Kite Pharma Announces Presentations at the Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT)

On April 28, 2016 Kite Pharma, Inc., (Nasdaq:KITE) ("Kite") a clinical-stage biopharmaceutical company focused on developing engineered autologous T cell therapy (eACT) products for the treatment of cancer, reported four presentations to be delivered at the upcoming American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) Annual Meeting (Press release, Kite Pharma, APR 28, 2016, View Source [SID:1234511531]). The presentations will address KTE-C19, Kite’s lead chimeric antigen receptor (CAR) product candidate, and, separately, a fully-human anti-CD19 CAR product candidate for the treatment of B-cell lymphomas and leukemias. The fully-human anti-CD19 CAR product candidate is currently being studied in an ongoing Phase 1 clinical trial as part of a Cooperative Research and Development Agreement (CRADA) between Kite and the National Cancer Institute (NCI). Under this CRADA, Kite collaborates with James (Jim) N. Kochenderfer, M.D., an investigator in the Experimental Transplantation and Immunology Branch of the NCI.

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Oral Presentations:

The Impact of Different Hinge and Transmembrane Components on the Function of a Novel Fully-Human Anti-CD19 Chimeric Antigen Receptor

Date: Wednesday, May 4, 2016 4:45-5:00PM Eastern Time
Session: Cancer-Targeted Gene and Cell Therapy (3:30-5:30PM Eastern Time)
Abstract Number: 74
Location: Washington 1-2, Marriott Wardman Park
Presenter: Leah Alabanza, Ph.D., Experimental Transplantation and Immunology Branch, National Cancer Institute, Bethesda, MD

Production of KTE-C19 (Anti-CD19 CAR T Cells) for ZUMA-1: A Phase 1/2 Multi-Center Study Evaluating Safety and Efficacy in Subjects with Refractory Aggressive Non-Hodgkin Lymphoma (NHL)

Date: Thursday, May 5, 2016 4:15-4:30PM Eastern Time
Session: Vector and Cell Engineering/Manufacturing (4:00-5:45PM Eastern Time)
Abstract Number: 287
Location: Washington 1-2, Marriott Wardman Park
Presenter: Marc Better, Ph.D., Kite Pharma, Santa Monica, CA

Updated Phase 1 Results from ZUMA-1: A Phase 1/2 Multi-Center Study Evaluating the Safety and Efficacy of KTE-C19 (Anti-CD19 CAR T Cells) in Subjects with Refractory Aggressive Non-Hodgkin Lymphoma (NHL)

Date: Saturday, May 7, 2016 10:15-10:30AM Eastern Time
Session: Cancer-Immunotherapy, Cancer Vaccines III (10:15AM-12:15PM Eastern Time)
Abstract Number: 745
Location: Thurgood Marshall North, Marriott Wardman Park
Presenter: Frederick Locke, M.D., Moffitt Cancer Center, Tampa, FL

Poster Presentation:

Development of a Manufacturing Process Using Monte Carlo Simulations to Support KTE-C19 (Anti-CD19 CAR T Cells) Studies in Leukemia

Date: Friday, May 6, 2016 6:00-8:00PM Eastern Time
Session: Cancer-Immunotherapy, Cancer Vaccines III
Abstract Number: 650
Location: Exhibit Hall C & B South, Marriott Wardman Park
Presenter: Kenny Choi, Kite Pharma, Santa Monica, CA

Varian Gives European Clinicians First Glimpse of Next Big Advance in Radiotherapy at ESTRO 35

On April 28, 2016 Varian Medical Systems reported that it will demonstrate its full range of radiotherapy delivery systems at the 35th ESTRO (European Society for Radiotherapy and Oncology) meeting, taking place here in Turin from April 29th-May 3rd (Press release, InfiMed, APR 28, 2016, View Source [SID:1234511530]). The Varian booth features the company’s technology and products for radiotherapy, radiosurgery, brachytherapy, and proton therapy, and will offer the European clinical community its first glimpse of High Definition Radiotherapy (HDRT).

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Visitors to the Varian booth (No. 5500) can learn about the company’s four pi (4π) non-coplanar treatment technology*, which exploits specific capabilities of the TrueBeam platform and is designed to deliver more compact radiation doses that may fully saturate a targeted tumor and "fall off" sharply outside the target zone, potentially minimizing dose to specific organs requiring more protection.

"We believe this technology could enable High Definition Radiotherapy — the next big advance in radiation oncology, rivaling the development of IMRT in the 1990s, IGRT and volumetric modulated arc therapy (VMAT) in the 2000s, and linac-based radiosurgery in more recent years," says Kolleen Kennedy, president of Varian’s Oncology Systems group. "This has the potential to make a big difference in the treatment of cancer patients."

Also on display on the Varian (NYSE: VAR) booth is the company’s TrueBeam platform for radiotherapy and radiosurgery, along with the RapidArc image-guided intensity-modulated radiotherapy system, the PerfectPitch six-degrees-of-freedom couch, and the Calypso ‘GPS for the Body’ system, all of which are aimed at helping clinicians to deliver treatments with both precision and speed. Varian will also exhibit its powerful family of oncology software products, including RapidPlan software for improving the quality and speed of treatment planning.

Additionally, the Varian booth is spotlighting the company’s ProBeam system, a fully-integrated image-guided IMPT (intensity-modulated proton therapy) solution, which incorporates pencil-beam scanning technology to optimize the dose applied to every point within the area being treated. Varian was recently selected to equip national proton therapy centers in Holland, Denmark and the UK with the ProBeam system.

Varian is hosting an ESTRO symposium entitled ‘Moving Radiotherapy towards the Horizon’ at 1.10pm on Sunday May 1st. This event will be chaired by Dr. Patrick Kupelian, Varian’s vice president of clinical affairs, and will feature presentations from Dr. Clive Peedell from South Tees Hospital in Middlesbrough, UK, and Dr. Max Dahele of VU University Medical Center in Amsterdam. These presentations will focus on technological advances and challenges in accessing new technology.

Baxalta Exceeds Guidance and Delivers Strong Sales and Earnings for First Quarter 2016

On April 28, 2016 Baxalta Incorporated (NYSE: BXLT), a global biopharmaceutical leader dedicated to delivering transformative therapies to patients with orphan diseases and underserved conditions, reported strong first quarter 2016 financial results (Press release, Baxalta, APR 28, 2016, View Source [SID:1234511527]).

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"Baxalta’s strong financial performance continues to highlight the attractive growth prospects that exist across the portfolio," said Ludwig Hantson, chief executive officer and president, Baxalta. "As we embark on the next phase of our journey, the outstanding contributions of our team will result in enhanced access to differentiated therapies that improve patient care and promising new treatments that address unmet medical needs."

Financial Results for the First Quarter 2016

In the first quarter, Baxalta generated net income on a GAAP basis of $145 million and earnings of $0.21 per diluted share. These results include net after-tax special items totaling $181 million, or $0.26 per diluted share, primarily for intangible asset amortization, expenses associated with the company’s separation from Baxter International (NYSE: BAX) and anticipated merger with Shire plc (LSE: SHP, NASDAQ: SHPG), as well as collaboration and business optimization charges.

On an adjusted basis, excluding special items, Baxalta reported first quarter net income of $326 million, or $0.47 per diluted share, which compares favorably to the company’s previously-issued guidance of $0.44 to $0.46 per diluted share. These financial results reflect robust sales, and higher gross margins, providing enhanced flexibility for accelerated investments in research and development, marketing and launch preparedness, and global infrastructure to position the company for future success.

Sales Momentum Across Differentiated Portfolio

In the first quarter, on a GAAP basis, Baxalta’s worldwide revenues of $1.5 billion advanced 14 percent from the prior-year period. Excluding the impact of foreign currency, sales advanced 18 percent.

On a pro forma basis, worldwide revenues increased 10 percent. Excluding the impact of foreign currency, sales advanced 14 percent, exceeding the company’s previously-issued guidance of growth in the 8 to 9 percent range. Within the United States, sales of $879 million rose 16 percent; international sales of $669 million increased 3 percent. Excluding foreign currency, international sales increased 11 percent.

By business, global hematology revenues of $843 million increased 8 percent (excluding the impact of foreign currency) as the company continues to focus on enhancing access and elevating standards of care worldwide. Growth was driven by the U.S. introduction of ADYNOVATE [Antihemophilic Factor (Recombinant), PEGylated], an extended circulating half-life recombinant Factor VIII (rFVIII) treatment for hemophilia A, as well as heightened demand for ADVATE [Antihemophilic Factor (Recombinant)] and FEIBA [Anti-Inhibitor Coagulant Complex], an inhibitor treatment. Also contributing to performance was growth of RIXUBIS [Coagulation Factor IX (Recombinant)], a treatment for hemophilia B, and OBIZUR [Antihemophilic Factor (Recombinant), Porcine Sequence], for the treatment of acquired hemophilia A.

Immunology sales of $653 million advanced 13 percent on a pro forma basis (excluding the impact of foreign currency). The company continues to capitalize on its broad and differentiated portfolio of immunoglobulin therapies, including HYQVIA [Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase], and is driving strong sales of specialty biotherapeutics.

Baxalta’s new oncology business recorded sales of $52 million in the quarter. This reflects revenues of ONCASPAR (pegaspargase), a marketed biologic treatment for acute lymphoblastic leukemia (ALL).

First Quarter 2016 Highlights and Key Milestone Achievements

Baxalta’s disciplined strategic decisions are accelerating innovation and supporting meaningful pipeline achievements, unlocking value for patients, customers and shareholders.

"Our commitment to serving patients is our inspiration," added Hantson. "We have an incredible legacy of developing differentiated therapies. Baxalta’s patient-centric approach will continue to enhance the lives of people with orphan diseases and underserved conditions, and create sustainable, long-term value for all of our partners and stakeholders."

Complementing the company’s strong financial performance in the first quarter are a number of recent achievements:

Expanding the ADYNOVATE label and geographic reach with approval in Japan for the treatment of pediatric, adolescent and adult patients with hemophilia A and for use during surgery; submission in the U.S. of supplemental Biologics License Applications (sBLAs) to the FDA for the treatment of children under the age of 12 with hemophilia A and for use in surgical settings; and the filing of a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for approval under the name, ADYNOVI.
Developing further options for direct factor replacement treatment with the initiation of the Phase 1 first-in-human clinical trial of BAX 826, a second extended half-life treatment based on ADVATE that uses proprietary polysialic acid (PSA) technology and targets weekly dosing for patients with hemophilia A.

Undertaking efforts to expand global access and indications for HYQVIA including recent regulatory approval in Australia. In addition, the company has received orphan drug designation from the FDA for the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP), a neurological disorder characterized by progressive weakness and impaired sensory function in the legs and arms, and a Phase 3 clinical trial is underway.

Leveraging the company’s global development, manufacturing and commercial capabilities to make leading biologics more accessible for patients including BAX 2200 (CHS-0214), a proposed biosimilar of Enbrel (etanercept), which met its primary endpoint in a confirmatory, double-blind, randomized, controlled, two-part clinical study. This ongoing study is evaluating the efficacy and safety of BAX 2200 compared to Enbrel in patients with moderate-to-severe rheumatoid arthritis that is inadequately controlled with methotrexate alone.

Accelerating treatment for patients with significant unmet medical needs with Health Canada’s Priority Review of the New Drug Submission (NDS) for irinotecan liposome injection, also known as "nal-IRI," for the treatment of patients with metastatic adenocarcinoma of the pancreas previously treated with gemcitabine-based therapy. The expedited review is expected to be conducted in the second half of 2016.

Accelerating innovation in growing immuno-oncology portfolio with announcement of global collaboration with Precision BioSciences, a genome editing company, to develop a broad series of allogeneic chimeric antigen receptor (CAR) T cell therapies directed toward areas of major unmet need in multiple cancers. The companies will develop CAR T therapies for up to six unique targets, with the first program expected to enter clinical studies in late 2017.
Additional Information

Given the proposed merger agreement with Shire plc announced on January 11, 2016, Baxalta will not be hosting an investor conference call to discuss financial results. In addition, the company will not be providing financial guidance for the second quarter or full-year 2016, and previously-issued guidance for Baxalta as a standalone entity is no longer applicable.

The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and approval by both Baxalta’s and Shire’s stockholders. The special meeting of stockholders to adopt the merger agreement with Shire will be held on May 27, 2016, at 7:00 a.m. Central Time, for Baxalta stockholders of record as of the close of business on April 11, 2016. The special meeting will be held at Baxalta’s corporate headquarters, located at 1200 Lakeside Drive, Bannockburn, Illinois 60015. The transaction is expected to close shortly after the special meeting takes place, assuming stockholder approval is received by both companies.

Complementary information related to Baxalta’s first quarter 2016 financial results may be accessed by visiting the Baxalta corporate website at investor.baxalta.com.

Solid Performance in the First Quarter of 2016 with Business EPS(1) up 5.3% at Constant Exchange Rates

On April 29, 2016 Sanofi reported financial results for the quarter ended March 31, 2016 (Press release, Sanofi, APR 28, 2016, View Source [SID:1234511734]).

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Solid financial results and 2016 Guidance confirmed

Aggregate Group sales(2) increased by 0.7%(3) (-1.9% at 2016 exchange rates) to €8,543 million (with VaxServe sales of non-Group products(4) of €83 million now reported in Other revenues). Excluding Venezuela, Aggregate Group sales grew 3.0%

Business EPS(1) was up 5.3% at CER to €1.34 and increased 1.5% on a reported basis

Sanofi continues to expect 2016 Business EPS(1) to be broadly stable(5) at CER, barring unforeseen major adverse events

Sales performance led by Sanofi Genzyme and Emerging Markets

Sanofi Genzyme Global Business Unit (GBU) sales increased 20.5%, driven by the MS franchise

Strong growth of Sanofi Pasteur GBU with sales of €625m, up +8.2%, despite expected lower sales of Pentacel due to supply constraints in the U.S.

Diabetes and Cardiovascular GBU performance reached €1,499 million, down 5.8%. On a worldwide basis, including Emerging

Markets, Diabetes franchise sales declined 4.5%

General Medicines & Emerging Markets GBU sales of €4,490 million, -4.3%, or stable excluding Venezuela

Total Emerging Markets(6) sales were €2,373 million, an increase of 13.1% excluding Venezuela

Advancing the next wave of innovation

Dupilumab is the first systemic therapy to show positive Phase III results in moderate-to-severe atopic dermatitis, representing a
promising new class of immunotherapies

Sarilumab demonstrated superiority vs. adalimumab in a Phase III monotherapy study in rheumatoid arthritis

The WHO Strategic Advisory Group of Experts on Immunization recommended the use of Dengvaxia in endemic countries. The first public dengue immunization program started in the Philippines in April

Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
"I am pleased with the solid performance of the Group in the first quarter driven by Sanofi Genzyme, Sanofi Pasteur and Merial as well as our growth in Emerging Markets. At the same time, we have made significant progress with two major late-stage pipeline assets, dupilumab and sarilumab, highlighting the potential of our emerging immunology franchise. As we enter the second quarter, we remain focused on the execution of our strategic priorities and confirm our financial outlook of broadly stable Business EPS at CER for the full year."

Q1 2016
Change
Change (CER)
Aggregate Group sales(2)
€8,543m
-1.9%
+0.7%
Business net income(1)
€1,722m
-0.2%
+3.5%
Business EPS(1)
€1.34
+1.5%
+5.3%
IFRS net sales reported
€7,783m
-3.3%
IFRS net income reported
€1,087m
+6.3%
IFRS EPS reported
€0.84
+7.7%

Following the announcement of exclusive negotiations with Boehringer Ingelheim and as per the IFRS 5 presentation requirement for discontinued operations, net income for Sanofi’s Animal Health business (Merial) will be reported on a separate line ("Net income from the held for exchange Animal Health Business") in the Consolidated Income Statement for Q1 2016, and the prior year. Until the closing of the transaction, Sanofi will continue to manage and report the performance of the Animal Health business, which will remain an operating segment consistent with IFRS 8 and be included in the key performance indicators of the Group.

(1) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (see Appendix 8 for definition). The consolidated income statement for Q1 2016 is provided in Appendix 4 and a reconciliation of business net income to IFRS net income reported in Appendix 3; (2) Including Animal Health Business (see Appendix 8 for definition of Aggregate Group sales) which is reported on a single line in the consolidated income statements in accordance with IFRS 5 (Non-current assets held for sale and discontinued operations).

Additionally, Sanofi comments include Animal Health Business for every income statement line using "Aggregate" wording; (3) Percentage changes in net sales and Aggregate sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 8); (4) See chapter on Vaccines; (5) 2015 business EPS of €5.64; (6) See page 7;
Investor Relations: (+) 33 1 53 77 45 45 – E-mail: [email protected] – Media Relations: (+) 33 1 53 77 46 46 – E-mail: [email protected]
Web site: www.sanofi.com Mobile app: SANOFI IR available on the App Store and Google Play
2016 first-quarter Aggregate Group sales
Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(7).
First-quarter Aggregate Group sales were €8,543 million down 1.9% at 2016 exchange rates. Exchange rate movements had a negative effect of 2.6 percentage points as the adverse evolution of several emerging market currencies more than offset the positive effects from the U.S. dollar and the Japanese Yen against the Euro. At CER, Aggregate Group sales increased 0.7%.
This performance included a negative currency impact related to the change of exchange rate applied for the translation of Venezuela operations, resulting from the evolution of exchange system in February 2016 as well as from the persistent inability to exchange Venezuelan bolivars for U.S. dollars at the privileged official rate(8). In addition, in the first quarter of 2015, Sanofi benefited from a significant increase in product demand in Venezuela, due to buying patterns associated with local market conditions. As a consequence, sales in Venezuela were €3 million in the first quarter of 2016 (€200 million in the first quarter of 2015). Excluding Venezuela, Aggregate Group sales increased 3.0% at CER.

Global Business Units
The table below presents sales by global business units (GBU) and reflects the reorganization of the Group into five Global Business Units with effect from January 1, 2016. In this organizational structure, all Pharmaceutical sales in Emerging Markets are now included in the General Medicines and Emerging Markets GBU. This new reporting structure simplifies Sanofi, deepens specialization and allows clear focus on growth drivers.

Net Sales by GBU
(€ million)
Q1 2016
Change
(CER)
Sanofi Genzyme (Specialty Care)(a)
1,169
+20.5%
Diabetes & Cardiovascular(a)
1,499
-5.8%
General Medicines & Emerging Markets(b)
4,490
-4.3%(c)
Sanofi Pasteur (Vaccines)
625
+8.2%
Merial (Animal Health)
760
+17.5%
Total Aggregate Group sales
8,543
+0.7%(d)

Does not include Emerging Markets sales- see definition page 7; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Sanofi Genzyme (c) Excluding Venezuela: -0.3% at CER; (d) Excluding Venezuela: +3.0% at CER;

Global Franchises
The table below presents sales by global franchises. The performance by franchise provides a bridge to our previous reporting methodology and allows straightforward peer comparisons. Appendix 1 provides a reconciliation of sales by GBU and by franchise.

Net sales by Franchise
(€ million)
Q1 2016
Change
(CER)
Developed
Markets
Change
(CER)
Emerging
Markets
Change
(CER)
Specialty Care
1,371
+18.4%
1,169
+20.5%
202
+9.3%
Diabetes & Cardiovascular
1,832
-3.5%
1,499
-5.8%
333
+6.7%(a)
Established Products
2,591
-8.2%
1,667
-11.5%
924
-2.1%(b)
Consumer Healthcare (CHC)
905
-3.1%
594
+1.5%
311
-9.9%(c)
Generics
459
+3.3%
282
+6.0%
177
0.0%(d)
Vaccines
625
+8.2%
347
-8.1%
278
+37.0%
Animal Health
760
+17.5%
612
+13.0%
148
+37.5%
Total Aggregate net sales
8,543
+0.7%(f)
6,170
-0.7%
2,373
+4.2%(e)

Excluding Venezuela : +12.3% (b) Excluding Venezuela : +8.8%; (c) Excluding Venezuela : +3,8%; (d) Excluding Venezuela : +7.1%; (e) Excluding Venezuela : +13,1%; (f) Excluding Venezuela: +3.0% at CER;

(7) See Appendix 8 for definitions of financial indicators.

(8) In Q1 2016, the exchange rate used was the DICOM rate (273VEF per USD as of March 31,2016) versus the privileged official CENCOEX rate of 6.3VEF per USD in Q1 2015.

Pharmaceuticals
First-quarter sales for Pharmaceuticals were down 1.4% to €7,158 million impacted by a decrease in Diabetes and Established Rx Products sales that was partially offset by the multiple sclerosis and rare disease franchises. Excluding Venezuela, sales for Pharmaceuticals were up 1.2%.
Rare Diseases
Net sales
(€ million)
Q1 2016
Change
(CER)
Cerezyme
182
+3.7%(a)
Myozyme / Lumizyme
166
+8.3%
Fabrazyme
149
+6.4%
Aldurazyme
48
+4.2%
Cerdelga
23
+130.0%
Total Rare Diseases
646
+8.5%(b)

Excluding Venezuela: +6.5%; (b) Excluding Venezuela: +9.7%;
Gaucher sales increased 10.1% to €205 million in the first quarter, sustained by Cerezyme in Emerging Markets (up 20.7% to €56 million) and the ramp up of Cerdelga (€23 million versus €10 million in the first quarter of 2015). Cerdelga, the only first-line oral therapy for Gaucher disease type 1 patients, achieved an important milestone with more than 500 patients now receiving the product. In Emerging Markets, Cerezyme sales benefited from the performance in Turkey, Middle East, Brazil and Argentina. In the U.S., first-quarter sales of the Gaucher franchise increased 3.3% to €63 million reflecting decreased sales of Cerezyme (€44 million, down 14.0%) which were more than offset by Cerdelga sales (€19 million versus €10 million in the first quarter of 2015). In Europe, where Cerdelga is now available in several countries (Germany, France, Denmark, and Nordic countries), sales of the Gaucher franchise were €74 million, up 7.2%.

First-quarter sales of Fabrazyme increased 6.4% to €149 million driven by Europe (up 15.2% to €37 million), and the U.S. (up 8.5% to €79 million) reflecting new patient accrual. In Emerging Markets sales were down 23.5% to €11 million impacted by public order pattern in Brazil.

Sales of Myozyme/Lumizyme were €166 million, an increase of 8.3% in the first quarter, driven by the U.S. (up 12.5% to €55 million) and Europe (up 8.2% to €79 million). In Emerging Markets, sales were stable at €20 million.

Multiple Sclerosis
Net sales (€ million)
Q1 2016
Change
(CER)
Aubagio
279
+64.1%
Lemtrada
88
+134.2%
Total Multiple Sclerosis
367
+76.9%
First-quarter sales of Aubagio increased 64.1% to €279 million driven by the U.S. (up 49.6% to €188 million) and Europe (up 105.6% to €74 million in sales).

Sales of Lemtrada were €88 million in the first quarter including €46 million in the U.S. (versus €16 million in the first quarter of 2015), and €35 million in Europe (versus €19 million in the first quarter of 2015), mainly in Germany and the UK.

Oncology
Net sales (€ million)
Q1 2016
Change
(CER)
Jevtana
90
+16.9%
Thymoglobulin
65
+18.2%
Taxotere
46
-11.3%
Eloxatin
42
-18.5%
Mozobil
35
+2.9%
Zaltrap
17
-15.0%
Total Oncology
358
+1.4%

First-quarter Oncology sales increased 1.4% to €358 million, driven by Jevtana and Thymoglobulin which offset the decline of Taxotere and Eloxatin.

Sales of Jevtana (cabazitaxel) were up 16.9% to €90 million in the first quarter led by the U.S. (up 40.7% to €38 million) and Japan. First-quarter Thymoglobulin sales increased 18.2% to €65 million due to Emerging Markets (up 66.7% to €14 million) and the U.S. (up 12.5% to €37 million).

Sales of Eloxatin were down 18.5% to €42 million in the first quarter reflecting lower sales in Canada which was attributable to recent generic competition. Over the same period, sales of Taxotere (docetaxel) decreased 11.3% (to €46 million), reflecting generic competition especially in Japan.

Diabetes
Net sales (€ million)
Q1 2016
Change
(CER)
Lantus
1,395
-11.0%
Toujeo
103

Total glargine
1,498
-5.0%
Amaryl
88
-5.2%
Apidra
85
-3.3%
Insuman
32
0.0%
BGM (Blood Glucose Monitoring)
17
+6.3%
Lyxumia
9
+12.5%
Total Diabetes
1,734
-4.5%(a)

Excluding Venezuela: -3.6%;
In the first quarter, the Diabetes franchise sales were down 4.5% to €1,734 million, reflecting lower sales of Lantus in the U.S. First-quarter U.S. Diabetes sales were down 11.1%. Outside the U.S., sales were €784 million, an increase of 4.5% driven by Emerging Markets (up 6.4% to €331 million; excluding Venezuela up 12%). Sales in Europe reached €338 million, an increase of 4.0% driven by the launch of Toujeo.

First-quarter sales of Sanofi’s glargine (Lantus and Toujeo) were €1,498 million, down 5.0%. In the U.S., glargine sales of €921 million were down 10.7%. In Europe, sales of Sanofi’s glargine increased 4.1% to €255 million despite the launch of a biosimilar glargine in several European markets.

Over the quarter, sales of Lantus were €1,395 million down 11.0%. In the U.S., as anticipated, sales of Lantus decreased 17.8% to €843 million mainly reflecting lower average net price. In Europe, first-quarter Lantus sales were €236 million, down 3.7% while in Emerging Markets, sales were €228 million, up 6.3%, driven by China and the Middle East.

Sales of Toujeo were €103 million in the first quarter of which €78 million were recorded in the U.S. and €19 million were from Europe. The global roll-out of this product continues and Sanofi expects Toujeo to be available in over 40 countries by the end of 2016.

First-quarter sales of Amaryl were €88 million (down 5.2%), of which €71 million were generated in Emerging Markets (down 1.3%).

Sales of Apidra decreased 3.3% to €85 million in the first-quarter, reflecting lower sales in the U.S. (down 28.6% to €25 million). In Emerging Markets, sales of Apidra increased 35.3% to €20 million driven by the performance in Middle-East.

Cardiovascular
Praluent (alirocumab, collaboration with Regeneron) was launched in the U.S. in July 2015 and in several European markets in the fourth quarter of 2015. Sales of Praluent were €12 million of which €9 million were in the U.S. and €3 million in Europe where the product is commercially available in the UK, Germany and Nordic countries. First-quarter sales reflected current payer restrictions limiting uptake.

First-quarter sales of Multaq were €86 million (up 2.4%), of which €73 million were generated in the U.S. (up 2.9%).
Established Rx Products
Net sales (€ million)
Q1 2016
Change
(CER)
Lovenox
404
-3.9%
Plavix
388
-18.2%(a)
Renvela/Renagel
234
+2.7%
Aprovel/Avapro
169
-12.9%(b)
Synvisc /Synvisc-One
88
+4.7%
Allegra
75
-10.0%
Myslee/Ambien/Stilnox
70
-5.3%
Other
1,163
-8.0%(c)
Total Established Rx Products
2,591
-8.2%(d)

Excluding Venezuela: -15.2%; (b) Excluding Venezuela: -2.8%; (c) Excluding Venezuela: -3.7%; (d) Excluding Venezuela: -4.8%
First-quarter sales of Established Rx Products were €2,591 million, down 8.2%, reflecting lower sales in Venezuela and Plavix in Japan. Excluding Venezuela, sales of Established Rx Products were down 4.8%. In Emerging Markets, sales of Established Rx Products were €924 million, down 2.1% and up 8.8% excluding Venezuela. In Europe and the U.S., sales of Established Rx Products were down 5.5% (to €933 million) and 3.0% (to €370 million), respectively.

First-quarter sales of Lovenox were €404 million in the first quarter, down 3.9% impacted by generic competition in the U.S. In Emerging Markets and in Europe, sales of Lovenox were down 4.0% (to €105 million) and stable (at €262 million), respectively. Sanofi expects potential biosimilar competition in Europe in 2016.

Plavix sales were down 18.2% to €388 million in the first quarter reflecting generic competition in Japan that started in June 2015 (sales in Japan were down 56.1% to €92 million), which was partially offset by continued strong performance in China (up 24.6% to €172 million).

Renvela/Renagel sales were up 2.7% to €234 million in the first quarter. In the U.S., sales of the product increased 15.8% to €194 million. Generics of the product are currently marketed in some European countries, which resulted in Europe sales of Renvela/Renagel down 38.9% to €22 million. Sanofi expects potential generic competition in the U.S. in 2016.

First-quarter sales of Aprovel/Avapro were down 12.9% to €169 million due to the impact of Venezuela. Excluding Venezuela, sales of Aprovel/Avapro were down 2.8% reflecting generic competition in Japan.

Consumer Healthcare
Net sales (€ million)
Q1 2016
Change
(CER)
Allegra
140
0.0%
Doliprane
77
-9.4%
Nasacort
45
+7.1%
Enterogermina
42
-22.8%
Essentiale
39
-14.0%
Maalox
24
-7.1%
No Spa
21
+4.5%
Magne B6
20
+10.0%
Lactacyd
19
-15.4%
Dorflex
19
+8.7%
Other CHC Products
459
-0.8%
Total Consumer Healthcare
905
-3.1%(a)
Excluding Venezuela: +2.4%

First-quarter Consumer Healthcare (CHC) sales were €905 million, down 3.1%, due to Venezuela. Excluding Venezuela and divestiture of small products, CHC sales were up 4.1% driven by the performance in Australia, Brazil and the U.S., which was partially offset by Russia and France. Over the quarter, sales of CHC in the U.S. were up 7.7% to €284 million driven by Nasacort, Allegra and Gold Bond. In Emerging Markets, sales were down 9.9% to €311 million and up 3.8% excluding Venezuela reflecting lower sales in Russia. In the Rest of the World, first-quarter sales grew 12.7% to €68 million driven by allergy and the vitamins business in Australia. In Europe, sales were down 7.3% to €242 million in the quarter, impacted by price decrease of Doliprane in France in 2015 and a mild winter season compared with the first quarter of 2015.

Generics
Sales of Generics were up 3.3% (6.5% excluding Venezuela) to €459 million in the first quarter and were driven by the U.S. and authorized generics version of Plavix in Japan. In Emerging Markets, first-quarter sales of Generics were stable at €177 million and up 7.1% excluding Venezuela.

Vaccines
Net sales (€ million)
Q1 2016
Change
(CER)
Polio/Pertussis/Hib Vaccines
(incl. Pentacel, Pentaxim and Imovax)
288
+6.0%
Meningitis/Pneumonia Vaccines
(incl. Menactra)
122
+27.8%
Travel and Other Endemic Vaccines
83
+4.9%
Adult Booster Vaccines (incl. Adacel )
80
-15.8%
Influenza Vaccines
(incl. Vaxigrip and Fluzone)
20
+4.5%
Dengvaxia
19

Other Vaccines
13
-31.6%
Total Vaccines (consolidated sales)
625
+8.2%*
*Comparability based on the new presentation of VaxServe sales (see below)

VaxServe sales
VaxServe is a U.S. entity of the Vaccines segment. VaxServe activities include products distribution in the U.S. in channels which are not the primary focus of Sanofi Pasteur. VaxServe complements its Sanofi Pasteur products offering by distributing vaccines and other products from third party manufacturers. All VaxServe sales were reported on the line Net sales in the past.
In order to provide more relevant published information, VaxServe sales of non-Group products are reported on the line Other revenues in the income statement from January 1, 2016. Accordingly, prior period comparative net sales have been reclassified to the line Other revenues.

The 2015 quarterly and full-year 2015 business P&L as well as sales of GBUs and franchises by geographic region reflecting this reclassification are available on the Investors section of Sanofi’s website.

In the first quarter of 2015 and in 2015, sales of VaxServe of non-Group products were €100 million and €482 million, respectively.

Vaccines
First-quarter consolidated vaccines sales increased 8.2% to €625 million driven by Polio/Pertussis/Hib Vaccines franchise in Emerging Markets, Menactra and the launch of Dengvaxia. In the U.S., sales of vaccines were down 17.3% to €244 million due to the expected supply constraints of Pentacel and phasing of Adacel. In Emerging Markets sales of vaccines were up 37.0% driven by Pentaxim, Hexaxim growth and the first sales of Dengvaxia.

First quarter sales of Polio/Pertussis/Hib Vaccines increased 6.0% to €288 million. In Emerging Markets, sales of the franchise were up 51.6% to €180 million driven by the growth of Pentaxim in China and Hexaxim in the Middle-East and Africa, which more than offset the expected sales decrease of Pentacel in the U.S. (sales of Polio/Pertussis/Hib Vaccines in the U.S. were €60 million, down 49.2%) and lower Polio vaccines sales in China. As already communicated, Sanofi Pasteur is experiencing Pentacel manufacturing delays and will not be able to meet all current demand. Supply improvements are expected in the second half of 2016.

Dengvaxia, the world’s first dengue vaccine is now approved in four countries (Mexico, the Philippines, Brazil and El Salvador). Sales in the first quarter were €19 million, generated in the Philippines where the first public dengue immunization program has started. Recently the Strategic Advisory Group of Experts on Immunization (SAGE) has issued its recommendations to the World Health Organization on the use of Dengvaxia dengue vaccine. The SAGE advises that countries with high dengue transmission consider introduction of the dengue vaccine as part of an integrated disease prevention strategy including vector control to effectively lower their dengue disease burden.

Sales of Influenza Vaccines were €20 million, an increase of 4.5%.

Menactra sales grew 29.9% to €111 million in the first quarter reflecting favorable CDC order phasing in the U.S.
First-quarter Adult Booster Vaccines sales were down 15.8% to €80 million due to phasing of Adacel in the U.S.
Sales of Travel and Other Endemic Vaccines increased 4.9% to €83 million in the first quarter.

Sales of Sanofi Pasteur MSD (not consolidated), the joint venture with Merck & Co. in Europe, were up 18% to €165 million in the first quarter driven by Repevax (pertussis, dipteria, polio, tetanus booster vaccine), Hexyon (the new hexavalent pediatric vaccine) and Varivax (varicella vaccine). In March, Sanofi Pasteur and Merck announced their intent to end their joint vaccines operations in Europe, Sanofi Pasteur MSD, to pursue their own distinct growth strategies in Europe. Sanofi Pasteur and Merck expect the project to be completed by the end of 2016, subject to local labor laws and regulations and regulatory approvals.

Animal Health(9)
Net sales € million
Q1 2016
Change
(CER)
Companion Animal
529
+20.1%
Production Animal
231
+12.1%
Total Animal Health
760
+17.5%
of which Vaccines
212
+18.3%
of which fipronil products
181
-4.7%
of which avermectin products
170
+8.9%

First-quarter Animal Health sales were up 17.5% to €760 million driven by the success of NexGard, Merial’s next generation flea and tick product for dogs, in the U.S. and Japan.

Sales of the Companion Animals segment were up 20.1% to €529 million in the first quarter boosted by the success of NexGard, which more than offset the decline in the Frontline family of products. HeartGard and Oravet, a dental hygiene chewable for dogs, recently launched in the U.S., also contributed to growth in the Companion Animals segment.

First-quarter sales of the Production Animals segment were up 12.1% to €231 million reflecting strong performance of the Avian business in Emerging Markets as well as Ruminant business in the U.S., mainly driven by the success of LongRange.

Aggregate Group sales by geographic region
Aggregate Group sales (€ million)
Q1 2016
Change
(CER)
United States
2,966
+1.5%
Emerging Markets(a)
2,373
+4.2%
of which Latin America
571
-14.9%
of which Asia
833
+15.6%
of which Africa, Middle East and South Asia(b)
668
+11.8%
of which Eurasia(c)
259
+9.9%
Europe(d)
2,372
+1.7%
Rest of the world(e)
832
-13.3%
of which Japan
447
-25.3%
Total Aggregate Group sales
8,543
+0.7%

World excluding U.S., Canada, Western & Eastern Europe (except Eurasia), Japan, South Korea, Australia, New Zealand and Puerto Rico
India, Pakistan, Bangladesh, Sri Lanka
Russia, Ukraine, Georgia, Belarus, Armenia and Turkey
Western Europe + Eastern Europe except Eurasia
Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico
(9) The Animal Health business is reported on a single line in the consolidated income statements in accordance with IFRS 5 (Non-current assets held for sale and discontinued operations). Sanofi will continue to manage and report the performance of the Animal Health business, which will remain an operating segment consistent with IFRS 8.

First-quarter Aggregate sales in the U.S. increased 1.5% to €2,966 million. The strong performance of Multiple sclerosis franchise (up 64.7%), and Animal Health (up 19.9%) more than offset the 11.1% decrease in the diabetes franchise.

First-quarter Aggregate sales in Emerging Markets increased 4.2% to €2,373 million. Excluding Venezuela, Aggregate sales in Emerging Markets grew 13.1% driven by Vaccines (up 39.6%) and Animal Health (up 37.5%). In the Asia region, Aggregate sales increased 15.6% to €833 million in the first quarter driven by the performance in China (up 17.6% to €554 million). In China, the strong performance was mainly due to sales of Plavix, Lantus, and Vaccines. In Latin America, first-quarter Aggregate sales were down 14.9% to €571 million and up 11.0% excluding Venezuela driven by sales in Argentina and Colombia. Aggregate sales in Brazil were up 1.1% to €217 million impacted by economic conditions in the country. Aggregate sales in the Eurasia region increased 9.9% to €259 million driven by Turkey. Sales in Russia were up 2.3% to €116 million. In Africa and the Middle East and South Asia, Aggregate sales were up 11.8% to €668 million sustained by the performance in Africa (up 19.2%).

Aggregate sales in Europe increased 1.7% to €2,372 million in the first quarter. The performance of multiple sclerosis (up 98.2%), rare diseases (up 11.1%), diabetes (up 4.0%) and Vaccines (up 45.5%) franchises was partially offset by lower sales of Established Rx products (down 5.5%) and CHC (down 7.3%).

In the first quarter, Aggregate sales in Japan decreased 25.3% to €447 million, impacted by generic competition to Plavix (down 56.1%).

R&D update
Consult Appendix 6 for full overview of Sanofi’s R&D pipeline
Regulatory update
Regulatory updates since the publication of the fourth quarter results on February 9, 2016 include the following:
In February, the U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for the investigational fixed-ratio combination of basal insulin glargine and GLP-1 receptor agonist lixisenatide for the treatment of adults with type 2 diabetes.

The FDA decision is anticipated in August 2016. In March, the FDA announced that on May 25, 2016, the Endocrinologic and Metabolic Drugs Advisory Committee will review the NDA for the investigational fixed-ratio combination of basal insulin glargine and lixisenatide and investigational lixisenatide. In Europe, Sanofi submitted the dossier of this fixed-ratio combination to health authorities in March.

In February, the new hexavalent pediatric vaccine, PR5i (DTP-HepB-Polio-Hib), was granted a Marketing Authorization in EU.
At the end of April 2016, the R&D pipeline contained 46 pharmaceutical new molecular entities (excluding Life Cycle Management) and vaccine candidates in clinical development of which 15 are in Phase III or have been submitted to the regulatory authorities for approval.

Portfolio update
Phase III:
The Data Monitoring Committee (DMC) of the ODYSSEY OUTCOMES study for Praluent has completed the first interim analysis based on unblinded study data. In addition to the review of the safety data, the DMC performed a futility assessment and recommended the study continue with no changes. Sanofi remains blinded to the actual results of this analysis. The second interim analysis for futility and overwhelming efficacy potentially could occur in the second half of 2016 when 75% of the targeted number of primary events have occurred
In March, Sanofi and Regeneron announced positive topline results from the Phase III ODYSSEY ESCAPE trial evaluating Praluent (alirocumab) Injection in patients with an inherited form of high cholesterol known as heterozygous familial hypercholesterolemia, whose cholesterol levels required chronic, weekly or bi-weekly apheresis therapy.

In March, Sanofi and Regeneron announced that a Phase III monotherapy study, SARIL-RA-MONARCH, met its primary endpoint demonstrating that sarilumab was superior to adalimumab (marketed by AbbVie as Humira) in improving signs and symptoms in patients with active rheumatoid arthritis at Week 24.

In April, Sanofi and Regeneron announced positive topline results from two placebo-controlled Phase 3 studies known as LIBERTY AD SOLO 1 and SOLO 2, evaluating investigational dupilumab in adult patients with inadequately controlled moderate-to-severe atopic dermatitis. In the studies, treatment with dupilumab as monotherapy significantly improved measures of overall disease severity, skin clearing, itching, quality of life, and mental health.

The second generation meningococcal ACYW conjugate vaccine, Men Quad TT, with a broader age indication (from infants to the elderly) entered into Phase III.

Phase II:
In March, data from a Phase I/II clinical study, NEO1, evaluating the investigational novel enzyme replacement therapy neoGAA in 24 patients with late-onset Pompe disease were presented at WORLD Symposium 2016. The safety and efficacy data from this study support further development of the therapy. Sanofi plans to begin enrolling patients in a pivotal Phase 3 trial for neoGAA in Q2 2016.

SAR422459, ABC4A gene therapy, entered in Phase IIa in Stargardt Disease, a rare eye disease.
2016 first-quarter Aggregate financial results
Business Net Income(10)
In the first quarter of 2016, Sanofi generated Aggregate sales of €8,543 million, a decrease of 1.9% (up 0.7% at CER).
Aggregate other revenues decreased 13.9% to €155 million and include VaxServe sales of non-Group products (down 17.0% to €83 million) following the change in presentation as of January 1, 2016(11). At CER, Aggregate other revenues were down 15.0%.

First-quarter Aggregate gross profit was €6,005 million, down 1.6% and up 0.6% at CER. The Aggregate gross margin ratio improved by 0.2 percentage points to 70.3% versus the first quarter of 2015 reflecting a favorable currency effect. At CER, the positive impact from the Multiple Sclerosis, the Rare Disease and Vaccines franchises offset the negative impact of U.S. Diabetes, Venezuela and Plavix generic competition in Japan. Sanofi now expects its 2016 Aggregate gross margin ratio to be above 69% and below 70% at CER.

Aggregate Research and Development expenses were €1,278 million in the first quarter, an increase of 6.6%. At CER, Aggregate R&D expenses were up 6.5% reflecting the new immuno-oncology alliance with Regeneron and the monoclonal antibodies developed with Regeneron including the dupilumab Phase III program.

First-quarter Aggregate selling general and administrative expenses (SG&A) decreased 0.8% to €2,418 million. At CER, Aggregate SG&A was up 1.3% despite lower G&A expenses and mainly reflecting the U.S. launch costs of Praluent and Toujeo, commercial expenses supporting the Multiple Sclerosis franchise and increased spend for Merial. The ratio of Aggregate SG&A to Aggregate sales increased 0.3 percentage points to 28.3% compared with the first quarter of 2015.

Aggregate other current operating income net of expenses was €79 million versus -€67 million in the first quarter of 2015. In the first quarter of 2015, this line included a foreign exchange loss of €66 million booked in connection with Sanofi‘s Venezuelan operations. In the first quarter of 2016, the foreign exchange loss related to Venezuela was €102 million. The loss resulted from the application of the lowest and floating official rate DICOM(12) implemented as part of the Venezuela exchange system started in February 2016. This line also included an indemnity amount of €192 million before tax pursuant to an arbitration award to Sanofi in February 2016 as consequence of a contractual dispute.

The Aggregate share of profits from associates was €23 million in the first quarter versus €31 million in the first quarter of 2015. The Aggregate share of profits from associates included Sanofi’s share in Regeneron profit recorded under the equity method since the beginning of April 2014 as well as Sanofi’s share of profit in Sanofi Pasteur MSD (the Vaccines joint venture with Merck & Co. in Europe).

Aggregate non-controlling interests were -€27 million in the first quarter versus -€33 million in the first quarter of 2015.
Aggregate business operating income was €2,384 million, down 0.6% in the first quarter of 2016. At CER, Aggregate business operating income increased 3.0%. The ratio of Aggregate business operating income to Aggregate net sales increased 0.4 percentage points to 27.9% versus the same period of 2015.

Net Aggregate financial expenses were €118 million in the first quarter versus €97 million in the first quarter of 2015 which included capital gains of €16 million associated with the sale of financial investments.

The first quarter effective tax rate (including Animal Health) was 24.0% compared with 25.0% in the first quarter of 2015.
First-quarter business net income(10) decreased 0.2% to €1,722 million (up 3.5% at CER). The ratio of business net income to Aggregate sales was 20.2%, an increase of 0.4 percentage points compared with the first quarter of 2015.

In the first quarter of 2016, business earnings per share(10) (EPS) was €1.34, an increase of 1.5% on a reported basis and 5.3% at CER. The average number of shares outstanding was 1,288.4 million in the first quarter of 2016 versus 1,308.4 million in the first quarter of 2015.

(10) See Appendix 8 for definitions of financial indicators, and Appendix 3 for reconciliation of business net income to IFRS net income reported
(11) See page 6, chapter on Vaccines
(12) 273 VEF/USD as of March 31, 2016

2016 guidance
Sanofi continues to expect 2016 Business EPS to be broadly stable at CER, barring unforeseen major adverse events. In addition, the currency impact on 2016 full-year business EPS is estimated to be around -3%, applying March 2016 average rates to the three next quarters of 2016.

From business net income to IFRS net income reported (see Appendix 3)
In the first quarter of 2016, the main reconciling items between business net income and IFRS net income reported were:
A €444 million amortization charge related to fair value re-measurement on intangible assets of acquired companies (primarily Aventis: €140 million and Genzyme: €218 million) and to acquired intangible assets (licenses/products: €34 million). These items have no cash impact on the Group.

A charge of €29 million reflecting an increase of Bayer contingent considerations linked to Lemtrada.
Restructuring costs of €500 million mainly related to transformation in Europe, Japan and Brazil.

A €338 million tax effect arising from the items listed above, comprising €156 million of deferred taxes generated by amortization charged against intangible assets and €171 million associated with restructuring costs. (see Appendix 3).
In "Share of profits/losses from associates", an income of €70 million, net of tax, mainly relating to the share of fair-value re-measurement on asset and liabilities of associates and to the share of amortization of intangible assets of acquired joint-ventures. This item has no cash impact on the Group.

In Animal Health items, a net expense of €71 million mainly relating to a change in deferred tax charge resulting from taxable temporary differences relating to investments in subsidiaries since it is likely that these differences will reverse.

Capital Allocation
In the first quarter of 2016, net cash generated by operating activities decreased by 29.6% to €878 million after capital expenditures of €325 million and an increase in working capital of €822 million mainly due to payment phasing. This net Cash Flow has contributed to finance a share repurchase (€1,403 million), acquisitions and partnerships net of disposals (€569 million) and restructuring costs (€121 million). As a consequence, net debt increased from €7,254 million at December 31, 2015 to €8,373 million at the end of March 2016 (amount net of €6,483 million cash and cash equivalents).

AbbVie to Expand Oncology Presence Through Acquisition of Stemcentrx and its Novel, Late-Stage Rova-T Compound for Small Cell Lung Cancer

On April 28, 2016 /PRNewswire/ — AbbVie (NYSE:ABBV), a global biopharmaceutical company, announced that it will acquire Stemcentrx and its lead late-stage asset rovalpituzumab tesirine (Rova-T) currently in registrational trials for small cell lung cancer (SCLC) (Press release, AbbVie, APR 28, 2016, https://news.abbvie.com/news/abbvie-to-expand-oncology-presence-through-acquisition-stemcentrx-and-its-novel-late-stage-rova-t-compound-for-small-cell-lung-cancer.htm [SID:1234511643]).

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Rova-T is a novel biomarker-specific therapy that is derived from cancer stem cells and targets delta-like protein 3 (DLL3) that is expressed in more than 80 percent of SCLC patient tumors and is not present in healthy tissue. Registrational trials for third-line small cell lung cancer are expected to complete enrollment by the end of 2016.

"AbbVie is committed to continued innovation in oncology, a critical component of our long-term growth and an area of significant need to millions of patients worldwide," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "The addition of Stemcentrx and its late-stage compound Rova-T provide AbbVie with a unique platform in solid tumor therapeutics and complement our leadership position in hematologic oncology. We believe the acquisition of Stemcentrx will strengthen and accelerate our ability to deliver innovative therapies that will have a remarkable impact on patients’ lives."

In Phase 1/2 studies of relapsed SCLC patients who have previously failed one or more standard therapies, Rova-T demonstrated overall response rates of 44 percent in the patients identified with high expression of DLL3. The expression of DLL3 suggests Rova-T also may be useful across multiple tumor types, including metastatic melanoma, glioblastoma multiforme, prostate, pancreatic and colorectal cancers, where DLL3 expression ranges from 50-80 percent. Rova-T combines a targeted antibody that delivers a cytotoxic agent directly to the DLL3-expressing cancer cells while minimizing toxicity to healthy cells.

Rova-T is under investigation as a third-line treatment in SCLC, where there is no currently approved therapy. Rova-T also has been submitted to the U.S. Food and Drug Administration for Breakthrough Therapy designation. Additional data on Rova-T, including overall survival data, will be presented at the 2016 ASCO (Free ASCO Whitepaper) Annual Meeting in June 2016. Rova-T was recently selected to be included in the Best of ASCO (Free ASCO Whitepaper) Program, which presents scientific and educational highlights from the meeting. Approximately one percent of all data abstracts are selected for this program. Studies designed to select a Rova-T regimen for first-line registration will be starting soon.

"Rova-T is the first predictive biomarker-based therapy associated with drug efficacy in small cell lung cancer, and that is a big deal for this difficult disease," said Charles Rudin, M.D., Ph.D., chief, thoracic oncology service, Memorial Sloan Kettering Cancer Center.

Beyond Rova-T, Stemcentrx has four novel compounds in clinical trials across several solid tumor indications including triple-negative breast cancer, ovarian cancer and non-small cell lung cancer. Stemcentrx has additional pre-clinical compounds advancing toward clinical trials in 2016 and a proprietary technology platform that leverages stem cell biology to identify and screen potential targets against live tumor tissue to more predictably advance discovery and development of new assets.

"We are thrilled to be joining the AbbVie team and believe that, together, we can bring much-needed therapies to cancer patients," said Brian Slingerland, founder and chief executive officer, Stemcentrx. "We have worked for eight years exploring the origins of cancer and drivers of its recurrence and have discovered novel therapeutic targets to attack the most difficult-to-treat tumors. AbbVie, with its long-term commitment and expertise in drug development, will help us turn our scientific discoveries into a mainstay of cancer treatments."

AbbVie’s clinical oncology pipeline is comprised of more than a dozen assets, with 5 programs in late-stage development, spanning nearly 200 clinical trials across more than 19 types of tumors. AbbVie currently markets Imbruvica, a BTK-inhibitor approved to treat chronic lymphocytic leukemia (CLL), mantle cell lymphoma and Waldenstrom’s macroglobulinemia, and VenclextaTM, a BCL-2 inhibitor approved to treat CLL in patients with 17p deletion.

Transaction Terms
AbbVie will acquire Stemcentrx for approximately $5.8 billion in cash and stock. AbbVie will pay approximately $2.0 billion of the transaction value in cash and fund the remaining portion with stock. In addition, Stemcentrx investors are eligible to receive up to $4 billion in cash for additional, success-based milestone payments for the achievement of certain regulatory and clinical developments.

The transaction is subject to customary closing conditions and expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in second-quarter 2016. Upon completion of the transaction, AbbVie intends to execute an accelerated share repurchase program of up to $4 billion of the company’s common stock.

AbbVie expects this transaction to be approximately $0.20 dilutive to our ongoing earnings per share in 2016, with accretion beginning in 2020. As a result, AbbVie is updating its 2016 adjusted diluted earnings per share guidance range to $4.62 to $4.82.