On July 25, 2018, Vericel Corporation (the "Company," "Vericel" or "we") amended its Distribution Agreement, dated May 15, 2017 (the "Distribution Agreement") by and between Orsini Pharmaceutical Services, Inc. ("Orsini") and the Company, as previously amended (the "Fourth Amendment") (Filing, 8-K, Vericel, 25 25, 2018, View Source [SID1234528399]).

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The Fourth Amendment amends certain payment terms between the parties, including as a result of termination of the Distribution Agreement. Under the Fourth Amendment, the parties agreed to eliminate Orsini’s right to serve as the Company’s exclusive distributor for MACI as the Company is moving to a limited network of distributors. Orsini remains the exclusive pharmacy supplying MACI for only an enumerated list of Payors (as defined in the Distribution Agreement). Notwithstanding the elimination of Orsini’s exclusivity, if the Company (a) does not submit a fixed number of MACI cases to Orsini prior to June 30, 2019 (and accordingly does not pay the dispensing and administrative fees for such fixed number of cases), and (b) terminates the Distribution Agreement pursuant to the terms of the Fourth Amendment, Orsini will be entitled to increased administrative fees based on such fixed number of cases. The Company will generally be required to pay an amount determined by amounts collected by Orsini and the difference between the fixed number and actual number of cases submitted to Orsini.

The revised payment terms in the Fourth Amendment apply only to a list of existing cases at the time of execution of the Fourth Amendment and any claims submitted after June 15, 2018. The Fourth Amendment includes a provision whereby the Company retains the credit and collection risk from the end customer on implants after June 15, 2018, and Orsini performs the collection activities. Pursuant to the Fourth Amendment, the Company will pay Orsini a dispensing fee on a per implant basis and an administrative fee related to Orsini’s collection performance.

On July 25, 2018 On July 25, 2018 OncBioMune Pharmaceuticals, Inc. reported that it has entered into a securities purchase agreement (the "Purchase Agreement") with an institutional investor for the sale of a convertible note in the aggregate principal amount of $150,000 (the "Note") (Filing, 8-K, Oncbiomune, JUL 25, 2018, View Source [SID1234528398]). The Note bears interest at 8% per year and will mature on the one year anniversary of the date of issue. The Note is convertible into common stock at a 25% discount to the average of the closing prices of the common stock for the prior five trading days including the date upon which a notice of conversion is received by the Company or its transfer agent. The holder will not have the right to convert any portion of its Note if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to its conversion.

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The Note may be prepaid at the Company’s option at a 105% premium between 30 days and 180 days after issuance, and at a 110% premium between 180 days after issuance and the maturity date. Upon certain events, the holder may redeem the note for 125% of the principal plus accrued but unpaid interest. The Note also includes certain penalties upon the occurrence of an event of default, including an increase in the principal and reduction in the conversion rate, as further described in the Note. The Company agreed to use its best efforts to file a proxy statement and take all necessary corporate actions in order to obtain shareholder approval to increase its authorized shares of common stock or effect a reverse split to allow for reserving sufficient shares of common stock to allow full conversion of the Note.

The foregoing description of the Purchase Agreement and Note is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and Note, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

Information concerning the Company’s issuance of the Note as set forth in Item 1.01 above is incorporated herein to this Item 2.03 by this reference.

Item 3.02 Unregistered Sales of Equity Securities

Information concerning the Company’s issuance of the Note as set forth in Item 1.01 above is incorporated herein to this Item 3.02 by this reference.

The Note and shares of common stock underlying the Note are not registered under the Securities Act of the 1933, as amended (the "Securities Act"), or any state securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. In connection with the holder’s execution of the Purchase Agreement, the holder represented to the Company that it is an "accredited investor" as defined in Regulation D of the Securities Act and that the securities being purchased by it are being acquired solely for their its own account and for investment purposes and not with a view to the future sale or distribution.

On July 25, 2018 Takeda Pharmaceutical Company Limited (TSE: 4502) reported that the global, randomized, Phase 3 ALTA-1L (ALK in Lung Cancer Trial of AP26113 in 1st Line) trial met its primary endpoint at the first pre-specified interim analysis, with ALUNBRIG (brigatinib) demonstrating a statistically significant improvement in progression-free survival (PFS) compared to crizotinib in adults with anaplastic lymphoma kinase-positive (ALK+) locally advanced or metastatic non-small cell lung cancer (NSCLC) who had not received a prior ALK inhibitor (Press release, Takeda, JUL 25, 2018, View Source [SID1234527938]). The trial was designed to assess the efficacy and safety of ALUNBRIG in comparison to crizotinib based on evaluation of the primary endpoint of PFS, or length of time from the start of treatment that a patient lives without the disease getting worse. ALUNBRIG is currently not approved as frontline therapy.

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"This represents a major milestone for the ALUNBRIG program. Our goal with ALUNBRIG is to improve the lives of patients with ALK+ NSCLC by furthering the available therapeutic options," said Jesús Gomez-Navarro, M.D., Vice President, Head of Oncology Clinical Research and Development, Takeda. "We are encouraged by the data, which demonstrated a statistically significant improvement in progression-free survival versus crizotinib in patients with ALK+ advanced NSCLC, and look forward to beginning discussions with regulatory authorities as we seek to expand ALUNBRIG’s indication into the frontline setting."

The safety profile associated with ALUNBRIG from the ALTA-1L trial was generally consistent with the existing prescribing information, with no new safety concerns.

The results from this interim analysis will be submitted for presentation at an upcoming medical meeting.

About the ALTA-1L Trial
The Phase 3 ALTA-1L (ALK in Lung Cancer Trial of AP26113 in 1st Line) trial of ALUNBRIG in adults is a global, ongoing, randomized, open-label, comparative, multicenter trial, which enrolled 275 patients with ALK+ locally advanced or metastatic NSCLC who have not received prior treatment with an ALK inhibitor. Patients received either ALUNBRIG, 180 mg once daily with seven-day lead-in at 90 mg once daily, or crizotinib, 250 mg twice daily. Independent Review Committee (IRC)-assessed progression-free survival (PFS) was the primary endpoint. Secondary endpoints included objective response rate (ORR) per RECIST v1.1, intracranial ORR, intracranial PFS, overall survival (OS), safety and tolerability. A total of approximately 198 PFS events are planned at the final analysis of the primary endpoint in order to demonstrate a minimum of six months PFS improvement over crizotinib. The trial is designed with two pre-specified interim analyses for the primary endpoint – one at 50 percent of planned PFS events and one at 75 percent of planned PFS events.

About ALK+ NSCLC
Non-small cell lung cancer (NSCLC) is the most common form of lung cancer, accounting for approximately 85 percent of the estimated 1.8 million new cases of lung cancer diagnosed each year worldwide, according to the World Health Organization. Genetic studies indicate that chromosomal rearrangements in anaplastic lymphoma kinase (ALK) are key drivers in a subset of NSCLC patients. Approximately three to five percent of patients with metastatic NSCLC have a rearrangement in the ALK gene.

Takeda is committed to continuing research and development in NSCLC to improve the lives of the approximately 40,000 patients diagnosed with this serious and rare form of lung cancer worldwide each year.

About ALUNBRIG (brigatinib)
ALUNBRIG is a targeted cancer medicine discovered by ARIAD Pharmaceuticals, Inc., which was acquired by Takeda in February 2017. In April 2017, ALUNBRIG received Accelerated Approval from the U.S. Food and Drug Administration (FDA) for ALK+ metastatic NSCLC patients who have progressed on or are intolerant to crizotinib. This indication is approved under Accelerated Approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

ALUNBRIG received Breakthrough Therapy Designation from the FDA for the treatment of patients with ALK+ NSCLC whose tumors are resistant to crizotinib and was granted Orphan Drug Designation by the FDA for the treatment of ALK+ NSCLC, ROS1+ and EGFR+ NSCLC. A Marketing Authorization Application (MAA) for ALUNBRIG was submitted to the European Medicines Agency (EMA) in February 2017.

The brigatinib clinical development program further reinforces Takeda’s ongoing commitment to developing innovative therapies for people living with ALK+ NSCLC worldwide and the healthcare professionals who treat them. The comprehensive program includes the following clinical trials:

Phase 1/2 trial, which was designed to evaluate the safety, tolerability, pharmacokinetics and preliminary anti-tumor activity of ALUNBRIG
Pivotal Phase 2 ALTA trial investigating the efficacy and safety of ALUNBRIG at two dosing regimens in patients with ALK+ locally advanced or metastatic NSCLC who had progressed on crizotinib
Phase 3 ALTA-1L trial assessing the efficacy and safety of ALUNBRIG in comparison to crizotinib in patients with ALK+ locally advanced or metastatic NSCLC who have not received prior treatment with an ALK inhibitor
Phase 2 single-arm, multicenter study in Japanese patients with ALK+ NSCLC, focusing on patients who have progressed on alectinib
Phase 2 global study evaluating ALUNBRIG in patients with advanced ALK+ NSCLC who have progressed on alectinib or ceritinib
For additional information on the brigatinib clinical trials, please visit www.clinicaltrials.gov.

IMPORTANT SAFETY INFORMATION (U.S.)
WARNINGS AND PRECAUTIONS

Interstitial Lung Disease (ILD)/Pneumonitis: Severe, life-threatening, and fatal pulmonary adverse reactions consistent with interstitial lung disease (ILD)/pneumonitis have occurred with ALUNBRIG. In Trial ALTA (ALTA), ILD/pneumonitis occurred in 3.7% of patients in the 90 mg group (90 mg once daily) and 9.1% of patients in the 90→180 mg group (180 mg once daily with 7-day lead-in at 90 mg once daily). Adverse reactions consistent with possible ILD/pneumonitis occurred early (within 9 days of initiation of ALUNBRIG; median onset was 2 days) in 6.4% of patients, with Grade 3 to 4 reactions occurring in 2.7%. Monitor for new or worsening respiratory symptoms (e.g., dyspnea, cough, etc.), particularly during the first week of initiating ALUNBRIG. Withhold ALUNBRIG in any patient with new or worsening respiratory symptoms, and promptly evaluate for ILD/pneumonitis or other causes of respiratory symptoms (e.g., pulmonary embolism, tumor progression, and infectious pneumonia). For Grade 1 or 2 ILD/pneumonitis, either resume ALUNBRIG with dose reduction after recovery to baseline or permanently discontinue ALUNBRIG. Permanently discontinue ALUNBRIG for Grade 3 or 4 ILD/pneumonitis or recurrence of Grade 1 or 2 ILD/pneumonitis.

Hypertension: In ALTA, hypertension was reported in 11% of patients in the 90 mg group who received ALUNBRIG and 21% of patients in the 90→180 mg group. Grade 3 hypertension occurred in 5.9% of patients overall. Control blood pressure prior to treatment with ALUNBRIG. Monitor blood pressure after 2 weeks and at least monthly thereafter during treatment with ALUNBRIG. Withhold ALUNBRIG for Grade 3 hypertension despite optimal antihypertensive therapy. Upon resolution or improvement to Grade 1 severity, resume ALUNBRIG at a reduced dose. Consider permanent discontinuation of treatment with ALUNBRIG for Grade 4 hypertension or recurrence of Grade 3 hypertension. Use caution when administering ALUNBRIG in combination with antihypertensive agents that cause bradycardia.

Bradycardia: Bradycardia can occur with ALUNBRIG. In ALTA, heart rates less than 50 beats per minute (bpm) occurred in 5.7% of patients in the 90 mg group and 7.6% of patients in the 90→180 mg group. Grade 2 bradycardia occurred in 1 (0.9%) patient in the 90 mg group. Monitor heart rate and blood pressure during treatment with ALUNBRIG. Monitor patients more frequently if concomitant use of drug known to cause bradycardia cannot be avoided. For symptomatic bradycardia, withhold ALUNBRIG and review concomitant medications for those known to cause bradycardia. If a concomitant medication known to cause bradycardia is identified and discontinued or dose adjusted, resume ALUNBRIG at the same dose following resolution of symptomatic bradycardia; otherwise, reduce the dose of ALUNBRIG following resolution of symptomatic bradycardia. Discontinue ALUNBRIG for life-threatening bradycardia if no contributing concomitant medication is identified.

Visual Disturbance: In ALTA, adverse reactions leading to visual disturbance including blurred vision, diplopia, and reduced visual acuity, were reported in 7.3% of patients treated with ALUNBRIG in the 90 mg group and 10% of patients in the 90→180 mg group. Grade 3 macular edema and cataract occurred in one patient each in the 90→180 mg group. Advise patients to report any visual symptoms. Withhold ALUNBRIG and obtain an ophthalmologic evaluation in patients with new or worsening visual symptoms of Grade 2 or greater severity. Upon recovery of Grade 2 or Grade 3 visual disturbances to Grade 1 severity or baseline, resume ALUNBRIG at a reduced dose. Permanently discontinue treatment with ALUNBRIG for Grade 4 visual disturbances.

Creatine Phosphokinase (CPK) Elevation: In ALTA, creatine phosphokinase (CPK) elevation occurred in 27% of patients receiving ALUNBRIG in the 90 mg group and 48% of patients in the 90 mg→180 mg group. The incidence of Grade 3‑4 CPK elevation was 2.8% in the 90 mg group and 12% in the 90→180 mg group. Dose reduction for CPK elevation occurred in 1.8% of patients in the 90 mg group and 4.5% in the 90→180 mg group. Advise patients to report any unexplained muscle pain, tenderness, or weakness. Monitor CPK levels during ALUNBRIG treatment. Withhold ALUNBRIG for Grade 3 or 4 CPK elevation. Upon resolution or recovery to Grade 1 or baseline, resume ALUNBRIG at the same dose or at a reduced dose.

Pancreatic Enzyme Elevation: In ALTA, amylase elevation occurred in 27% of patients in the 90 mg group and 39% of patients in the 90→180 mg group. Lipase elevations occurred in 21% of patients in the 90 mg group and 45% of patients in the 90→180 mg group. Grade 3 or 4 amylase elevation occurred in 3.7% of patients in the 90 mg group and 2.7% of patients in the 90→180 mg group. Grade 3 or 4 lipase elevation occurred in 4.6% of patients in the 90 mg group and 5.5% of patients in the 90→180 mg group. Monitor lipase and amylase during treatment with ALUNBRIG. Withhold ALUNBRIG for Grade 3 or 4 pancreatic enzyme elevation. Upon resolution or recovery to Grade 1 or baseline, resume ALUNBRIG at the same dose or at a reduced dose.

Hyperglycemia: In ALTA, 43% of patients who received ALUNBRIG experienced new or worsening hyperglycemia. Grade 3 hyperglycemia, based on laboratory assessment of serum fasting glucose levels, occurred in 3.7% of patients. Two of 20 (10%) patients with diabetes or glucose intolerance at baseline required initiation of insulin while receiving ALUNBRIG. Assess fasting serum glucose prior to initiation of ALUNBRIG and monitor periodically thereafter. Initiate or optimize anti-hyperglycemic medications as needed. If adequate hyperglycemic control cannot be achieved with optimal medical management, withhold ALUNBRIG until adequate hyperglycemic control is achieved and consider reducing the dose of ALUNBRIG or permanently discontinuing ALUNBRIG.

Embryo-Fetal Toxicity: Based on its mechanism of action and findings in animals, ALUNBRIG can cause fetal harm when administered to pregnant women. There are no clinical data on the use of ALUNBRIG in pregnant women. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective non-hormonal contraception during treatment with ALUNBRIG and for at least 4 months following the final dose. Advise males with female partners of reproductive potential to use effective contraception during treatment and for at least 3 months after the last dose of ALUNBRIG.

ADVERSE REACTIONS
Serious adverse reactions occurred in 38% of patients in the 90 mg group and 40% of patients in the 90→180 mg group. The most common serious adverse reactions were pneumonia (5.5% overall, 3.7% in the 90 mg group, and 7.3% in the 90→180 mg group) and ILD/pneumonitis (4.6% overall, 1.8% in the 90 mg group and 7.3% in the 90→180 mg group). Fatal adverse reactions occurred in 3.7% of patients and consisted of pneumonia (2 patients), sudden death, dyspnea, respiratory failure, pulmonary embolism, bacterial meningitis and urosepsis (1 patient each).

The most common adverse reactions (≥25%) in the 90 mg group were nausea (33%), fatigue (29%), headache (28%), and dyspnea (27%) and in the 90→180 mg group were nausea (40%), diarrhea (38%), fatigue (36%), cough (34%), and headache (27%).

DRUG INTERACTIONS
CYP3A Inhibitors: Avoid concomitant use of ALUNBRIG with strong CYP3A inhibitors. Avoid grapefruit or grapefruit juice as it may also increase plasma concentrations of brigatinib. If concomitant use of a strong CYP3A inhibitor is unavoidable, reduce the dose of ALUNBRIG.

CYP3A Inducers: Avoid concomitant use of ALUNBRIG with strong CYP3A inducers.

CYP3A Substrates: Coadministration of ALUNBRIG with CYP3A substrates, including hormonal contraceptives, can result in decreased concentrations and loss of efficacy of CYP3A substrates.

USE IN SPECIFIC POPULATIONS
Pregnancy: ALUNBRIG can cause fetal harm. Advise females of reproductive potential of the potential risk to a fetus.

Lactation: There are no data regarding the secretion of brigatinib in human milk or its effects on the breastfed infant or milk production. Because of the potential adverse reactions in breastfed infants, advise lactating women not to breastfeed during treatment with ALUNBRIG.

Females and Males of Reproductive Potential:
Contraception: Advise females of reproductive potential to use effective non-hormonal contraception during treatment with ALUNBRIG and for at least 4 months after the final dose. Advise males with female partners of reproductive potential to use effective contraception during treatment with ALUNBRIG and for at least 3 months after the final dose.

Infertility: ALUNBRIG may cause reduced fertility in males.

Pediatric Use: The safety and efficacy of ALUNBRIG in pediatric patients have not been established.

Geriatric Use: Clinical studies of ALUNBRIG did not include sufficient numbers of patients aged 65 years and older to determine whether they respond differently from younger patients. Of the 222 patients in ALTA, 19.4% were 65-74 years and 4.1% were 75 years or older. No clinically relevant differences in safety or efficacy were observed between patients ≥65 and younger patients.

Hepatic or Renal Impairment: No dose adjustment is recommended for patients with mild hepatic impairment or mild or moderate renal impairment. The safety of ALUNBRIG in patients with moderate or severe hepatic impairment or severe renal impairment has not been studied.

On July 25, 2018 Gilead Sciences, Inc. (Nasdaq: GILD) reported its results of operations for the second quarter ended June 30, 2018 (Press release, Gilead Sciences, JUL 25, 2018, View Source;p=irol-newsArticle&ID=2359992 [SID1234527885]). The financial results that follow represent a year-over-year comparison of the second quarter 2018 to the second quarter 2017. Total revenues were $5.6 billion in 2018 compared to $7.1 billion in 2017. Net income was $1.8 billion or $1.39 per diluted share in 2018 compared to $3.1 billion or $2.33 per diluted share in 2017. Non-GAAP net income was $2.5 billion or $1.91 per diluted share in 2018 compared to $3.4 billion or $2.56 per diluted share in 2017. Non-GAAP diluted EPS in the second quarter of 2018 benefited $0.15 from a favorable settlement of a tax examination.

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Three Months Ended Six Months Ended
June 30, June 30,
(In millions, except per share amounts) 2018 2017 2018 2017
Product sales $ 5,540 $ 7,046 $ 10,541 $ 13,423
Royalty, contract and other revenues 108 95 195 223
Total revenues $ 5,648 $ 7,141 $ 10,736 $ 13,646

Net income attributable to Gilead $ 1,817 $ 3,073 $ 3,355 $ 5,775
Non-GAAP net income $ 2,494 $ 3,372 $ 4,452 $ 6,321

Diluted earnings per share $ 1.39 $ 2.33 $ 2.55 $ 4.38
Non-GAAP diluted earnings per share $ 1.91 $ 2.56 $ 3.39 $ 4.79

Product Sales

Total product sales for the second quarter of 2018 were $5.5 billion compared to $7.0 billion for the same period in 2017. Product sales for the second quarter of 2018 were $4.1 billion in the United States, $1.0 billion in Europe and $466 million in other locations. Product sales for the second quarter of 2017 were $5.0 billion in the United States, $1.4 billion in Europe and $665 million in other locations.

___________________________________

Note: Non-GAAP financial information excludes acquisition-related, up-front collaboration, stock-based compensation and other expenses, fair value adjustments of marketable equity securities and measurement period adjustments relating to the enactment of the 2017 Tax Cuts and Jobs Act (Tax Reform). A reconciliation between GAAP and non-GAAP financial information is provided in the tables on page 8, 9 and 10.

HIV product sales(1) were $3.7 billion for the second quarter of 2018 compared to $3.2 billion for the same period in 2017. The increase was primarily due to the continued uptake of products containing emtricitabine (FTC) and tenofovir alafenamide (TAF), which include Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg), Descovy (emtricitabine 200 mg/tenofovir alafenamide 25 mg), Genvoya (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir alafenamide 10 mg) and Odefsey (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg).
Chronic hepatitis C (HCV) product sales, which consist of Epclusa (sofosbuvir 400 mg/velpatasvir 100 mg), Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg), Vosevi (sofosbuvir 400 mg/velpatasvir 100 mg/voxilaprevir 100 mg) and Sovaldi (sofosbuvir 400 mg), were $1.0 billion for the second quarter of 2018 compared to $2.9 billion for the same period in 2017. The decline was primarily due to lower sales of Harvoni, Epclusa and Sovaldi across all major markets as a result of increased competition.
Yescarta (axicabtagene ciloleucel), which was launched in the United States in October 2017, generated $68 million in sales during the second quarter of 2018.
Other product sales, which include products from Gilead’s chronic hepatitis B (HBV), cardiovascular, oncology and other categories inclusive of Vemlidy (tenofovir alafenamide), Viread (tenofovir disoproxil fumarate), Letairis (ambrisentan), Ranexa (ranolazine), Zydelig (idelalisib) and AmBisome (amphotericin B liposome for injection), were $807 million for the second quarter of 2018 compared to $932 million for the same period in 2017.
Operating Expenses

Three Months Ended Six Months Ended
June 30, June 30,
(In millions) 2018 2017 2018 2017
Research and development expenses (R&D) $ 1,192 $ 864 $ 2,129 $ 1,795
Non-GAAP R&D expenses $ 921 $ 812 $ 1,735 $ 1,701

Selling, general and administrative expenses (SG&A) $ 980 $ 897 $ 1,977 $ 1,747
Non-GAAP SG&A expenses $ 840 $ 827 $ 1,724 $ 1,634

During the second quarter of 2018, compared to the same period in 2017:

R&D expenses increased primarily due to up-front collaboration expenses related to Gilead’s collaboration agreement with Sangamo Therapeutics, Inc., expense associated with Gilead’s purchase of a U.S. Food and Drug Administration (FDA) Priority Review Voucher and stock-based compensation expenses associated with Gilead’s acquisition of Kite Pharma, Inc. (Kite).
Non-GAAP R&D expenses increased primarily due to expense associated with Gilead’s purchase of an FDA Priority Review Voucher.
SG&A expenses increased primarily due to stock-based compensation expenses associated with Gilead’s acquisition of Kite and higher costs to support the growth of Gilead’s business following the acquisition of Kite.
Non-GAAP SG&A expenses increased primarily due to higher costs to support the growth of Gilead’s business following the acquisition of Kite.
___________________________________
(1) Excludes sales of Viread as Viread is primarily used for treatment of chronic hepatitis B (HBV).

Effective Tax Rate

The effective tax rate and non-GAAP effective tax rate in the second quarter of 2018 were 12.8% and 13.4% compared to 24.3% and 22.8% in the first quarter of 2018, respectively. The effective tax rate and non-GAAP effective tax rate were lower in the second quarter of 2018 primarily due to a favorable settlement of a tax examination. For the full year 2018, Gilead has revised its non-GAAP effective tax rate to be in the range of 19.0% – 21.0%.

Gilead is unable to project potential measurement period adjustments during 2018 relating to Tax Reform. As a result, Gilead is unable to project an effective tax rate on a GAAP basis.

Cash, Cash Equivalents and Marketable Securities

As of June 30, 2018, Gilead had $31.7 billion of cash, cash equivalents and marketable securities compared to $32.1 billion as of March 31, 2018. During the second quarter of 2018, Gilead generated $1.6 billion in operating cash flow, including tax-related payments of $1.5 billion, and also paid cash dividends of $740 million and utilized $450 million on stock repurchases.

Revised Full Year 2018 Guidance

Gilead revised its full year 2018 guidance, initially provided on February 6, 2018:

(In millions, except percentages and per share amounts)
Initially Provided
February 6, 2018
Reiterated
May 1, 2018

Updated
July 25, 2018

Net Product Sales $20,000 – $21,000 $20,000 – $21,000
Non-GAAP
Product Gross Margin 85% – 87% 85% – 87%
R&D Expenses $3,400 – $3,600 $3,400 – $3,600
SG&A Expenses $3,400 – $3,600 $3,400 – $3,600
Effective Tax Rate 21.0% – 23.0% 19.0% – 21.0%
Diluted EPS Impact of Acquisition-related, Up-front Collaboration, Stock-based Compensation and Other Expenses $1.41 – $1.51 $1.50 – $1.60

Corporate Highlights

Announced the promotion of Andrew Dickinson to Executive Vice President, Corporate Development and Strategy, with responsibility for Gilead’s corporate development, alliance management, competitive intelligence and corporate strategy and planning functions. Martin Silverstein, Executive Vice President, Strategy, has decided to leave Gilead at the end of August.
Announced that Harish M. Manwani has been appointed to Gilead’s Board of Directors.
Product and Pipeline Updates announced by Gilead during the Second Quarter of 2018 include:

HIV and Liver Diseases Programs

Announced that the European Commission has granted Marketing Authorization for Biktarvy for the treatment of HIV-1 infection.
Announced a research collaboration and license agreement with Hookipa Biotech AG (Hookipa) that grants Gilead exclusive rights to Hookipa’s TheraT and Vaxwave arenavirus vector-based immunization technologies for HBV and HIV.
Announced that the China Drug Administration (CDA) has approved Epclusa for the treatment of adults with genotype 1-6 HCV infection. The CDA also approved Epclusa in combination with ribavirin for adults with HCV and decompensated cirrhosis.
Announced that FDA has approved Truvada- in combination with safer sex practices – to reduce the risk of sexually acquired HIV-1 in at-risk adolescents.
Presented data at The International Liver Congress 2018, which included the announcement of:
The completion of enrollment, ahead of schedule, of STELLAR-3 and STELLAR-4, two ongoing Phase 3 trials evaluating the apoptosis signal-regulating kinase 1 inhibitor selonsertib in patients with F3 and F4 stages of fibrosis due to nonalcoholic steatohepatitis (NASH).
Results from a proof-of-concept study of investigational combination therapies for patients with NASH, combining selonsertib with either the Acetyl-CoA carboxylase inhibitor GS-0976 or the selective, non-steroidal Farnesoid X receptor agonist GS-9674. Based on this 12-week study, these combination therapies were well tolerated and offered additional benefits for improving NASH by reducing liver fat content, liver cell injury and fibrosis. Gilead has initiated a larger 350-patient Phase 2b study of combinations of selonsertib, GS-0976 or GS-9674 in patients with advanced fibrosis due to NASH.
Results from two studies utilizing machine learning techniques which suggest that noninvasive tests perform as effectively as liver biopsy for predicting clinical outcomes in patients with advanced fibrosis due to NASH.
Oncology and Cell Therapy Programs

Announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use has issued a positive opinion on Gilead’s Marketing Authorization Application for Yescarta as a treatment for adult patients with relapsed or refractory diffuse large B-cell lymphoma and primary mediastinal large B-cell lymphoma, after two or more lines of systemic therapy.
Presented data at the 2018 American Society of Clinical Oncologists Annual Meeting, which included the announcement of:
Results from an ongoing Phase 1 study conducted by the National Cancer Institute showing that clinical responses were observed with investigational T cell receptor cell therapy targeting human papillomavirus (HPV) type 16 E7 in solid tumor cancers caused by HPV.
Analyses of the ZUMA-1 study of Yescarta in adult patients with refractory large B-cell lymphoma showing that response status may predict rates of progression-free survival and that treatment responses were consistent across prior lines of therapy.
An analysis of the ZUMA-3 study evaluating investigational KTE-C19 for the treatment of adult patients with relapsed or refractory acute lymphoblastic leukemia showed that patients experienced manageable safety and encouraging efficacy irrespective of prior blinatumomab use.
Announced new worldwide facilities to advance manufacturing of cell therapies for people with cancer and a new cooperative research and development agreement with the National Cancer Institute to develop adoptive cell therapies targeting patient-specific tumor neoantigens.
Inflammation Programs

Announced that the randomized, placebo-controlled Phase 2 EQUATOR study of filgotinib, an investigational, selective JAK1 inhibitor, in 131 adults with moderate to severe psoriatic arthritis, achieved its primary endpoint of improvement in the signs and symptoms of psoriatic arthritis at week 16, as assessed by the American College of Rheumatology 20 percent improvement score.
Announced that an independent Data Monitoring Committee (DMC) conducted a planned interim futility analysis of the filgotinib Phase 2b/3 ulcerative colitis study, SELECTION, after 350 patients completed the induction period in the Phase 2b portion of the study. The DMC recommended that the study proceed into Phase 3 as planned at both the 100 mg and 200 mg once daily dose level in biologic-experienced and biologic-naïve patients.
Announced a scientific collaboration with Verily Life Sciences LLC (Verily), an Alphabet company, using Verily’s Immunoscape platform to identify and better understand the immunological basis of three common and serious inflammatory diseases: rheumatoid arthritis, inflammatory bowel disease and lupus-related diseases.
Non-GAAP Financial Information

The information presented in this document has been prepared by Gilead in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead’s GAAP financial information, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in the same industry. A reconciliation between GAAP and non-GAAP financial information is provided in the tables on pages 8, 9 and 10.

On July 25, 2018 Immune Design (Nasdaq:IMDZ), an immunotherapy company focused on next-generation therapies in oncology, reported that it will report second quarter 2018 financial results after the close of U.S. financial markets on Wednesday, August 1, 2018 (Press release, Immune Design, JUL 25, 2018, View Source [SID1234527871]). Immune Design management will host a webcast conference call at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time on August 1, 2018 to discuss the financial results and provide a corporate update.

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The live call may be accessed by dialing 844-266-9538 for domestic callers and 216-562-0391 for international callers. A live webcast of the call will be available online from the investor relations section of the company website at View Source and will be archived there for at least 30 days. A telephone replay of the call will be available for five days by dialing 855-859-2056 for domestic callers or 404-537-3406 for international callers and entering the conference code: 3376676.