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BIND Therapeutics Determines Pfizer’s $40 Million Bid Is Highest and Best in 363 Auction for Substantially All of BIND’s Assets

On July 26, 2016 BIND Therapeutics, Inc. (NASDAQ: BIND), a biotechnology company developing targeted and programmable therapeutics called ACCURINS, reported that Pfizer Inc. (NYSE: PFE) prevailed at a Section 363 auction to purchase substantially all of BIND’s assets (Press release, BIND Therapeutics, JUL 26, 2016, View Source [SID1234556287]). The winning bid of $40 million, subject to U.S. Bankruptcy Court approval for which a hearing is scheduled to take place on July 27, 2016, was selected as the highest and best bid. NanoCarrier Co., Ltd. has been selected as the back-up bidder. The Company plans to disclose additional terms of its agreement with Pfizer upon Court approval.

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BIND initiated voluntary Chapter 11 bankruptcy protection on May 1, 2016 and conducted a sale of assets, pursuant to Section 363 of the Bankruptcy Code, during an auction held on July 25 and 26, 2016.

10-Q – Quarterly report [Sections 13 or 15(d)]

Alder Biopharmaceuticals has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Alder Biopharmaceuticals, 2017, JUL 26, 2016, View Source [SID1234521723]).

Dr. Reddy’s Q1 FY17 Financial Results

On July 26, 2016 Dr. Reddy’s Laboratories Ltd. (BSE: 500124) (NSE: DRREDDY) (NYSE: RDY) reported its consolidated financial results for the first quarter ended June 30, 2016 under International Financial Reporting Standards (IFRS) (Press release, Dr Reddy’s, JUL 26, 2016, View Source [SID:1234514050]).

Q1 FY17: Key Highlights

Consolidated revenues at Rs. 32.3 billion, year-on-year decline of 14%
Gross Profit Margin at 56.2%, declined by ~490 bps over that of last year
Research & Development (R&D) spend at Rs. 4.8 billion, year-on-year increase of 9%. Continued focus on building complex generics and differentiated products pipeline
Selling, general & administrative (SG&A) expenses at Rs. 12.3 billion, year-on-year increase of 12%
EBITDA at Rs. 4.0 billion, 12.3% of revenues
Profit after tax at Rs. 1.3 billion, 3.9% of revenues
Co-chairman and CEO GV Prasad said: "We have come through a very difficult first quarter, with our top and bottom lines impacted by a decline in volume growth, particularly in the US market and the loss of business in Venezuela. We also faced a number of challenges in the quarter including price erosion and delayed launches as a result of the warning letter, which significantly impacted our earnings. However, we continue to take actions that focus on remediation, strengthening our quality systems and executing on our strong product pipeline. We remain focused on generating long term, sustainable growth."

All amounts in millions, except EPS

All US dollar amounts based on convenience translation rate of I USD = Rs. 67.51

Dr. Reddy’s Laboratories Limited and Subsidiaries
Consolidated Income Statement

Particulars Q1 FY 17 Q1 FY 16
Growth %
($) (Rs.) % ($) (Rs.) %
Revenues 479 32,345 100.0 557 37,578 100.0 (14)
Cost of revenues 210 14,167 43.8 217 14,631 38.9 (3)
Gross profit 269 18,178 56.2 340 22,947 61.1 (21)
Operating Expenses
Selling, general & administrative expenses 182 12,284 38.0 163 10,973 29.2 12
Research and development expenses 71 4,802 14.8 65 4,387 11.7 9
Other operating expense / (income) (1) (96) (0.3) (2) (125) (0.3) (23)
Results from operating activities 18 1,188 3.7 114 7,712 20.5 (85)
Finance expense / (income), net (7) (445) (1.4) (3) (216) (0.6) 106
Share of (profit) of equity accounted investees, net of income tax (1) (74) (0.2) (1) (49) (0.1) 49
Profit before income tax 25 1,707 5.3 118 7,977 21.2 (79)
Income tax expense 7 444 1.4 25 1,720 4.6 (74)
Profit for the period 19 1,263 3.9 93 6,257 16.6 (80)

Diluted EPS 0.11 7.43 0.54 36.58 (80)

EBITDA Computation

Particulars Q1 FY 17 Q1 FY 16
($) (Rs.) ($) (Rs.)
Profit before tax 25 1,707 118 7,977
Interest (income) / expense net* (6) (409) (5) (304)
Depreciation 26 1,760 23 1,519
Amortization 14 921 11 749
EBITDA 59 3,979 147 9,941
EBITDA (% to sales) 12.3 26.5

* Includes income from investments

All amounts in millions, except EPS

All US dollar amounts based on convenience translation rate of I USD = Rs. 67.51

Key Balance Sheet Items

Particulars As on 30th June 16 As on 31st March 16
($) (Rs.) ($) (Rs.)
Cash and cash equivalents and Other current Investments 379 25,578 592 39,955
Trade receivables 526 35,499 612 41,306
Inventories 414 27,922 379 25,578
Property, plant and equipment 814 54,951 799 53,961
Goodwill and Other Intangible assets 419 28,284 365 24,644
Loans and borrowings (current & non-current) 557 37,632 496 33,513
Trade payables 188 12,723 182 12,300
Equity 1,690 1,14,112 1,901 1,28,336

Revenue Mix by Segment

Particulars Q1 FY 17
Q1 FY 16

Growth %
($) (Rs.) % ($) (Rs.) %
Global Generics 395 26,638 82 459 30,961 82 (14)
North America 15,523 18,516 (16)
Europe* 1,615 1,912 (16)
India 5,223 4,756 10
Emerging Markets# 4,277 5,777 (26)
PSAI 70 4,692 15 83 5,614 15 (16)
North America 643 580 11
Europe 1,947 2,350 (17)
India 372 670 (44)
Rest of World 1,730 2,014 (14)
Proprietary Products & Others 15 1,015 3 15 1,003 3 1
Total 479 32,345 100 557 37,578 100 (14)

* Europe primarily includes Germany, UK and out licensing sales business
# Emerging Markets refers to Russia, other CIS countries, Romania and Rest of the World markets including Venezuela.

Segmental Analysis

Global Generics

Revenues from Global Generics segment are at Rs. 26.6 billion, year-on-year decline of 14%; decline primarily on account of lower contribution from North America and loss of sales from Venezuela.

Revenues from North America at Rs. 15.5 billion, year-on-year decline of 16%. Decline primarily on account of increased competition primarily in valgancyclovir and azacitidine, coupled with pricing pressure and moderation in volumes off-take.

As of 30th June, 2016, cumulatively 78 generic filings are pending for approval with the USFDA (76 ANDAs and 2 NDAs under 505(b)(2) route). Of these 76 ANDAs, 50 are Para IVs out of which we believe 18 have ‘First to File’ status.
Revenues from Emerging Markets at Rs. 4.3 billion, year-on-year decline of 26%.
Revenues from Russia at Rs. 2.3 billion, year-on-year growth of 2%. Moderate growth primarily on account of depreciation of Ruble, in constant currency revenues grew by 23% year-on-year. Sequentially, the revenues have been stable.
Revenues from other CIS countries and Romania market at Rs. 0.7 billion, year-on-year decline of 15%.
Revenues from Rest of World (RoW) territories at Rs. 1.3 billion, year-on-year decline of 53% primarily on account of no sales in Venezuela. Ex-Venezuela it grew by 19%.
Revenues from India at Rs. 5.2 billion, year-on-year growth of 10%. NPPA pricing notifications and the WPI based annual price decline impacted growth. Portfolio acquired from UCB well-integrated into our supply chain.
Revenues from Europe at Rs. 1.6 billion, year-on-year decline of 16%.
Pharmaceutical Services and Active Ingredients (PSAI)

Revenues from PSAI at Rs. 4.7 billion, year-on-year decline of 16%. Decline primarily on account of lower dispatches in API business on account of the ongoing remediation activities.
During the quarter, 19 DMFs were filed globally of which 2 were in the US. The cumulative number of DMF filings as of 30th June, 2016 was 784.
Proprietary Products (PP)

Subsequent to the approvals received from USFDA for 2 NDAs, the company had launched these two molecules ZembraceSym Touch (Suma 3 mg) injection and Sernivo (betamethasone dipropionate) Spray, 0.05% in the US. The performance of these two molecules is gradually picking up traction.

Income Statement Highlights:

Gross profit margin at 56.2% and declined by ~490 bps over that of previous year primarily led by increased competitive intensity in some of the key products in NAG and relatively lower price realizations. Gross profit margin for Global Generics (GG) and PSAI business segments are at 61.3% and 24.1% respectively.
SG&A expenses at Rs. 12.3 billion, year-on-year growth of 12%. This increase is largely due to the ongoing remediation activities, launch related activities for the approved NDAs by PP and certain routine items related to manpower and other spends.
Research & development expenses at Rs. 4.8 billion, year-on-year growth of 9%. As a % to sales R&D expenses stood at 14.8% in Q1 FY17 as compared to 11.7% in Q1 FY16. Continued focus on building complex generics and differentiated products pipeline.
Net Finance income at Rs. 445 million compared to the net finance income of Rs. 216 million in Q1 FY16. The incremental charge of Rs. 229 million is on account of:
Net foreign exchange gain of Rs. 36 million in the current quarter vs net foreign exchange loss of Rs. 88 million in the previous year.
Increase in profit on sales of investments by Rs. 54 million.
Net increase in interest income of Rs. 51 million.
Profit after Tax at Rs. 1.3 billion
Diluted earnings per share is at Rs. 7.4
Capital expenditure is at Rs. 3.2 billion.
Earnings Call Details (06.30 pm IST, July 26, 2016)

Janssen Announces Clinical Collaboration with Bristol-Myers Squibb to Evaluate Immuno-oncology Combination in Lung Cancer

On July 26, 2016 Janssen Biotech, Inc. reported it has entered into a clinical study collaboration agreement with Bristol-Myers Squibb Company to evaluate the combination of two immuno-oncology compounds in patients with non-small cell lung cancer (NSCLC) (Press release, Johnson & Johnson, JUL 26, 2016, View Source [SID:1234514043]). The Phase 2 clinical trial will evaluate the tolerability and clinical activity of the combination of Janssen’s investigational immunotherapy JNJ-64041757 and Bristol-Myer Squibb’s PD-1 immune checkpoint inhibitor, OPDIVO (nivolumab), in NSCLC patients.

JNJ-64041757 is an antigen-presentation therapeutic, based on Live Attenuated Double-Deleted (LADD) Listeria monocytogenes strains engineered to induce an immune response against NSCLC tumors. Janssen licensed JNJ-64041757 (previously referred to as ADU-214) and another compound, JNJ-64041809 (previously referred to as ADU-741), from Aduro Biotech, Inc., in 2014. Both are currently in Phase 1 clinical development: JNJ-64041757 in lung cancer and JNJ-64041809 in prostate cancer. OPDIVO is indicated for the treatment of patients with NSCLC with progression on or after platinum-based chemotherapy.

"Cancer immunotherapy is a key aspect of our emerging lung cancer portfolio," said Matthew Lorenzi, Ph.D., Vice President, Lung Cancer, Janssen Research & Development, LLC. "This collaboration will help extend the clinical development of JNJ-64041757 while allowing us to gather data on the immune response triggered by the combination of these two innovative approaches."

The study will be conducted by Janssen. Information, including anticipated study start, is expected to be posted on www.clinicaltrials.gov later this year. Additional details of the collaboration were not disclosed.

Baxter Reports Second Quarter 2016 Results and Raises Financial Outlook for Full-Year 2016

On July 26, 2016 Baxter International Inc. (NYSE:BAX) reported results for the second quarter of 2016, and increased its sales and earnings per share outlook for full-year 2016. Baxter’s second quarter worldwide sales totaled $2.6 billion, an increase of 4 percent on a reported basis and 6 percent on a constant currency basis as compared to the prior-year period (Press release, Baxter, JUL 26, 2016, View Source [SID:1234514034]).

"Our second quarter results reflect the steady progress we are making on our strategy to drive industry-leading performance through a disciplined focus on portfolio management and innovation, operational excellence and capital allocation," said José (Joe) E. Almeida, chairman and chief executive officer.

Financial Results

During the quarter, Baxter reported income from continuing operations of $1.2 billion, or $2.19 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis. These results included an after-tax net gain of approximately $1.1 billion from the disposition of the company’s remaining shares of Baxalta Incorporated (Baxalta), which the company spun-off in July 2015. Partially offsetting these results were net after-tax special items totaling $192 million primarily related to business optimization initiatives, intangible asset amortization, asset impairment and Baxalta related spin-off costs.

On an adjusted basis, excluding special items, Baxter’s second quarter income from continuing operations totaled $256 million, or $0.46 per diluted share, exceeding the company’s previously-issued guidance of $0.38 to $0.40 per diluted share.

Baxter’s second quarter worldwide sales totaled $2.6 billion, an increase of 4 percent on a reported basis and 6 percent on a constant currency basis as compared to the prior-year period. Sales within the United States were $1.1 billion, advancing 10 percent, while international sales totaled $1.5 billion, representing a 1 percent increase on a reported basis, and an increase of 3 percent on a constant currency basis. Adjusting for the impact of foreign exchange and a generic market entrant in the United States for the company’s oncology injectable, cyclophosphamide, Baxter’s sales increased 12 percent in the U.S. and globally rose 7 percent in the second quarter.

By business, Hospital Products sales of $1.6 billion increased 6 percent on a reported basis and 7 percent on a constant currency basis. Adjusting for the impact of foreign exchange and U.S. cyclophosphamide, Hospital Products sales advanced 9 percent from the prior year period. Hospital Products performance in the quarter benefited from strong sales across the portfolio, particularly within its U.S. Fluid Systems franchise, driven by solid demand for Baxter’s next-generation SIGMA SPECTRUM infusion pump as well as favorable demand and pricing for IV solutions. Strength internationally in anesthesia products and hospital pharmacy compounding services also contributed to growth in the quarter.

Baxter’s Renal sales totaled $965 million, representing a 2 percent increase on a reported basis, and a 4 percent increase on a constant currency basis. Increased demand globally for continuous renal replacement therapies along with strong sales of peritoneal dialysis products contributed to growth in the quarter. Baxter’s new AMIA Automated Peritoneal Dialysis (APD) System with the SHARESOURCE Connectivity Platform, which was launched in the U.S. in late 2015 and was recently approved by Health Canada, is contributing to growth with more than 500 patients now being treated with AMIA in the U.S. The AMIA APD and SHARESOURCE system is the first APD device cleared in the United States and Canada to include patient-centric features such as voice guidance, a touchscreen control panel and two-way telemedicine capabilities for remote patient management.

During the second quarter, Baxter also completed the disposition of its retained stake in Baxalta, which included an equity contribution of approximately $700 million to the company’s U.S. pension plan. It also included completion of an equity-for-equity share exchange which resulted in a reduction of Baxter’s outstanding share count of approximately 11 million.

"The successful disposition of the retained equity stake in Baxalta allowed us to effectively restructure our balance sheet and provides us with significant flexibility to invest in both organic and inorganic growth initiatives while also returning value to shareholders through dividends and stock repurchases," said Jay Saccaro, Baxter’s chief financial officer.

Financial Outlook

Based on the company’s strong performance in the first six months of the year, Baxter is raising its financial outlook for full-year 2016. For full-year 2016, Baxter now expects reported sales growth of 1 percent to 2 percent and on a constant currency basis, sales growth of 3 percent to 4 percent. In addition, the company now expects earnings from continuing operations, before special items, of $1.69 to $1.74 per diluted share for the full year as compared to previous guidance of $1.59 to $1.67 per diluted share.

For the third quarter, the company expects reported sales growth of 2 percent to 3 percent and on a constant currency basis, sales growth of 3 percent to 4 percent. Baxter expects earnings from continuing operations, before special items, of $0.43 to $0.45 per diluted share for the third quarter of 2016.

The earnings guidance for the third quarter and full-year 2016 excludes $0.05 and $0.22, respectively, per diluted share of intangible asset amortization expense; an estimated $0.02 and $0.08, respectively, per diluted share of Baxalta separation-related expense activities; an estimated $0.09 to $0.11 and $0.38 to $0.40, respectively, per diluted share of business optimization charges; and $7.88 per diluted share of asset impairment, debt extinguishment loss, product related reserve adjustments, and Baxalta retained stake gains for full-year 2016. These estimates are based on information reasonably available at the time of this release and future events or new information may result in different actual results. Reconciling for the inclusion of these items results in GAAP earnings of $0.25 to $0.29 per diluted share for the third quarter of 2016, and $8.87 to $8.94 per diluted share for full-year 2016.