On July 27, 2017 AstraZeneca, a global, innovation-driven biopharmaceutical business that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three main therapy areas – respiratory, inflammation, autoimmune disease (RIA), cardiovascular and metabolic disease (CVMD) and oncology – as well as in infection and neuroscience reported financial results for the first half of 2017 ended June 30, 2017 (Press release, AstraZeneca, JUL 27, 2017, View Source [SID1234519936]).

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Financial Summary
H1 2017Q2 2017
$m% change$m% change
Actual1CER2ActualCER
Total Revenue10,456(11)(9)5,051(10)(8)
Product Sales9,783(11)(10)4,940(10)(8)
Externalisation Revenue673(2)(1)111(17)(15)

Reported Operating Profit1,8423722925n/mn/m
Core Operating Profit33,215731,548108

Reported Earnings Per Share (EPS)$0.805841$0.38n/mn/m
Core EPS3$1.8651$0.8756
Financial Highlights
● The residual effects of the Crestor and Seroquel XR loss of exclusivity in the US impacted Product Sales
● Cost discipline continued:
o Reported R&D costs declined by 5% (1% at CER) to $2,802m
o Core R&D costs declined by 7% (4% at CER) to $2,617m
o Reported SG&A costs declined by 17% (15% at CER) to $4,658m
o Core SG&A costs declined by 12% (9% at CER) to $3,728m
● Reported Other Operating Income and Expense increased by 97% (101% at CER) to $839m; Core Other Operating Income and Expense increased by 105% (108% at CER) to $958m
● Reported EPS increased by 58% (41% at CER) to $0.80; Core EPS increased by 5% (1% at CER) to $1.86
● An unchanged first interim dividend of $0.90 per share
● Financial guidance for 2017 reiterated
Commercial Highlights
● The Growth Platforms grew by 2% (3% at CER) and represented 70% of Total Revenue:
● Emerging Markets: 3% growth (6% at CER), underpinned by China sales growth of 3% (8% at CER). Economic conditions in Latin America and Saudi Arabia limited overall Emerging Markets growth
● Respiratory: A decline of 6% (4% at CER), reflecting the competitive environment for Symbicort in the US
● New CVMD4: Growth of 3% (4% at CER). Brilinta growth of 26% (28% at CER) and Farxiga growth 22% (22% at CER), offset by other Diabetes
● Japan: Growth of 7% (6% at CER), with an accelerated performance in Q2 2017 reflecting the strong uptake of Tagrisso
● New Oncology5: Sales of $537m (H1 2016: $251m); particularly encouraging growth of Tagrisso. Lynparza’s US performance reflected the current indication
Achieving Scientific Leadership
The table below highlights the development of the late-stage pipeline since the last results announcement:
Regulatory ApprovalsImfinzi (durvalumab) – bladder cancer (US)
Faslodex – breast cancer (1st line) (EU, JP)
Kyntheum (brodalumab) – psoriasis (EU, received by partner)
Regulatory Submission AcceptancesLynparza – ovarian cancer (2nd line) (EU, JP)
Bevespi – chronic obstructive pulmonary disease (COPD) (EU)
Phase III or Major Data ReadoutsImfinzi – lung cancer (PACIFIC)
Bydureon – type-2 diabetes cardiovascular outcomes trial (met primary safety objective, did not meet primary efficacy objective)
tralokinumab – severe, uncontrolled asthma (did not meet primary endpoint)
Pascal Soriot, Chief Executive Officer, commenting on the results said:
“Our performance in the first half was in line with expectations as we experience the loss of exclusivity of Crestor and Seroquel XR in the US. We continued to deliver transformative science across the pipeline, particularly in Oncology. Imfinzi was launched in bladder cancer while we published practice-changing data in breast cancer for Lynparza, our first-in-class PARP inhibitor. In lung cancer, we strengthened our unique portfolio focused on both the genetic drivers of disease and immunotherapy. In the first half, we shared positive results for Imfinzi in the PACIFIC trial and reported more encouraging data for Tagrisso in patients with central nervous system metastases.
“I’m excited about our pipeline-driven transformation as we continue to deliver for shareholders on our strategy to return to sustainable long-term growth. In a pivotal year for AstraZeneca, we remain focused on realising the potential of our pipeline, growing our new launch medicines and bringing our strong science to patients.”
FY 2017 Guidance: Reiterated
The Company provides guidance on Total Revenue and Core EPS only. All commentary in this section is at CER and is unchanged from the prior results announcement:
Total RevenueA low to mid single-digit percentage decline
Core EPSA low to mid teens percentage decline*
*The Core EPS guidance anticipates a normalised effective Core tax rate in FY 2017 of 16-20% (FY 2016: 11%)
Guidance is subject to base-case assumptions of the progression of the pipeline and the extensive level of news flow listed on the following page. Variations in performance between quarters can be expected, with year-on-year comparisons expected to begin to ease in the second half of the year, given the recent annualisation of the impact of the entry of multiple Crestor generic medicines in the US.
The Company presents Core EPS guidance only at CER. It is unable to provide guidance on a Reported/GAAP basis because the Company cannot reliably forecast material elements of the Reported/GAAP result, including the fair value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal settlement provisions. Please refer to the section ‘Cautionary Statements Regarding Forward-Looking Statements’ at the end of this announcement.
In addition to the unchanged guidance above, the Company also provides unchanged indications in other areas of the Income Statement. The sum of Externalisation Revenue and Other Operating Income and Expense in
FY 2017 is anticipated to be ahead of that in FY 2016. Sustainable and ongoing income6 is expected to increase further as a proportion of total Externalisation Revenue in FY 2017 (FY 2016: 21%). Core R&D costs are expected to be broadly in line with those in FY 2016 and the Company anticipates a further reduction in Core SG&A costs in FY 2017, reflecting the evolving shape of the business. A full explanation is listed in the Operating & Financial Review.
FY 2017 Currency Impact
Based only on average exchange rates in H1 2017 and the Company’s published currency sensitivities, the Company continues to expect a low single-digit percentage adverse impact from currency movements on Total Revenue and a minimal impact on Core EPS. Further details on currency sensitivities are contained within the Operating and Financial Review.
Notes
1. All growth rates are shown at actual exchange rates, unless stated otherwise.
2. Constant exchange rates. These are non-GAAP measures because they remove the effects of currency movements from Reported results.
3. Core financial measures. These are non-GAAP measures because, unlike Reported performance, they cannot be derived directly from the information in the Group Financial Statements. See the Operating and Financial Review for a definition of Core financial measures and a reconciliation of Core to Reported financial measures.
4. New Cardiovascular and Metabolic Diseases, incorporating Brilinta and Diabetes.
5. New Oncology, comprising Lynparza, Tagrisso, Iressa (US) and Imfinzi.
6. Sustainable and ongoing income is defined as Externalisation Revenue, excluding initial revenue.
7. All commentary in this announcement refers to the performance in H1 2017, unless stated otherwise.
Pipeline: Forthcoming Major News Flow
Innovation is critical to addressing unmet patient needs and is at the heart of the Company’s growth strategy. The focus on research and development is designed to yield strong results from the pipeline.
Mid-2017Imfinzi +/- tremelimumab (treme) – lung cancer (MYSTIC): Data readout
H2 2017Faslodex – breast cancer (1st line): Regulatory decision (US)
Lynparza – ovarian cancer (2nd line): Regulatory decision (US)
Lynparza – breast cancer: Regulatory submission
Tagrisso – lung cancer (1st line): Data readout, regulatory submission
Imfinzi – lung cancer (PACIFIC): Regulatory submission
Imfinzi +/- treme – lung cancer (MYSTIC): Regulatory submission
Imfinzi +/- treme – lung cancer (ARCTIC): Data readout, regulatory submission
acalabrutinib – blood cancer: Regulatory submission (US) (Phase II)*
moxetumomab – leukaemia: Data readout
Bydureon – autoinjector: Regulatory decision (US), regulatory submission (EU)
benralizumab – severe, uncontrolled asthma: Regulatory decision (US)
tralokinumab – severe, uncontrolled asthma: Data readout
H1 2018Lynparza – ovarian cancer (2nd line): Regulatory decision (EU, JP)
Lynparza – ovarian cancer (1st line): Data readout, regulatory submission
Imfinzi +/- treme – head& neck cancer (KESTREL): Data readout
Imfinzi +/- treme – head & neck cancer (EAGLE): Data readout
moxetumomab – leukaemia: Regulatory submission
selumetinib – thyroid cancer: Data readout, regulatory submission
Bevespi – COPD: Regulatory submission (JP)
Duaklir – COPD: Regulatory submission (US)
benralizumab – severe, uncontrolled asthma: Regulatory decision (EU, JP)
tralokinumab – severe, uncontrolled asthma: Regulatory submission
PT010 – COPD: Data readout
H2 2018Imfinzi + treme – lung cancer (NEPTUNE): Data readout, regulatory submission
Imfinzi +/- treme – head& neck cancer (KESTREL): Regulatory submission
Imfinzi +/- treme – head & neck cancer (EAGLE): Regulatory submission
Imfinzi +/- treme – bladder cancer (DANUBE): Data readout, regulatory submission
roxadustat – anaemia: Regulatory submission (US)
Bevespi – COPD: Regulatory decision (EU)
benralizumab – COPD: Data readout, regulatory submission
PT010 – COPD: Regulatory submission (JP)
anifrolumab – lupus: Data readout
The term ‘data readout’ in this section refers to Phase III data readouts, unless stated otherwise.
*Potential fast-to-market opportunity ahead of randomised, controlled trials.

On July 27, 2017 Roche reported strong performance in the first half of 2017 (Press release, Hoffmann-La Roche, JUL 27, 2017, View Source [SID1234519901]).

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Group sales increase 5%1 at constant exchange rates and in Swiss francs
Pharmaceuticals Division sales up 5%, driven mainly by Tecentriq, Ocrevus and Perjeta
Diagnostics Division sales grow 5%, primarily due to immunodiagnostics
Core earnings per share growing ahead of sales at 6%

In the second quarter, the US FDA approves Tecentriq for certain people with metastatic urothelial carcinoma, Rituxan Hycela for subcutaneous injection, Actemra/RoActemra for giant cell arteritis and Lucentis for diabetic retinopathy

In July, the European CHMP recommends EU approval for Tecentriq in a specific type of metastatic lung and two types of metastatic bladder cancer. Further, CHMP recommends EU approvals of Actemra/RoActemra for the treatment of giant cell arteritis as well as Gazyvaro for people with previously untreated advanced follicular lymphoma
Outlook for 2017 raised

Commenting on the Group’s results, Roche CEO Severin Schwan said: "In the first half of the year, both our Pharmaceuticals and Diagnostics Divisions showed strong performance, very much driven by new product launches.

Particularly pleasing is the very successful launch of Ocrevus for the treatment of two forms of multiple sclerosis.

Based on our half-year performance, we raised the outlook for the full-year to mid-single digit sales growth."

Group results
Strong performance in both divisions
In the first half of 2017, Group sales rose 5% to CHF 26.3 billion. Core EPS grew 6%, ahead of sales. Core EPS growth reflects the strong underlying business performance. IFRS net income increased 2%.

Sales in the Pharmaceuticals Division increased 5% to CHF 20.5 billion. The recently launched medicines Tecentriq, Ocrevus and Alecensa contributed CHF 0.5 billion of new sales, which represents half of the division’s growth. Perjeta continued its strong sales increase. This growth was partially offset by lower sales of Tarceva, Tamiflu and Pegasys. In the US, sales advanced 8%, led by Tecentriq, Xolair, MabThera/Rituxan and Ocrevus, recently launched for the treatment of relapsing and primary progressive forms of multiple sclerosis. In Europe, sales were stable. Growth of Perjeta and Actemra/RoActemra sales was offset by lower sales of Avastin. In the International region, sales grew by 5%, led by the Latin America and Asia–Pacific subregions. In Japan, sales were stable. Growth of Alecensa sales (+42%) was partially offset by Avastin (-3%), which was negatively affected by the biannual government price cuts in April 2016.

Diagnostics Division sales increased 5% to CHF 5.8 billion. Centralised and Point of Care Solutions (+8%) was the main contributor, led by the growth of its immunodiagnostics business (+13%). In regional terms, growth was driven in particular by Asia–Pacific (+13%), with continued strong growth in China (+20%). Sales increased 3% in EMEA2, 8% in Latin America, 1% in North America, and 2% in Japan.

Core operating profit increased by 3% in the Pharmaceuticals Division and by 5% in the Diagnostics Division. The growth rates of both divisions were impacted by the base effect of income in 2016 from changes to the Group’s Swiss pension plans, partially offset by income from older medicine divestments in the first half of 2017.

Core EPS increased by 6% and net income on an IFRS basis increased by 2%. IFRS net income was impacted by impairments of intangible assets. These increased by CHF 0.7 billion net of taxes, notably from the partial impairment of the Esbriet product intangible.

Important new product approvals in Pharmaceuticals
In the second quarter of this year health authorities approved several new medicines: In April, Tecentriq received accelerated approval from the US Food and Drug Administration (FDA) for the treatment of people with locally advanced or metastatic urothelial carcinoma who are not eligible for cisplatin chemotherapy. In the same month, Lucentis was approved by the FDA for the monthly treatment of all forms of diabetic retinopathy. In May, Actemra/RoActemra subcutaneous injection was approved by the FDA for the treatment of giant cell arteritis. This is a chronic and severe autoimmune condition that has not seen any new treatments in more than 50 years. In June, the FDA approved Rituxan Hycela (rituximab and hyaluronidase human) for subcutaneous injection, for the treatment of adults with specific forms of blood cancer. This new formulation combines the monoclonal antibody used in intravenous MabThera/Rituxan with hyaluronidase, an enzyme that enables injection of the medicine under the skin. Also in June, a new tablet formulation of Esbriet was approved by the European Commission for the treatment of mild to moderate idiopathic pulmonary fibrosis (IPF), following approval by the FDA in early 2017. In July, the Australian Therapeutic Goods Administration approved Ocrevus for the treatment of relapsing forms of multiple sclerosis (RMS) and primary progressive multiple sclerosis (PPMS).

Clinical trial results support Roche medicines
The primary analysis of the phase III Haven 1 study in adults and adolescents and interim analysis of the phase III Haven 2 study showed positive data. The studies evaluated once-weekly subcutaneous emicizumab prophylaxis for the treatment of adults and adolescents or children with haemophilia A and inhibitors to factor VIII. The primary endpoint was treated bleeds, and results showed a statistically significant and clinically meaningful reduction in bleed rate of 87% (Haven 1) with emicizumab prophylaxis compared with on-demand treatment with bypassing agents.3
New data from additional analyses of the pivotal phase III Gallium study in people with previously untreated follicular lymphoma confirmed that the improvement in progression-free survival (PFS) with Gazyva/Gazyvaro-based treatment over MabThera/Rituxan-based treatment was sustained, irrespective of chemotherapy regimen.4 This updated analysis includes a further six months of follow-up.

Data presented at EAN5 showed Ocrevus significantly reduced disease activity and disability progression in patients with RMS and PPMS, as measured by No Evidence of Progression or Active Disease (NEPAD), a novel composite endpoint in MS. Ocrevus significantly reduced the risk of RMS and PPMS patients requiring mobility aids versus comparators. In patients with PPMS, Ocrevus reduced the risk of more severe forms of disability progression versus placebo.

The phase III Aphinity study showed adjuvant (after surgery) treatment with the combination of Perjeta, Herceptin and chemotherapy (the Perjeta-based regimen) significantly reduced the risk of breast cancer recurrence or death in people with HER2-positive early breast cancer compared to Herceptin and chemotherapy alone.6,7 At the time of the primary analysis, with median follow-up of 45.4 months, the reduction in risk of invasive breast cancer recurrence with the Perjeta-based regimen was greatest in people with lymph node-positive or hormone receptor-negative disease.

The phase III Alex study showed Alecensa reduced the risk of disease worsening or death (progression-free survival, PFS) by more than half (53%) compared to crizotinib when given as initial (first-line) treatment for people with anaplastic lymphoma kinase (ALK)-positive advanced non-small cell lung cancer (NSCLC).8

Clinical study updates
The phase III IMvigor211 study that evaluated Tecentriq in people with locally advanced or metastatic urothelial cancer whose disease progressed during or after treatment with a platinum-based chemotherapy (previously treated) did not meet its primary endpoint of overall survival compared to chemotherapy. The results observed in people treated with Tecentriq in IMvigor211 were generally consistent with those observed in a similar group of people in the Phase II IMvigor210 study.

In July, the EU Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Tecentriq as a monotherapy for the treatment of adults with locally advanced or metastatic NSCLC after they have been previously treated with chemotherapy. People with EGFR activating mutations or ALK positive tumour mutations should also have received targeted therapy before receiving Tecentriq. This positive recommendation is based on results from the large randomised phase III Oak study and the randomised phase II Poplar study. The CHMP also adopted a positive opinion for the use of Tecentriq as a monotherapy for the treatment of adults with locally advanced or metastatic urothelial carcinoma who have been previously treated with a platinum based chemotherapy or who are considered ineligible for cisplatin chemotherapy. This positive opinion is based on results from the randomised phase III IMvigor211 study and cohorts 1 and 2 from the single-arm phase II IMvigor210 study.

New generation of diagnostics products
The cobas MRSA/SA nucleic acid test for use on the cobas Liat System for the qualitative detection and differentiation of methicillin-resistant Staphylococcus aureus (MRSA) and Staphylococcus aureus (SA) is now available in countries accepting the CE mark and ideal for use at the point of care. This menu expansion serves specific needs of European markets. This is the first real-time PCR test that simultaneously detects MRSA and SA with one sample in less than 30 minutes. MRSA and SA are both significant sources of healthcare- and community-associated infections.
Also introduced to the markets were the Avenio ctDNA (ctDNA – circulating tumour DNA) analysis kits for oncology research. These are the first blood-based distributed oncology tests and provide accurate insights into different stages and types of cancer. They represent a portfolio of three next-generation sequencing (NGS) liquid biopsy assay kits for oncology research: the Avenio ctDNA Targeted Kit, Expanded Kit and Surveillance Kit. The kits include all reagents, bioinformatics and software to make ctDNA-testing accessible to all NGS laboratories.

Roche launched the Avenio Millisect System, which utilises an automated, digitally assisted process to reliably and efficiently isolate clinically relevant cells from tissue biopsies for diagnostic testing in the US and countries accepting the CE mark. It allows for efficient tissue dissection and maximises medical value for all molecular downstream
applications.

The Elecsys HIV combi PT assay was approved by the FDA. This highly sensitive and specific assay further expands Roche’s broad testing menu for infectious diseases in the US. With the addition of this assay, laboratories will be able to screen for common co-infections, such as hepatitis C and syphilis, which can be tested simultaneously with HIV, reducing the need for sample splitting and additional analysers. The FDA also granted approval for the cobas CMV (cytomegalovirus) test for use on the fully automated cobas 6800 and cobas 8800 systems. Healthcare professionals use the CMV test to assess how transplant patients on therapy are responding to treatment.

On July 27, 2017 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the second quarter of 2017 which were highlighted by strong sales for key products Opdivo and Eliquis and regulatory approvals for Opdivo, the Daklinza and Sunvepra regimen and Orencia (Press release, Bristol-Myers Squibb, JUL 27, 2017, View Source [SID1234519905]).

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“We had a strong quarter, particularly for Opdivo and Eliquis, and also advanced our portfolio with important clinical and regulatory milestones across multiple therapeutic areas,” said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. “Looking forward, I am excited by our opportunity to continue delivering across our portfolio, maintaining our focus on strong commercial performance and advancing our diversified pipeline.”

Second Quarter
$ amounts in millions, except per share amounts
2017
2016
Change
Total Revenues $5,144 $4,871 6%
GAAP Diluted EPS 0.56 0.69 (19)%
Non-GAAP Diluted EPS 0.74 0.69 7%

SECOND QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted second quarter 2017 revenues of $5.1 billion, an increase of 6% compared to the same period a year ago. Revenues increased 7% when adjusted for foreign exchange impact.
U.S. revenues increased 7% to $2.9 billion in the quarter compared to the same period a year ago. International revenues increased 4%. When adjusted for foreign exchange impact, international revenues increased 7%.
Gross margin as a percentage of revenue decreased from 75.2% to 69.6% in the quarter primarily due to product mix and a $127 million impairment charge in connection with the expected sale of manufacturing operations in Swords, Ireland.
Marketing, selling and administrative expenses decreased 6% to $1.2 billion in the quarter.
Research and development expenses increased 31% to $1.7 billion in the quarter primarily due to license and asset acquisition charges of $393 million in the second quarter of 2017.
The effective tax rate was 28.8% in the quarter, compared to 26.4% in the second quarter last year.
The company reported net earnings attributable to Bristol-Myers Squibb of $916 million, or $0.56 per share, in the second quarter compared to net earnings of $1.2 billion, or $0.69 per share, for the same period in 2016.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or $0.74 per share, in the second quarter, compared to $1.2 billion, or $0.69 per share, for the same period in 2016. An overview of specified items is discussed under the “Use of Non-GAAP Financial Information” section.
Cash, cash equivalents and marketable securities were $9.1 billion, with a net cash position of $868 million, as of June 30, 2017.
SECOND QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

The increase in global revenues for the second quarter of 2017, compared to the second quarter of 2016, was driven by:

Product
Growth %

Eliquis 51%
Opdivo 42%
Yervoy
34%
Sprycel
12%
Orencia 10%

Opdivo

Regulatory

In July, the U.S. Food and Drug Administration (FDA) accepted the company’s supplemental Biologics License Applications to update Opdivo dosing to include 480 mg infused over 30 minutes every four weeks for all currently approved monotherapy indications. The applications are under review with an action date of March 5, 2018.
In June, the company announced the European Commission (EC) approved Opdivo for the treatment of locally advanced unresectable or metastatic urothelial carcinoma in adults after failure of prior platinum-containing therapy.
In May, the company announced the FDA accepted a supplemental Biologics License Application to extend the use of Opdivo to patients with hepatocellular carcinoma (HCC) after prior sorafenib therapy. The FDA granted the application priority review and previously granted Opdivo orphan-drug designation for the treatment of HCC. The FDA action date is September 24, 2017.
In April, the company announced the EC approval of Opdivo as monotherapy for the treatment of squamous cell cancer of the head and neck in adults progressing on or after platinum-based therapy.
Clinical

In July, the company announced interim analysis of results from a Phase 3 study evaluating Opdivo versus Yervoy in patients with stage IIIb/c or stage IV melanoma who are at high risk of recurrence following complete surgical resection. More detail from study results is included in the original press release for this and other data announced in the second quarter. (link)
In June, at the 14th International Conference on Malignant Lymphoma, the company announced data and analysis from studies evaluating Opdivo monotherapy and Opdivo combination therapy:
CheckMate -205: Extended follow-up data from the Phase 2 study of Opdivo monotherapy in adult patients with relapsed or progressed classical Hodgkin lymphoma (cHL) after autologous stem cell transplant, irrespective of brentuximab vedotin therapy history. (link)
Updated interim analysis from the ongoing Phase 1/2 clinical study evaluating Seattle Genetics’ ADCETRIS (brentuximab vedotin) and Opdivo in relapsed or refractory cHL patients. (link)
In June, during ASCO (Free ASCO Whitepaper) in Chicago, the company announced results from five studies for Opdivo and the Opdivo + Yervoy regimen:
CheckMate -204: First presentation of efficacy data from the Phase 2 study to evaluate the Opdivo + Yervoy regimen in patients with melanoma metastatic to the brain. (link)
CheckMate -142: Interim data from the Phase 2 study evaluating Opdivo monotherapy or the Opdivo + Yervoy regimen in patients with DNA mismatch repair deficient or microsatellite instability-high metastatic colorectal cancer. (link)
CheckMate -358: First disclosure of data from the Phase 1/2 study evaluating Opdivo in patients with advanced cervical, vaginal and vulvar cancers, all associated with infection by the human papillomavirus (HPV). (link)
ECHO-204: Updated data from the Phase 1/2 study evaluating the safety and efficacy of Incyte Corporation’s investigational oral selective IDO1 enzyme inhibitor, epacadostat, in combination with Opdivo in multiple advanced solid tumors. (link)
IFCT-1501 MAPS-2: The first report of data evaluating the safety and efficacy of Opdivo or the Opdivo + Yervoy regimen for previously treated unresectable malignant pleural mesothelioma patients. (link)
Yervoy

Regulatory

In July, the company announced the FDA approved an expanded indication for Yervoy to include the treatment of unresectable or metastatic melanoma in pediatric patients.
Clinical

In June, at ASCO (Free ASCO Whitepaper), the company presented results of an interim descriptive analysis from an ongoing National Cancer Institute Phase 3 study evaluating Yervoy 3 mg/kg and Yervoy 10 mg/kg in patients with stage III or resectable stage IV melanoma who are at high risk of recurrence following complete surgical resection. (link)
Empliciti

In June, at the annual Congress of the European Hematology Association (EHA) (Free EHA Whitepaper), the company presented four-year follow-up data from the Phase 3 ELOQUENT-2 study evaluating Empliciti plus lenalidomide/dexamethasone versus lenalidomide/dexamethasone alone in patients with relapsed/refractory multiple myeloma. (link)
Sprycel

Regulatory

In July, the company announced the FDA accepted its supplemental New Drug Application to include an indication for Sprycel to treat children with Philadelphia chromosome-positive chronic phase (CP) chronic myeloid leukemia (CML), as well as a powder for oral suspension (PFOS) formulation of Sprycel. The application is under priority review with an action date of November 9, 2017.
In May, the company announced the European Medicines Agency (EMA) validated its grouped Type II variation/Extension of Application for Sprycel to treat children and adolescents aged one year to 18 years with CP-CML and to include the PFOS. Validation of the application confirms the submission is complete and begins the EMA’s centralized review process.
Clinical

In June, at ASCO (Free ASCO Whitepaper), the company presented data from the Phase 2 CA180-226 study evaluating Sprycel in imatinib-resistant or -intolerant and newly diagnosed pediatric patients with CP-CML. (link)
Orencia

Regulatory

In July, the EC approved Orencia for the treatment of active Psoriatic Arthritis (PsA) in adult patients for whom the response to previous disease-modifying antirheumatic drug therapy, including methotrexate, has been inadequate, and additional systemic therapy for psoriatic skin lesions is not required.
In July, the company announced the FDA approved Orencia in intravenous and subcutaneous injection formulation for the treatment of adults with active PsA.
In June, the company announced the availability of a new FDA-approved subcutaneous Orencia administration option for use in patients two years of age and older with moderately to severely active polyarticular Juvenile Idiopathic Arthritis, providing the option of Orencia treatment that can be administered at home.
Clinical

In June, at the Annual European Congress of Rheumatology (EULAR 2017), the company presented 23 abstracts related to Orencia, including new data on the role of biomarkers and magnetic resonance imaging in rheumatoid arthritis patient identification and treatment. (link)
Daklinza

In April, the company announced the China Food and Drug Administration approved a direct-acting antiviral regimen comprised of Daklinza and Sunvepra, for the treatment of treatment-naive or -experienced patients, with or without compensated cirrhosis, infected with genotype 1b chronic hepatitis C virus (HCV). Daklinza was also approved in China for use in combination with other agents, including sofosbuvir, for adult patients with HCV genotypes 1-6.
Investigational Compound Highlights

Oncology

In June, during ASCO (Free ASCO Whitepaper) in Chicago, the company announced results from a study for the company’s anti-lymphocyte activation gene-3 (LAG-3) monoclonal antibody (BMS-986016):
CA224-020: Proof-of-Concept data from the Phase 1/2a study combining BMS-986016 with Opdivo in heavily pretreated advanced melanoma patients who were relapsed or refractory on anti-PD-1/PD-L1 therapy. (link)
SECOND QUARTER BUSINESS DEVELOPMENT UPDATE

In June, the company and SK Biotek Co., Ltd announced the signing of a definitive purchase agreement to sell Bristol-Myers Squibb’s manufacturing operations in Swords, Ireland, to SK Biotek, a wholly-owned subsidiary of SK Holdings, based in Seoul, South Korea. The companies intend to complete the deal by the fourth quarter of 2017.
In June, the company and Novartis announced a clinical research collaboration to investigate the safety, tolerability and efficacy of Opdivo and the Opdivo + Yervoy regimen in combination with Novartis’ Mekinist, as a potential treatment option for metastatic colorectal cancer in patients with microsatellite stable tumors where the tumors are proficient in mismatch repair.
In June, the company and QIAGEN announced an agreement to explore the use of next-generation sequencing technology to develop gene expression profiles as predictive or prognostic tools for use with Bristol-Myers Squibb novel immuno-oncology therapies in cancer treatment.
In June, the company and Seattle Genetics, Inc. announced an expanded clinical collaboration agreement for a Phase 3 study to evaluate the combination of Opdivo and Seattle Genetics’ antibody-drug conjugate ADCETRIS versus ADCETRIS alone as a potential treatment option for patients with relapsed/refractory or transplant-ineligible advanced cHL.
In May, the company and Array BioPharma announced a clinical research collaboration to investigate the safety, tolerability and efficacy of Array’s investigational MEK inhibitor, binimetinib, in combination with Opdivo and the Opdivo + Yervoy regimen as a potential treatment for metastatic colorectal cancer in patients with microsatellite stable tumors.
In May, the company and Advaxis, Inc. announced a clinical development collaboration to evaluate Opdivo and Advaxis’ ADXS-DUAL, an investigational immunotherapy targeting HPV-associated cancers, as a potential combination treatment option for women with metastatic cervical cancer.
In May, the company and Calithera Biosciences, Inc. announced an expansion of their existing collaboration to evaluate Opdivo in combination with Calithera’s CB-839, an investigational orally administered glutaminase inhibitor, in patients with non-small cell lung cancer and melanoma.
ADCETRIS is a trademark of Seattle Genetics, Inc.

Mekinist is a trademark of Novartis.

2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is updating its 2017 GAAP EPS guidance range from $2.72 – $2.87 to $2.66 – $2.76 and raising the lower end of its non-GAAP EPS guidance range from $2.85 – $3.00 to $2.90 – $3.00. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2017 GAAP and non-GAAP line-item guidance assumptions are:

An effective tax rate of approximately 23% for GAAP with non-GAAP remaining at approximately 21%.
The financial guidance excludes the impact of any potential future strategic acquisitions and divestitures and any specified items that have not yet been identified and quantified. The non-GAAP guidance also excludes other specified items as discussed under “Use of Non-GAAP Financial Information.” Details reconciling GAAP amounts to non-GAAP amounts, with non-GAAP reflecting specified items are provided in supplemental materials attached to this press release and available on the company’s website.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings and related EPS information, that are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of future operating results. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods including restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, R&D charges in connection with the acquisition or licensing of third party intellectual property rights, divestiture gains or losses, upfront payments from out-licensed assets, pension charges, legal and other contractual settlements and debt redemption gains or losses, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of our baseline performance before items that are considered by us to not be reflective of our ongoing results. In addition, this information is among the primary indicators we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting for future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted EPS prepared in accordance with GAAP.

On July 27, 2017 The Bayer Group reported performance in the second quarter of 2017 matched the prior-year period, despite the company registering declines at Crop Science (Press release, Bayer, JUL 27, 2017, View Source [SID1234519899]).

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"At Crop Science, we experienced a significant decline in sales and earnings in connection with high channel inventories in Brazil, the world’s second-largest agriculture market," CEO Werner Baumann said when he presented the interim report for the second quarter on Thursday. "However, we generated an encouraging increase in earnings and margins at Pharmaceuticals and Animal Health," he noted. Business declined at Consumer Health, primarily due to the difficult market environment in the United States. Sales and earnings of the company’s Life Science businesses were down overall. Covestro, for its part, once again posted substantial growth in sales and earnings. In view of performance at Crop Science and Consumer Health, the Bayer Group has revised its outlook for the full year.

As regards the planned acquisition of Monsanto, Baumann believes the company remains on track. "We are making progress in our discussions with regulatory authorities and are on schedule," he said. On June 30, 2017, Bayer had filed an application with the European Commission seeking approval for the planned acquisition of Monsanto, representing a further significant milestone in the transaction.

Sales of the Bayer Group increased by 3.0 percent to EUR 12,193 million (Q2 2016: EUR 11,833 million) in the second quarter of 2017. Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales advanced by 1.9 percent. Sales of the Life Science businesses amounted to EUR 8,714 million (Q2 2016: EUR 8,858 million), down by 2.8 percent (Fx & portfolio adj.) year on year. Group EBITDA before special items came to EUR 3,056 million (Q2 2016: EUR 3,054 million), matching the prior-year quarter (plus 0.1 percent). At EUR 2,151 million (Q2 2016: EUR 2,138 million), EBIT was also in line with the previous year (plus 0.6 percent), and included net special charges in the amount of EUR 205 million (Q2 2016: EUR 104 million). These primarily reflected value adjustments at the Pharmaceuticals segment, expenses in conjunction with the acquisition of Monsanto, and charges relating to efficiency improvement programs. EBIT before special items moved ahead by 5.1 percent to EUR 2,356 million (Q2 2016: EUR 2,242 million).

Net income declined by 11.3 percent to EUR 1,224 million (Q2 2016: EUR 1,380 million), and core earnings per share (total) by 16.2 percent to EUR 1.40 (Q2 2016: EUR 1.67). Core earnings per share from continuing operations fell by 12.6 percent to EUR 1.81 (EUR 2.07). Material effects included the reduction of Bayer’s interest in Covestro and the increased number of shares following the issuance of the mandatory convertible notes in November 2016.

Net cash provided by operating activities (total) climbed by 16.7 percent to EUR 2,313 million (Q2 2016: EUR 1,982 million). Net financial debt of the Bayer Group declined by EUR 1.0 billion to EUR 9.4 billion between March 31, 2017, and the end of the second quarter. Cash inflows from operating activities and positive currency effects offset the outflow for the dividend payment. The Group generated proceeds of approximately EUR 1.0 billion from the sale of Covestro shares.

Pharmaceuticals achieves substantial increase in earnings

Sales of prescription medicines rose in the second quarter by 4.4 percent (Fx & portfolio adj.) to EUR 4,304 million (Q2 2016: EUR 4,104 million). "At Pharmaceuticals, we once again benefited from the strong performance of our key growth products, and achieved a very encouraging increase in earnings and margins," Baumann said. The oral anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Xofigo and Stivarga, and the pulmonary hypertension treatment Adempas posted total combined sales of EUR 1,555 million (Q2 2016: EUR 1,332 million). Sales of Xarelto once again increased substantially, rising by 18.4 percent adjusted for currency effects (Fx adj.), due primarily to higher volumes in Europe and China. Eylea also delivered significant growth, with sales advancing by 10.6 percent (Fx. adj.), thanks largely to higher volumes in Europe and encouraging sales gains in Canada and Australia. Sales of Xofigo increased by a substantial 28.0 percent (Fx adj.), with business benefiting from a successful market launch in Japan and growth in the United States and Europe. Stivarga also posted significant sales growth of 20.8 percent (Fx adj.). Performance was driven by business in the United States, where, among other things, the product obtained approval as a second-line treatment for patients with hepatocellular carcinoma. Sales of Adempas advanced by 17.9 percent (Fx adj.), buoyed by its continued positive performance in the United States.

Business with the hormone-releasing intrauterine devices of the Mirena product family was up overall, with sales increasing by 4.5 percent (Fx adj.). In the United States, performance continued to be buoyed by the successful market launch of the Kyleena intrauterine device. In contrast, sales of the Kogenate/Kovaltry blood-clotting medicines were down year on year overall, declining by 7.7 percent (Fx adj.), due to order volumes placed by the product’s distribution partner remaining significantly lower. As expected, business with the multiple sclerosis product Betaferon/Betaseron declined, with sales down by 6.4 percent (Fx adj.). This was largely due to lower demand in the United States and Latin America. Overall, the Pharmaceuticals business grew in all regions.

EBITDA before special items of Pharmaceuticals improved by a very encouraging 9.5 percent to EUR 1,481 million (Q2 2016: EUR 1,352 million). Positive earnings effects resulted primarily from higher volumes, while the cost of goods sold and expenses for research and development were lower.

Consumer Health registers decline in business

Sales of self-care products fell by 2.2 percent (Fx & portfolio adj.) to EUR 1,542 million (Q2 2016: EUR 1,553 million). "At Consumer Health, we experienced substantial declines in sales in North America, especially in the United States, due to the difficult market environment," Baumann explained. "In contrast, we expanded our business in Latin America and Europe/Middle East/Africa."

Sales of Bepanthen/Bepanthol wound and skin care products advanced by 4.9 percent (Fx adj.), driven by performance in Asia/Pacific and Latin America. The considerable increase in sales of the prenatal vitamin Elevit, at 9.9 percent (Fx adj.), was largely the result of demand remaining strong in Asia/Pacific, primarily in China. Sales of the analgesic Aspirin matched the strong prior-year quarter. Including business with Aspirin Cardio, which is reported under Pharmaceuticals, sales advanced by 4.9 percent (Fx adj.). In contrast, business with the antihistamine Claritin declined substantially compared with a strong prior-year quarter, primarily in the United States and China. Sales of the product were down 12.3 percent (Fx adj.). In the United States, business was impacted by a weaker allergy season, among other things, while sales in the prior-year quarter had been buoyed by the market launch of ClariSpray. Sales of the sunscreen product Coppertone were significantly lower year on year, falling by 16.7 percent (Fx adj.). This development was mainly due to increased competitive pressure and a weak season to date in the United States.

EBITDA before special items of Consumer Health declined by 4.3 percent to EUR 314 million (Q2 2016: EUR 328 million). The fall in earnings is mainly attributable to lower volumes and the higher cost of goods sold, which resulted in part from inventory write-offs.

Substantial decline in sales and earnings at Crop Science

Second-quarter sales of the agricultural business (Crop Science) fell by 15.8 percent (Fx & portfolio adj.) to EUR 2,163 million (Q2 2016: EUR 2,518 million). "This decline is mainly due to significantly higher provisions for crop-protection product returns in Brazil," Baumann explained. At the end of the harvest season, regular stocktaking revealed high channel inventories in the Brazilian market, requiring measures to be taken to normalize the situation. The high level of channel inventories was caused by weaker demand due to significantly lower insect and fungal infestation levels, while inventory-building among distributors remained at a high level. Excluding the EUR 428 million decline in sales in Brazil, business at Crop Science was up slightly year on year on a currency-adjusted basis. Sales advanced by 5.0 percent (Fx adj.) in North America, while sales in Europe/ Middle East/Africa matched the prior-year level (Fx adj.: minus 0.2 percent). In the Asia/Pacific region, sales declined by 2.0 percent (Fx adj.).

At Crop Protection, sales were lower across all product groups, especially at Fungicides, where they fell by 40.2 percent (Fx & portfolio adj.), and at Insecticides, where they declined by 16.9 percent (Fx & portfolio adj.). At SeedGrowth, sales were down by 6.3 percent (Fx & portfolio adj.) year on year, while sales at Herbicides retreated by 6.0 percent (Fx & portfolio adj.). In contrast, sales at Seeds (which also includes the traits business) rose by 4.6 percent (Fx & portfolio adj.). Environmental Science also delivered positive performance, with sales climbing by 20.6 percent (Fx & currency adj.), in part due to the delivery of products to the company that acquired the consumer business.

EBITDA before special items of Crop Science declined by 52.2 percent to EUR 317 million (Q2 2016: EUR 663 million), in particular due to the situation in Brazil, where Bayer recorded a substantial negative impact on earnings in the amount of EUR 355 million in total. This figure included EUR 173 million in provisions for product returns, EUR 53 million in impairment losses recognized on receivables and EUR 56 million in inventory write-offs, as well as EUR 73 million in other effects. Excluding the Brazil business, earnings were up slightly year on year.

Strong increase in earnings at Animal Health

Sales of the Animal Health business moved ahead by 2.1 percent (Fx and portfolio adj.) to EUR 450 million (Q2 2016: EUR 426 million). The development of business in the Asia/Pacific region was encouraging. In North America, the Cydectin product portfolio that was acquired in January 2017 contributed to sales growth on a currency-adjusted basis. Bayer once again achieved double-digit percentage sales gains with its Seresto flea and tick collar (Fx adj.: plus 17.4 percent), thanks largely to strong demand in the United States and Europe. Sales of the Advantage family of flea, tick and worm control products declined overall (Fx adj.: minus 7.7 percent), primarily due to lower than expected demand in the United States. EBITDA before special items increased by 16.0 percent to EUR 116 million (Q2 2016: EUR 100 million). Positive earnings contributions resulted from price increases, the lower cost of goods sold as well as the Cydectin business that Bayer acquired. These more than offset a decline in volumes and slightly higher expenses for research and development.

Covestro generates significant growth in sales and earnings

Sales of Covestro in the second quarter of 2017 increased by 15.8 percent (Fx & portfolio adj.) to EUR 3,479 million (Q2 2016: EUR 2,975 million). Selling prices were much higher overall, especially at Polyurethanes, while volumes matched the prior-year period overall. EBITDA before special items improved by 49.0 percent to EUR 809 million (Q2 2016: EUR 543 million). Substantially higher selling prices more than offset the effect of increased raw material prices.

EBITDA before special items up 8 percent in the first half of 2017

Group sales in the first half of 2017 increased by 7.4 percent (Fx & portfolio adj.: plus 5.7 percent) to EUR 25,437 million (H1 2016: EUR 23,687 million). EBITDA before special items advanced by 7.9 percent to EUR 6,949 million (H1 2016: EUR 6,441 million), while net income rose by 14.4 percent to EUR 3,307 million (H1 2016: EUR 2,891 million). Core earnings per share from continuing operations came in at EUR 4.44 (H1 2016: EUR 4.42), matching the prior-year period.

Outlook for the full year 2017 adjusted

Due to the current business and currency development, Bayer is adjusting its forecast for the fiscal year 2017. Its forecast for the second half is based on the exchange rates as of June 30, 2017, including a rate of USD 1.14 (previously: USD 1.07) to the euro. Sales of the Bayer Group are now expected to increase to more than EUR 49 billion (previously: around EUR 51 billion). This now corresponds to a mid-single-digit (previously: mid- to high-single-digit) percentage increase on a currency- and portfolio-adjusted basis. EBITDA before special items is now targeted to increase by a high-single-digit percentage (previously: low-teens percentage). The company now aims to grow core earnings per share from continuing operations by a low- to mid-single-digit percentage (previously: mid- to high-single-digit percentage). Here it must be noted that Bayer’s interest in Covestro amounts to only 41 percent as of June 2017 (previously: 53 percent). Excluding capital and portfolio measures, net financial debt is targeted to be around EUR 7 billion at the end of 2017 (previously: around EUR 8 billion).

For its Life Science businesses, Bayer is now budgeting for sales of between EUR 35 billion and EUR 36 billion (previously: approximately EUR 37 billion). This corresponds to a low-single-digit percentage (previously: mid-single-digit percentage) increase on a currency- and portfolio-adjusted basis. EBITDA before special items is expected to come in slightly above the level of the previous year (previously: rise by a mid- to high-single-digit percentage).

Despite negative currency development, Bayer is confirming its February forecast for Pharmaceuticals, and continues to expect sales of more than EUR 17 billion. This corresponds to a mid-single-digit percentage increase on a currency- and portfolio-adjusted basis. In line with its previous forecast, Bayer aims to increase sales of its key growth products to more than EUR 6 billion, and continues to expect a high-single-digit percentage increase in EBITDA before special items. There is no change in the company’s expectation of improving the EBITDA margin before special items.

For Consumer Health, Bayer forecasts a weak second half of the year and now expects to generate full-year sales of about EUR 6 billion (previously: more than EUR 6 billion). This would be in line with the prior-year level on both a reported and a currency- and portfolio-adjusted basis (previously: low- to mid-single-digit percentage increase on a currency- and portfolio-adjusted basis). Meanwhile, Bayer now expects EBITDA before special items of Consumer Health to decline by a high-single-digit percentage (previously: increase by a low- to mid-single-digit percentage).

For Crop Science, Bayer is now budgeting sales of below EUR 10 billion (previously: sales of more than EUR 10 billion). This corresponds to a low-single-digit-percentage decline on a currency- and portfolio-adjusted basis (previously: low-single-digit percentage increase). Meanwhile, Bayer now expects the division’s EBITDA before special items to decline by a mid-teens percentage (previously: at the prior-year level).

For Animal Health, the Reconciliation and Covestro, Bayer confirms the forecasts published in February and April 2017. This also applies to the forecasts for the other key data.