On July 28, 2015 Merck (NYSE:MRK), known as MSD outside the United States and Canada, reported financial results for the second quarter of 2015 (Press release, Merck & Co, JUL 28, 2015, View Source [SID:1234506724]).

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!

Commentary from Chairman and Chief Executive Officer Kenneth C. Frazier

"We’re investing resources to grow our strongest brands and to support the most promising assets in our pipeline, while at the same time lowering our cost base and delivering operating leverage."

"We’ve made significant progress this quarter in two of our most important assets, the KEYTRUDA and hepatitis C programs, and will be fully prepared to take advantage of these potentially breakthrough opportunities."

"We’re witnessing the introduction of breakthrough therapies for some of the most difficult-to-treat diseases. Merck’s late-stage pipeline and ongoing launches reflect scientific and therapeutic progress with the potential to provide significant value to patients and society."

Select Business Highlights

Worldwide sales were $9.8 billion for the second quarter of 2015, a decrease of 11 percent compared with the second quarter of 2014, including a 7 percent negative impact from foreign exchange and a 7 percent net unfavorable impact resulting from the divestiture of the Consumer Care business and select products, partially offset by the acquisition of Cubist Pharmaceuticals, Inc. (Cubist).

The following table reflects sales of the company’s top pharmaceutical products, as well as total sales of Animal Health and Consumer Care products.

Commercial and Pipeline Highlights

During the second quarter of 2015, Merck continued to advance its pipeline while also focusing on the ongoing launches of KEYTRUDA (pembrolizumab), its anti-PD-1 therapy, for the treatment of advanced melanoma in patients whose disease has progressed after other therapies; BELSOMRA (suvorexant) for the treatment of insomnia; and ZERBAXA (ceftolozane and tazobactam), a combination product for the treatment of certain serious bacterial infections in adults.

The company accelerated its KEYTRUDA clinical development program.

The European Commission approved KEYTRUDA last week at a dose of 2 mg/kg every three weeks for the treatment of advanced (unresectable or metastatic) melanoma in adults, allowing marketing of KEYTRUDA in all 28 European Union member states.
The U.S. Food and Drug Administration (FDA) accepted for review the supplemental Biologics License Application (sBLA) for KEYTRUDA for the treatment of patients with advanced non-small cell lung cancer whose disease has progressed on or after platinum-containing chemotherapy and an FDA-approved therapy for EGFR or ALK genomic tumor aberrations, if present. The FDA granted Priority Review with a PDUFA action date of Oct. 2, 2015; the sBLA will be reviewed under the FDA’s Accelerated Approval program.

At the 51st Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) in June, data sets were presented investigating the use of KEYTRUDA in advanced head and neck cancer (KEYNOTE-012) and in multiple difficult-to-treat cancers, including advanced small cell lung cancer, esophageal cancer and ovarian cancer (KEYNOTE-028). Additionally, data were presented and simultaneously published in The New England Journal of Medicine suggesting that the presence of DNA repair mutations in colorectal cancer cells is associated with favorable responses to KEYTRUDA.

The clinical development program for the treatment of chronic hepatitis C virus (HCV) infection made substantial progress in the second quarter of 2015.

As announced earlier today, the FDA has accepted for review the New Drug Application (NDA) for grazoprevir/elbasvir, an investigational once-daily, single tablet combination therapy for the treatment of adult patients infected with chronic HCV genotypes (GT) 1, 4 or 6. The FDA granted Priority Review with a PDUFA action date of Jan. 28, 2016.
Last week the European Medicines Agency (EMA) accepted for review the company’s marketing authorization application (MAA) for grazoprevir/elbasvir for the treatment of adult patients infected with chronic HCV GT 1, 3, 4 or 6. The EMA said it will initiate a review of the MAA under accelerated assessment timelines.

Results from the Trial Evaluating Cardiovascular Outcomes with Sitagliptin (TECOS) of JANUVIA (sitagliptin), a medicine that helps lower blood sugar levels in adults with type 2 diabetes, were presented in June at the 75th Scientific Sessions of the American Diabetes Association and simultaneously published online in The New England Journal of Medicine. The study found that, added to usual care, treatment with JANUVIA did not increase the risk of major adverse cardiovascular events in the primary composite endpoint, or hospitalization for heart failure, compared to placebo.

The FDA has accepted the resubmission of the NDA for sugammadex injection, an investigational medicine for the reversal of neuromuscular blockade induced by rocuronium or vecuronium, with a PDUFA action date of Dec. 19, 2015. Sugammadex injection is marketed as BRIDION in more than 60 countries.

The FDA has extended its planned review timeline of the Biologics License Application for V419, the investigational pediatric hexavalent combination vaccine, DTaP5-IPV-Hib-HepB, which is being developed and, if approved, will be commercialized through a partnership of Merck and Sanofi Pasteur. The FDA has not requested additional clinical studies for licensure.

Pharmaceutical Revenue Performance

Second-quarter pharmaceutical sales declined 6 percent to $8.6 billion, including a 9 percent negative impact from foreign exchange. Excluding the impact of exchange, growth was driven by sales in the core therapeutic areas of hospital acute care, oncology and diabetes. The increase in hospital acute care was driven by the addition of the Cubist portfolio and sales growth of inline brands. Growth in oncology reflects sales of $110 million for KEYTRUDA. Growth in diabetes primarily reflects higher sales in the United States, Europe and emerging markets.

Second-quarter pharmaceutical sales reflect declines in the cardiovascular portfolio of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, primarily due to loss of exclusivity of ZETIA in Canada (where it is marketed as EZETROL) and volume declines of both products in the United States, as well as lower sales of REMICADE (infliximab), a treatment for inflammatory diseases, due to loss of exclusivity in Europe. Pharmaceutical sales also reflect declines in the HCV portfolio of VICTRELIS (boceprevir) and PEGINTRON (peginterferon alfa-2b), as well as for ISENTRESS (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection. The decline for ISENTRESS was due to timing of tender purchases in the emerging markets and volume declines in the United States.

Animal Health Revenue Performance

Animal Health sales totaled $840 million for the second quarter of 2015, a decrease of 4 percent compared with the second quarter of 2014, including a 14 percent negative impact from foreign exchange. Excluding the impact of exchange, growth was primarily driven by an increase in sales of companion animal and swine products, including continued strong growth from BRAVECTO (fluralaner), a chewable tablet that kills fleas and ticks in dogs for up to 12 weeks.

Other Revenue Performance

Other revenues – primarily comprising alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales – decreased 3 percent to $381 million compared to the second quarter of 2014. The decrease was driven primarily by the loss of revenue from AstraZeneca recorded by Merck, which was $316 million in the second quarter of 2014, partially offset by higher third-party manufacturing sales.

Second-Quarter 2015 Expense and Other Information

The costs detailed below totaled $8.2 billion on a GAAP basis during the second quarter of 2015 and include $1.8 billion of acquisition- and divestiture-related costs and restructuring costs.

The gross margin was 61.6 percent for the second quarter of 2015 compared to 55.2 percent for the second quarter of 2014, reflecting 13.8 and 17.4 unfavorable percentage point impacts, respectively, from the acquisition- and divestiture-related costs and restructuring costs noted above. The increase in non-GAAP gross margin was driven by lower inventory write-offs and foreign exchange.

Marketing and administrative expenses, on a non-GAAP basis, were $2.5 billion in the second quarter of 2015, a decrease from $2.9 billion in the same period of 2014, which was primarily driven by the sale of the Consumer Care business, the favorable impact of foreign exchange and declines in direct selling costs.

Research and development (R&D) expenses, on a non-GAAP basis, were $1.6 billion in the second quarter of 2015, a 2 percent decrease compared to the second quarter of 2014.

Other (income) expense, net, was $739 million of expense in the second quarter of 2015 compared to $650 million of income in the second quarter of 2014. The second quarter of 2015 includes foreign exchange losses of $715 million related to the revaluation of the company’s net monetary assets in Venezuela. The second quarter of 2014 includes a $741 million gain recorded in connection with AstraZeneca’s option exercise.

The GAAP effective tax rate of 14.7 percent for the second quarter of 2015 reflects the impacts of acquisition- and divestiture-related costs and restructuring costs, as well as the favorable impact of a net benefit of $370 million related to the settlement of certain federal income tax issues and the unfavorable impact of foreign exchange losses related to Venezuela for which no tax benefit was recorded. The non-GAAP effective tax rate, which excludes these items, was 26.0 percent for the second quarter of 2015.

Financial Outlook

Merck has narrowed and raised its full-year 2015 non-GAAP EPS range to be between $3.45 and $3.55, including a negative impact from foreign exchange. The range excludes acquisition- and divestiture-related costs, costs related to restructuring programs and certain other items. The company has lowered its full-year 2015 GAAP EPS range to be between $1.52 and $1.71. The change in the GAAP EPS range reflects the incorporation of foreign exchange losses related to Venezuela, as well as the anticipated gain on the previously announced sale of certain migraine clinical development programs.

At current exchange rates, the company now anticipates full-year 2015 revenues to be between $38.6 billion and $39.8 billion, including a negative impact from foreign exchange and approximately $1 billion of net lost sales from acquisitions and divestitures.

In addition, the company continues to expect full-year 2015 non-GAAP marketing and administrative expenses to be below 2014 levels and R&D expenses to be modestly above 2014 levels. The company anticipates total operating expenses in the second half of 2015 to be approximately $200 million lower than in the second half of 2014.

The company now anticipates its full-year 2015 non-GAAP tax rate will be in the range of 23 to 24 percent, not including a 2015 R&D tax credit.

A reconciliation of anticipated 2015 EPS, as reported in accordance with GAAP to non-GAAP EPS that excludes certain items, is provided in the table below.

On July 28, 2015 Laboratory Corporation of America Holdings (LabCorp or the "Company") (NYSE: LH) reported results for the quarter ended June 30, 2015 (Press release, LabCorp, JUL 28, 2015, View Source;p=RssLanding&cat=news&id=2071567 [SID:1234506723]).

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!

Consolidated Results

Second Quarter Results

Net revenue for the quarter was $2.22 billion, an increase of 46.3% over last year’s $1.52 billion. The acquisition of Covance contributed $620.8 million in net revenue during the quarter, driving 40.9% year over year net revenue growth. The remainder of the increase of $81.5 million, or 5.4%, was primarily due to strong organic volume growth and tuck-in acquisitions, partially offset by currency. Organic revenue growth in the quarter, excluding currency, was 5.4%, of which Beacon LBS, the Company’s technology-enabled solution providing point-of-care decision support, contributed 1.1%.

Operating income for the quarter was $321.3 million, compared to $246.7 million in the second quarter of 2014. The Company recorded restructuring charges and special items of $23.1 million during the second quarter of 2015, compared to $6.7 million during the same period in 2014. Adjusted operating income (excluding amortization of $46.6 million, restructuring and special items) for the quarter was $391.0 million, or 17.6% of net revenue, compared to $275.4 million, or 18.2%, in the second quarter of 2014. The increase in adjusted operating income was due to the Covance acquisition, organic volume growth and productivity, partially offset by currency.

The Company recorded net earnings in the quarter of $168.4 million, or $1.64 per diluted share, compared to $141.3 million, or $1.64 per diluted share, last year. Adjusted EPS (excluding amortization, restructuring and special items) were $2.09 in the quarter, compared to $1.84 in the second quarter of 2014.

"We are extremely pleased with our results this quarter, in which we began to see the power of our combined businesses," said David P. King, Chairman and Chief Executive Officer. "We delivered impressive growth, as well as record revenue, earnings and free cash flow to our shareholders. We remain focused on executing our long-term growth strategy, and delivering on our mission of improving health and improving lives."

Operating cash flow for the second quarter was $396.7 million, compared to $207.4 million in the second quarter of 2014. The increase in operating cash flow was due to the acquisition of Covance as well as improved earnings and working capital. Capital expenditures totaled $69.1 million, compared to $48.1 million in the second quarter of 2014. As a result, free cash flow (operating cash flow less capital expenditures) was $327.6 million, compared to $159.3 million in the second quarter of 2014.

At the end of the quarter, the Company’s cash balance and total debt were $619.0 million and $6.8 billion, respectively. During the quarter, the Company invested $62.2 million in tuck-in acquisitions and paid down $145.0 million of debt. The Company’s liquidity at the end of the quarter was approximately $1.6 billion, consisting of cash and available credit.

Year-To-Date Results

The following year-to-date consolidated results of the Company include Covance as of February 19, 2015; prior to February 19, 2015, these consolidated results exclude Covance.

Net revenue was $3.99 billion, an increase of 35.4% over last year’s $2.95 billion. The acquisition of Covance contributed $888.0 million from the date of closing on February 19, 2015, driving 30.1% year over year net revenue growth. The remainder of the increase of $155.9 million, or 5.3%, was due to strong organic volume growth and tuck-in acquisitions, partially offset by price, mix and currency. Organic revenue growth in the first half of the year, excluding currency, was 5.2%, of which Beacon LBS contributed 0.5%.

Operating income was $452.4 million, compared to $450.0 million in the first half of 2014. The Company recorded $161.8 million in restructuring charges and special items (costs associated with the acquisition of Covance and Project LaunchPad) during the first half of 2015, compared to $14.3 million during the same period in 2014. Adjusted operating income (excluding amortization of $79.0 million, restructuring and special items) was $693.2 million, or 17.4% of net revenue, compared to $507.3 million, or 17.2%, in the first half of 2014. The increase in adjusted operating income was due to the acquisition of Covance, organic volume growth and productivity gains, partially offset by price, mix and currency.

The Company’s earnings were reduced by restructuring and special items of $214.4 million ($161.8 million impacted operating income and $52.6 million impacted interest expense), or $154.8 million after-tax. As a result, the Company recorded net earnings in the first half of 2015 of $169.7 million, or $1.73 per diluted share, compared to $254.4 million, or $2.94 per diluted share, last year. Adjusted EPS (excluding amortization, restructuring and special items) were $3.85, compared to $3.35 in the first half of 2014.

Operating cash flow for the first half of 2015 was $309.8 million, compared to $349.7 million in the first half of 2014, as the Company’s operating cash flow was negatively impacted by $153.5 million in non-recurring items relating to the acquisition of Covance. Excluding these items, operating cash flow was $463.3 million, with the year-on-year increase driven by improved earnings, partially offset by seasonal working capital requirements. Capital expenditures totaled $102.9 million, compared to $104.6 million in the first half of 2014. As a result, free cash flow (operating cash flow less capital expenditures) was $206.9 million, compared to $245.1 million in the first half of 2014. Excluding non-recurring items, free cash flow was $360.4 million during the first half of 2015.

***

The following segment results are presented on a pro forma basis for all periods as if the acquisition of Covance closed on January 1, 2014 and exclude amortization, restructuring, special items and unallocated corporate expenses. Reconciliations of segment results to historically reported results are included in the Condensed Pro Forma Segment Information tables and notes.

Segment Results

LabCorp Diagnostics

Net revenue for the quarter was $1.58 billion, an increase of 5.4% over net revenue of $1.49 billion for the second quarter of 2014. The increase in net revenue was the result of organic volume growth, measured by requisitions, Beacon LBS and tuck-in acquisitions, partially offset by currency. The increase in net revenue of 5.4% includes the benefit from Beacon LBS of 1.1%, and unfavorable foreign currency translation of 0.7%. Total volume (measured by requisitions) increased by 4.7% (organic volume of 4.3% and acquisition volume of 0.4%). Revenue per requisition increased by 0.2%.

Adjusted operating income (excluding amortization, restructuring and special items) for the quarter was $347.1 million, or 22.0% of net revenue, compared to adjusted operating income of $308.9 million, or 20.7% of net revenue, in the second quarter of 2014. The increase was primarily due to strong volume growth and productivity. Improvement in productivity was driven, in part, by Project LaunchPad, the Company’s enterprise-wide business process improvement initiative. The Company is on track to deliver approximately $50 million of net savings in 2015 through Project LaunchPad.

Covance Drug Development

Net revenue for the quarter was $643.7 million, a decrease of 2.7% from revenue of $661.3 million for the second quarter of 2014. The strengthening U.S. Dollar negatively impacted year-over-year revenue growth by approximately 450 basis points. Excluding currency, net revenue increased 1.8% year-over-year, on increased volume, partially offset by mix.

Adjusted operating income (excluding amortization, restructuring and special items) was $89.9 million, or 14.0% of net revenue, compared to adjusted operating income of $84.7 million, or 12.8% of net revenue, in the second quarter of 2014. The increase was primarily due to higher volume, cost synergies and lower depreciation expense, partially offset by the impact of currency and mix. The Company is on track to deliver acquisition-related cost synergies in 2015 of approximately $35 million.

Net orders (gross orders less cancellations and reductions) in the quarter were $737 million, representing a net book-to-bill of 1.15. Backlog at June 30, 2015 was approximately $6.6 billion.

Outlook for 2015

The Company’s updated guidance for 2015 includes the following:

Net revenue growth (assuming foreign exchange rates effective as of June 30, 2015) of 40% to 42%, after the impact from approximately 190 basis points of negative currency. Net revenue growth in LabCorp Diagnostics of 3.5% to 5.5%, after the impact from approximately 70 basis points of negative currency. The change in net revenue in Covance Drug Development is expected to be -1.5% to 0.5% versus full year 2014 revenue after the impact of approximately 320 basis points of negative currency.

Adjusted EPS of $7.75 to $8.00, versus prior guidance of $7.55 to $7.90, and as compared to $6.80 last year.
Operating cash flow of $990 million to $1,015 million, capital expenditures of $270 million to $295 million, and free cash flow of $695 million to $745 million. The Company expects free cash flow in 2015 to be negatively impacted by approximately $120 million of net non-recurring items related to the Covance acquisition. Excluding these items, the Company expects free cash flow to be $815 million to $865 million versus $536 million last year.
Use of Adjusted Measures

The Company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including Adjusted EPS, Adjusted Operating Income, Free Cash Flow, and certain segment information. The Company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s operational performance. The Company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the Company’s financial results with the financial results of other companies. However, the Company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the tables accompanying this press release.

The Company today is furnishing a Current Report on Form 8-K that will include additional information on its business and operations. This information will also be available in the investor relation’s section of the Company’s website at www.labcorp.com. Analysts and investors are directed to the Current Report on Form 8-K and the website to review this supplemental information.

On July 28, 2015 Foundation Medicine, Inc. (NASDAQ:FMI) reported the initiation of a large-scale, multi-center prospective clinical study to validate its circulating tumor DNA (ctDNA) assay for multiple, solid and hematologic tumor types (Press release, Foundation Medicine, JUL 28, 2015, View Source [SID:1234506722]). Expected to launch commercially in 2016, the ctDNA assay will complement FoundationOne for solid tumors and FoundationOne Heme for hematologic malignancies and provide healthcare practitioners with a full suite of analytically validated genomic profiling products to support the application of precision medicine and targeted therapies in cancer care.

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!

"Tumor tissue obtained by biopsy is the gold standard material from which we generate the requisite molecular information to guide the optimally targeted treatment of patients with cancer," said Francis Giles, M.D., Deputy Director of the Robert H. Lurie Comprehensive Cancer Center of Northwestern University. "Blood based ‘liquid biopsy’ assays offer the potential to define actionable molecular lesions in patients in whom a tissue specimen can’t be safely obtained or is otherwise unavailable. We’re delighted to be part of this rigorously designed study which we anticipate will help bring a new, less invasive diagnostic option to our patients with cancer."

Study Rationale and Objectives

The presence of ctDNA in plasma is a well-established phenomenon and has led to recent innovation in the development of non-invasive tumor sequencing assays. However, the concentration of ctDNA compared to other cell free DNA fragments can vary significantly depending on tumor type and disease stage. For many cancer patients, this means that the proportion of detectable tumor DNA in the blood is extremely low1, making the detection of therapeutically relevant genomic alterations more difficult compared with tissue-based approaches. Importantly, up to 40% of patients shed no tumor DNA into the bloodstream1 and will thus test negative using ctDNA assays.

The challenge and opportunity is to commercialize a rigorously validated ctDNA assay that provides physicians with confidence in test results and affords genomic profiling to patients in whom otherwise few or no targeted treatment options would have been identified. To address these challenges, Foundation Medicine has launched a large, multi-center study to assess the potential utility of its ctDNA assay across various cancers and stages of disease. The study will also provide the analytic validation mandated for clinical use of a commercial ctDNA assay by establishing concordance of the assay in detecting genomic alterations from circulating tumor DNA as compared to alterations detected in tissue biopsies assessed by the company’s comprehensive genomic profile for solid tumors, FoundationOne.

"Innovation in genomic profiling is incredibly important in oncology and ctDNA assays, in particular, may offer tremendous potential for patients with cancer at certain stages of disease," added Samuel Klempner, M.D., Assistant Professor, Division of Hematology/Oncology at UC Irvine Health and a co-investigator in the study. "We’re optimistic that this study with Foundation Medicine will identify a less invasive option for a population of patients with cancer and reliably identify subsequent treatment options in select patients."

Luis E. Raez, M.D., Medical Director of the Memorial Cancer Institute, Associate Professor at Florida international University (FIU) in Miami, FL and co-investigator in the study, stated, "I am very excited to be participating in this study utilizing a liquid biopsy assay for my patients when tissue specimens are not available, and because this assay is being developed to the same caliber of standards as FoundationOne and FoundationOneHeme, where validation data and methodology will be best in class and made publicly available for peer-review by the oncology community."

The study is expected to be completed next year and it will include patients who are most likely to benefit from liquid-based genomic profiling, such as patients who relapse after standard non-targeted treatment. Approximately 20% of the patients in the study will include those with earlier-stage disease, allowing the company to investigate how different types of tumors shed DNA into the bloodstream at different stages of tumor growth and metastasis.

"There are no short cuts to commercializing clinical assays that inform therapeutic treatment options," said Vincent Miller, M.D., Chief Medical Officer of Foundation Medicine. "We are applying the same analytic rigor to our ctDNA assay as we applied to FoundationOne and FoundationOne Heme, both of which are considered gold standard assays for molecular profiling. Our aim with our ctDNA assay is not to replace tissue biopsies, but rather, to identify clinical settings for utilization of this innovation, including for example, tissue-limited situations. We look forward to defining the utility of this approach through the outcomes of this study and to launching this assay in 2016."

On July 28, 2015 Dynavax Technologies Corporation (NASDAQ: DVAX) reported the completion of an underwritten public offering of 5,227,273 shares of its common stock, including 681,818 shares sold pursuant to the full exercise of an over-allotment option previously granted to the underwriters (Press release, Dynavax Technologies, JUL 28, 2015, View Source [SID:1234506721]). All of the shares were offered by Dynavax at a price to the public of $27.50 per share. The net proceeds to Dynavax from this offering were approximately $135 million, after deducting the underwriting discount and other estimated offering expenses payable by Dynavax. Dynavax anticipates using the net proceeds from the proposed offering to fund activities associated with completing the ongoing Phase 3 HBV-23 study of HEPLISAV-B, seeking regulatory approval of HEPLISAV-B in the United States, and preparing for the anticipated U.S. commercial launch of HEPLISAV-B, should HEPLISAV-B gain approval by the Food and Drug Administration. In addition, net proceeds from the offering will support continuing the clinical development of our investigational cancer immunotherapeutic product candidate, SD-101, and for other general corporate purposes, including working capital.

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!

Cowen and Company, RBC Capital Markets and William Blair acted as joint book-running managers for the offering.

The securities described above were offered by Dynavax pursuant to a shelf registration statement previously filed with the Securities and Exchange Commission (the "SEC"), which the SEC declared effective on December 3, 2014. A final prospectus supplement related to the offering was filed with the SEC and is available on the SEC’s website located at View Source Copies of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained from Cowen and Company, LLC c/o Broadridge Financial Services, 1155 Long Island Avenue, Edgewood, NY, 11717, Attn: Prospectus Department, by calling (631) 274-2806 or by faxing (631) 254-7140, or RBC Capital Markets, LLC, Attention: Equity Syndicate, 200 Vesey Street, 8th Floor, New York, NY 10281-8098, or by telephone at (877) 822-4098 or William Blair & Company, L.L.C., Attention: Prospectus Department, 222 West Adams Street, Chicago, IL 60606, by telephone at (800) 621-0687, or by e-mail at [email protected].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

On July 28, 2015 Champions Oncology, Inc. (OTC: CSBR), engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs, reported its financial results for the year ended April 30, 2015 (Filing, 8-K, Champions Oncology, JUL 28, 2015, View Source [SID:1234506720]).

Fourth Quarter and Recent Business Highlights:

• Quarterly revenue increased 32% over the same prior year period result
• Procured a quarterly record high of more than 140 implants

Joel Ackerman, Champions Oncology CEO, stated, "The end of fiscal 2015 is an opportune time to assess the accomplishments and challenges of the past year. While the Company experienced an anticipated slowdown in revenue growth in the earlier part of the year, the foundation for long term success and operational improvements continued to progress. The $14 million of capital raised during the year demonstrated continued investor confidence in the Company and provides the ability to execute our strategic vision."

Financial Results

For the fourth quarter of 2015, revenue was $3.2 million, as compared to $2.5 million for the three months ended April 30, 2014, an increase of 32%. For the twelve-month period ended April 30, 2015, revenue was $8.9 million, as compared to $11.6 million for the same period of the prior year, a decrease of 23%. Total operating expense for the fourth quarter 2015 was $5.7 million as compared to $4.8 million for the fourth quarter 2014. For the twelve months ended April 30, 2015, total operating expense was $22.1 million, as compared to $17.8 million for the twelve months ended April 30, 2014.

For the fourth quarter of 2015 and 2014, Champions reported a loss from operations of $2.4 million. Excluding stock-based compensation of $0.9 million and $0.8 million for the three months ended April 30, 2015 and 2014, Champions recognized a loss from operations of $1.5 million and $1.4 million respectively. For the twelve months ended April 30, 2015, Champions reported a loss from operations of $13.2 million as compared to a loss from operations of $6.3 million for the twelve months ended April 30, 2014. Excluding stock-based compensation of $3.2 million and $2.8 million for the twelve months ended April 30, 2015 and 2014, Champions recognized a loss from operations of $10.0 million and $3.5 million respectively.

Operating Results

The number of implants during the quarter was 143 consisting of 51 commercial implants and 92 implants from research partnerships and trials. Total implants increased 39% over the same period last year with a 149% increase in implants from research partnerships. The increase in research implants were the result of continued effort to expand our TumorBank by partnering with academic medical centers. These implants will further the Company’s efforts to increase the scale of our platform.

POS revenue was $418,000 and $430,000 for the three months ended April 30, 2015 and 2014, respectively, a decrease of $12,000 or 3%. Core revenue from our TumorGraft technology platform decreased $35,000 or 9%. This decrease is due to the cessation of implant activities in our Singapore entity due to regulatory restrictions. Non-core POS revenue increased $24,000. POS revenue was $1.7 million and $2.3 million for the twelve months ended April 30, 2015 and 2014, respectively, a decrease of $0.6 million or 27%. The decrease is due to a reduction in the number of tests per panel resulting in a $300,000 decrease in panel revenue. Non-core revenue decreased $212,000.

POS cost of sales was $543,000 and $628,000 for the three months ended April 30, 2015 and 2014, respectively, a decrease of $85,000, or 14%. POS cost of sales was $2.73 million for both the twelve months ended April 30, 2015 and 2014. For the three months ended April 30, 2015 and 2014, gross margin for POS was negative 30% and negative 46%, respectively. For the twelve months ended April 30, 2015 and 2014, gross margin for POS was negative 64% and negative 21%, respectively. The decline in gross margin is attributed to the decrease in core POS revenue and a fixed cost component to the cost of sales. Non-core revenue, which has a lower cost of sale and higher margins, declined, contributing to the lower overall margins in POS.

Translational Oncology Solutions (TOS):

TOS revenue was $2.8 million and $2.0 million for the three months ended April 30, 2015 and 2014, respectively, an increase of $0.8 million or 39%. TOS revenue was $7.2 million and $9.3 million for the twelve months ended April 30, 2015 and 2014, respectively, a decrease of $2.1 million, or 23%. The decline is largely due to a slower conversion of bookings to revenue.

TOS cost of sales was $1.7 million and $1.0 million for the three months ended April 30, 2015 and 2014, respectively, an increase of $0.7 million, or 74%. TOS cost of sales was $4.9 million and $3.5 million for the twelve months ended April 30, 2015 and 2014, respectively, an increase of $1.4 million, or 39%. For the three months ended April 30, 2015 and 2014, gross margin for TOS was 41% and 52%, respectively. Gross margin fluctuates from quarter to quarter generally due to the timing of revenue recognition. Gross margin for the quarter was below usual levels due to an increase in TOS studies whose revenue will be recognized upon study completion. For the twelve months ended April 30, 2015 and 2014, gross margin for TOS was 32% and 62%, respectively.

Research and development expense was $1.1 million and $663,000 for the three months ended April 30, 2015 and 2014, respectively. Research and development expense was $4.8 million and $2.3 million for the twelve months ended April 30, 2015 and 2014, respectively. The increase is largely due to investment in characterizing the TumorBank. Sales and marketing expense for the three months ended April 30, 2015 and 2014 was $943,000 and $1.0 million respectively. Sales and marketing expense for the twelve months ended April 30, 2015 and 2014 was $4.3 million and $3.2 million, respectively. The increase was the result of the expansion of the TOS sales force offset by reduced sales and marketing expense for POS. General and administrative expense for the three months ended April 30, 2015 and 2014 was $1.4 million and $1.5 million, respectively. General and administrative expense for the twelve months ended April 30, 2015 and 2014 was $5.3 million and $6.1 million, respectively.

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!