On May 24, 2018 Genmab A/S (Nasdaq Copenhagen: GEN) reported that topline results from the Phase III study of Arzerra (ofatumumab) plus bendamustine did not meet the primary endpoint of improved progression-free survival (PFS) in patients with indolent B-cell non-Hodgkin’s lymphoma (iNHL) who were unresponsive to rituximab or a rituximab-containing regimen, compared to those given bendamustine alone (Press release, Genmab, MAY 24, 2018, View Source [SID1234527081]). The safety profile observed in this study was consistent with that observed in other trials of ofatumumab and no new safety signals were observed.

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"We are disappointed that the ofatumumab treatment regimen did not meet the primary endpoint in this trial. The completion of this Phase III study, which began in 2010, would not have been possible without the generous participation of the patients and their families, and we are most grateful for this. The full data will be submitted for publication at a future medical conference and we hope that these will provide a better understanding of this result," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.

The results from this Phase III study do not impact any other ongoing studies with ofatumumab.

About the study (COMPLEMENT A+B)
The study is an open-label, two-arm, randomized, Phase III study that included 346 patients with indolent B-cell non-Hodgkin’s lymphoma who were unresponsive to rituximab or a rituximab-containing regimen. Patients in the study were randomized 1:1 to treatment with up to eight cycles of bendamustine given in combination with 12 doses of ofatumumab (1,000 mg) or up to eight cycles with bendamustine alone. The primary endpoint of the study was PFS.

Ofatumumab is not approved for the treatment of indolent non-Hodgkin’s Lymphoma.

About Ofatumumab (Arzerra)
Ofatumumab is a human monoclonal antibody that is designed to target the CD20 molecule found on the surface of normal B lymphocytes and on B cell malignancies (including chronic lymphocytic leukemia and non-Hodgkin’s lymphomas).

In the United States, Arzerra is approved for use in combination with chlorambucil for the treatment of previously untreated patients with CLL for whom fludarabine-based therapy is considered inappropriate, in combination with fludarabine and cyclophosphamide for the treatment of patients with relapsed CLL and for extended treatment of patients who are in complete or partial response after at least two lines of therapy for recurrent or progressive CLL. In the European Union, Arzerra is approved for use in combination with chlorambucil or bendamustine for the treatment of patients with CLL who have not received prior therapy and who are not eligible for fludarabine-based therapy and in combination with fludarabine and cyclophosphamide for adult patients with relapsed CLL. In more than 60 countries worldwide, including the United States and EU member countries, Arzerra is also indicated as monotherapy for the treatment of patients with CLL who are refractory after prior treatment with fludarabine and alemtuzumab. On January 22, 2018, it was announced that Novartis intends to transition Arzerra for the treatment of CLL indications from commercial availability to limited availability via compassionate use programs in non-U.S. markets.

Please see full Prescribing Information, including Boxed WARNING for Arzerra (ofatumumab).

Arzerra is marketed under a collaboration agreement between Genmab and Novartis. A subcutaneous formulation of ofatumumab is also being investigated in two Phase III clinical studies in relapsing multiple sclerosis.

On May 24, 2018 AbbVie (NYSE: ABBV), a research-based global biopharmaceutical company, reported that the Phase 3 iLLUMINATE (PCYC-1130) trial met its primary endpoint of improvement in progression-free survival (PFS) (Press release, AbbVie, MAY 24, 2018, View Source [SID1234526895]). The study evaluated IMBRUVICA (ibrutinib) in combination with GAZYVA (obinutuzumab) in previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) patients, the most common adult leukemia. Specifically, the study met its primary endpoint for a clinically and statistically significant difference in PFS for patients treated with IMBRUVICA plus obinutuzumab versus those who received chlorambucil plus obinutuzumab, as assessed by an Independent Review Committee (IRC).

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IMBRUVICA is a first-in-class Bruton’s tyrosine kinase (BTK) inhibitor jointly developed and commercialized by Pharmacyclics LLC, an AbbVie company, and Janssen Biotech, Inc. IMBRUVICA has been available in the U.S. since November 2013 and is U.S. Food and Drug Administration (FDA)-approved for treatment in six disease indications. IMBRUVICA has the longest follow-up data as a BTK therapy in CLL.1

Pharmacyclics and Janssen are sharing the primary analysis data from the study with regulatory authorities and plan to present the data in a future publication or medical congress. Based on the data and if approved by the FDA, IMBRUVICA plus obinutuzumab could be the first chemotherapy-free CD20 combination in first-line CLL treatment.

"We are optimistic about the topline results from the iLLUMINATE study and the fact that IMBRUVICA plus obinutuzumab demonstrated marked improvement in progression-free survival compared to obinutuzumab plus chlorambucil, a combination which is currently recommended by the National Comprehensive Cancer Network guidelines as a Category 1 treatment,"2 said Danelle James, M.D., M.A.S., Head of Clinical Science, Pharmacyclics LLC, an AbbVie company. "Since its introduction nearly five years ago, IMBRUVICA has been regarded as an important treatment option for patients with CLL/SLL. As well, we now have long-term, five-year data in CLL. We are committed to researching the full potential of IMBRUVICA alone and in combination therapy across a range of B-cell blood cancers."

"We’re pleased to see positive results for the combination of ibrutinib plus obinutuzumab. This chemotherapy-free combination represents a potential new treatment option for patients with chronic lymphocytic leukemia," said John Gribben, M.D., leading investigator for the iLLUMINATE study and Professor of Medical Oncology, Barts Cancer Institute, London, United Kingdom. "It’s exciting to see the blood cancer treatment paradigm continue to evolve – each advance moves us one step closer to a better standard of care for these patients."

CLL is the most common form of leukemia in adults and is a type of cancer that can develop from cells in the bone marrow that later mature into certain white blood cells (called lymphocytes). While these cancer cells start in the bone marrow, they then later spread into the blood. The prevalence of CLL is approximately 115,000 patients in the U.S.3 with approximately 19,000 newly diagnosed patients every year.4 SLL is a slow-growing lymphoma biologically similar to CLL in which too many immature white blood cells cause lymph nodes to become larger than normal.5 CLL/SLL are predominately diseases of the elderly, with a median age of 71 at diagnosis.

About iLLUMINATE
iLLUMINATE (NCT 02264574) is a Pharmacyclics-sponsored, randomized, multi-center, open-label, Phase 3 study of IMBRUVICA in combination with obinutuzumab versus chlorambucil in combination with obinutuzumab in patients with previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL). According to the study protocol, patients enrolled are age 65 years and older or if less than age 65 years must have at least one of the following criteria: Cumulative Illness Rating Score (CIRS) >6 and Creatinine clearance estimated <70 mL/min using Cockcroft-Gault equation. In the study, patients were randomized to receive IMBRUVICA 420 mg continuously in combination with obinutuzumab 1000 mg intravenously over 6 cycles or chlorambucil on Days 1 and 15 of each cycle plus obinutuzumab 1000 mg intravenously over 6 cycles. The primary endpoint is progression-free survival by IRC, with secondary objectives including overall response rate and rate of minimal residual disease (MRD)-negative responses.

About IMBRUVICA
IMBRUVICA (ibrutinib) is a first-in-class, oral, once-daily therapy that mainly works by blocking a protein called Bruton’s tyrosine kinase (BTK). BTK is a key signaling molecule in the B-cell receptor signaling complex that plays an important role in the survival and spread of malignant B cells as well as other serious, debilitating conditions.6 IMBRUVICA blocks signals that tell malignant B cells to multiply and spread uncontrollably.

IMBRUVICA is FDA-approved in six distinct patient populations: chronic lymphocytic leukemia (CLL), small lymphocytic lymphoma (SLL), Waldenström’s macroglobulinemia (WM), along with previously-treated mantle cell lymphoma (MCL), previously-treated marginal zone lymphoma (MZL) and previously-treated chronic graft-versus-host disease (cGVHD).7

IMBRUVICA was first approved for adult patients with MCL who have received at least one prior therapy in November 2013.
Soon after, IMBRUVICA was initially approved in adult CLL patients who have received at least one prior therapy in February 2014. By July 2014, the therapy received approval for adult CLL patients with 17p deletion, and by March 2016, the therapy was approved as a frontline CLL treatment.
IMBRUVICA was approved for adult patients with WM in January 2015.
In May 2016, IMBRUVICA was approved in combination with bendamustine and rituximab (BR) for adult patients with previously treated CLL/SLL.
In January 2017, IMBRUVICA was approved for adult patients with MZL who require systemic therapy and have received at least one prior anti-CD20-based therapy.
In August 2017, IMBRUVICA was approved for adult patients with cGVHD that failed to respond to one or more lines of systemic therapy.
Accelerated approval was granted for the MCL and MZL indications based on overall response rate. Continued approval for MCL and MZL may be contingent upon verification and description of clinical benefit in confirmatory trials.

IMBRUVICA has been granted four Breakthrough Therapy Designations from the U.S. FDA. This designation is intended to expedite the development and review of a potential new drug for serious or life-threatening diseases.8 IMBRUVICA was one of the first medicines to receive FDA approval via the new Breakthrough Therapy Designation pathway.

IMBRUVICA is being studied alone and in combination with other treatments in several blood and solid tumor cancers and other serious illnesses. IMBRUVICA has one of the most robust clinical oncology development programs for a single molecule in the industry, with more than 130 ongoing clinical trials. There are approximately 30 ongoing company-sponsored trials, 14 of which are in Phase 3, and more than 100 investigator-sponsored trials and external collaborations that are active around the world. To date, 100,000 patients around the world have been treated with IMBRUVICA in clinical practice and clinical trials.

IMPORTANT SAFETY INFORMATION

WARNINGS AND PRECAUTIONS

Hemorrhage: Fatal bleeding events have occurred in patients treated with IMBRUVICA. Grade 3 or higher bleeding events (intracranial hemorrhage [including subdural hematoma], gastrointestinal bleeding, hematuria, and post-procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in approximately half of patients treated with IMBRUVICA.

The mechanism for the bleeding events is not well understood.

IMBRUVICA may increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant therapies and patients should be monitored for signs of bleeding.

Consider the benefit-risk of withholding IMBRUVICA for at least 3 to 7 days pre and post-surgery depending upon the type of surgery and the risk of bleeding.

Infections: Fatal and non-fatal infections (including bacterial, viral, or fungal) have occurred with IMBRUVICA therapy. Grade 3 or greater infections occurred in 14% to 29% of patients. Cases of progressive multifocal leukoencephalopathy (PML) and Pneumocystis jirovecii pneumonia (PJP) have occurred in patients treated with IMBRUVICA. Consider prophylaxis according to standard of care in patients who are at increased risk for opportunistic infections.

Monitor and evaluate patients for fever and infections and treat appropriately.

Cytopenias: Treatment-emergent Grade 3 or 4 cytopenias including neutropenia (range, 13 to 29%), thrombocytopenia (range, 5 to 17%), and anemia (range, 0 to 13%) based on laboratory measurements occurred in patients with B-cell malignancies treated with single agent IMBRUVICA. Monitor complete blood counts monthly.

Cardiac Arrhythmias: Fatal and serious cardiac arrhythmias have occurred with IMBRUVICA therapy. Grade 3 or greater ventricular tachyarrhythmias occurred in 0 to 1% of patients, and Grade 3 or greater atrial fibrillation and atrial flutter occurred in 0 to 6% of patients. These events have occurred particularly in patients with cardiac risk factors, hypertension, acute infections, and a previous history of cardiac arrhythmias.

Periodically monitor patients clinically for cardiac arrhythmias. Obtain an ECG for patients who develop arrhythmic symptoms (e.g., palpitations, lightheadedness, syncope, chest pain) or new onset dyspnea. Manage cardiac arrhythmias appropriately, and if it persists, consider the risks and benefits of IMBRUVICA treatment and follow dose modification guidelines.

Hypertension: Hypertension (range, 6 to 17%) has occurred in patients treated with IMBRUVICA with a median time to onset of 4.6 months (range, 0.03 to 22 months). Monitor patients for new onset hypertension or hypertension that is not adequately controlled after starting IMBRUVICA.

Adjust existing anti-hypertensive medications and/or initiate anti-hypertensive treatment as appropriate.

Second Primary Malignancies: Other malignancies (range, 3 to 16%) including non-skin carcinomas (range, 1 to 4%) have occurred in patients treated with IMBRUVICA. The most frequent second primary malignancy was non-melanoma skin cancer (range, 2 to 13%).

Tumor Lysis Syndrome: Tumor lysis syndrome has been infrequently reported with IMBRUVICA therapy. Assess the baseline risk (e.g., high tumor burden) and take appropriate precautions.

Monitor patients closely and treat as appropriate.

Embryo-Fetal Toxicity: Based on findings in animals, IMBRUVICA can cause fetal harm when administered to a pregnant woman. Advise women to avoid becoming pregnant while taking IMBRUVICA and for 1 month after cessation of therapy. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be apprised of the potential hazard to a fetus. Advise men to avoid fathering a child during the same time period.

ADVERSE REACTIONS

B-cell malignancies: The most common adverse reactions (≥20%) in patients with B-cell malignancies (MCL, CLL/SLL, WM and MZL) were thrombocytopenia (62%)*, neutropenia (61%)*, diarrhea (43%), anemia (41%)*, musculoskeletal pain (30%), bruising (30%), rash (30%), fatigue (29%), nausea (29%), hemorrhage (22%), and pyrexia (21%).

The most common Grade 3 or 4 adverse reactions (≥5%) in patients with B-cell malignancies (MCL, CLL/SLL, WM and MZL) were neutropenia (39%)*, thrombocytopenia (16%)*, and pneumonia (10%).

Approximately 6% (CLL/SLL), 14% (MCL), 11% (WM) and 10% (MZL) of patients had a dose reduction due to adverse reactions. Approximately 4%-10% (CLL/SLL), 9% (MCL), and 9 % (WM [6%] and MZL [13%]) of patients discontinued due to adverse reactions.

cGVHD: The most common adverse reactions (≥20%) in patients with cGVHD were fatigue (57%), bruising (40%), diarrhea (36%), thrombocytopenia (33%)*, stomatitis (29%), muscle spasms (29%), nausea (26%), hemorrhage (26%), anemia (24%)*, and pneumonia (21%).

The most common Grade 3 or 4 adverse reactions (≥5%) reported in patients with cGVHD were fatigue (12%), diarrhea (10%), neutropenia (10%)*, pneumonia (10%), sepsis (10%), hypokalemia (7%),

headache (5%), musculoskeletal pain (5%), and pyrexia (5%).

Twenty-four percent of patients receiving IMBRUVICA in the cGVHD trial discontinued treatment due to adverse reactions. Adverse reactions leading to dose reduction occurred in 26% of patients.

*Treatment-emergent decreases (all grades) were based on laboratory measurements and adverse reactions.

DRUG INTERACTIONS

CYP3A Inhibitors: Dose adjustment may be recommended.

CYP3A Inducers: Avoid coadministration with strong CYP3A inducers.

SPECIFIC POPULATIONS

Hepatic Impairment (based on Child-Pugh criteria): Avoid use of IMBRUVICA in patients with severe baseline hepatic impairment. In patients with mild or moderate impairment, reduce IMBRUVICA dose.

On May 24, 2018 Genmab A/S (Nasdaq Copenhagen: GEN) reported that topline results from the Phase III study of Arzerra (ofatumumab) plus bendamustine did not meet the primary endpoint of improved progression-free survival (PFS) in patients with indolent B-cell non-Hodgkin’s lymphoma (iNHL) who were unresponsive to rituximab or a rituximab-containing regimen, compared to those given bendamustine alone (Press release, Genmab, MAY 24, 2018, View Source [SID1234526894]). The safety profile observed in this study was consistent with that observed in other trials of ofatumumab and no new safety signals were observed.

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"We are disappointed that the ofatumumab treatment regimen did not meet the primary endpoint in this trial. The completion of this Phase III study, which began in 2010, would not have been possible without the generous participation of the patients and their families, and we are most grateful for this. The full data will be submitted for publication at a future medical conference and we hope that these will provide a better understanding of this result," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.

The results from this Phase III study do not impact any other ongoing studies with ofatumumab.

About the study (COMPLEMENT A+B)
The study is an open-label, two-arm, randomized, Phase III study that included 346 patients with indolent B-cell non-Hodgkin’s lymphoma who were unresponsive to rituximab or a rituximab-containing regimen. Patients in the study were randomized 1:1 to treatment with up to eight cycles of bendamustine given in combination with 12 doses of ofatumumab (1,000 mg) or up to eight cycles with bendamustine alone. The primary endpoint of the study was PFS.

Ofatumumab is not approved for the treatment of indolent non-Hodgkin’s Lymphoma.

About Ofatumumab (Arzerra)
Ofatumumab is a human monoclonal antibody that is designed to target the CD20 molecule found on the surface of normal B lymphocytes and on B cell malignancies (including chronic lymphocytic leukemia and non-Hodgkin’s lymphomas).

In the United States, Arzerra is approved for use in combination with chlorambucil for the treatment of previously untreated patients with CLL for whom fludarabine-based therapy is considered inappropriate, in combination with fludarabine and cyclophosphamide for the treatment of patients with relapsed CLL and for extended treatment of patients who are in complete or partial response after at least two lines of therapy for recurrent or progressive CLL. In the European Union, Arzerra is approved for use in combination with chlorambucil or bendamustine for the treatment of patients with CLL who have not received prior therapy and who are not eligible for fludarabine-based therapy and in combination with fludarabine and cyclophosphamide for adult patients with relapsed CLL. In more than 60 countries worldwide, including the United States and EU member countries, Arzerra is also indicated as monotherapy for the treatment of patients with CLL who are refractory after prior treatment with fludarabine and alemtuzumab. On January 22, 2018, it was announced that Novartis intends to transition Arzerra for the treatment of CLL indications from commercial availability to limited availability via compassionate use programs in non-U.S. markets.

On May 24, 2018 VBL Therapeutics (Nasdaq:VBLT), a clinical-stage biotechnology company focused on the discovery, development and commercialization of first-in-class treatments for cancer, reported that the Company will present an update on the OVAL Phase 3 trial of VB-111 in platinum-resistant ovarian cancer at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2018 Annual Meeting, to be held June 1-5 in Chicago, Illinois (Press release, VBL Therapeutics, MAY 24, 2018, View Source [SID1234526889]). In addition the Company will present data on its novel MOSPD2 program at the 2018 BIO International Convention, to be held June 4-7, 2018 in Boston.

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2018 ASCO (Free ASCO Whitepaper) Annual Meeting – Presentation Details

Title: Clinical trial in progress: A study of VB-111 combined with paclitaxel vs. paclitaxel for treatment of recurrent platinum-resistant ovarian cancer (OVAL, VB-111-701/GOG-3018).
Abstract: TPS5609
Session Title: Gynecologic Cancer
Date: June 4, 2018
Time: 1:15 PM-4:45 PM CDT
Location: Hall A
Poster Board: #331b
Presenter: Dr. Richard T. Penson, M.D.,MRCP, associate professor of Medicine, Harvard Medical School, clinical director of Medical Gynecologic Oncology, Massachusetts General Hospital
2018 BIO International Convention – Presentation Details

Date: Tuesday, June 5, 2018
Time: 2:45 pm EDT
Presentation Room: Theater 1
Location: Boston Convention & Exhibition Center
Webcast: Bio International Webcast Link
About VB-111 (ofranergene obadenovec)
VB-111, a potential first-in-class anticancer therapeutic candidate, is the Company’s lead oncology product currently being studied in a Phase 3 trial for ovarian cancer. VB-111 has received an Orphan Designation for the treatment of ovarian cancer by the European Medicines Agency (EMA). At the 2016 ASCO (Free ASCO Whitepaper), the Company presented data in platinum-resistant ovarian cancer, demonstrating a meaningful and significant increase in overall survival with VB-111 given in combination with chemotherapy (810 days vs. 172 days, p=0.042), along with a 60% durable CA-125 response rate—approximately two times the historical response observed with bevacizumab (Avastin) plus chemotherapy in ovarian cancer. The OVAL study is conducted in collaboration with the Gynecologic Oncology Group (GOG) Foundation, Inc., a leading organization for research excellence in the field of gynecologic malignancies.

About MOSPD2
MOSPD2 is a novel tumor-related target identified by VBL that may be used as a marker for selective targeting of several types of tumors. Research conducted by VBL has shown that MOSPD2 is a novel membrane protein found on tumor cells that is present when they start invading tissues or creating metastatic lesions. The Company believes that targeting of MOSPD2 may have several therapeutic applications, including inhibition of tumor cell metastases and targeting of MOSPD2-positive tumor cells. There are also potential applications in the inhibition of monocyte migration in chronic inflammatory conditions. VBL is developing the VB-600 series of pipeline candidates towards these applications.

On May 24, 2018 McKesson Corporation (NYSE:MCK) reported that revenues for the fourth quarter ended March 31, 2018, were $51.6 billion, up 6% compared to $48.7 billion a year ago (Press release, McKesson, MAY 24, 2018, View Source [SID1234526887]). On a constant currency basis, revenues increased 4% over the prior year. For the fiscal year, McKesson had revenues of $208.4 billion, up 5% compared to $198.5 billion a year ago. On a constant currency basis, revenues increased 4% over the prior year.

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On the basis of U.S. generally accepted accounting principles ("GAAP"), fourth-quarter loss per diluted share from continuing operations was $(5.58), compared to earnings per diluted share of $16.79 a year ago. Full-year GAAP earnings per diluted share from continuing operations was $0.30, compared to $23.28 a year ago. Fourth-quarter GAAP loss per diluted share and full-year GAAP earnings per share included after-tax net charges totaling $1.9 billion and $2.6 billion, respectively, or $9.07 and $12.32 per diluted share, respectively, driven primarily by non-cash goodwill and long-lived asset impairment charges in the company’s European and Canadian retail businesses, partially offset by benefits related to the Tax Cuts and Jobs Act of 2017.

Prior year fourth-quarter and full-year GAAP earnings per diluted share included an after-tax net gain of $3.0 billion, or $14.10 per diluted share and $13.53 per diluted share, respectively, related to the creation of the Change Healthcare joint venture.

Fourth-quarter Adjusted Earnings per diluted share was $3.49, up 2% compared to $3.41 a year ago. Full-year Adjusted Earnings per diluted share was $12.62, up 1% compared to $12.54 for the prior year, which includes the $0.31 per diluted share contribution to create a non-profit foundation.

For the full year, McKesson generated cash from operations of $4.3 billion and ended the year with cash and cash equivalents of $2.7 billion. During the year, McKesson repaid approximately $765 million in net long-term debt, paid $2.9 billion for acquisitions, repurchased approximately $1.7 billion of its common stock, invested $580 million internally and paid $262 million in dividends."

"While we realized significant charges in the fourth quarter reflecting challenging market conditions in Europe and Canada, I’m pleased with the Fiscal 2018 performance across our other businesses. And the strength of our balance sheet and cash flow enabled us to make internal investments and acquisitions that will drive growth," said John H. Hammergren, chairman and chief executive officer. "This strong financial position, combined with actions we are taking in relation to our recently announced multi-year strategic growth initiative, ensures McKesson’s ongoing focus on delivering shareholder value.

"We also returned capital to shareholders through share repurchases and a quarterly dividend. And yesterday, our Board of Directors approved an additional share repurchase authorization of $4 billion, as we believe that the company’s shares are an attractive investment opportunity and repurchasing stock is an important part of our diversified capital allocation strategy," continued Hammergren.

Segment Results

Distribution Solutions revenues were $51.6 billion for the quarter, up 7% on a reported basis and 5% on a constant currency basis. For the full year, Distribution Solutions revenues were $208.1 billion, up 6% on a reported basis and 5% on a constant currency basis, compared to the prior year.

North America pharmaceutical distribution and services revenues of $42.7 billion for the quarter were up 5% on both a reported basis and constant currency basis. For the full year, North America pharmaceutical distribution and services revenues were $174.2 billion, up 6% on both a reported and constant currency basis, compared to the prior year. Revenue growth for the quarter and the full year was driven primarily by market growth and acquisitions, partially offset by branded to generic conversions.

International pharmaceutical distribution and services revenues were $7.2 billion for the quarter, up 19% on a reported basis and 4% on a constant currency basis, driven by acquisitions and market growth, which were the same factors that drove full year revenues of $27.3 billion, up 10% on a reported basis and up 5% on a constant currency basis, compared to the prior year.

Medical-Surgical distribution and services revenues were $1.7 billion for the quarter, up 9%, driven primarily by market growth, including the impact of a stronger flu season. For the full year, Medical-Surgical distribution and services revenues were $6.6 billion, up 6% compared to the prior year.

Fourth-quarter Distribution Solutions GAAP operating loss was $(689) million and GAAP operating margin was (1.33)%. On a constant currency basis, fourth-quarter adjusted operating profit was $1.1 billion, up 8% from the prior year on a reported basis and 7% on a constant currency basis. Adjusted operating margin for the Distribution Solutions segment was 2.26% on a constant currency basis. Adjusted operating margin excluding noncontrolling interests for the Distribution Solutions segment was 2.17% on a constant currency basis.

For the full year, Distribution Solutions GAAP operating profit was $1.2 billion and GAAP operating margin was 0.59%. On a constant currency basis, full-year adjusted operating profit was $4.1 billion, up 8% from the prior year on a reported basis and 7% on a constant currency basis. Adjusted operating margin for the Distribution Solutions segment was 1.96% on a constant currency basis. Adjusted operating margin excluding noncontrolling interests for the Distribution Solutions segment was 1.87% on a constant currency basis.

Fourth-quarter Technology Solutions GAAP operating profit was $23 million. Fourth-quarter adjusted operating profit was $72 million, driven by the company’s proportionate share of the income from McKesson’s equity investment in Change Healthcare.

Full-year Technology Solutions GAAP operating loss was $(23) million. Full-year adjusted operating profit was $304 million, primarily driven by the company’s proportionate share of the income from McKesson’s equity investment in Change Healthcare.

Fiscal Year 2018 Reconciliation of GAAP Results to Adjusted Earnings

Adjusted Earnings per diluted share of $12.62 for the fiscal year ending March 31, 2018, excludes the following GAAP items:

Amortization of acquisition-related intangibles of $2.60 per diluted share;
Acquisition-related expenses and adjustments of $1.20 per diluted share;
Last-In-First-Out ("LIFO") inventory-related credits of 31 cents per diluted share;
Restructuring charges of $2.82 per diluted share, including non-cash long-lived asset impairment charges; and
Other adjustment net charges of $6.01 per diluted share, primarily including non-cash goodwill asset impairment charges, partially offset by benefits related to the Tax Cuts and Jobs Act of 2017.
Revised Segment Financial Reporting Effective Fiscal Year 2019

Following the retirement of the president of Distribution Solutions in January 2018 and an evaluation of the company’s management and operating structure, McKesson has revised its reportable segments commencing in the first quarter of Fiscal 2019. McKesson’s new reportable segments are:

U.S. Pharmaceutical and Specialty Solutions, which includes the U.S. Pharmaceutical and McKesson Specialty Health businesses;
European Pharmaceutical Solutions; and
Medical-Surgical Solutions.
All remaining operating segments and business activities that are not significant enough to require reportable segment disclosure will be included in Other. Other primarily includes McKesson Canada, McKesson Prescription Technology Solutions (MRxTS) and the company’s equity method investment in Change Healthcare.

Please refer to a second 8-K filed today with the Securities and Exchange Commission for historical supplemental information for the fiscal years ending March 31, 2018; March 31, 2017; and March 31, 2016 reflecting historical results by revised reportable segment.

Fiscal Year 2019 Outlook

McKesson expects Adjusted Earnings per diluted share of $13.00 to $13.80 for the fiscal year ending March 31, 2019.

"Our Fiscal 2019 outlook represents mid- to high-single digit percentage growth year over year, reflecting a more stable market environment and effective capital allocation, while including the previously outlined headwinds in our European and Rexall businesses," Hammergren concluded.

McKesson has ceased providing forward-looking guidance on a GAAP basis as the company is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, as items are inherently uncertain and depend on various factors, many of which are beyond the company’s control.

Key Assumptions for Fiscal 2019

The Fiscal 2019 outlook is based on the following key assumptions and is also subject to the Risk Factors outlined below:

McKesson to deliver mid-single digit percent revenue growth and down slightly to up mid-single digit percent adjusted income from operations growth in Fiscal 2019.
U.S. Pharmaceutical and Specialty Solutions to deliver low- to mid-single digit percent revenue growth and flat to down mid-single digit percent adjusted operating profit growth in Fiscal 2019.
European Pharmaceutical Solutions to deliver flat to mid-single digit percent revenue and adjusted operating profit growth in Fiscal 2019.
Medical-Surgical Solutions is expected to deliver low-double digit percent revenue growth and mid- to high-single digit percent adjusted operating profit growth in Fiscal 2019.
Other is expected to deliver low-single digit percent revenue growth and adjusted operating profit to be flat in Fiscal 2019, which includes a gross headwind of between $100 million and $120 million related to the generic pricing initiative the Canadian provincial governments enacted April 1, 2018, as well as the impact of an increase in minimum wage in multiple provinces.
Adjusted equity earnings from the company’s investment in Change Healthcare are expected to grow in the low- to mid-single digit percent in Fiscal 2019.
Expect low-double digit percent decline in corporate expenses compared to Fiscal 2018.
Interest expense is expected to decline year over year.
The guidance range assumes a full-year adjusted tax rate of approximately 21% to 23%, which may vary from quarter to quarter.
Income attributable to noncontrolling interests is expected to decline year over year.
The company’s ownership position in McKesson Europe is assumed to be approximately 77% for Fiscal 2019.
Foreign currency exchange rate movements are assumed to have a net favorable impact of up to 10 cents per diluted share year over year.
Commencing in Fiscal 2019, the company will provide free cash flow guidance. Free cash flow is expected to be approximately $3.0 billion, which is net of expected property acquisitions and capitalized software expenditures of between $600 million and $800 million.
Weighted average diluted shares used in the calculation of earnings per share are expected to be approximately 200 million for the year.
Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, acquisition-related expenses and adjustments, LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring charges, and other adjustments. A reconciliation of McKesson’s GAAP financial results to Adjusted Earnings is provided in Schedules 2, 3 and 4 of the financial statement tables included with this release.

The company will not provide forward-looking guidance on a GAAP basis prospectively as McKesson is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

Constant Currency

McKesson also presents its financial results on a constant currency basis. The company conducts business worldwide in local currencies, including the Euro, British pound and Canadian dollar. As a result, the comparability of the financial results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. Constant currency information is presented to provide a framework for assessing how the company’s business performed excluding the effect of foreign currency exchange rate fluctuations. The supplemental constant currency information of the company’s GAAP financial results and Adjusted Earnings (Non-GAAP) is provided in Schedule 3 of the financial statement tables included with this release.

Non-GAAP Measures

McKesson also provides adjusted operating profit margin excluding noncontrolling interests. The company has arrangements involving third-party noncontrolling interests. As a result, pre-tax results are affected by the portion of pre-tax earnings attributable to noncontrolling interests. Adjusted operating profit margin excluding noncontrolling interests information is presented to provide a framework for assessing how the company’s business performed excluding the effect of pre-tax earnings that is not attributable to McKesson. The supplemental adjusted operating profit margin excluding noncontrolling interests information of the company’s GAAP financial results and Adjusted Earnings (Non-GAAP) is provided in Schedule 3 of the financial statement tables included with this release.

McKesson also provides a free cash flow estimate on a forward-looking basis. Free cash flow is defined as net cash provided by operating activities less property acquisitions and capitalized software expenditures, as outlined in the company’s condensed consolidated statements of cash flows.

Risk Factors

Except for historical information contained in this press release, matters discussed may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These statements may be identified by their use of forward-looking terminology such as "believes", "expects", "anticipates", "may", "will", "should", "seeks", "approximately", "intends", "plans", "estimates" or the negative of these words or other comparable terminology. The discussion of financial trends, strategy, plans or intentions may also include forward-looking statements. It is not possible to predict or identify all such risks and uncertainties; however, the most significant of these risks and uncertainties are described in the company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission and include, but are not limited to: changes in the U.S. healthcare industry and regulatory environment; managing foreign expansion, including the related operating, economic, political and regulatory risks; changes in the Canadian healthcare industry and regulatory environment; exposure to European economic conditions, including recent austerity measures taken by certain European governments; changes in the European regulatory environment with respect to privacy and data protection regulations; fluctuations in foreign currency exchange rates; the company’s ability to successfully identify, consummate, finance and integrate acquisitions; the performance of the company’s investment in Change Healthcare; the company’s ability to manage and complete divestitures; material adverse resolution of pending legal proceedings; competition and industry consolidation; substantial defaults in payment or a material reduction in purchases by, or the loss of, a large customer or group purchasing organization; the loss of government contracts as a result of compliance or funding challenges; public health issues in the U.S. or abroad; cyberattack, natural disaster, or malfunction of sophisticated internal computer systems to perform as designed; the adequacy of insurance to cover property loss or liability claims; the company’s proprietary products and services may not be adequately protected, and its products and solutions may be found to infringe on the rights of others; system errors or failure of our technology products or services to conform to specifications; disaster or other event causing interruption of customer access to data residing in our service centers; changes in circumstances that could impair our goodwill or intangible assets; new or revised tax legislation or challenges to our tax positions; general economic conditions, including changes in the financial markets that may affect the availability and cost of credit to the company, its customers or suppliers; changes in accounting principles generally accepted in the United States of America; withdrawal from participation in multiemployer pension plans or if such plans are reported to have underfunded liabilities; inability to realize the expected benefits from the company’s restructuring and business process initiatives; difficulties with outsourcing and similar third party relationships; risks associated with the company’s retail expansion; and the company’s inability to keep existing retail store locations or open new retail locations in desirable places. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

Conference Call Details

The company has scheduled a conference call for today, Thursday, May 24th, at 8:00 AM ET. The dial-in number for individuals wishing to participate on the call is 323-701-0225. Craig Mercer, senior vice president, Investor Relations, is the leader of the call, and the password to join the call is ‘McKesson’. A telephonic replay of this conference call will be available for five calendar days. The dial-in number for individuals wishing to listen to the replay is 719-457-0820 and the pass code is 3609926. An archive of the conference call will also be available on the company’s Investor Relations website at View Source

Shareholders are encouraged to review the company’s filings with the Securities and Exchange Commission.