On February 2, 2017 CytomX Therapeutics, Inc. (Nasdaq:CTMX), a biopharmaceutical company developing investigational Probody therapeutics for the treatment of cancer, reported the treatment of the first patient in the PROCLAIM (Probody Clinical Assessment In Man) CX-072 study, a Phase 1/2 clinical trial evaluating CX-072, a PD-L1-targeting Probody therapeutic, as monotherapy and in combination with Yervoy (ipilimumab) or Zelboraf(vemurafenib) in patients with all types of cancers (Press release, CytomX Therapeutics, FEB 2, 2017, View Source [SID1234517622]).

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"Treating the first patient with CX-072 marks a key milestone as we advance our broad pipeline of innovative Probody therapeutics into clinical development within the PROCLAIM program," said Rachel W. Humphrey, M.D., chief medical officer of CytomX Therapeutics. "Advancement of this potentially transformational treatment, derived from our Probody technology platform, would not be possible without the patients who are willing to engage with the scientific community by enrolling in clinical trials. We thank them for their participation."

About the PROCLAIM-072 Trial
The first clinical trial under the international umbrella program PROCLAIM is the open-label, dose-finding Phase 1/2 study evaluating CX-072 as monotherapy and in combination with Yervoy (ipilimumab) or Zelboraf(vemurafenib) in patients with all types of cancers. As part of the study, CytomX aims to achieve three goals as part of the PROCLAIM-072 clinical trial:

Tolerability: Demonstrate that CX-072 is well tolerated in patients and potentially improves safety, particularly in the combination setting.
Anti-cancer activity: Demonstrate initial evidence of CX-072’s anti-cancer activity as monotherapy and in combination.
Translational program and Probody platform proof-of-concept: Explore mechanistic aspects of Probody activity in patients as observed in preclinical studies.
More information about the trial is available at clinicaltrials.gov.

On February 2, 2017 Merck (NYSE:MRK), known as MSD outside the United States and Canada, reported financial results for the fourth quarter and full year of 2016 (Press release, Merck & Co, FEB 2, 2017, View Source [SID1234517619]).

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"The performance of Merck’s broad and balanced portfolio allows us to remain committed to biomedical innovation that saves and improves lives and delivers long-term value to shareholders," said Kenneth C. Frazier, chairman and chief executive officer, Merck. "The momentum behind our pipeline and key product launches, including the continued growth and expansion of KEYTRUDA into new indications and markets around the world, further reinforces our company’s strategic direction."

Financial Summary
$ in millions, except EPS amounts Fourth Quarter Year Ended
Dec. 31, Dec. 31,
2016 2015 2016 2015
Sales $10,115 $10,215 $39,807 $39,498
GAAP EPS 0.42 0.35 2.04 1.56
Non-GAAP EPS that excludes certain items1*
0.89 0.93 3.78 3.59
GAAP net income2
1,177 976 5,691 4,442
Non-GAAP net income that excludes certain items1,2* 2,470 2,608 10,538 10,195
*Refer to table on page 8.
Worldwide sales were $10.1 billion for the fourth quarter of 2016, a decrease of 1 percent compared with the fourth quarter of 2015, including a 1 percent negative impact from foreign exchange. Sales in the fourth quarter of 2016 reflect the unfavorable impact of approximately $150 million of sales in Japan, which occurred in the third quarter of 2016 rather than in the fourth quarter due to the implementation of a resource planning system. Full-year 2016 worldwide sales were $39.8 billion, an increase of 1 percent compared with the full year of 2015, including a 2 percent negative impact from foreign exchange.

GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) were $0.42 for the fourth quarter and $2.04 for the full year of 2016. Non-GAAP EPS of $0.89 for the fourth quarter and $3.78 for the full year of 2016 excludes acquisition- and divestiture-related costs, restructuring costs and certain other items, which include a charge to settle the worldwide KEYTRUDA patent litigation.

Pipeline Highlights

Merck significantly advanced the clinical development program for KEYTRUDA (pembrolizumab), an anti-PD-1 therapy.

The FDA approved a supplemental Biologics License Application (sBLA) for KEYTRUDA for the first-line treatment of patients with metastatic NSCLC whose tumors have high PD-L1 expression (Tumor Proportion Score [TPS] of 50 Percent or More) as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations.
The FDA granted Priority Review for three additional sBLAs for KEYTRUDA, including:
Use in combination with chemotherapy as a first-line treatment for patients with metastatic or advanced NSCLC regardless of PD-L1 expression and with no EGFR or ALK genomic tumor aberrations. The PDUFA action date is May 10, 2017.
The treatment of previously treated patients with advanced microsatellite instability-high cancer. The PDUFA action date is March 8, 2017.
The treatment of patients with refractory classical Hodgkin lymphoma (cHL) or for patients with cHL who have relapsed after three or more prior lines of therapy. The PDUFA action date is March 15, 2017.
KEYTRUDA received Breakthrough Therapy Designations from the FDA for the second-line treatment of patients with urothelial carcinoma with disease progression on or after platinum-containing chemotherapy and for the treatment of patients with primary mediastinal B-cell lymphoma that is refractory to or has relapsed after two prior lines of therapy.
The European Commission approved KEYTRUDA for the first-line treatment of metastatic NSCLC in adults whose tumors have high PD-L1 expression (TPS of 50 percent or more) with no EGFR or ALK positive tumor mutations.
KEYTRUDA was approved in Japan as a first- and second-line treatment of certain patients with PD-L1-positive unresectable advanced/recurrent NSCLC.
Merck and Incyte Corporation recently announced the expansion of the clinical development program investigating KEYTRUDA in combination with epacadostat, Incyte’s investigational oral selective IDO1 inhibitor, to include pivotal studies for NSCLC, renal cell carcinoma, bladder cancer and squamous cell carcinoma of the head and neck.
The company recently completed enrollment in its Phase 3 APECS study (NCT01953601) evaluating the safety and efficacy of verubecestat (MK-8931) in people with prodromal, or mild, Alzheimer’s disease. Estimated primary completion date for the trial is February 2019.

Fourth-Quarter and Full-Year Revenue Performance

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


$ in millions Fourth Quarter Year Ended
Change Ex- Dec. 31, Dec. 31, Change Ex-
2016 2015 Change Exchange 2016 2015 Change Exchange
Total Sales $10,115 $10,215 -1% 0% $39,807 $39,498 1% 3%
Pharmaceutical 8,904 9,027 -1% -1% 35,151 34,782 1% 2%
JANUVIA/JANUMET 1,509 1,447 4% 4% 6,109 6,014 2% 2%
ZETIA/VYTORIN 873 999 -13% -13% 3,701 3,777 -2% -1%
GARDASIL/GARDASIL 9 542 497 9% 9% 2,173 1,908 14% 14%
PROQUAD, M-M-R II and VARIVAX 405 409 -1% -1% 1,640 1,505 9% 10%
KEYTRUDA 483 214 125% 128% 1,402 566 148% 151%
ISENTRESS 337 374 -10% -9% 1,387 1,511 -8% -6%
REMICADE 269 396 -32% -31% 1,268 1,794 -29% -28%
CUBICIN 119 322 -63% -63% 1,087 1,127 -4% -4%
SINGULAIR 210 273 -23% -26% 915 931 -2% -4%
PNEUMOVAX 23
238 188 27% 25% 641 542 18% 17%
Animal Health 884 832 6% 7% 3,478 3,331 4% 8%
Other Revenues 327 356 -8% 30% 1,178 1,385 -15% 15%
Pharmaceutical Revenue

Fourth-quarter pharmaceutical sales decreased 1 percent to $8.9 billion. The decline was driven primarily by the loss of U.S. market exclusivity in 2016 for CUBICIN (daptomycin for injection), an I.V. antibiotic; NASONEX (mometasone furoate monohydrate), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms; and ZETIA (ezetimibe), a medicine for lowering LDL cholesterol; as well as by the ongoing impact of biosimilar competition in the company’s marketing territories in Europe for REMICADE (infliximab), a treatment for inflammatory diseases. In the aggregate, sales of these products declined $564 million during the fourth quarter of 2016 compared to the fourth quarter of 2015.

These declines were largely offset by growth in oncology, hepatitis C, diabetes and vaccines, which include the ongoing launches of KEYTRUDA and ZEPATIER (elbasvir and grazoprevir), a medicine for the treatment of chronic hepatitis C virus genotypes 1 or 4 infection. Additionally, the ongoing launch of BRIDION (sugammadex) Injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery, generated sales of $139 million during the fourth quarter of 2016.

Growth of KEYTRUDA reflects the company’s continued efforts to launch the product with new indications, particularly as a first-line treatment for NSCLC and for previously treated recurrent or metastatic head and neck cancer in the United States, and as a second-line treatment for NSCLC globally.

ZEPATIER sales growth was primarily driven by the ongoing launch in the United States, as well as ongoing launches in emerging markets and the launches in Europe and Japan. In the fourth quarter of 2016, sales of ZEPATIER were $229 million.

Pharmaceutical sales also reflect an increase in the diabetes franchise of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCl), medicines that help lower blood sugar in adults with type 2 diabetes, driven by sales growth in the United States, partially offset by lower sales in Japan due to the timing of shipments.

Growth in vaccines resulted from higher sales of PNEUMOVAX 23 (pneumococcal vaccine polyvalent) in the United States due to the adoption of recently issued vaccination guidelines from the Centers for Disease Control and Prevention; and GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine, Recombinant], vaccines to prevent certain cancers and other diseases caused by HPV, due to increased pricing and demand in the United States. On Dec. 31, 2016, Merck and Sanofi Pasteur ended the Sanofi Pasteur MSD vaccines joint venture. As a result, beginning in 2017, Merck will operate its vaccines business in Europe and will record vaccine sales in the 19 European countries previously part of the joint venture.

In April 2017 the company will lose market exclusivity in the United States for VYTORIN (ezetimibe/simvastatin), a medicine for lowering LDL cholesterol, and anticipates a significant decline in U.S. VYTORIN sales thereafter. Full-year 2016 U.S. sales of VYTORIN were $473 million.

Full-year 2016 pharmaceutical sales increased 1 percent to $35.2 billion, including a 1 percent negative impact from foreign exchange. Growth was driven by sales in oncology, vaccines and hepatitis C products, partially offset by sales declines of $887 million due to the loss of U.S. market exclusivity for NASONEX and CUBICIN, and the impact of biosimilar competition for REMICADE in the company’s marketing territories in Europe.

Animal Health Revenue

Animal Health sales totaled $884 million for the fourth quarter of 2016, an increase of 6 percent compared with the fourth quarter of 2015, including a 1 percent negative impact from foreign exchange. Worldwide sales for the full year of 2016 were $3.5 billion, an increase of 4 percent, including a 4 percent negative impact from foreign exchange. Sales growth in both periods was primarily driven by an increase in sales of companion animal products, particularly the BRAVECTO (fluralaner) line of products that kill fleas and ticks in dogs and cats for up to 12 weeks.

Fourth-Quarter and Full-Year Expense, EPS and Related Information

The tables below present selected expense information.


$ in millions
Acquisition- and
Divestiture- Restructuring Certain Other
Fourth-Quarter 2016 GAAP
Related Costs 3
Costs Items
Non-GAAP 1
Materials and production $3,332 $756 $32 $– $2,544
Marketing and administrative 2,593 22 4 – 2,567
Research and development 1,720 (33) 9 – 1,744
Restructuring costs 265 – 265 – –
Other (income) expense, net 721 35 – 654 32

Fourth-Quarter 2015
Materials and production $3,850 $1,194 $81 $– $2,575
Marketing and administrative 2,615 47 8 – 2,560
Research and development 1,797 (24) 18 – 1,803
Restructuring costs 233 – 233 – –
Other (income) expense, net 905 47 – 707 151

$ in millions
Acquisition- and
Divestiture- Restructuring Certain Other
Year Ended Dec. 31, 2016 GAAP
Related Costs 3
Costs Items
Non-GAAP 1
Materials and production $13,891 $4,035 $181 $– $9,675
Marketing and administrative 9,762 78 95 – 9,589
Research and development 7,194 222 142 – 6,830
Restructuring costs 651 – 651 – –
Other (income) expense, net 810 47 – 648 115

Year Ended Dec. 31, 2015
Materials and production $14,934 $4,869 $361 $– $9,704
Marketing and administrative 10,313 436 78 – 9,799
Research and development 6,704 39 52 – 6,613
Restructuring costs 619 – 619 – –
Other (income) expense, net 1,527 54 – 1,125 348
GAAP Expense, EPS and Related Information

On a GAAP basis, the gross margin was 67.1 percent for the fourth quarter of 2016 compared to 62.3 percent for the fourth quarter of 2015. The increase in gross margin for the fourth quarter of 2016 was primarily driven by lower acquisition- and divestiture-related costs and restructuring costs noted above, which negatively affected gross margin by 7.7 percentage points in the fourth quarter of 2016 compared with 12.5 percentage points for the fourth quarter of 2015. The gross margin was 65.1 percent for the full year of 2016 compared to 62.2 percent for the full year of 2015. The increase in gross margin for the full year of 2016 was primarily driven by lower acquisition- and divestiture-related costs and restructuring costs, which negatively affected gross margin by 10.6 percentage points in the full year of 2016 compared with 13.2 percentage points for the full year of 2015.

Marketing and administrative expenses were $2.6 billion in the fourth quarter of 2016, a 1 percent decrease compared to the fourth quarter of 2015. The decline primarily reflects lower acquisition- and divestiture-related costs. Full-year 2016 marketing and administrative expenses were $9.8 billion, a 5 percent decrease compared to the full year of 2015. The decline reflects lower acquisition- and divestiture-related costs, the favorable impact of foreign exchange and lower direct selling costs.

Research and development (R&D) expenses were $1.7 billion in the fourth quarter of 2016, a 4 percent decrease compared to the fourth quarter of 2015. The decline reflects a reduction in expenses resulting from a decrease in the estimated fair value of liabilities for contingent consideration, partially offset by higher in-process research and development (IPR&D) impairment charges. R&D expenses were $7.2 billion for the full year of 2016, a 7 percent increase compared to the full year of 2015. The increase primarily reflects higher IPR&D impairment charges, clinical development spending and restructuring costs, partially offset by a reduction in expenses resulting from a decrease in the estimated fair value of liabilities for contingent consideration.

Other (income) expense, net, was $721 million of expense in the fourth quarter of 2016 compared to $905 million of expense in the fourth quarter of 2015 and was $810 million of expense for the full year of 2016 compared to $1.5 billion of expense for the full year of 2015. Other (income) expense, net for the fourth quarter and full year of 2016 includes a $625 million charge to settle the worldwide KEYTRUDA patent litigation. Other (income) expense, net for the fourth quarter and full year of 2015 includes $161 million and $876 million, respectively, of foreign exchange losses related to the devaluation of the company’s net monetary assets in Venezuela and a $680 million net charge to settle the Vioxx shareholder class action litigation.

GAAP EPS was $0.42 for the fourth quarter of 2016 compared with $0.35 for the fourth quarter of 2015. GAAP EPS was $2.04 for the full year of 2016 compared with $1.56 for the full year of 2015.

Non-GAAP Expense, EPS and Related Information

The non-GAAP gross margin was 74.8 percent for the fourth quarter of 2016, the same as the fourth quarter of 2015. The non-GAAP gross margin was 75.7 percent for the full year of 2016 compared to 75.4 percent for the full year of 2015. The increase in GAAP gross margin for the full year of 2016 reflects lower inventory write-offs.

Non-GAAP marketing and administrative expenses were $2.6 billion in the fourth quarter of 2016, comparable to the fourth quarter of 2015. Non-GAAP marketing and administrative expenses were $9.6 billion for the full year of 2016, a 2 percent decrease compared to the full year of 2015. The decline reflects the favorable impact of foreign exchange and lower direct selling costs.

Non-GAAP R&D expenses were $1.7 billion in the fourth quarter of 2016, a 3 percent decline compared to the fourth quarter of 2015. The decline reflects lower licensing costs. Non-GAAP R&D expenses were $6.8 billion for the full year of 2016, a 3 percent increase compared to the full year of 2015 reflecting increased clinical development spending.

Non-GAAP EPS was $0.89 for the fourth quarter of 2016 compared with $0.93 for the fourth quarter of 2015. Non-GAAP EPS was $3.78 for the full year of 2016 compared with $3.59 for the full year of 2015.

Non-GAAP other (income) expense, net, was $32 million of expense in the fourth quarter of 2016 compared to $151 million of expense in the fourth quarter of 2015, primarily reflecting the receipt of a milestone payment. Non-GAAP other (income) expense, net, for the full year of 2016 was $115 million of expense compared to $348 million of expense for the full year of 2015, reflecting lower foreign exchange losses.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.


$ in millions, except EPS amounts
Fourth Quarter Year Ended
Dec. 31, Dec. 31,
2016 2015 2016 2015
EPS
GAAP EPS $0.42 $0.35 $2.04 $1.56
Difference4
0.47 0.58 1.74 2.03
Non-GAAP EPS that excludes items listed below1 $0.89 $0.93 $3.78 $3.59

Net Income
GAAP net income2 $1,177 $976 $5,691 $4,442
Difference 1,293 1,632 4,847 5,753
Non-GAAP net income that excludes items listed below1,2 $2,470 $2,608 $10,538 $10,195

Decrease (Increase) in Net Income Due to Excluded Items:
Acquisition- and divestiture-related costs3 $780 $1,264 $4,382 $5,398
Restructuring costs 310 340 1,069 1,110
Charge to settle worldwide KEYTRUDA patent litigation 625 – 625 –
Net charge to settle Vioxx shareholder class action litigation – 680 – 680
Foreign exchange losses related to Venezuela – 161 – 876
Gain on divestiture of certain ophthalmic products – (147) – (147)
Gain on divestiture of certain migraine clinical development programs – – – (250)
Other 29 13 23 (34)
Net decrease (increase) in income before taxes 1,744 2,311 6,099 7,633
Income tax (benefit) expense5
(451) (679) (1,252) (1,880)
Decrease (increase) in net income $1,293 $1,632 $4,847 $5,753
Financial Outlook

Merck expects its full-year 2017 GAAP EPS to be between $2.47 and $2.62. Merck expects its full-year 2017 non-GAAP EPS to be between $3.72 and $3.87, including an approximately 2 percent negative impact from foreign exchange. The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs.

At mid-January 2017 exchange rates, Merck anticipates full-year 2017 revenues to be between $38.6 billion and $40.1 billion, including an approximately 2 percent negative impact from foreign exchange.

The following table summarizes the company’s 2017 financial guidance.


GAAP Non-GAAP 1

Revenue $38.6 to $40.1 billion $38.6 to $40.1 billion**
Operating expenses Higher than 2016 by a low-single digit rate Higher than 2016 by a low-single digit rate
Effective tax rate 22.0% to 23.0% 21.0 % to 22.0%
EPS $2.47 to $2.62 $3.72 to $3.87
**The company does not have any non-GAAP adjustments to revenue.
A reconciliation of anticipated 2017 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.


$ in millions, except EPS amounts

Full-Year 2017

GAAP EPS $2.47 to $2.62
Difference4 1.25
Non-GAAP EPS that excludes items listed below1 $3.72 to $3.87

Acquisition- and divestiture-related costs $3,600
Restructuring costs 600
Net decrease (increase) in income before taxes 4,200
Estimated income tax (benefit) expense (750)
Decrease (increase) in net income $3,450
The expected full-year 2017 GAAP effective tax rate of 22.0 to 23.0 percent reflects an unfavorable impact of approximately 1 percentage point from the above items.

Total Employees

As of Dec. 31, 2016, Merck had approximately 68,000 employees worldwide.

On February 1, 2017 Takeda reported Q3 FY2016 results (Press release, Takeda, FEB 1, 2017, View Source [SID1234517617]).

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Strong Q3 year-to-date （YTD） results propelled by Growth Drivers

Underlying Revenue grew +7.4％, with Takeda’s Growth Drivers （GI, Oncology, CNS and Emerging Markets） delivering growth of +15.5％, and Underlying Revenue growth across all regions （U.S. +14.4％, Japan +5.0％, Europe ＆ Canada +4.6％, Emerging Markets +4.9％）.
Reported revenue declined -5.6％, due to unfavorable currencies （-8.4pp） and the impact of divestitures （-4.5pp）.
Underlying Core Earnings grew +23.5％, with the Core Earnings margin increasing by 2.1pp. Despite unfavorable currencies and the negative impact of divestitures, reported operating profit was up +29.8％, benefiting from strong underlying growth and a one-time gain on the Teva JV transaction that was booked in Q1 FY2016.
Underlying Core EPS was up +31.7％, reflecting strong Core Earnings growth and a lower tax rate due to timing. Reported EPS was 212 yen, an increase of +46.3％ from 145 yen in the prior year.
Adjusted Operating Free Cash Flow was up +9.3％ to 120.0 billion yen.

Takeda’s Growth Drivers delivered +15.5% Underlying Revenue growth

GI underlying revenue +37.9％, driven by ENTYVIO and TAKECAB.
Oncology underlying revenue +6.3％, supported by uptake of NINLARO and ADCETRIS.
CNS underlying revenue +28.3％, underpinned by strong performance of TRINTELLIX.
Emerging Markets underlying revenue +4.9％, with robust growth in the key markets of Brazil （+9.5％）, China （+8.0％） and Russia （+7.3％）.

Christophe Weber, President and Chief Executive Officer of Takeda, commented:
"Our impressive year-to-date performance is evidence of how our strategic transformation is driving profitable growth. We are pleased to report that Takeda’s Growth Drivers （GI, Oncology, CNS and Emerging Markets） have maintained their strong momentum, driven in particular by the continued success of ENTYVIO and NINLARO. This gives us the confidence to improve the full-year outlook for FY2016.
Furthermore, we continue to make strong progress against our strategic transformation. In December, we announced our plan to sell Takeda’s shareholding in Wako Pure Chemical, and in January, we announced our plan to acquire ARIAD Pharmaceuticals. This deal will significantly enhance our global oncology portfolio and create value for our shareholders."

Reported Results for Q3 FY2016 YTD （April － December）
（billion yen） FY2015
Q3 YTD FY2016
Q3 YTD Growth
Reported Underlying2
Revenue 1,393.3 1,315.8 －5.6％ ＋7.4％
Core Earnings1 267.9 228.3 －14.8％ ＋23.5％
Operating Profit 167.5 217.4 ＋29.8％ N/A
Net Profit3 113.6 165.7 ＋45.8％ N/A
EPS 145 yen 212 yen ＋46.3％ N/A
Core EPS 240 yen 229 yen －4.4％ ＋31.7％
1 Core Earnings is calculated by taking reported Gross Profit and deducting SG＆A expenses and R＆D expenses. In addition, certain other items that are non-core in nature and significant in value may also be adjusted.
2 Underlying growth compares two periods of financial results on a common basis, showing the ongoing performance of the business excluding the impact of foreign exchange and divestitures from both periods.
3 Attributable to the owners of the company.

FY2016 Management Guidance: Takeda increases management guidance for Underlying Core Earnings to "High-teen growth" and Underlying Core EPS to "Mid-teen growth"


Previous Guidance
（Oct 28, 2016） Revised Guidance
（Feb 1, 2017）
Underlying Revenue

Mid-single digit growth（％） Mid-single digit growth（％）
Underlying Core Earnings

Mid- to high-teen growth（％） High-teen growth（％）
Underlying Core EPS

Low- to mid-teen growth（％） Mid-teen growth（％）
Annual Dividend per Share 180 yen 180 yen

FY2016 Reported Forecast: increased Core Earnings of 16-17 billion yen will offset accelerated 1　and potential impacts of the ARIAD acquisition2

（billion yen） Previous Forecast
（Oct 28, 2016） Revised Forecast
（Feb 1, 2017）
Revenue 1,670.0 1,700.0
R＆D Expenses －310.0 －315.0
Operating Profit 135.0 135.0
Net Profit3 91.0 93.0
EPS 116 yen 119 yen
Exchange Rate （annual average） 1 US$＝104 yen
1 euro＝117 yen 1 US$＝109 yen
1 euro＝120 yen
1 The revised forecast includes costs related to the R＆D transformation program of 47 billion yen in FY2016 （previous forecast was 40 billion yen）. Total estimated costs for the program are unchanged at 75 billion yen （28 billion yen expected in FY2017）.
2 Potential impacts to operating profit of approximately minus 9-10 billion yen are expected in FY2016 related to the acquisition of ARIAD Pharmaceuticals, Inc.
3 Attributable to the owners of the company

For more details on Takeda’s Q3 FY2016 YTD results and other financial information please visit View Source

On February 1, 2017 Roche reported good results for 2016 (Press release, Hoffmann-La Roche, FEB 1, 2017, View Source [SID1234517616]).

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Roche reports good results in 2016

Group sales increase 4%1 at constant exchange rates, 5% in Swiss francs

Pharmaceuticals Division sales up 3%, mainly driven by cancer medicines Perjeta and Herceptin as well as
Actemra/RoActemra

Diagnostics Division sales grow 7%, driven primarily by immunodiagnostic solutions

Successful launches of four new medicines; five US FDA breakthrough therapy designations granted

Emicizumab prophylaxis shows positive results in people with haemophilia A in pivotal trial

Successful launch of new immunochemistry instrument cobas e 801

Core earnings per share up 5% at constant exchange rates, 8% in Swiss francs

Board proposes dividend increase to CHF 8.20

Outlook for 2017: sales expected to grow low- to mid-single digit, at constant exchange rates. Core earnings per share targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to further increase its dividend in Swiss francs.


Key figures 2016
CHF millions % change
2016 2015 CER1 CHF
Group sales 50,576 48,145 +4 +5
Pharmaceuticals Division 39,103 37,331 +3 +5
Diagnostics Division 11,473 10,814 +7 +6
Core operating profit 18,420 17,542 +4 +5
Core EPS – diluted (CHF) 14.53 13.49 +5 +8
IFRS net income 9,733 9,056 +7 +7

Commenting on the Group’s results, Roche CEO Severin Schwan said: «I am pleased that we have again reached all our financial targets while our product portfolio has made significant progress. We brought four new medicines to market in less than a year, including our first cancer immunotherapy Tecentriq. In Diagnostics, we launched an immunodiagnostic instrument, the cobas e 801, which represents a major step forward in realising the connected laboratory. We again look forward to a number of important clinical read-outs and regulatory milestones for Roche medicines this year, reflecting our broad and innovative product pipeline.»

Group results
Good performance in both divisions
Group sales rose 4% to CHF 50.6 billion. Despite high investments in the launch of new products and product development, core EPS grew faster than sales (+5%). Core EPS growth reflects the good underlying business performance and an impact from changes to the Group’s Swiss pension plans. IFRS net income was up 7% at constant exchange rates and in Swiss francs.

Sales in the Pharmaceuticals Division rose 3% to CHF 39.1 billion, driven by growth of Perjeta, Herceptin and Actemra/RoActemra, partially offset by lower sales of Pegasys, Tarceva and Lucentis.

In the US, Pharmaceuticals sales advanced 3%, led by the respiratory medicines Xolair and Esbriet. The recently launched medicines Tecentriq and Alecensa contributed to the growth as well. Sales of eye drug Lucentis and cancer medicines Avastin and Tarceva declined due to growing use of other therapeutic options. In Europe, sales growth of 4% was driven by Perjeta, Actemra/RoActemra and MabThera/Rituxan. In Japan, sales grew 1% despite the biennial price cuts and a special price reduction rule for best-selling medicines. Tamiflu, Alecensa and Actemra/RoActemra were key sales contributors. In the International region, sales gained 4%, driven by the Asia-Pacific and Latin America subregions.

Diagnostics divisional sales increased 7% to CHF 11.5 billion – above market growth. Centralised and Point of Care Solutions2 was the main contributor, led by its immunodiagnostics business.

In the EMEA3 (+2%) and North America (+3%) regions, the division’s largest markets, the sales increases were led by Centralised and Point of Care Solutions. Sales growth in North America was partially offset by a decline in Diabetes Care business, which faced continued pricing pressure. The sales increase in Asia-Pacific (+16%) was mainly driven by China. In Latin America, sales advanced 18%. Sales growth in Japan (+2%) was also led by the Centralised and Point of Care Solutions business.

High number of launches in Pharmaceuticals
Roche recently launched four new medicines: Cotellic (advanced melanoma), Alecensa (lung cancer), Venclexta (chronic lymphocytic leukemia; jointly commercialised with AbbVie) and Tecentriq (bladder and lung cancer). In addition, five FDA breakthrough therapy designations were granted for Roche medicines in 2016. A major highlight was the US launch of Roche’s cancer immunotherapy medicine Tecentriq in May. It is the first FDA-approved treatment for people with a specific type of bladder cancer in more than 30 years. Furthermore, in October the FDA cleared Tecentriq for use in previously treated metastatic non-small cell lung cancer (NSCLC). The pivotal Oak trial showed that people with this form of lung cancer who received Tecentriq live significantly longer, regardless of their PD-L1 status, compared with those receiving chemotherapy. Additional data presented at the ECTRIMS4 congress in September showed that Roche’s ocrelizumab increased disease control in both relapsing and primary progressive multiple sclerosis (RMS and PPMS). Roche is seeking regulatory approval for this medicine in RMS and PPMS in the US and the EU. The US FDA’s action date for a decision is March 28, 2017.

Roche also presented other important clinical results in 2016. A pivotal study in a group of people with haemophilia A (Haven 1) showed that prophylaxis with emicizumab led to a significant reduction in the number of bleeds over time. A phase III study by Chugai (J-Alex) found that first-line treatment with Alecensa significantly reduced the risk of disease worsening or death compared to crizotinib, the current standard of care, in people with ALK-positive NSCLC.

While Gazyva/Gazyvaro showed positive results in a major clinical trial (Gallium) in follicular lymphoma, a separate trial (Goya) of the medicine in diffuse large B-cell lymphoma, did not reach its primary study goal. Also in 2016, Roche presented data from the largest clinical trial ever conducted in giant cell arteritis (GCA), a serious inflammatory disease of blood vessels. Initially combined with a steroid regimen, Actemra/RoActemra more effectively sustained remission compared to a steroid-only regimen in people with newly diagnosed and relapsing GCA.

Further broadening the Diagnostics portfolio
During 2016, Roche added nine key instruments and tests to its comprehensive portfolio, further improving decision-making in healthcare, and supporting laboratories’ efforts to increase efficiency. Among the new instruments are the cobas e 801 immunoassay module, the CoaguChek INRange system to monitor vitamin K antagonist therapy, and the Accu-Chek Guide, a next-generation blood glucose monitoring system.

The US-FDA approved two accompanying diagnostics: the Ventana PD-L1 (SP142) test is a complementary diagnostic which determines PD-L1 status of patients with bladder and lung cancer. The cobas EGFR Mutation test v2 is a companion diagnostic for lung cancer medicine Tarceva. The FDA also granted premarket clearance and a CLIA5 waiver for the cobas Liat Influenza A/B & RSV test. This is the first point-of-care test that extends molecular testing on the Liat system beyond influenza A/B and Streptococcus A to include respiratory syncytial virus (RSV). The FDA also approved Roche tests for the detection of Zika virus.

Outlook for 2017
In 2017, Roche expects sales to grow low- to mid-single digit, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to further increase its dividend in Swiss francs.