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8-K – Current report

On August 6, 2015Acceleron Pharma Inc. (NASDAQ: XLRN), a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic candidates that regulate cellular growth and repair, reported a corporate update and reported financial results for the second quarter ended June 30, 2015 (Filing, 8-K, Acceleron Pharma, AUG 6, 2015, View Source [SID:1234507061]).

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"In the second quarter, we presented promising new longer-term treatment data from our luspatercept programs. These results further reinforce our excitement about the potential of luspatercept to help patients with myelodysplastic syndromes and beta-thalassemia. We and our collaboration partner, Celgene, look forward to starting pivotal trials in both of these indications by the end of this year," said John Knopf, Ph.D., Chief Executive Officer of Acceleron. "At Acceleron, we remain focused on bringing innovative therapies to patients, and we are continuing to advance and expand our earlier stage pipeline as well. We have scheduled our first Research and Development Day for investors on October 23, 2015. At that meeting, we will review our clinical and preclinical programs, including a first look at top-line data from the phase 1 trial with our candidate muscle agent, ACE-083."

Recent Highlights and Current Updates

Development Programs
Hematology

• Completed enrollment and treatment in the luspatercept phase 2 dose escalation study in myelodysplastic syndromes (MDS) – Enrollment and treatment ongoing in the phase 2 dose escalation beta-thalassemia study.

• Long-term phase 2 extension studies ongoing with luspatercept in both MDS and beta-thalassemia – Patients who completed their 3-month treatment in the MDS or beta-thalassemia dose escalation studies were eligible to enroll in the 12-month MDS or beta-thalassemia extension study. Enrollment in the MDS extension study is complete and enrollment in the beta-thalassemia extension study is ongoing.

• Presented luspatercept phase 2 data supporting the advancement to phase 3 clinical trials at the European Hematology Association (EHA) (Free EHA Whitepaper)’s annual meeting – In lower risk MDS patients, which represent a large majority of patients affected by the disease, longer-term treatment with luspatercept led to sustained increases in hemoglobin levels and transfusion independence. In both transfusion and non-transfusion dependent beta-thalassemia patients, luspatercept generated durable increases in hemoglobin levels, reductions in transfusion burden and improvements in iron overload. Based on these promising data, Acceleron and Celgene are advancing luspatercept to phase 3 clinical trials in MDS and beta-thalassemia.

• Luspatercept granted Fast Track designations for beta-thalassemia – The United States Food and Drug Administration (FDA) has granted Fast Track Designations to luspatercept for two separate indications—the use of luspatercept for the treatment of patients with transfusion dependent beta-thalassemia and the use of luspatercept for the treatment of patients with non-transfusion dependent beta-thalassemia.

Oncology

• Presented preliminary renal cell carcinoma (RCC) phase 2 data showing that the combination of dalantercept and axitinib generated encouraging, progression-free survival – In 2nd through 4th line RCC patients, the aggregate median progression-free survival (PFS) rate for the combination of dalantercept and axitinib across all three dose levels of dalantercept tested was 8.3 months. The median PFS has not yet been reached for the 0.9 mg/kg dose group, which has been chosen as the dose level for the randomized Part 2 stage of this study.

Muscle Diseases

• Completed enrollment and treatment in ACE-083 phase 1 clinical trial – The phase 1 study of ACE-083, a therapeutic candidate designed to selectively increase muscle mass and strength in the muscle into which it is administered, has completed enrollment and treatment in healthy volunteers.

• Advanced and expanded pipeline – Acceleron is advancing several promising preclinical programs, particularly those designed to increase muscle mass and strength. Our goal is to advance a fifth, internally discovered therapeutic candidate into clinical trials by the end of 2016.

Upcoming Milestones and Events

• Phase 3 clinical trials with luspatercept in MDS and beta-thalassemia expected to start by year-end – Acceleron and Celgene plan to initiate pivotal programs for luspatercept in beta-thalassemia and MDS by year-end.

• Acceleron Research and Development (R&D) Day scheduled for Friday October 23, 2015 – Acceleron will hold its first R&D Day on Friday morning, October 23, 2015 in New York City.

• ACE-083 phase 1 clinical data – Preliminary, top-line data from the ACE-083 phase 1 clinical trial will be presented at the Acceleron R&D Day on October 23.

• Data from a new preclinical muscle program expected to be presented at the World Muscle Society annual meeting – Acceleron plans to present data from a new preclinical program, ACE-2494, at the World Muscle Society’s 20th International Congress in Brighton, UK, which runs from September 30 to October 4, 2015.

Financial Results
• Cash Position – Cash, cash equivalents and investments as of June 30, 2015 were $156.6 million. As of December 31, 2014 the company had cash and cash equivalents of $176.5 million. Acceleron expects that its cash, cash equivalents and investments as of June 30, 2015 will be sufficient to fund the Company’s operations into the second half of 2017.

Progenics Pharmaceuticals Announces Second Quarter 2015 Financial Results

On August 6, 2015 Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX) reported results of operations for the second quarter and six months ended June 30, 2015 (Press release, Progenics Pharmaceuticals, AUG 6, 2015, View Source [SID:1234507060]).

"We have reported significant progress across our late stage pipeline," stated Mark Baker, CEO of Progenics. "Our ultra-orphan drug, Azedra, received Breakthrough Therapy Designation from the FDA for malignant pheochromocytoma and paraganglioma, providing for an expedited development and review process. We are encouraged by the progress with our ongoing pivotal Phase 2b trial and we remain on track to complete enrollment in this trial by year-end."

Mr. Baker continued, "We have solidified our leadership position in prostate cancer imaging, announcing plans to advance 1404 into a Phase 3 trial later this year and acquiring PyL, a complementary imaging agent candidate used in conjunction with PET imaging. With these two programs, we have established a premier development portfolio of prostate cancer imaging agents, with the potential to transform how we detect and monitor the full spectrum of prostate cancer, from initial diagnosis to recurrent and advanced disease."

"Important progress was also made with our RELISTOR franchise in the second quarter, with Valeant’s New Drug Application submission for RELISTOR Oral and EU approval of RELISTOR Subcutaneous Injection for the treatment of opioid induced constipation," concluded Mr. Baker.

Net loss for the quarter was $11.7 million or $0.17 diluted per share, compared to net loss of $11.1 million or $0.16 diluted per share in the second quarter of 2014. Net loss for the current six months was $22.0 million, or $0.32 diluted per share, compared to $20.4 million or $0.31 diluted per share in the first half of 2014. Progenics ended the quarter with cash and cash equivalents of $99.3 million, a decrease of $9.1 million in the quarter and $20.0 million from 2014 year-end.

Second quarter revenue totaled $1.9 million, up from $1.5 million in the second quarter of 2014, reflecting RELISTOR (methylnaltrexone bromide) royalty income of $1.8 million compared to $1.4 million in the corresponding period in 2014, based on net sales reported to Progenics by our commercialization partner, Valeant Pharmaceuticals International, Inc. The current quarter increase in royalty revenue is primarily due to higher net sales of $11.9 million for the three months ended June 30, 2015, compared to $9.1 million for the corresponding period in 2014. Collaboration revenue for the second quarter remained unchanged at $0.1 million compared to the corresponding period in 2014. Current year first half revenues were $2.2 million, down from $3.3 million in the first half of 2014, reflecting royalty income of $1.9 million compared to $2.1 million and collaboration revenue of $0.2 million compared to $1.1 million in the corresponding period in 2014.

Second quarter research and development expenses decreased by $1.5 million compared to the second quarter of 2014, reflecting lower clinical trial expenses for PSMA ADC and 1404, resulting from completion of these Phase 2 trials in 2014, and lower compensation expenses, partially offset by higher contract manufacturing and clinical trial expenses for Azedra. Year-to-date research and development expenses decreased by $2.1 million compared to the corresponding period in 2014. Second quarter general and administrative expenses increased by $2.1 million from the corresponding period in 2014. Year-to-date general and administrative expenses increased by $2.3 million compared to prior year period. Both increases are primarily due to charges accrued in the second quarter of 2015 related to an action brought by a former employee who was terminated by the Company in 2008. The non-cash item for the quarter and year-to-date periods resulted from increased estimates for fair value of contingent consideration liability.

Second Quarter and Recent Events

In August, Progenics entered into an exclusive worldwide licensing agreement for [18F]DCFPyL ("PyL"), a clinical-stage prostate specific membrane antigen (PSMA)-targeted imaging agent for prostate cancer, with Johns Hopkins University.

In July, Progenics announced that the FDA designated Azedra as a Breakthrough Therapy for the treatment of patients with malignant pheochromocytoma and paraganglioma. Azedra is currently being evaluated in a pivotal Phase 2b trial, which is being conducted under a Special Protocol Assessment Agreement (SPA), and has received Orphan Drug and Fast Track designations from the FDA.

In July, the Company also announced details of its planned Phase 3 clinical trial for 1404, a developmental stage small molecule designed to help visualize prostate cancer by targeting prostate specific membrane antigen (PSMA). The Phase 3 clinical trial is expected to enroll approximately 450 patients with biopsy-proven low-grade prostate cancer who are candidates for active surveillance but have planned to undergo radical prostatectomy, and will evaluate the specificity and sensitivity of 1404 to identify clinically significant prostate cancer. Progenics expects to commence the Phase 3 trial by the end of this year.

In July, Sheldon Hirt joined Progenics as Executive Vice President and General Counsel. Mr. Hirt previously served as Senior Vice President, Legal Affairs and Assistant General Counsel at Actavis plc.

In June, Progenics and Valeant announced that Valeant had submitted a New Drug Application to the U.S. Food and Drug Administration (FDA) for RELISTOR Tablets for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non-cancer pain.

Also in June, Progenics and Valeant announced that the European Commission had approved RELISTOR Subcutaneous Injection for the treatment of OIC when response to laxative therapy has not been sufficient in adult patients. The decision is applicable to all 28 European Union member states plus Iceland and Norway and includes an additional one year of marketing protection.

Researchers Find RapidPlan™ Software Can Improve the Efficiency and Quality of Treatment Planning for Radiotherapy, Radiosurgery

On August 6, 2015 Varian Medical Systems reported that treatment planning for radiotherapy and radiosurgery can be significantly expedited and improved using new software for storing and accessing clinical knowledge based on best planning practices (Press release, InfiMed, AUG 6, 2015, View Source [SID:1234507059]). This was the finding of several research teams that compared conventional plans with plans generated using knowledge-based treatment planning software like the RapidPlan tool from Varian Medical Systems (NYSE: VAR). The researchers from diverse institutions recently presented their findings during the 2015 American Association of Physicists in Medicine (AAPM) annual meeting.

Plan generation that typically took 30 to 180 minutes was completed in just 15 to 20 minutes using a model based on 48 spine tumor cases, created by Joy Foy, MSE, and colleagues from the University of Michigan. "RapidPlan knowledge-based planning greatly decreased the amount of time required to achieve high quality treatment plans with minimal human intervention and could feasibly be used to standardize plan quality between institutions," the researchers found.1

RapidPlan enables clinicians to extract information from past clinical experience and use it to generate mathematical models that expedite the creation of new treatment plans. The software helps the planner quickly generate a new treatment plan that achieves the radiation oncologist’s tumor coverage and normal tissue sparing goals, greatly reducing the need for time-consuming, manual trial-and-error processes. Knowledge-based treatment planning is becoming a routine practice for quality control, according to researchers from the University of Texas MD Anderson Cancer Center in Houston and Duke University Medical Center in Durham, NC. 2

Munther Ajlouni, MD; Karen Snyder, MS; and their colleagues at the Henry Ford Health System in Detroit, MI, developed a RapidPlan model based on 105 manually created SBRT lung cancer treatment plans. They found that RapidPlan generated treatment plans with comparable quality to manually created plans but with increased consistency and greater efficiency.3

Jason Pawlowski, PhD, medical physicist at Sarah Cannon, presented work from Sarah Cannon radiation oncology site colleagues across the nation aimed to develop and validate a knowledge-based planning model for treating locally advanced non-small cell lung cancer. The Sarah Cannon radiation oncology team found that the RapidPlan model more quickly achieved treatment plans that were equivalent, or superior to, previously-created manually optimized plans of the same patients.4

Changsheng Ma, MD and Yong Yi, MD from the Shandong Tumor Hospital in Jinan, Shangdong Province, China, used RapidPlan and data from 20 patient cases to develop a RapidPlan model for treating cervical cancer with IMRT. This approach "can generate clinically acceptable treatment plans of high quality, while improving the efficiency of the treatment planning process." they reported. 5

GTx Provides Corporate Update and Reports Second Quarter 2015 Financial Results

On August 6, 2015 GTx, Inc. (Nasdaq: GTXI) reported financial results for the quarter and six months ended June 30, 2015, and highlighted recent accomplishments and developments (Press release, GTx, AUG 6, 2015, View Source;p=RssLanding&cat=news&id=2076477 [SID:1234507058]). The Company has initiated its Phase 2 clinical trial of enobosarm in androgen receptor positive (AR+) triple negative breast cancer (TNBC) and anticipates initiating this quarter an additional Phase 2 clinical study of enobosarm to treat AR+ and estrogen receptor positive (ER+) breast cancer. The Company also is evaluating several selective androgen receptor modulator (SARM) compounds in preclinical models of Duchenne muscular dystrophy (DMD) where a SARM’s ability to increase muscle mass may prove beneficial to patients suffering from DMD.

"I am pleased that we have initiated our Phase 2 clinical study of AR+ triple negative breast cancer, and I look forward to having our first patient enrolled this quarter," said Marc S. Hanover, CEO of GTx.

"Our primary focus continues to be developing enobosarm for the treatment of advanced breast cancer and the preclinical development of our newly licensed selective androgen receptor degrader program," said Dr. Robert J. Wills, Executive Chairman of GTx. "In addition, the extensive SARM data from our preclinical and clinical development efforts, together with input from leading experts in areas of muscle disorders, has encouraged us to undertake preclinical studies to determine whether SARMs offer a treatment option for DMD."

Corporate Highlights

Enobosarm, a SARM, is the Company’s lead product candidate and is being developed as a targeted treatment for two advanced breast cancer indications for (i) AR+ TNBC and (ii) ER+ and AR+ breast cancer. For both clinical trials, the primary efficacy objective will be clinical benefit, which is defined as a complete response, partial response or stable disease by Response Evaluation Criteria in Solid Tumors 1.1.

The Company initiated its open-label, proof-of-concept Phase 2 clinical trial of a daily dose of 18 mg of enobosarm in patients with advanced AR+ TNBC. The study will enroll up to 55 patients to obtain 41 evaluable patients for the primary efficacy objective defined as clinical benefit at 16 weeks. There will be two stages of evaluation in the clinical trial with the first stage assessment occurring following 16 weeks of treatment for the first 21 evaluable patients. If at least 2 of the 21 patients achieve clinical benefit, the trial will continue to enroll the second stage of the study.

In the third quarter of 2015, the Company plans to initiate an open-label Phase 2 clinical trial of enobosarm to assess clinical benefit in patients with ER+/AR+ advanced breast cancer. The study will enroll up to 118 patients to obtain 44 evaluable patients in each of two cohorts. One cohort will receive a daily dose of 9 mg of enobosarm and the other cohort a daily dose of 18 mg of enobosarm. There will be two stages of evaluation in the clinical trial with the first stage assessment occurring following 24 weeks of treatment for the first 18 evaluable patients in each of the two cohorts. If at least 3 of the 18 patients achieve clinical benefit in one or both cohorts, the trial will continue through the second stage for that cohort.

The Company is expecting data from the first stage of each Phase 2 clinical trial by the end of 2016.

Selective Androgen Receptor Degrader (SARD) technology is being evaluated as a potentially novel treatment for men with castration-resistant prostate cancer (CRPC), including those who do not respond or are resistant to currently approved therapies.

The Company believes that its SARD compounds will degrade multiple forms of the androgen receptor, including AR variants, such as ARv-7.

The Company is conducting research in collaboration with the University of Tennessee Health Science Center to select and optimize appropriate drug development candidates to move into the preclinical studies required to support initial clinical trials.
SARM’s ability to increase muscle mass may prove beneficial as a treatment for DMD.

DMD is a rare genetic disorder affecting approximately one in 3,000 boys. DMD is characterized by progressive muscle degeneration and weakness and represents a serious unmet medical need.

The Company is undertaking preclinical studies and has initiated discussions with experts to better understand the potential of SARMs as a treatment for DMD.

GTx-758 (Capesaris) for the treatment of advanced prostate cancer.

All patients in the Company’s open-label Phase 2 clinical trial of GTx-758 in men with metastatic and high risk non-metastatic CRPC have reached the primary endpoint assessment. Both the 125 mg and 250 mg doses have demonstrated dose dependent increases from baseline in sex hormone binding globulin (SHBG), reductions in free testosterone and reductions in prostate specific antigen (PSA), confirming the mechanism of action of GTx-758. Efficacy and safety data from the clinical trial will be presented at an appropriate scientific meeting and submitted for publication.

The Company is discussing this data with potential strategic partners to determine their interest in partnering or acquiring this asset, as well as the library of ER alpha agonist compounds.

Second Quarter and Six Months 2015 Financial Results

As of June 30, 2015, cash and short-term investments were $39.4 million compared to $49.3 million at December 31, 2014.
Loss from operations for the quarter ended June 30, 2015 was $5.0 million compared to $10.9 million for the same period of 2014. Loss from operations for the six months ended June 30, 2015 was $10.0 million compared to $19.9 million for the same period of 2014.

Research and development expenses for the quarter ended June 30, 2015 were $3.0 million compared to $7.9 million for the same period of 2014.

General and administrative expenses for the quarter ended June 30, 2015 were $2.0 million compared to $3.1 million for the same period of 2014.

The Company recognized a non-cash loss of $43.0 million and $40.4 million for the quarter and six months ended June 30, 2015, respectively, due to the change in fair value of the Company’s warrant liability. The Company classified the warrants issued in its November 2014 private placement as a liability due to certain provisions of the warrants that may require the Company, or its successor, to pay cash to warrant holders under certain circumstances through December 31, 2016. The Company anticipates recognizing non-cash gains or losses resulting from the revaluation of these warrants to fair value each reporting period through the earlier of December 31, 2016 or the exercise in full of these warrants.

The net loss for the quarter ended June 30, 2015 was $48.0 million compared to a net loss of $10.9 million for the same period in 2014. The net loss for the quarter ended June 30, 2015 included the above mentioned non-cash loss of $43.0 million related to the change in the fair value of the Company’s warrant liability. The net loss for the six months ended June 30, 2015 was $50.3 million compared to $19.9 million for the same period of 2014. The net loss for the six months ended June 30, 2015 included a non-cash loss of $40.4 million related to the change in fair value of the Company’s warrant liability.

GTx had approximately 140.4 million shares outstanding as of June 30, 2015. Additionally, there remain warrants outstanding to purchase approximately 64.3 million shares of GTx common stock at an exercise price of $0.85 per share.

Emergent BioSolutions Reports Second Quarter and Six Months 2015 Financial Results and Reaffirms 2015 Guidance

On August 6, 2015 Emergent BioSolutions Inc. (NYSE:EBS) reported financial results for the quarter and six months ended June 30, 2015 (Press release, Emergent BioSolutions, AUG 6, 2015, View Source;p=RssLanding&cat=news&id=2076503 [SID:1234507057]).

Financial highlights include:
Total revenues: Q2 2015 of $126.1 million, up 14% over prior year; six months 2015 of $189.7 million, up 16% over prior year;
GAAP net income/loss: Q2 2015 net income of $14.1 million, or $0.32 per diluted share; six months 2015 net loss of $7.4 million, or $0.19 per diluted share;

Adjusted net income/loss: Q2 2015 net income of $17.0 million, or $0.36 per diluted share; six months 2015 net loss of $1.8 million, or $0.05 per diluted share;

EBITDA: Q2 2015 of $29.6 million, or $0.62 per diluted share; six months 2015 of $9.6 million, or $0.25 per diluted share; and
Adjusted EBITDA: Q2 2015 of $31.0 million, or $0.65 per diluted share; six months 2015 of $12.2 million, or $0.32 per diluted share.

2015 business accomplishments:

FDA approval of Anthrasil (Anthrax Immune Globulin Intravenous (Human))
Awards to manufacture Ebola monoclonal antibodies under our CIADM arrangement with BARDA
Successful dosing of our first patient in the Phase I trial for MOR209/ES414, our immunotherapeutic treatment for prostate cancer
FDA approval and launch of IXINITY, a recombinant factor IX treatment for Hemophilia B
Continued steady progress on Building 55 sBLA approval

2015 outlook:

Reaffirmation of previous guidance – FY 2015 total revenues of $510-$540 million, net income of $50-$60 million (GAAP) and $60-$70 million (adjusted); and

New guidance – Q3 2015 total revenues of $140 to $155 million.

2015 FINANCIAL PERFORMANCE
(I) Quarter Ended June 30, 2015 (unaudited)

Revenues

Product Sales

For Q2 2015, product sales were $82.0 million, an increase of 5% as compared to 2014. The increase primarily reflects increased sales of BioThrax during the quarter.

Contract Manufacturing

For Q2 2015, revenue from our contract manufacturing operations was $8.9 million, a decrease of 3% as compared to 2014. The decrease was primarily due to the timing of fill/finish facility service to third parties.
Contracts, Grants and Collaborations
For Q2 2015, contracts, grants and collaborations revenue was $35.2 million, an increase of 54% as compared to 2014. The increase was primarily due to development funding for Anthrasil.

Operating Expenses

Cost of Product Sales and Contract Manufacturing

For Q2 2015, cost of product sales and contract manufacturing was $27.3 million, a decrease of 21% as compared to 2014. The decrease was primarily attributable to the decrease in the BioThrax cost per dose sold associated with increased production yield in the period in which the doses were produced.

Research and Development
For Q2 2015, gross research and development (R&D) expenses were $40.9 million, an increase of 9% as compared to 2014. The increase was primarily attributable to additional R&D expenditures associated with product development programs in the Biodefense segment. Net R&D expenses, which are more representative of the company’s actual out-of-pocket investment in product development, are calculated as gross research and development expenses less contracts, grants and collaboration revenues. For Q2 2015, net R&D expenses were $5.7 million, a decrease of 61% as compared to 2014.

Selling, General and Administrative
For Q2 2015, selling, general and administrative expenses were $36.5 million, an increase of 19% as compared to 2014. The increase was primarily attributable to selling, general and administrative costs associated with the launch of IXINITY and professional services to support the company’s strategic growth initiatives.

Net Income
For Q2 2015, GAAP net income per diluted share is computed using the if-converted method. This method requires GAAP net income to be adjusted in the amount of $1.0 million, from $14.1 million to $15.1 million, related to interest expense and amortization of debt issuance cost, both net of tax, associated with the company’s 2.875% Convertible Senior Notes due 2021.
(II) Six Months Ended June 30, 2015 (unaudited)

Revenues

Product Sales
For the six months of 2015, product sales were $100.3 million, a decrease of 12% as compared to 2014. The decrease was primarily attributable to the timing of deliveries of BioThrax to the SNS due to our decision to suspend shipments to the CDC in Q1 2015. Shipments were subsequently resumed in Q2 2015.

Contract Manufacturing
For six months of 2015, revenue from our contract manufacturing operations was $21.1 million, an increase of 77% as compared to 2014. The increase was primarily due to the impact of fill/finish services revenues for the entire six month period in 2015.

Contracts, Grants and Collaborations
For six months of 2015, contracts, grants and collaborations revenue was $68.3 million, an increase of 78% as compared to 2014. The increase was primarily due to development funding for Anthrasil.

Operating Expenses
Cost of Product Sales and Contract Manufacturing
For the six months of 2015, cost of product sales and contract manufacturing was $46.0 million, a decrease of 14% as compared 2014. The decrease was primarily attributable to a decrease in product sales and contract manufacturing revenues.

Research and Development
For the six months of 2015, gross R&D expenses were $79.6 million, an increase of 18% as compared to 2014. The increase was primarily attributable to additional R&D expenditures in the Biodefense segment.

Net R&D expenses for the six months of 2015 were $11.3 million, a decrease of 62% as compared to 2014.

Selling, General and Administrative

For the six months of 2015, selling, general and administrative expenses were $70.9 million, an increase of 17% as compared to 2014. The increase was primarily attributable to additional post-acquisition selling, general and administrative costs largely associated with the operations acquired in Q1 2014, including IXINITY launch costs, as well as professional services to support the company’s strategic growth initiatives.

(III) Reconciliation of GAAP Net Income to Adjusted Net Income/(Loss), EBITDA and Adjusted EBITDA

This press release contains three financial measures (Adjusted Net Income/(Loss), EBITDA or earnings before interest, taxes, depreciation and amortization, and adjusted EBITDA) that are considered "non-GAAP" financial measures under applicable Securities & Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Adjusted Net Income adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and provision for income taxes. Adjusted EBITDA also excludes specified items that can be highly variable and the non-cash impact of certain purchase accounting adjustments. The company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the company’s business.

The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the company’s reported results of operations, management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety.