjusted EBITDA was $41.1 million compared to $37.9 million in the same quarter last year (see table at the end of this press release).

Income tax expense was $3.5 million resulting in an effective tax rate of 25% compared to $5.8 million and an effective tax rate of 19% in the same quarter last year. Income tax expense for the first quarter of 2018 would have been approximately 20% excluding the immediate recognition of certain effects of share-based compensation. The increase in the tax rate for 2019 as compared to 2018 is primarily due to higher state taxes as a result of state tax reform and the Company’s expanded state tax presence due to recent acquisitions, as well as the geographic mix of income.

Income from continuing operations was $10.5 million, or $0.31 per diluted share, compared to $24.2 million, or $0.72 per diluted share, in the same quarter last year.

Adjusted Income from continuing operations was $20.2 million, or $0.60 per share, compared to $25.8 million, or $0.77 per share, in the same quarter last year.

Capital expenditures were $19.2 million and depreciation and amortization was $14.7 million compared to $23.8 million and $7.5 million, respectively, in the same quarter last year.

Net debt was $430.0 million at the end of the quarter compared to $204.1 million at December 31, 2018. The change during the quarter was primarily the result of acquiring Avista and related transaction and integration expenses, positively offset by $28.7 million of Free cash flow.

First Quarter 2019 Operating Results – Drug Substance ("DS") segment

Net revenue was $112.1 million compared to $136.6 in the same quarter last year, an 18% decrease. This includes a 4% unfavorable impact of foreign exchange compared to the first quarter of 2018. The decrease was due to lower volumes of certain branded APIs, primarily from Cambrex’s largest product, partially offset by higher sales of clinical phase products and generic APIs.

Gross profit in the first quarter of 2019 was $43.4 million compared to $50.0 million in the same quarter last year. Gross margin increased to 39% from 37% in the same quarter last year. The increase in margin was primarily driven by a favorable impact from foreign currency, favorable product mix related to generic APIs and lower inventory charges due to batch failures in 2018 partially offset by lower production volumes.

Selling, general and administrative ("SG&A") expenses were $9.4 million in the first quarter of 2019 compared to $11.5 million in the same quarter last year. The decrease was mainly due to lower consulting costs associated with a 2018 operational excellence initiative and the impact of foreign currency.

Operating profit was $31.2 million compared to $35.4 million in the first quarter of 2018. The decrease was due to lower gross profit partially offset by lower operating expenses as described above.

First Quarter 2019 Operating Results – Drug Product ("DP") segment

Net revenue in the first quarter of 2019 was $24.5 million. The former Halo business that comprises what is now the DP segment was acquired in September of 2018.

Gross profit was $6.0 million and gross margin was 25% in the first quarter of 2019.

SG&A expenses were $6.2 million in the first quarter of 2019, which includes amortization of purchased intangibles of $3.0 million.

Operating loss was $0.3 million in the first quarter of 2019 which includes amortization of purchased intangibles of $3.0 million.

First Quarter 2019 Operating Results – Early Stage Development and Testing ("ESDT") segment

The Company’s Cambrex High Point ("CHP") facility is included in the ESDT segment for both periods presented. The former Avista businesses that comprise the majority of what is now the ESDT segment were acquired in January of 2019. The 2018 results for this segment include only the High Point facility, formerly part of Cambrex’s legacy API business.

Net revenue in the first quarter of 2019 was $22.9 million compared to $4.5 million in the same quarter last year. The increase is due to the acquisition of Avista and a 31% increase in CHP’s first quarter 2019 revenue.

Gross profit was $5.5 million in the first quarter of 2019 compared to $0.9 million in the same quarter last year. Gross margin was 24% in the first quarter of 2019 compared to 20% in the same period last year.

SG&A expenses were $6.5 million in the first quarter of 2019, which includes amortization of purchased intangibles of $1.4 million.

Operating loss was $2.5 million in the first quarter of 2019, which includes $1.2 million in integration expenses and $1.4 million of amortization of purchased intangible assets. Operating loss for the first quarter of 2018 was $0.4 million.

First Quarter 2019 Operating Results – Corporate Headquarters

SG&A expenses were $2.9 million in the first quarter of 2019 compared to $4.0 million in the same quarter last year. The decrease is primarily the result of lower due diligence costs related to mergers and acquisition activities.

Consolidated acquisition and integration expenses were $6.1 million for the first quarter of 2019, of which $4.9 million is reflected in the Corporate Headquarters cost center and $1.2 million is reflected in the ESDT segment. There were no acquisition and integration expenses during the first quarter of 2018.

Operating loss at Corporate in the first quarter of 2019 was $8.1 million compared to $4.6 million in the same quarter last year.

Financial Expectations – Continuing Operations

The following table shows the Company’s current expectations for its full year 2019 financial performance versus its expectations from the previous quarter. The expectations in the table below reflect expected results from the business including the recent acquisitions of Halo and Avista. All expectations for 2019, including growth relative to 2018, are based on actual and expected ASC 606 results for both years.

Consistent with the Company’s usual guidance practices, these financial expectations are for continuing operations and exclude the impact of any potential future acquisitions and related transaction and integration expenses, including expenses related to the recent acquisitions of Halo Pharma and Avista Pharma Solutions, divestitures, restructuring activities, certain tax items discussed below, and the impact of foreign currency on Net revenue.

EBITDA, Adjusted EBITDA and Adjusted Income from continuing operations per share for 2019 will be computed on a basis consistent with the reconciliation of the current quarter financial results in the tables at the end of this press release. Free cash flow is defined as the change in debt (excluding lease obligations, M&A and integration expenses), net of cash during the year. Adjusted effective tax rate excludes the immediate recognition of certain benefits of share-based compensation and certain other items adjusted for in the non-GAAP reconciliation tables at the end of this release.

The tax rate will be sensitive to the Company’s geographic mix of income, changes in the tax laws or rates within the countries in which the Company operates and the effects of certain share-based payments.

Cambrex expects M&A and related integration expenses for 2019 to be between $9 and $11 million. These amounts are excluded from the guidance for consolidated Adjusted EBITDA, Adjusted income from continuing operations per share and Free cash flow included above. These expenses include approximately $3.8 million of transaction and $2.3 million of integration expenses incurred in conjunction with the acquisition of Avista in early January and expected on-going integration expenses across most functional areas for the remainder of 2019. This estimate also includes certain anticipated expenses related to IT systems, but does not include costs to upgrade the two newly acquired businesses to Cambrex’s ERP software, which are planned to occur over the course of 2019 and 2020.

Expectations above include preliminary estimates for Depreciation and Amortization expense associated with purchase accounting for the Avista acquisition. Cambrex expects to finalize the purchase accounting for Avista during the second quarter of 2019. As a result, expected Depreciation and Amortization expense and its impact on expected Adjusted income from continuing operations per share in the table above could change when purchase accounting is finalized.

Refer to the tables at the end of this press release which include items typically adjusted to arrive at the Company’s non-GAAP results.

The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the Company’s Form 10-Q for first quarter 2019 is filed with the Securities and Exchange Commission ("SEC").

Conference Call and Webcast

A conference call to discuss the Company’s first quarter 2019 results will begin at 8:30 a.m. Eastern Time on May 2, 2019 and can be accessed by calling 1-800-682-0995 for domestic and +1-334-323-0522 for international. Please use the passcode 2251796 and call approximately 10 minutes prior to the start time. A webcast will be available in the Investors section on the Cambrex website located at www.cambrex.com. A telephone replay of the conference call will be available through May 9, 2019 by calling 1-888-203-1112 for domestic and +1-719-457-0820 for international. Please use the passcode 2251796 to access the replay.