On August 4, 2016 Merck, a leading science and technology company, reported a significant increase in sales in the second quarter of 2016 in comparison with the year-earlier period (Press release, Merck KGaA, AUG 4, 2016, View Source [SID:1234514332]). Schedule your 30 min Free 1stOncology Demo! EBITDA pre exceptionals also rose sharply. Owing to good business performance in the second quarter, Merck lifted its forecast for sales and EBITDA pre exceptionals.
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"We again achieved everything we aimed for in the second quarter. That applies to both the Sigma-Aldrich integration and the development of new medicines," said Stefan Oschmann, CEO and Chairman of the Executive Board of Merck. "Strong demand for our products and dynamic market developments gave our Healthcare and Life Science businesses additional tailwinds. Since particularly in Healthcare our performance in the second quarter was so good, we have decided to lift our forecast for the full year."
Net sales of the Merck Group rose in the second quarter of 2016 by 18.2% to € 3.8 billion (Q2 2015: € 3.2 billion). Organic sales growth, which was driven by Life Science and Healthcare, amounted to 5.1%. Acquisition-related sales growth of 19.2% reflects the Sigma-Aldrich transaction, which closed in November 2015. This was amid negative exchange rate effects of -6.1%, which were mainly due to Latin American currencies. In the second quarter, Merck grew organically in all reporting regions. As a result of the Sigma-Aldrich acquisition, North America’s share of Group sales increased significantly to 26% (Q2 2015: 20%). Europe and Asia-Pacific, which each accounted for a 31% share of Group sales, were the largest reporting regions.
EBITDA pre exceptionals, the key earnings indicator of the Group, climbed by 28.8% to € 1,158 million (Q2 2015: € 899 million) thanks to the good operating performance of Healthcare and Life Science as well as the Sigma-Aldrich acquisition. The EBITDA margin pre exceptionals roseto 30.4% (Q2 2015: 27.9%). Despite higher exceptionals in the course of the Sigma-Aldrich acquisition, Group EBIT grew by 9.8% to € 550 million (Q2 2015: € 501 million). In the second quarter, Merck’s net income of € 312 million was -9.1% lower than in the year-earlier period (Q2 2015: € 343 million). This reflected a sharp increase in the negative financial result stemming mainly from the long-term share-based variable compensation program, whose value increased due to the favorable development of the Merck share price in the second quarter of 2016. Earnings per share pre exceptionals rose in the second quarter of 2016 by 19.2% to € 1.55 (Q2 2015: € 1.30).
Net financial debt, which had increased sharply owing to the Sigma-Aldrich acquisition, decreased slightly to € 12.5 billion as of June 30, 2016 (December 31, 2015: € 12.7 billion) despite dividend payments. Merck had 50,456employees worldwide on June 30, 2016.
Organic growth in the first half
In the first half of 2016, net sales of the Merck Group increased by 19.3% to € 7.5 billion (January-June 2015: € 6.3 billion). This was due to both acquisition effects (+19.5%) and organic sales increases (+4.9%). Exchange rate movements lowered sales by -5.1% in the first half and were primarily attributable to Latin American currencies.
EBITDA pre exceptionals of the Merck Group amounted to € 2.2 billion in the first half of 2016 (January-June 2015: € 1.8 billion). This represented an increase of 27.9% over the first half of 2015. Earnings per share pre exceptionals climbed by 27.2% to € 3.09 in the first half of 2016 (January-June 2015: € 2.43).
Healthcare delivers organic growth in all regions
In the second quarter of 2016, sales by the Healthcare business sector showed strong organic growth of 7.3%, to which all regions contributed. This was canceled out by negative foreign exchange effects of -9.0%. In addition, the return of the rights to Kuvan to BioMarin Pharmaceutical lowered sales by -1.0%. Consequently, Healthcare net sales decreased by -2.7% in the second quarter of 2016 to
€ 1.8 billion (Q2 2015: € 1.8 billion).
Organically, sales of Rebif, which is used to treat relapsing forms of multiple sclerosis, were flat in the second quarter of 2016, despite competitive pressure from oral formulations. Including currency headwinds of -4.2%, Rebif sales amounted to € 441 million (Q2 2015: € 461 million). In the second quarter, Merck generated organic sales growth of 6.8% with the oncology drug Erbitux. Including negative foreign exchange effects of -7.2%, Erbitux sales were stable at € 232 million (Q2 2015: € 233 million). With the fertility treatment Gonal-f, Merck achieved very strong organic sales growth of 23.1%, which was primarily attributable to North America. In this region, Merck benefited from an advantageous competitive situation. Including negative exchange rate effects, sales grew by € 209 million (Q2 2015: € 177 million).
EBITDA pre exceptionals of the Healthcare business sector rose in the second quarter by 16.1% to € 557 million (Q2 2015: € 480 million). This was due not only to good organic performance, but also to a gain of around € 30 million on the sale of a minority interest held by the Merck Venture Fund. Against this background, the EBITDA margin pre exceptionals of Healthcare improved significantly in the second quarter to 31.8% (Q2 2015: 26.6%).
Life Science doubles EBITDA pre exceptionals
The Life Science business sector generated a strong organic sales increase of 8.1% in the second quarter of 2016. Life Science thus achieved the highest organic growth rate of all the Merck business sectors, benefiting from sustained demand for Merck products from the biopharmaceutical industry. In addition to organic growth, the acquisition of Sigma-Aldrich lifted sales by 79.7%. However, exchange rate effects lowered sales by -2.8%. In the second quarter of 2016, sales by the Life Science business sector thus rose overall by 85.0% to € 1.4 billion (Q2 2015: € 773 million).
The Process Solutions business area, which markets products for the entire pharmaceutical production value chain, delivered strong organic sales growth of 13.5%. The Research Solutions business area, which focuses on academia and pharmaceutical research institutions, reported organic sales growth of 3.2%. Applied Solutions, which serves clinical and diagnostic testing laboratories as well as the food and environmental industries, achieved an organic sales increase of 3.9%.
EBITDA pre exceptionals of the Life Science business sector soared by 108.6% to € 417 million in the second quarter (Q2 2015: € 200 million). The EBITDA margin pre exceptionals of Life Science improved to 29.1% (Q2 2015: 25.9 %).
"The doubling of Life Science’s EBITDA pre exceptionals reflects not only our strong organic growth, but also the Sigma-Aldrich acquisition synergies, which we are leveraging with focus and resolve," said Stefan Oschmann. "And we will not let up before we fully realize our synergy objectives for 2018."
Performance Materials maintains profitability in a difficult market environment
In the second quarter, net sales of the Performance Materials business sector declined organically by -4.7%, mainly owing to destocking by display industry customers. In addition, negative exchange rate effects of -2.0% were incurred. The SAFC Hitech business of Sigma-Aldrich, which has been integrated into the Performance Materials business sector, made a positive impact with a 3.1% contribution to sales. Sales by Performance Materials thus declined by -3.5% to € 621 million (Q2 2015: € 643 million).
The Display Materials business unit saw an organic decrease in sales owing to the continued volume declines of mature liquid crystal technologies as well as destocking by customers, a development that will extend into the second half of the year. By contrast, the innovative liquid crystal technology UB-FFS grew further. The Integrated Circuit Materials business unit, which includes the business with materials used to manufacture integrated circuits and the SAFC Hitech business of Sigma-Aldrich, generated solid organic sales growth. The Pigments & Functional Materials business unit delivered very strong organic growth in comparison with a weak year-earlier quarter. Within the Performance Materials business sector, the highest growth rates were achieved by the Advanced Technologies business unit. This was primarily due to the expanding business with OLED materials. A new OLED materials production unit in Darmstadt involving an investment of around € 30 million is to be commissioned in September 2016 to manufacture materials for ultra-modern displays and lighting. Moreover, Merck is planning to construct a new production facility for liquid crystal window modules for around € 15 million; manufacturing is scheduled to begin in 2017. Merck’s objective is to expand its market and technology leadership in liquid crystals beyond applications in displays.
In the second quarter, EBITDA pre exceptionals of Performance Materials amounted to € 273 million (Q2 2015: € 295 million). With an EBITDA margin pre exceptionals of 44.1%, the profitability of Performance Materials was the highest among all the business sectors.
Merck lifts forecast
Owing to the good business performance in the second quarter, Merck is lifting its forecast and now expects Group net sales to increase to between € 14.9 billion and € 15.1 billion in 2016 (previous forecast: € 14.8 billion to € 15.0 billion). Organically, Merck predicts net sales to increase moderately in 2016 (previous forecast: slightly). In addition, owing to the acquisition of Sigma-Aldrich, the company continues to expect a portfolio-related net sales increase in the low double-digit percentage range. This will still be countered by negative foreign exchange effects that are forecast to range between –3% and –5% and are mainly due to the currency devaluations in Latin America. Owing to the good business performance, especially in the Healthcare business sector, Merck is also raising its forecast for EBITDA pre exceptionals, which is now expected to range between € 4,250 million and € 4,400 million for 2016 (previous forecast: € 4,100 million to € 4,300 million). Business free cash flow of the Merck Group is expected to be between € 3,140 million and € 3,250 million in 2016.
Forecast for FY 2016
€ million
Net sales
EBITDA pre exceptionals
Earnings per share pre exceptionals
Merck Group
14,900 –15,100
~4,250 –4,400
€ 5.85 – € 6.10
Healthcare
Solid organic growth,
slightly negative portfolioeffect due to the
divestment of Kuvan
~ 1,950 – 2,050
Life Science
Organic growth in the mid to high
single-digit percentage range, portfolio effect in the high double-digit percentage range due to the acquisition of Sigma-Aldrich
~ 1,620 – 1,670
Performance Materials
Moderate decline
~ 1,100 – 1,150
Corporate and Other
–
~-370 – -400
Merck Group – Key figures
€ million
Q2 2016
Q2 2015
Change
in %
Jan.- June 2016
Jan.- June 2015
Change
in %
Net sales
3,805
3,219
18.2
7,470
6,261
19.3
Operating result (EBIT)
550
501
9.8
1,399
981
42.6
Margin (% of net sales)
14.5
15.6
18.7
15.7
EBITDA
1,069
845
26.6
2,351
1,650
42.5
Margin (% of net sales)
28.1
26.2
31.5
26.4
EBITDA pre exceptionals
1,158
899
28.8
2,242
1,752
27.9
Margin (% of net sales)
30.4
27.9
30.0
28.0
Profit after tax
314
346
-9.1
907
631
43.8
Earnings per share (€)
0.72
0.79
-8.9
2.08
1.44
44.4
Earnings per share pre exceptionals (€)
1.55
1.30
19.2
3.09
2.43
27.2
Net income
312
343
-9.1
903
625
44.4
June 30, 2016
Dec. 31, 2015
Net financial debt
12,510
12,654
-1.1
CTI BioPharma Reports Second Quarter 2016 Financial Results
On August 4, 2016 CTI BioPharma Corp. (NASDAQ and MTA:CTIC) reported financial results for the second quarter ended June 30, 2016 (Press release, CTI BioPharma, AUG 4, 2016, View Source [SID:1234514251]). Schedule your 30 min Free 1stOncology Demo! "The interest from oncologists generated by the Phase 3 PERSIST-1 long-term safety and efficacy results of pacritinib showing durable reduction in spleen volume and symptom burden including in patients that crossed over to pacritinib from best available therapy, presented at ASCO (Free ASCO Whitepaper), supports our belief that pacritinib may play an important role in the treatment of myelofibrosis," said James A. Bianco, M.D., President and Chief Executive Officer of CTI BioPharma. "We are now in the process of preparing for the release of top-line results from the second Phase 3 trial of pacritinib, PERSIST-2, which we expect to report in the third quarter of 2016. The results from the full analysis of the PERSIST-2 trial are a key requirement as we continue to work with the FDA to seek to address their recommendations for getting pacritinib off clinical hold."
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Second Quarter Event
In June 2016, researchers presented long-term safety and efficacy results from the pivotal Phase 3 trial, PERSIST-1, evaluating pacritinib versus best available therapy, excluding treatment with JAK2 inhibitors (BAT), in patients with myelofibrosis. As previously reported, the PERSIST-1 trial met its primary endpoint in the intent-to-treat population with statistically significant reduction in spleen volume when compared to patients receiving BAT. The results presented were an update on the efficacy and safety for all patients regardless of their initial platelet count, including patients with very low platelet counts at study entry, a condition known as severe or life-threatening thrombocytopenia. A planned analysis of the study up to 72 weeks demonstrated treatment with pacritinib led to durable reductions in spleen volume and symptom burden, two key measures of disease control, in patients with myelofibrosis, including patients with low platelets at baseline. These and other findings were presented at the 52nd Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper).
Second Quarter Financial Results
Total revenues for the second quarter and six months ended June 30, 2016, were $7.4 million and $43.8 million, respectively, compared to $1.1 million and $3.8 million for the respective periods in 2015. The increase in total revenue for the six month period in 2016 is primarily due to recognition of $32 million in milestone payments and reimbursement of development costs from Baxalta, which is now part of Shire plc, related to pacritinib. CTI BioPharma had previously received a cash advance for these milestone payments from Baxalta in the second quarter of 2015 that was accounted for as long-term debt until the achievement of the associated milestones in the first quarter of 2016. Net product sales of PIXUVRI for the second quarter and the six months ended June 30, 2016, were $1.1 million and $2.3 million, respectively, compared to $0.8 million and $1.7 million for the respective periods in 2015.
GAAP operating loss for the second quarter and six months ended June 30, 2016, was $19.1 million and $14.9 million, respectively, compared to GAAP operating loss of $31.0 million and $58.5 million for the respective periods in 2015. Non-GAAP operating loss, which excludes non-cash share-based compensation expense, for the second quarter and six months ended June 30, 2016, was $16.7 million and $8.8 million, respectively, compared to the non-GAAP operating loss of $28.3 million and $51.4 million for the respective periods in 2015. The decrease in CTI BioPharma’s operating loss for the six month period ended June 30, 2016 is primarily due to recognition in the first quarter of 2016 of $32 million in milestone payments as license and contract revenue related to pacritinib as mentioned above. Non-cash share-based compensation expense for the second quarter and six months ended June 30, 2016, was $2.3 million and $6.2 million, respectively, compared to $2.8 million and $7.1 million for the respective periods in 2015. For information on CTI BioPharma’s use of non-GAAP operating loss and a reconciliation of such measure to GAAP operating loss, see the section below entitled "Non-GAAP Financial Measures."
Net loss for the second quarter of 2016 was $19.8 million, or ($0.07) per share, compared to a net loss of $32.6 million, or ($0.19) per share, for the same period in 2015. Net loss for the six months ended June 30, 2016 was $16.5 million, or ($0.06) per share, compared to a net loss of $61.2 million, or ($0.35) per share, for the same period in 2015. The decrease in net loss for the second quarter and the six months ended June 30, 2016 compared to the respective periods in 2015 is primarily due to increased net product sales and license and contract revenue and decreased operating expenses.
As of June 30, 2016, cash and cash equivalents totaled $76.7 million, compared to $128.2 million as of December 31, 2015.
Juno Therapeutics Announces Multiple Myeloma Partnership with Memorial Sloan Kettering Cancer Center and Eureka Therapeutics for Developing CAR T Cell Immunotherapy Against Multiple Novel Targets
On August 4, 2016 Juno Therapeutics, Inc. (Nasdaq: JUNO), a biopharmaceutical company focused on re-engaging the body’s immune system to revolutionize the treatment of cancer, reported that it has entered into an exclusive license agreement with Memorial Sloan Kettering Cancer Center (MSK) and Eureka Therapeutics, Inc. for a novel, fully-human binding domain targeting B-cell maturation antigen (BCMA), along with binding domains against two additional undisclosed multiple myeloma targets to be used for the potential development and commercialization of chimeric antigen receptor (CAR) cell therapies for patients with multiple myeloma (Press release, Juno, AUG 4, 2016, View Source [SID:1234514265]). The binding domains were developed under a collaboration agreement between Eureka Therapeutics and MSK. The parties expect the BCMA CAR to enter human testing as early as 1H2017. Schedule your 30 min Free 1stOncology Demo! "We are optimistic that CAR T therapy can be an important component in treating patients with multiple myeloma, and we are pleased to bring additional fully-human binding domains against BCMA and other targets into our program," said Hy Levitsky, M.D., Juno’s Chief Scientific Officer. "We believe that a multi-pronged approach may be necessary to treat this disease, and we will pursue more than one target against myeloma. The MSK and Eureka constructs are promising additions to our portfolio that will accelerate our efforts and provide additional opportunities to combat this disease."
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"We are pleased to work with Juno Therapeutics on developing CAR T therapies against multiple myeloma," said Dr. Cheng Liu, President and Chief Executive Officer of Eureka Therapeutics. "Multiple myeloma is a devastating disease. For the past three years, we have been working with MSK to develop CAR T therapies against multiple myeloma, and we are delighted that Juno is able to use their broad expertise to bring these therapies to patients faster."
MSK and Eureka Therapeutics are eligible to receive an undisclosed upfront payment, additional payments upon the achievement of undisclosed clinical, regulatory, and commercial milestones, and royalties on net sales.
Momenta Discontinues Further Accrual of its Phase 2 Trial of Necuparanib in Patients with Pancreatic Cancer Following Planned Interim Futility Analysis
On August 4, 2016 Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), a biotechnology company specializing in the characterization and engineering of complex drugs, reported that the Company has discontinued further accrual in its Phase 2 trial evaluating necuparanib in combination with Abraxane and gemcitabine in patients with advanced metastatic pancreatic cancer (Press release, Momenta Pharmaceuticals, AUG 4, 2016, View Source [SID:1234514227]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
The decision to discontinue enrollment into the study was based on the recommendation from the independent Data Safety Monitoring Board (DSMB) following a planned interim futility analysis conducted once 57 deaths (50% of the target number of 114 events required for trial completion) had occurred. Data were assessed from 120 randomized patients as of July 20, 2016. While no new safety signals were observed and the toxicity profile was considered manageable, the DSMB determined that necuparanib in combination with Abraxane and gemcitabine did not show a sufficient level of efficacy to warrant continued enrollment. Additionally, no new toxicities were observed that necessitate immediate discontinuation of study drug in patients currently active on protocol. The DSMB also recommended that the company consider unblinding the data to provide more information to determine how best to address ongoing patients.
"We are extremely disappointed with the outcome of the futility analysis – in particular, for those patients with pancreatic cancer where there is still so much unmet need for safe and effective therapy," said Jim Roach, M.D., Senior Vice President of Development and Chief Medical Officer of Momenta Pharmaceuticals. "We agree with the DSMB recommendations and plan to confirm the futility analysis and determine next steps for the necuparanib program."
"We are saddened that necuparanib did not produce the outcome we had hoped for in this patient population," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals. "We would like to thank the investigators and their brave patients for participating in this trial as well as our staff and external advisors for their support throughout this program."
The Phase 1/2 necuparanib trial is a two-part study in patients with advanced metastatic pancreatic cancer. Part A was a Phase 1, open-label, multiple ascending dose study of necuparanib given first as a single dose and then daily in combination with Abraxane and gemcitabine; final data from Part A was reported at the 2016 ASCO (Free ASCO Whitepaper) Annual Meeting. Part B is a Phase 2, randomized, placebo-controlled, double-blind study investigating the antitumor activity of necuparanib combined with Abraxane and gemcitabine compared with placebo combined with Abraxane and gemcitabine.
About Necuparanib
Necuparanib (M402) is a novel oncology drug candidate engineered to have a broad range of effects on tumor cells. The use of heparins to treat venous thrombosis in cancer patients has generated numerous reports of antitumor activity; however, the dose of these products has been limited by their anticoagulant activity. Leveraging its experience in deciphering the structure-function relationships of complex therapeutics, Momenta engineered necuparanib from unfractionated heparin to have significantly reduced anticoagulant activity while preserving relevant antitumor properties associated with heparins.
Calithera Announces Enrollment of First Patient in CB-839 in Combination with Checkpoint Modulator
On August 4, 2016 Calithera Biosciences, Inc. (Nasdaq:CALA), a clinical stage biotechnology company focused on the development of novel cancer therapeutics, reported that the first patient has been enrolled in a Phase 1/2 clinical trial assessing the safety and efficacy of CB-839, a first-in-class glutaminase inhibitor, in combination with nivolumab for the treatment of renal cell carcinoma, malignant melanoma and non-small cell lung cancer (Press release, Calithera Biosciences, AUG 4, 2016, View Source [SID:1234514226]). Schedule your 30 min Free 1stOncology Demo! "In preclinical models, glutaminase inhibition with CB-839 substantially increased the number of tumor regressions in combination with PD-1 and PD-L1 antibodies by overcoming a metabolic checkpoint blocking T-cell activation," said Susan Molineaux, PhD, President and Chief Executive Officer of Calithera. "We have demonstrated that CB-839 can safely be added to standard of care therapeutics to treat solid tumors with the potential to improve clinical outcomes, and we look forward to the results of this trial testing an immuno-oncology therapy in combination with our first-in-class glutaminase inhibitor."
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
The Phase 1/2 study will assess the safety, pharmacokinetics and pharmacodynamics of CB-839 and nivolumab. The study will enroll patients with clear cell renal cell carcinoma who are either naïve to checkpoint inhibitors, or were recently treated with nivolumab without tumor response, as well as melanoma and non-small cell lung cancer patients who have received anti-PD-1 monotherapy as their most recent line of therapy without tumor response.