On July 26, 2018 Cytokinetics, Incorporated (Nasdaq:CYTK) reported financial results for the second quarter of 2018 (Press release, Cytokinetics, JUL 26, 2018, View Source [SID1234527900]). Net loss for the second quarter was $27.5 million, or $0.51 per share, compared to a net loss for the second quarter of 2017 of $29.1 million, or $0.60 per share. Cash, cash equivalents and investments totaled $232.0 million at June 30, 2018.

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"We made substantial progress in the second quarter of 2018 advancing programs in both our cardiac and skeletal muscle verticals," said Robert I. Blum, Cytokinetics’ President and Chief Executive Officer. "Following the recent presentation of positive data from our Phase 2 study of reldesemtiv in patients with SMA, we are now working with our partner, Astellas, as well as advocacy partners and clinical advisors, to consider a potential path forward in this indication, and potentially others, as we expect additional results this year. In the past quarter, we also received feedback from FDA regarding the planned second Phase 3 clinical trial of omecamtiv mecarbil in patients with heart failure, under our collaboration with Amgen; we are working toward the objective of initiating this trial before the end of the year. Finally, we continued the preclinical development of several new compounds, independently and within our collaborations, and we expect to move one or more potential drug candidates into Phase 1 clinical studies later this year."

Recent Highlights and Upcoming Milestones

Cardiac Muscle Program

omecamtiv mecarbil (cardiac myosin activator)

Continued patient enrollment in GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure), the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil. Enrollment has surpassed 50 percent completion with over 4,000 patients randomized to date having a risk profile consistent with the trial design. We expect completion of patient enrollment into GALACTIC-HF to occur during the first half of 2019.

Conducted further interactions with FDA and finalized the protocol for a second Phase 3 clinical trial of omecamtiv mecarbil. This trial is intended to evaluate the potential effect of omecamtiv mecarbil on exercise performance in patients with heart failure and will be conducted by Cytokinetics in collaboration with Amgen. We continue to work toward the objective of beginning this clinical trial by the end of the year.
Skeletal Muscle Program

reldesemtiv (next-generation FSTA)

Announced that data from the Phase 2 clinical study of reldesemtiv in patients with spinal muscular atrophy (SMA) were presented by John W. Day, M.D., Ph.D., Professor of Neurology and Pediatrics (Genetics), Stanford University, at the 2018 Annual Cure SMA Conference in Dallas. The study showed dose- and concentration-dependent increases in time to muscle fatigue as measured by changes from baseline in Six Minute Walk Distance, a sub-maximal exercise test of aerobic capacity and endurance, and Maximal Expiratory Pressure, a measure of strength of respiratory muscles, after eight weeks of treatment with reldesemtiv.

Continued site activation and patient enrollment in FORTITUDE-ALS (Functional Outcomes in a Randomized Trial of Investigational Treatment with CK-2127107 to Understand Decline in Endpoints – in ALS), the Phase 2 clinical trial of reldesemtiv which is designed to assess the change from baseline in percent predicted slow vital capacity and other measures of skeletal muscle function after 12 weeks of treatment with reldesemtiv in patients with ALS. This trial has enrolled over 250 patients toward the objective of 445 patients in the trial and is being conducted by Cytokinetics in collaboration with Astellas. We expect to complete enrollment in FORTITUDE-ALS in Q4 2018 with results from this clinical trial now expected in the first half of 2019.

Completed patient enrollment in the Phase 2 clinical trial of reldesemtiv in patients with chronic obstructive pulmonary disease (COPD) which is designed to assess its effect on physical function. This trial is being conducted by Astellas in collaboration with Cytokinetics. We expect results from this clinical trial in Q3 2018.

Continued patient enrollment in the Phase 1b clinical trial of reldesemtiv in elderly subjects with limited mobility which is designed to assess its effect on measures of physical function. This trial is being conducted by Astellas in collaboration with Cytokinetics. We expect Astellas will conduct an interim analysis of data from this clinical trial in Q3 2018.
Pre-Clinical Research and Development

Continued research in collaboration with Astellas directed to the discovery of next-generation skeletal muscle activators; jointly advanced a potential drug candidate into IND-enabling studies.

Continued pre-clinical development of a next-generation cardiac muscle activator in collaboration with Amgen; we expect to submit an IND in 2018 and plan to initiate Phase 1 studies for this potential drug candidate by year-end or in early 2019.

Continued IND-enabling studies with an unpartnered cardiac sarcomere directed compound and engaged FDA in preparation for potential advancement to Phase 1 studies expected in Q4 2018.

Continued independent research activities directed to our other muscle biology research programs.
Corporate

Announced the continuation of our partnership with The ALS Association in the fight against ALS with renewal of Gold Level Sponsorship of the National Walks to Defeat ALS and Premier Level National ALS Advocacy Conference Sponsorship as well as Platinum Level Sponsorship for initiatives led by The ALS Association Golden West Chapter, including grant funding for care services for people living with ALS in the San Francisco Bay Area.

Announced an expanded partnership with Cure SMA to increase education, awareness and fundraising for SMA. As a National Platinum Partner for 2018, Cytokinetics will lend support to several of Cure SMA’s initiatives at both the local and national level to advance understanding of, and research toward potential treatments for SMA.
Financials

Revenues for the three and six months ended June 30, 2018 were $6.2 million and $11.5 million, respectively, compared to $3.1 million and $7.2 million for the corresponding periods in 2017. Revenues for the first six months of 2018 stemmed from our strategic alliance with Astellas.

Research and development expenses for the three months ended June 30, 2018 increased to $21.6 million and $43.7 million, respectively from $19.8 million and $39.1 million for the same periods in 2017, respectively, primarily due to increases in clinical trial expenses for reldesemtiv and preclinical expenses for our cardiac sarcomere directed program, offset in part by lower clinical trial and other development expenses for tirasemtiv.

General and administrative expenses for the three months ended June 30, 2018 decreased to $8.0 million from $8.4 million in 2017 primarily because of reduced precommercial and general outside services and increased to $17.3 million for the six months ended June 30, 2018 from $16.6 million for the same period in 2017, primarily due to increased general facilities-related costs.

Financial Guidance

The Company also updated financial guidance for 2018. The Company has reduced spending and revenue guidance by $5 million because of a delay in enrollment of FORTITUDE-ALS, with a corresponding reduction in cash revenues as the cost of that trial is being reimbursed by Astellas. The Company does not anticipate any change in net cash utilization. The Company estimates cash revenue will be in the range of $12 to $18 million, operating expenses will be in the range of $100 to $110 million, and net cash utilization will be approximately $100 million.

Conference Call and Webcast Information

Members of Cytokinetics’ senior management team will review the company’s second quarter results via a webcast and conference call today at 4:30 PM Eastern Time. The webcast can be accessed through the Investors & Media section of the Cytokinetics website at www.cytokinetics.com. The live audio of the conference call can also be accessed by telephone by dialing either (866) 999-CYTK (2985) (United States and Canada) or (706) 679-3078 (international) and typing in the passcode 9599438.

An archived replay of the webcast will be available via Cytokinetics’ website until August 2, 2018. The replay will also be available via telephone by dialing (855) 859-2056 (United States and Canada) or (404) 537-3406 (international) and typing in the passcode 9599438 from July 26, 2018 at 7:30 PM Eastern Time until August 2, 2018.

On July 26, 2018 CTI BioPharma Corp. (CTI BioPharma) (NASDAQ: CTIC) reported that management plans to report its second quarter 2018 financial results on Thursday, August 2, 2018, after the close of the U.S. financial markets (Press release, CTI BioPharma, JUL 26, 2018, View Source;p=RssLanding&cat=news&id=2360352 [SID1234527899]). Following the announcement, members of the management team will host a webcast conference call to discuss the results and provide a general corporate update at 4:30 p.m. ET (1:30 p.m. PT). Access to the event can be obtained as follows:

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Thursday, August 2, 2018
1:30 p.m. PT/4:30 p.m. ET/10:30 p.m. CET
877-260-1479 (domestic)
+1 334 323 0522 (international)

To access the live audio webcast or the subsequent archived recording, visit CTI BioPharma’s website, www.ctibiopharma.com. Webcast and telephone replays of the conference call will be available at approximately two hours after completion of the call. Callers can access the replay by dialing 1-888-203-1112 (domestic) or +1 719-457-0820 (international). The access code for the replay is 3255708. The telephone replay will be available until Thursday, August 9, 2018.

On July 26, 2018 Champions Oncology, Inc. (Nasdaq: CSBR), engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs, reported its financial results for the fourth fiscal quarter and 12 months ended April 30, 2018 (Press release, Champions Oncology, JUL 26, 2018, View Source [SID1234527898]).

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Fiscal Year 2018 Financial and Recent Business Highlights:

Record annual revenue of $20.2 million, an increase of 31.3% year-over-year

Record Translational Oncology Services ("TOS") revenue of $18.8 million, an increase of 37.2% year-over-year

Record annual TOS bookings

Successfully transitioned to our own new lab facility, doubling capacity, expanding revenue opportunities and realizing material cost savings

Forecast of at least 20% revenue growth in fiscal 2019 and sustained, quarterly operational profitability

Ronnie Morris, CEO of Champions, commented, "Exceeding $20 million in revenue is a significant milestone for our company, and our increasingly robust bookings and a growing pipeline of identified opportunities reinforce our optimism for the coming quarters and for revenue growth that will again exceed 20% this fiscal year. There is tremendous energy within our team about the opportunities in the market and the level of engagement from both new and existing customers."

"In addition, we made meaningful progress towards achieving our goal of sustained, long-term profitability by growing our business organically and leveraging the scale of our operations," added Mr. Morris. "Our core business is built on a highly leverageable, scalable business model that enabled us to grow our revenue by more than 30% in fiscal 2018, well ahead of our targeted 20% growth, and manage costs and operating expense to a modest increase of 4.2%. We anticipate delivering operational profitability during each quarter of fiscal 2019."

Fourth Fiscal Quarter Financial Results

Exhibit 99.1

For the fourth quarter of fiscal 2018, revenue increased 32.3% to $4.9 million compared to $3.7 million for the fourth quarter of fiscal 2017. Total operating expenses for the fourth quarter of fiscal 2018 were $5.5 million compared to $6.1 million for the fourth quarter of fiscal 2017, a decrease of $593,000 or (9.7%). For the fourth quarter of fiscal 2018, Champions reported a loss from operations of $594,000, which includes $172,000 in stock-based compensation and $110,000 in depreciation, an improvement of $1.8 million or (75.1%), compared to the loss from operations of $2.4 million, inclusive of $761,000 in stock-based compensation and $35,000 depreciation expense, in the fourth quarter of fiscal 2017. Excluding stock based compensation and depreciation, Champions reported a loss from operations for the quarter of $312,000; however, as forecasted for the full year, Champions reported income from operations of $40,000 and is positioned for sustained quarterly operational profitability going forward.

Cost of oncology solutions was $2.8 million for the three months ended April 30, 2018, an increase of $248,000, or 9.6% compared to $2.6 million for the three months ended April 30, 2017. The increase in cost of sales was due to an increase in TOS studies. For the three months ended April 30, 2018, gross margin was 42.7% compared to 30.9% for the three months ended April 30, 2017. Gross margin varies based on timing differences between expense and revenue recognition; however, the improvement can be attributed to leveraging cost of sales against a growing revenue base.

Research and development expense was $1.1 million for both the three months ended April 30, 2018 and 2017. Sales and marketing expense for the three months ended April 30, 2018 was $715,000, a decrease of $177,000, or (19.8%) compared to $892,000 for the three months ended April 30, 2017. The decrease is mainly due to a reduction of payroll and travel expenses. General and administrative expense was $888,000 for the three months ended April 30, 2018 compared to $1.6 million for the three months ended April 30, 2017, a decrease of $682,000 or (43.4%). The decrease is mainly due to a reduction in stock-based compensation expense.

Year-to-Date Financial Results

For the twelve months of fiscal 2018, revenue increased 31.3% to $20.2 million, as compared to $15.4 million for the twelve months of fiscal 2017. For the twelve months of fiscal 2018, total operating expenses decreased (2.8%) to $21.6 million, as compared to $22.2 million for the twelve months of fiscal 2017. The decrease is mainly due to a decrease in stock-based compensation.

For the twelve months ended April 30, 2018, Champions reported a loss from operations of $1.4 million, which includes $1.0 million in stock-based compensation and $360,000 in depreciation, an improvement of $5.5 million or (80.1%), compared to the loss from operations of $6.8 million, inclusive of $2.7 million in stock-based compensation and $141,000 depreciation, for the twelve months ended April 30, 2017. Excluding stock-based compensation and depreciation, Champions reported operating income of $40,000 for the twelve months ended April 30, 2018.

Net cash used in operations was $1.2 million and $2.8 million for the twelve months ended April 30, 2018 and 2017, respectively, a decrease of $1.6 million or (56.9%). The reduction in cash burn is the result of our revenue growth and expense management.

Cost of oncology solutions was $10.6 million for the twelve months ended April 30, 2018 compared to $9.7 million for the twelve months ended April 30, 2017, an increase of $850,000 or 8.8%. The increase in cost of sales was due to an increase in TOS studies. Gross margin was 47.9% for the twelve months ended April 30, 2018 compared to 37.0% for the twelve months ended April 30, 2017.The increase in cost of sales was due to an increase in TOS studies. The improvement in gross

Exhibit 99.1

margin was due to higher TOS revenue leveraged off the fixed cost component of the lab and effective management of the variable lab costs. Gross margin varies based on timing differences between expense and revenue recognition. While the gross margin improved, there are expenses incurred and recognized in advance of future revenue.

Research and development expense was $4.4 million for the twelve months ended April 30, 2018 an increase of $108,000, or 2.5% compared to $4.3 million for the twelve months ended April 30, 2017. Sales and marketing expense for the twelve months ended April 30, 2018 was $2.6 million, a decrease of $691,000, or (21.2%) compared to $3.3 million for the twelve months ended April 2017. The decrease is mainly due to reduction in salary and travel expenses. General and administrative expense was $4.1 million for the twelve months ended April 30, 2018, a decrease of 892,000 or (18.0%) compared to $5.0 million for the twelve months ended April 30, 2017. The decrease is primarily due to a reduction in stock-based compensation expense.

Conference Call Information:

The Company will host a conference call today at 4:30 p.m. EDT (1:30 p.m. PDT) to discuss its fourth quarter financial results. To participate in the call, please call 877-407-8035 (domestic) or 201-689-8035 (international) ten minutes ahead of the call and give the verbal reference "Champions Oncology."

Full details of the Company’s financial results will be available Monday July 30, 2018 in the Company’s Form 10-K at www.championsoncology.com.

* Non-GAAP Financial Information

See the attached Reconciliation of GAAP net loss to non-GAAP net loss for an explanation of the amounts excluded to arrive at non-GAAP net loss and related non-GAAP net loss per share amounts for the three and twelve months ended April 30, 2018 and 2017. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect the Company’s basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP net loss and non-GAAP loss per share are not, and should not be viewed as a substitute for similar GAAP items. Champions’ defines non-GAAP dilutive loss per share amounts as non-GAAP net loss divided by the weighted average number of diluted shares outstanding. Champions’ definition of non-GAAP net loss and non-GAAP diluted loss per share may differ from similarly named measures used by others.

On July 26, 2018 Celgene Corporation (NASDAQ:CELG) reported net product sales of $3,808 million for the second quarter of 2018, a 17 percent increase from the same period in 2017 (Press release, Celgene, JUL 26, 2018, View Source [SID1234527897]). Celgene reported second quarter 2018 total revenue of $3,814 million, a 17 percent increase compared to $3,271 million in the second quarter of 2017.

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Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $1,045 million and diluted earnings per share (EPS) of $1.43 for the second quarter of 2018. For the second quarter of 2017, GAAP net income was $1,101 million and diluted EPS was $1.36.

Adjusted net income for the second quarter of 2018 increased 5 percent to $1,585 million compared to $1,514 million in the second quarter of 2017. For the same period, adjusted diluted EPS increased 16 percent to $2.16 (including dilution from the Juno Therapeutics acquisition) from $1.87.

"We continued to deliver strong operating performance in the second quarter, leading us to update our 2018 financial guidance," said Mark J. Alles, Chairman and Chief Executive Officer of Celgene Corporation. "Our next innovation cycle is underway. We are meaningfully advancing our pipeline, while strengthening the organization to maximize future growth opportunities."

Second Quarter 2018 Financial Highlights

Unless otherwise stated, all comparisons are for the second quarter of 2018 compared to the second quarter of 2017. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense and a litigation-related loss contingency accrual expense. Please see the attached Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Net Income for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively.

Net Product Sales Performance

REVLIMID sales for the second quarter increased 21 percent to $2,453 million. REVLIMID sales continue to grow, driven by increases in market share and extended treatment duration. U.S. sales of $1,586 million and international sales of $867 million increased 17 percent and 28 percent year-over-year, respectively. International sales were also favorably impacted by customer buying patterns and sales of product for use in clinical trials.
POMALYST/IMNOVID sales for the second quarter were $507 million, an increase of 30 percent year-over-year. U.S. sales were $341 million and international sales were $166 million, an increase of 41 percent and 11 percent year-over-year, respectively. POMALYST/IMNOVID sales growth was driven primarily by increases in market share and treatment duration.
OTEZLA sales for the second quarter were $375 million, a 5 percent increase year-over-year. Second quarter U.S. sales of $291 million and international sales of $84 million decreased 5 percent and increased 62 percent year-over-year, respectively. OTEZLA sales in the U.S. were driven primarily by increasing demand with continued access pull-through in contracted health plans that was offset by lower customer inventory levels at the end of the second quarter of 2018. The strong momentum of OTEZLA adoption continued in key international markets with significant growth acceleration in Japan.
ABRAXANE sales for the second quarter were $243 million, a 4 percent decrease year-over-year. U.S. sales were $152 million and international sales were $91 million, a decrease of 6 percent and 2 percent year-over-year, respectively.
In the second quarter, all other product sales, which include IDHIFA, THALOMID, ISTODAX, VIDAZA and an authorized generic version of VIDAZA drug product primarily sold in the U.S., were $230 million compared to $222 million in the second quarter of 2017.
Research and Development (R&D)

On a GAAP basis, R&D expenses were $1,251 million for the second quarter of 2018 compared to $835 million for the same period in 2017. Adjusted R&D expenses were $948 million for the second quarter of 2018 compared to $690 million for the second quarter of 2017. The increase was driven by the inclusion of R&D expenses associated with the acquisition of Juno and regulatory submission-related work on multiple programs. Additional R&D expenses only included on a GAAP basis increased in 2018, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.

Selling, General and Administrative (SG&A)

On a GAAP basis, SG&A expenses were $790 million for the second quarter of 2018 compared to $939 million for the same period in 2017. Adjusted SG&A expenses were $672 million for the second quarter of 2018 compared to $532 million for the second quarter of 2017. The current period included an increase in SG&A expense associated with the acquisition of Juno and marketing-related expenses. Additional SG&A expenses only included on a GAAP basis decreased in 2018, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.

Cash, Cash Equivalents, Marketable Debt Securities and Publicly-Traded Equity Securities

Operating cash flow was $1.2 billion in the second quarter of 2018, compared to $1.6 billion for the second quarter of 2017. In May 2018, we entered into an accelerated share repurchase (ASR) agreement to repurchase an aggregate of $2 billion of our common stock. During the second quarter of 2018, we purchased 32.8 million of our shares for $3.3 billion, including the $2 billion paid for the ASR for which we have received a partial delivery of approximately 18 million shares. We anticipate the remaining shares from the ASR will be received in the third quarter of 2018. As of June 30, 2018, Celgene had approximately $2.8 billion remaining under its stock repurchase program. Celgene ended the quarter with approximately $3.4 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.

Portfolio Updates

In July, Celgene announced that the phase III AUGMENT trial evaluating REVLIMID in combination with rituximab (R2) in patients with relapsed and/or refractory follicular lymphoma and marginal zone lymphoma met the primary endpoint of progression-free survival (PFS). Data from the AUGMENT trial will be submitted to a future medical meeting. Global regulatory submissions are planned for the first quarter of 2019.
In June and July, Celgene and Acceleron Pharma announced that luspatercept achieved all primary and key secondary endpoints in the phase III MEDALIST and BELIEVE trials in patients with low-to-intermediate risk myelodysplastic syndromes (MDS) and transfusion-dependent beta-thalassemia, respectively. Data from the MEDALIST and BELIEVE trials will be submitted to a future medical meeting in 2018. Regulatory applications for luspatercept in the United States and Europe are planned for the first half of 2019.
At the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June, data were presented on Celgene’s pipeline assets and marketed products including:
Updated durability and safety data from the TRANSCEND NHL-001 trial evaluating liso-cel (JCAR017) in patients with relapsed and/or refractory aggressive non-Hodgkin lymphoma (NHL).
In collaboration with partner bluebird bio, updated data from the CRB-401 phase I trial evaluating bb2121 in patients with relapsed and/or refractory multiple myeloma (RRMM).
Results from the phase III OPTIMISMM trial evaluating POMALYST in combination with bortezomib and dexamethasone (PVd) in patients with second-line multiple myeloma.
Results from the phase III RELEVANCE trial evaluating REVLIMID in combination with rituximab in patients with previously untreated follicular lymphoma (FL).
Results from the Merck sponsored phase III KEYNOTE-407 trial evaluating KEYTRUDA (pembrolizumab) in combination with ABRAXANE as first-line treatment for metastatic squamous non-small cell lung cancer (NSCLC).
PFS and safety analysis from the Genentech-sponsored phase III IMpower131 trial evaluating TECENTRIQ (atezolizumab) plus chemotherapy (carboplatin and ABRAXANE) as first-line treatment in patients with advanced squamous NSCLC.
In May, Roche announced that the phase III IMpower130 trial evaluating TECENTRIQ plus chemotherapy (carboplatin and ABRAXANE) in patients with metastatic non-squamous NSCLC met its co-primary endpoints of overall survival and PFS. Additionally, in July, Roche announced that the phase III IMpassion130 trial with ABRAXANE in combination with TECENTRIQ in patients with metastatic or locally advanced triple negative breast cancer met its co-primary endpoint of PFS. Data from these trials will be presented at a future medical meeting.
The phase I TRANSCEND CLL-004 trial evaluating liso-cel in patients with relapsed and/or refractory chronic lymphocytic leukemia (CLL) continues to enroll. The phase III TRANSFORM (BCM-003) trial evaluating liso-cel as second-line therapy in patients with diffuse large B-cell lymphoma (DLBCL) who are eligible for transplantation is initiating. In addition, the phase II trial (PILOT) evaluating liso-cel as second-line therapy in patients with DLBCL who are not eligible for transplantation was initiated in May.
Organizational Updates

In May, Celgene announced the hiring of David V. Elkins as Executive Vice President (EVP) and Chief Financial Officer (CFO) and the appointment of Peter N. Kellogg to EVP, Chief Corporate Strategy Officer until his retirement planned for mid-2019. Mr. Elkins joined Celgene as EVP on July 1, 2018 and will succeed Peter Kellogg as CFO effective August 1, 2018.
In June, Celgene announced the appointment of Jonathan Biller as EVP and General Counsel effective July 3, 2018, following the departure of Gerald F. Masoudi.
Second Quarter 2018 Conference Call and Webcast Information

Celgene will host a conference call to discuss the second quarter of 2018 operational and financial performance on Thursday, July 26, 2018, at 9 a.m. ET. The conference call will be available by webcast at View Source An audio replay of the call will be available from noon July 26, 2018, until midnight ET August 2, 2018. To access the replay in the U.S., dial (855) 859-2056; outside the U.S. dial (404) 537-3406. The participant passcode is 2194616.

On July 26, 2018 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the second quarter of 2018, which were highlighted by strong sales for Eliquis (apixaban) and Opdivo (nivolumab), and important regulatory progress in the company’s Immuno-Oncology portfolio (Press release, Bristol-Myers Squibb, JUL 26, 2018, View Source [SID1234527896]).

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"We had a very good second quarter where we delivered strong performance for Eliquis and Opdivo, and achieved important regulatory and data milestones supporting our Immuno-Oncology portfolio," said Giovanni Caforio, M.D., chairman and chief executive officer, Bristol-Myers Squibb. "Looking forward, we are focused on robust commercial execution and the evolution of our diversified pipeline to deliver transformational medicines to the patients we serve."

SECOND QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted second quarter 2018 revenues of $5.7 billion, an increase of 11% compared with the same period a year ago. Revenues increased 9% when adjusted for foreign exchange impact.
U.S. revenues increased 13% to $3.2 billion in the quarter compared to the same period a year ago. International revenues increased 9%. When adjusted for foreign exchange impact, international revenues increased 4%.
Gross margin as a percentage of revenue increased from 69.5% to 71.5% in the quarter primarily due to an impairment charge for a manufacturing site in the prior period.
Marketing, selling and administrative expenses decreased 5% to $1.1 billion in the quarter.
Research and development expenses increased 45% to $2.4 billion in the quarter, which includes a $1.1 billion charge resulting from the Nektar collaboration in the second quarter of 2018.
The effective tax rate was 26.1% in the quarter, compared to 28.8% in the second quarter last year. The effective tax rate includes a nondeductible equity investment loss in the second quarter of 2018.
The company reported net earnings attributable to Bristol-Myers Squibb of $373 million, or $0.23 per share, in the second quarter compared to net earnings of $916 million, or $0.56 per share, for the same period in 2017.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.6 billion, or $1.01 per share, in the second quarter, compared to $1.2 billion, or $0.74 per share, for the same period in 2017. An overview of specified items is provided under the "Use of Non-GAAP Financial Information" section.
Cash, cash equivalents and marketable securities were $8.2 billion, with a net cash position of $805 million, as of June 30, 2018.
SECOND QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

Global revenues for the second quarter of 2018, compared to the second quarter of 2017, were driven by:

Eliquis , which grew by $474 million or a 40% increase
Opdivo , which grew by $432 million or a 36% increase
Orencia , which grew by 9%
Sprycel , which grew by 6%
Yervoy , which decreased by 2%
Opdivo

Regulatory

In July, the company announced the U.S. Food and Drug Administration (FDA) approved Opdivo plus low-dose Yervoy (injections for intravenous use) for the treatment of adult and pediatric patients 12 years and older with microsatellite instability high or mismatch repair deficient metastatic colorectal cancer that has progressed following treatment with a fluoropyrimidine, oxaliplatin and irinotecan.
In June, the company announced the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended expanded approval of the current indications for Opdivo to include the adjuvant treatment of adult patients with melanoma with involvement of lymph nodes or metastatic disease who have undergone complete resection. The CHMP recommendation will be reviewed by the European Commission (EC), which has the authority to approve medicines for the European Union.
In June, the company announced the FDA accepted its supplemental Biologics License Application for Opdivo plus low-dose Yervoy for the treatment of first-line advanced non-small cell lung cancer (NSCLC) in patients with tumor mutational burden (TMB) ≥10 mutations per megabase (mut/Mb).
In June, the China National Drug Administration approved Opdivo for the treatment of locally advanced or metastatic NSCLC after prior platinum-based chemotherapy in adult patients without EGFR or ALK genomic tumor aberrations.
In May, the EMA validated a type II variation application for the Opdivo plus Yervoy combination for treatment in adult patients with first-line metastatic NSCLC who have TMB ≥10 mut/Mb.
Clinical

In June, at the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper), the company announced important new data and analysis from four studies evaluating Opdivo as monotherapy and in combination with Yervoy, chemotherapy or NKTR-214:
CheckMate -227: Results from a part of the Phase 3 trial evaluating Opdivo plus low-dose Yervoy and Opdivo plus chemotherapy versus chemotherapy in patients with first-line advanced NSCLC with PD-L1 expression <1%, across squamous and non-squamous tumor histologies (Part 1b). (link)
CheckMate -238: Results from the Phase 3 trial evaluating Opdivo versus Yervoy in patients with stage IIIB/C or stage IV melanoma who are at high risk of recurrence following complete surgical resection. (link)
CheckMate -214: Patient-reported outcomes from the Phase 3 trial evaluating Opdivo plus low-dose Yervoy versus sunitinib over a two-year follow-up period in intermediate- and poor-risk patients with advanced renal cell carcinoma. (link)
Results from the Phase 1/2 dose-escalation study with Nektar Therapeutics, evaluating the safety, efficacy and biomarker data of NKTR-214 in combination with Opdivo for patients enrolled in the Phase 1 dose-escalation stage of the study and for the first patients consecutively enrolled in select dose expansion cohorts in Phase 2. (link)
Sprycel

Regulatory

In July, the company announced the EC has expanded the indication for Sprycel to include the treatment of children and adolescents aged 1 year to 18 years with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase, and to include a powder for oral suspension formulation.
Empliciti

Clinical

In June, the company announced the Phase 2 study evaluating the addition of Empliciti to pomalidomide and low-dose dexamethasone in patients with relapsed/refractory multiple myeloma showed a statistically significant and clinically meaningful improvement in progression free survival for patients treated with EPd compared with pomalidomide and dexamethasone alone. (link)
SECOND QUARTER BUSINESS DEVELOPMENT UPDATE

In July, the company and Tsinghua University announced a collaboration to discover therapeutic agents against novel targets for autoimmune diseases and cancers. The collaboration brings together the respective scientific expertise and capabilities of both organizations with a focus on validating new targets and generating early drug candidates for clinical development.
In April, the company and Nektar Therapeutics completed the agreement for the development and commercialization of NKTR-214 with Opdivo and Opdivo plus Yervoy, originally announced in February 2018.
In April, the company and Flatiron Health announced a three-year agreement to curate regulatory-grade real-world data for cancer research and real-world evidence generation.
2018 FINANCIAL GUIDANCE

Bristol-Myers Squibb is decreasing its 2018 GAAP EPS guidance range from $2.70 – $2.80 to $2.68 – $2.78 and increasing its non-GAAP EPS guidance range from $3.35 – $3.45 to $3.55 – $3.65. Both GAAP and non-GAAP guidance assume current exchange rates. Key revised 2018 GAAP and non-GAAP line-item guidance assumptions are:

Worldwide revenues increasing in the mid- to high-single digits.
The financial guidance for 2018 excludes the impact of any potential future strategic acquisitions and divestitures, and any specified items that have not yet been identified and quantified. The non-GAAP 2018 guidance also excludes other specified items as discussed under "Use of Non-GAAP Financial Information." Details reconciling adjusted non-GAAP amounts with the amounts reflecting specified items are provided in supplemental materials available on the company’s website.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings and related EPS information, that are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of future operating results. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods including restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, R&D charges in connection with the acquisition or licensing of third party intellectual property rights, divestiture and equity investment gains or losses, upfront payments from out-licensed assets, pension charges, legal and other contractual settlements and debt redemption gains or losses, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of our baseline performance before items that are considered by us to not be reflective of our ongoing results. In addition, this information is among the primary indicators we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting for future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted EPS prepared in accordance with GAAP.

Statement on Cautionary Factors

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as "anticipate", "estimates", "should", "expect", "guidance", "project", "intend", "plan", "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, effects of the continuing implementation of governmental laws and regulations related to Medicare, Medicaid, Medicaid managed care organizations and entities under the Public Health Service 340B program, pharmaceutical rebates and reimbursement, market factors, competitive product development and approvals, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions, claims and concerns that may arise regarding the safety and efficacy of in-line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, changes to business or tax planning strategies, difficulties and delays in product development, manufacturing or sales including any potential future recalls, patent positions and the ultimate outcome of any litigation matter. These factors also include the company’s ability to successfully execute its strategic plans, including its business development strategy, the expiration of patents or data protection on certain products, including assumptions about the company’s ability to retain patent exclusivity of certain products, and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the compounds will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company’s periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Company and Conference Call Information

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol-Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube and Facebook.

There will be a conference call on July 26, 2018 at 10:30 a.m. EDT during which company executives will review financial information and address inquiries from investors and analysts. Investors and the general public are invited to listen to a live webcast of the call at View Source or by calling the U.S. toll free 866-548-4713 or international 323-794-2093, confirmation code: 4235170. Materials related to the call will be available at the same website prior to the conference call. A replay of the call will be available beginning at 1:30 p.m. EDT on July 26, 2018 through 1:30 p.m. EDT on August 9, 2018. The replay will also be available through View Source or by calling the U.S. toll free 888-203-1112 or international 719-457-0820, confirmation code: 4235170.