On January 24, 2018 Novartis reported good operational performance and landmark innovation in 2017, entering our next growth phase(Press release, Novartis, JAN 24, 2018, View Source [SID1234523583]).

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 Full year sales grew 2% (cc, +1% USD) as strong performance of our growth drivers, including Cosentyx and Entresto, more than offset Gleevec/Glivec generic erosion:
o Cosentyx grew to USD 2.1 billion in 2017, USD 615 million in Q4
o Entresto grew to USD 507 million in 2017, USD 185 million in Q4
o Oncology excluding Gleevec/Glivec grew 10% (cc), with 13% (cc) growth in Q4
 Full year 2017 core1 operating income was broadly in line with prior year (0% cc,-1% USD) as sales growth and productivity fully offset generic erosion and growth investments:
o Core EPS of USD 4.86, grew 3% (cc, +2% USD)
 Operating income was up 7% (cc, +4% USD), growing ahead of core operating income, partly due to lower amortization
 Net income grew 12% (cc, +15% USD), growing ahead of operating income, mainly due to higher income from associated companies
 Free cash flow1 grew 10% to USD 10.4 billion
 Alcon returned to growth, sales up 4% (cc/USD) and core operating income up 5% (cc, +1% USD)
 Landmark year for innovation with 16 major approvals, 16 major submissions and 6 FDA Breakthrough Therapy designations; Q4 highlights:
o RTH2582 showed superiority vs. aflibercept in secondary endpoint measures of disease activity o Kymriah filed DLBCL in the US with Priority Review and in the EU with accelerated assessment o ACZ885 submitted to FDA and EMA for cardiovascular risk reduction
o Biosimilars for adalimumab (US) and pegfilgrastim (EU) filed
 Advanced Accelerator Applications acquisition completed
 Dividend of CHF 2.80 per share, an increase of 2%, proposed for 2017
 2018 Group Outlook: o Net sales are expected to grow low to mid single digit (cc)
o Core operating income is expected to grow mid to high single digit (cc)
 Elizabeth Barrett has been appointed CEO Novartis Oncology and Robert Kowalski, Head of Global Regulatory Affairs, will assume ad interim leadership of the Drug Development Organization, both effective February 1, 2018

Key figures1 Q4 2017 Q4 2016 % change FY 2017 FY 2016 % change USD m USD m USD cc USD m USD m USD cc Net sales 12 915 12 322 5 2 49 109 48 518 1 2 Operating income 2 070 1 455 42 41 8 629 8 268 4 7 Net income 1 976 936 111 58 7 703 6 698 15 12 EPS (USD) 0.85 0.40 113 59 3.28 2.82 16 14 Free cash flow 2 456 2 976-17 10 428 9 455 10 Core Operating income 3 223 3 013 7 5 12 850 12 987-1 0 Net income 2 818 2 658 6 4 11 391 11 314 1 2 EPS (USD) 1.21 1.12 8 6 4.86 4.75 2 3

2/12 Basel, January 24, 2018 — Commenting on the results, Joe Jimenez, CEO, said:

"Novartis had a good year in 2017. Cosentyx reached multi-blockbuster status, Entresto delivered over USD 500 million in sales and Alcon returned to growth. It was a landmark year for innovation resulting in a rich late stage pipeline. With several key launches on the horizon and our new operating model in place, Novartis is poised for sustainable growth."
Vas Narasimhan, designated CEO from February 1, commented:

"I want to thank Joe and the Board for their leadership and guidance as I transition to my new role. As CEO my priorities will be driving our next growth phase by strengthening operational execution, delivering more breakthrough innovation, pivoting to become a data centric, digitally enabled organization, building trust and reputation and transforming our culture. I feel privileged to lead Novartis at this exciting time."

GROUP REVIEW
Fourth quarter financials
Net sales were USD 12.9 billion (+5%, +2% cc) in the fourth quarter, as volume growth of 7 percentage points (cc), including growth from Cosentyx and Entresto, was partly offset by the negative impacts of generic competition (-3 percentage points) and pricing (-2 percentage points).

Operating income was USD 2.1 billion (+42%, +41% cc) mainly driven by growth drivers, productivity, lower impairments and a gain from achievement of a sales milestone related to the 2015 Vaccines divestment to GSK, which were partly offset by generic erosion. Core adjustments amounted to USD 1.2 billion (2016: USD 1.6 billion).

Net income was USD 2.0 billion (+111%, +58% cc), driven by the strong operating income growth and higher income from associated companies. The prior year included exceptional charges related to a revaluation loss in Venezuela of USD 0.3 billion.

EPS was USD 0.85 (+113%, +59% cc), driven by growth in net income and the benefit from the share buyback program.

Core operating income was USD 3.2 billion (+7%, +5% cc) as growth drivers and productivity more than offset generic erosion. Core operating income margin in constant currencies increased 0.7 percentage points; currency had a negative impact of 0.2 percentage points, resulting in a net increase of 0.5 percentage points to 25.0% of net sales.

Core net income was USD 2.8 billion (+6%, +4% cc) driven by growth in core operating income.

Core EPS was USD 1.21 (+8%, +6% cc), driven by growth in core net income and the benefit from the share buyback program.

Free cash flow amounted to USD 2.5 billion (-17% USD) compared to USD 3.0 billion in prior year. The decrease of USD 0.5 billion was mainly driven by lower cash flows from operating activities and higher net investments.

Innovative Medicines net sales were USD 8.8 billion (+6%, +4% cc) in the fourth quarter. Volume contributed 9 percentage points to sales growth. Generic competition had a negative impact of 4 percentage points largely due to Gleevec/Glivec genericization in Europe and the US. Pricing had a negative impact of 1 percentage point.

Operating income was USD 1.8 billion (+33%, +31% cc) driven by higher sales and lower impairments, partly offset by generic erosion and growth investments for Cosentyx, Entresto and Kisqali. Core adjustments were USD 0.9 billion (2016: USD 1.0 billion). Core operating income was USD 2.7 billion (+11%, +9% cc). Core operating income margin in constant currencies increased by 1.5 percentage points mainly driven by improved gross margin from productivity; currency had a negative impact of 0.1 percentage points, resulting in a net increase of 1.4 percentage points to 30.5% of net sales.

Sandoz net sales were USD 2.6 billion (0%,-4% cc) in the fourth quarter, as 8 percentage points of price erosion, mostly in the US, was partly offset by volume growth of 4 percentage points. US sales declined 17% due to increased industry-wide pricing pressure and continued customer consolidation. Excluding the US, net sales grew 4% (cc). Global Biopharmaceuticals grew 6% (cc).

3/12 Operating income was USD 305 million (-16%,-19% cc) mainly due to US price erosion and higher manufacturing restructuring charges, partly offset by continued gross margin improvement. Core operating income was USD 543 million (+4%, +1% cc). Core operating income margin increased by 1.1 percentage points (cc) mainly driven by favorable product and geographic mix and ongoing productivity improvements; currency had a negative impact of 0.2 percentage points, resulting in a net increase of 0.9 percentage points to 20.9% of net sales.

Alcon net sales were USD 1.6 billion (+8%, +6% cc) in the fourth quarter. Surgical growth of +9% (cc) was driven by cataract consumables and IOLs. Vision Care grew +2% (cc) including continued doubledigit growth of Dailies Total1, partly offset by declines in the weekly/monthly portfolio. Stock in trade movements accounted for approximately 1% (cc) of Alcon growth in the quarter. Alcon’s results reflect the fourth consecutive quarter of net sales growth as a result of improved operations, innovation, and customer relationships.

Operating loss was USD 78 million, compared to a loss of USD 120 million in the prior year, the improvement driven mainly by higher sales. Core operating income was USD 221 million (+36%, +36% cc), primarily driven by the higher sales. Core operating income margin in constant currencies increased by 3.0 percentage points mainly driven by higher sales; currency had a negative impact of 0.2 percentage points, resulting in a net increase of 2.8 percentage points to 14.1% of net sales.

Full year financials

Net sales were USD 49.1 billion (+1%, +2% cc) in the full year, as volume growth of 7 percentage points (cc), including growth from Cosentyx and Entresto, was partly offset by the negative impacts of generic competition (-3 percentage points) and pricing (-2 percentage points).

Operating income was USD 8.6 billion (+4%, +7% cc) as growth drivers, productivity, lower amortization and a gain from achievement of a sales milestone related to the 2015 Vaccines divestment to GSK, more than offset generic erosion. Core adjustments amounted to USD 4.2 billion (2016: USD 4.7 billion).

Net income was USD 7.7 billion (+15%, +12% cc) driven by higher operating income and income from associated companies. The prior year included exceptional charges related to a revaluation loss in Venezuela of USD 0.3 billion.

EPS was USD 3.28 (+16%, +14% cc) driven by net income growth and the benefit from the share buyback program.

Core operating income was USD 12.9 billion (-1%, 0% cc) broadly in line with prior year as sales growth and productivity fully offset generic erosion and growth investments. Core operating income margin in constant currencies decreased 0.3 percentage points, mainly due to generic erosion of Gleevec/Glivec, partly offset by growth drivers and productivity; currency had a negative impact of 0.3 percentage points, resulting in a net decrease of 0.6 percentage points to 26.2% of net sales.

Core net income was USD 11.4 billion (+1%, +2% cc), growing above core operating income due to higher core income from associated companies.

Core EPS was USD 4.86 (+2%, +3% cc) driven by growth in core net income and the benefit from the share buyback program.

Free cash flow amounted to USD 10.4 billion (+10% USD) compared to USD 9.5 billion in 2016. The increase was mainly driven by favorable working capital changes and lower legal settlement payments out of provisions.

Innovative Medicines delivered net sales of USD 33.0 billion (+1%, +2% cc) in the full year, including USD 2.1 billion of Cosentyx and USD 507 million of Entresto. Volume growth of 8 percentage points more than offset the negative impact of generic competition (-5 percentage points) and pricing (-1 percentage point).

Operating income was USD 7.8 billion (+5%, +7% cc) mainly driven by higher sales, lower amortization and productivity, partly offset by generic erosion and growth investments. Core adjustments totaled USD 2.5 billion (2016: USD 2.9 billion). Core operating income was USD 10.3 billion (0%, +2% cc).
4/12 Core operating income margin in constant currencies slightly decreased by 0.1 percentage points; currency had a negative impact of 0.4 percentage points, resulting in a net decrease of 0.5 percentage points to 31.3% of net sales.

Sandoz net sales were USD 10.1 billion (-1%,-2% cc) in the full year, as volume growth of 6 percentage points was more than offset by 8 percentage points of price erosion. Sales in the US declined 12% mainly due to increased industry-wide pricing pressure and continued customer consolidation. Excluding the US, net sales grew by 4% (cc). Global Biopharmaceuticals grew 12% (cc).

Operating income was USD 1.4 billion (-5%,-7% cc) mainly due to US price erosion, increased investments in ex-US M&S and higher manufacturing restructuring charges, partly offset by continued gross margin improvement. Core operating income was USD 2.1 billion (0%,-1% cc). Core operating income margin in constant currencies increased 0.1 percentage points; currency had a positive impact of 0.2 percentage points, resulting in a net increase of 0.3 percentage points to 20.7% of net sales.

Alcon net sales were USD 6.0 billion (+4%, +4% cc) for the full year. Surgical sales grew +5% (cc), driven by strong performance of the vitreoretinal portfolio and cataract consumables. Vision Care sales grew +3% (cc), driven by continued double-digit growth of Dailies Total1.

Operating loss was USD 190 million for the full year, compared to a loss of USD 132 million in the prior year, mainly due to growth plan investments and higher impairment charges related to business development activities, partly offset by higher sales. Core operating income was USD 857 million (+1%, +5% cc), as higher sales were partly offset by growth plan investments. Core operating income margin in constant currencies increased by 0.2 percentage points; currency had a negative impact of 0.6 percentage points, resulting in a net decrease of 0.4 percentage points to 14.2% of net sales.

Key growth drivers
Underpinning our financial results in the fourth quarter is a continued focus on key growth drivers, including Cosentyx, Entresto, Promacta/Revolade, Tafinlar + Mekinist, Jakavi, Kisqali, Tasigna, Kymriah and Gilenya as well as Biopharmaceuticals and Emerging Growth Markets.

Growth Drivers (Q4 performance)
 Cosentyx (USD 615 million, +53% cc) showed strong growth across all indications, with more than 125,000 patients treated since launch.

 Entresto (USD 185 million, +164% cc) performance driven by growing adoption by physicians in US and Europe, and continued market access improvements.

 Promacta/Revolade (USD 255 million, +43% cc) grew double-digit across all regions, driven by continued worldwide uptake for chronic immune thrombocytopenia.

 Tafinlar + Mekinist (USD 246 million, +33% cc) performance was driven by continued double-digit growth in the US due to increased demand and new launches in Europe.

 Jakavi (USD 228 million, +33% cc) showed continued double-digit growth across all regions driven by myelofibrosis and reimbursement of the second-line polycythemia vera indication in additional countries.

 Kisqali (USD 35 million) continued to progress in the fourth quarter with growth in the US and additional launches in the EU.

 Tasigna (USD 485 million, +6% cc) showed solid growth mainly driven by the US.

 Kymriah launch in the US progressed well in the fourth quarter. 33 treatment centers are now REMs certified, 25 of those are fully operational and we are focused on ensuring access for patients.

 Gilenya (USD 825 million,-1% cc) slightly declined mainly due to the US, partly offset by growth in Europe.

Biopharmaceuticals (USD 309 million, +6% cc) grew mainly driven by Zarxio in the US and launches of Rixathon (rituximab) and Erelzi (etanercept) in the EU, partly offset by competition for Glatopa 20 mg.

Emerging Growth Markets

Net sales in Emerging Growth Markets – which comprise all markets except the US, Canada, Western Europe, Japan, Australia and New Zealand – grew (+8% USD, +7% cc) mainly driven by China (+13% cc).

5/12 Strengthen R&D
Innovation Review

Benefitting from our continued focus on innovation, Novartis has one of the industry’s most competitive pipelines with more than 200 projects in clinical development.

Key developments from the fourth quarter of 2017 include:

New approvals and regulatory opinions (in Q4)

 Tasigna (nilotinib) was approved by the EC for the treatment of pediatric patients with newly diagnosed Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase (Ph+ CML-CP) and pediatric patients with Ph+ CML-CP with resistance or intolerance to prior therapy including imatinib.

 Tasigna US product label was updated with the inclusion of Treatment-Free Remission data, following FDA approval.

 Tafinlar (dabrafenib) + Mekinist (trametinib) combination therapy received FDA Breakthrough Therapy designation and Priority Review for adjuvant stage III BRAF V600 mutation-positive melanoma patients.

 Promacta (eltrombopag) received FDA Breakthrough Therapy designation in January for first-line use in severe aplastic anemia.

 Kisqali (ribociclib) received FDA Breakthrough Therapy designation for initial endocrine-based treatment in premenopausal women with HR+/HER2-advanced breast cancer.

 Gilenya (fingolimod) received FDA Breakthrough Therapy designation for relapsing forms of multiple sclerosis in the pediatric patient population, following the submission of Gilenya for a pediatric MS indication to both FDA and EMA. This was based on the phase III PARADIGMS study in children and adolescents, which showed an 82% reduction in the rate of relapses.

 Sandoz biosimilar rituximab (Roche’s Rituxan) was granted manufacturing and marketing approval in Japan by the Japanese regulator, the PDMA.

 Advanced Accelerator Applications acquisition completed in January.

Regulatory submissions and filings (in Q4)

 Kymriah (tisagenlecleucel, formerly CTL019) filed with FDA for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL) who are ineligible for or relapse after autologous stem cell transplant (ASCT), and with EMA for adult patients with r/r DLBCL who are ineligible for autologous stem cell transplant and children and young adult patients aged 3 to 25 years with relapsed or refractory B cell acute lymphoblastic leukemia. FDA granted Priority Review and EMA granted accelerated assessment of the submission.

 ACZ885 (canakinumab) submitted supplemental Biologics License Application and Marketing Authorization Application for cardiovascular risk reduction to the FDA and EMA.

 Sandoz proposed biosimilar pegfilgrastim (Amgen’s Neulasta) was accepted for regulatory review by EMA.

 Sandoz proposed biosimilar adalimumab (AbbVie’s Humira) was accepted for regulatory review by FDA in January.

Results from ongoing trials and other highlights (in Q4)

 RTH258 (brolucizumab) met its primary endpoint of non-inferiority vs. aflibercept in mean change in best-corrected visual acuity. Additionally, superiority was shown in three secondary endpoints that are considered key markers of nAMD disease, central subfield retinal thickness, retinal fluid and disease activity. Additionally, a majority of patients were on a 12-week treatment schedule immediately following the loading phase in two Phase III trials, also assessed by secondary endpoints in the HAWK and HARRIER trials.

 Kymriah results from the primary analysis of the pivotal Phase II JULIET trial in adults with r/r DLBCL showed sustained complete responses at six months. The data showed an overall response rate (ORR) of 53.1%, with 39.5% of patients achieving a complete response (CR) and 13.6% of patient achieving a partial response (PR) among 81 infused patients with three or more months of follow-up or earlier discontinuation. At six months from infusion the ORR was 37% with a CR rate of 30%. The median duration of response was not reached.

 Cosentyx (secukinumab) continues to build on its best-in-class profile:
 CLARITY study demonstrated Cosentyx superiority to Stelara (ustekinumab) in delivering clear and almost clear skin at 12 weeks.
 MEASURE 1 data showed that almost 80 percent of ankylosing spondylitis patients on Cosentyx have no radiographic progression of the spine at 4 years (modified stoke ankylosing spondylitis spinal score <2).
 FUTURE 5 data demonstrated reduced signs and symptoms of psoriatic arthritis while inhibiting progression of joint structural damage in PsA patients compared to placebo at 24 weeks.
 GESTURE and TRANSFIGURE studies showed sustained improvements in nail and palmoplantar psoriasis.

 Kisqali Phase III MONALEESA-7 trial, in combination with an aromatase inhibitor or tamoxifen and goserelin as initial endocrine-based therapy, showed significantly prolonged progression-free survival (PFS) compared to endocrine therapy and goserelin alone (median PFS 23.8 months compared to 13.0 months for tamoxifen or an aromatase inhibitor plus goserelin), in premenopausal or perimenopausal women with hormone-receptor positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) advanced or metastatic breast cancer.

 ACZ885 pre-planned secondary analysis of an exploratory endpoint in the Phase III CANTOS study showed that people with a prior heart attack who achieved hsCRP levels below 2mg/L at three months after the first dose had a 25% reduction in major adverse cardiovascular events versus placebo. These patients also had a significant reduction of 31% in the rate of cardiovascular death and all-cause death.

 BAF312 (siponimod) new analysis from Phase III EXPAND study demonstrated its effect on magnetic resonance imaging lesions and brain shrinkage in Secondary Progressive Multiple Sclerosis (SPMS).

 SEG101 (crizanlizumab) post hoc subgroup analysis from the Phase II SUSTAIN study showed that SEG101 approximately doubled the time to first on-treatment sickle cell pain crisis (also referred to as vaso-occlusive crises) at a monthly dose of 5.0 mg/kg. Results were consistent across patient subgroups despite differences in disease severity, genotype or background therapy.

 AMG 334 (erenumab) full data from the Phase III STRIVE study in episodic migraine was published in the New England Journal of Medicine.

 AMG 334 LIBERTY trial, the first migraine prevention trial of its kind conducted specifically in patients who have tried multiple therapies without success, met its primary endpoint of percentage of patients on AMG 334 achieving at least a 50% reduction of migraine days versus placebo. Additionally, all secondary endpoints were met.

 Gilenya analysis from the Phase III FREEDOMS study in Relapsing Remitting MS (RRMS) showed blood neurofilament levels were significantly lower in patients taking Gilenya compared to placebo at six months.
7/12

 Ultibro Breezhaler new data from the FLASH study showed Ultibro (indacaterol/glycopyrronium) 110/50 mcg significantly improved lung function (trough FEV1) in moderate-to-severe symptomatic and non-frequently exacerbating COPD patients after direct switch from Seretide (salmeterol/fluticasone) 50/500 mcg.

 CNP520 BACE1 inhibitor collaboration with Amgen and the Banner Alzheimer’s Institute was expanded to initiate a new trial, the Alzheimer’s Prevention Initiative Generation Study 2.

Alcon Strategic Review

In early 2017, we announced a strategic review of the Alcon Division in order to explore all options to maximize value for our shareholders.

We have made significant progress in our ongoing strategic review. Alcon returned to growth in 2017, with full year sales growing 4% (cc) and core operating income growing 5% (cc) as a result of improved operations, innovation, and customer relationships. Alcon grew sales (cc) in every quarter of 2017 and accelerated core operating income margin in the second half. As communicated in October, key criteria for a final decision and timing remain continued Alcon sales growth and margin improvement which need to be demonstrated for multiple quarters leading to potential action not likely before first half of 2019.

Additionally, we have transferred the ophthalmic OTC products, together with a small portfolio of surgical diagnostic products, to the Alcon Division effective January 1, 2018. Total 2017 sales for these businesses amounted to approximately USD 0.8 billion. Updated segment financials will be released during Q1.

Product quality strategy

Novartis continues to drive compliance, reliable product quality and sustainable efficiency as part of the quality strategy. A total of 217 Health authority inspections were completed in 2017 (84 in Q4 2017), 30 of which were conducted by the FDA (9 in Q4 2017). Of the 217 inspections, 99% were deemed acceptable. Of the two that were not; one manufacturing site inspection by the Russian Ministry of Industry and Trade resulted in an unsatisfactory outcome (Puurs, Belgium) with corrective and preventative actions on track; the other outcome of an inspection by the Gulf Cooperation Council of the Unterach, Austria site performed in November is pending.

Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority.

In January 2017, Novartis announced an up to USD 5.0 billion share buyback to be executed on the second trading line. In 2017, Novartis repurchased 56.4 million shares (USD 4.5 billion) under this buyback and 9.8 million shares (USD 0.8 billion) to mitigate dilution related to equity-based participation plans of associates. In addition, 3.8 million shares (USD 0.3 billion) were repurchased from associates and 13.4 million treasury shares (USD 0.9 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 56.6 million versus December 31, 2016. Novartis aims to offset the dilutive impact from equity based participation plans of associates. These treasury share transactions resulted in a net cash outflow of USD 5.2 billion.

As of December 31, 2017, the net debt increased by USD 3.0 billion to USD 19.0 billion versus December 31, 2016. The increase was mainly driven by the USD 6.5 billion annual dividend payment, net share repurchases of USD 5.2 billion and M&A related payments of USD 0.9 billion, partly offset by USD 10.4 billion free cash flow in 2017. The long-term credit rating for the company continues to be double-A (Moody’s Investors Service Aa3; S&P Global Ratings AA-; Fitch Ratings AA).

8/12
2018 Outlook
Barring unforeseen events
Group net sales in 2018 are expected to grow low to mid single digit (cc).
From a divisional perspective, we expect net sales performance (cc) in 2018 to be as follows:
 Innovative Medicines: grow mid single digit
 Sandoz: broadly in line to a slight decline
 Alcon: grow low to mid single digit

Group core operating income in 2018 is expected to grow mid to high single digit (cc).

If mid-January exchange rates prevail for the remainder of 2018, the currency impact for the year would be positive 3 percentage point on net sales and positive 4 percentage point on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

On January 24, 2018 Varian (NYSE: VAR) reported its first-quarter fiscal year 2018 results. All comparisons in this announcement are year-over-year unless noted otherwise (Press release, Varian Medical Systems, JAN 24, 2018, View Source [SID1234523571]). As a reminder, Varian adopted revenue Accounting Standard Codification 606 at the beginning of fiscal year 2018. First quarter fiscal year 2018 also reflects the impact from the new Tax Cuts and Jobs Act. As such the GAAP effective tax rate for the first quarter is 191.5 percent; Non-GAAP effective tax rate is 22.5 percent, which excludes the tax expense due to the mandatory deemed repatriation of foreign earnings and lower corporate tax rate’s impact on our deferred tax assets. The results that we disclose today, and any forward-looking statements, including guidance, reflect the new accounting standard and tax legislation.

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"We are very pleased with the strong start to the new fiscal year," said Dow Wilson, Chief Executive Officer of Varian. "We generated healthy orders, revenues and operating earnings growth in our Oncology business, and added two more proton therapy orders."

The company ended the quarter with $823 million in cash and cash equivalents and $340 million of debt. Net cash provided by operating activities was $179 million. During the quarter, the company invested $57 million to repurchase 525,000 shares of common stock.

"I’m delighted with our operational focus and execution in delivering these strong financial results during the quarter" added Gary E. Bischoping Jr., Chief Financial Officer of Varian.

Oncology Systems Segment

In the fiscal first quarter, Oncology revenues for the segment totaled $649 million, up 14 percent in dollars and 12 percent in constant currency. Gross orders were $620 million, up 7 percent in dollars and 6 percent in constant currency. Gross orders in the Americas increased 2 percent in dollars and in constant currency. In EMEA, gross orders rose 19 percent in dollars and 13 percent in constant currency, to $190 million; in APAC gross orders increased 6 percent in dollars and in constant currency with strong orders growth in Greater China and Japan. Operating earnings for the segment increased 19 percent.

Particle Therapy Segment

Revenues in the first quarter were $29 million, down 4 percent. In the quarter, the company booked ProBeam Compact orders from the University of Alabama at Birmingham and the Sylvester Comprehensive Cancer Center at the University of Miami totaling $46 million.

FY18 Annual Guidance Updated
Considering the financial and operational performance in the first quarter, and the impact of the new Tax Cuts and Jobs Act, fiscal year 2018 guidance is updated and increased to the following:

Revenue growth range of 4 percent to 7 percent
Non-GAAP Operating earnings as a percentage of revenues range of 18 percent to 19 percent
Non-GAAP effective tax rate of 21 percent
Weighted average diluted shares of 93 million
Non-GAAP Earnings per diluted share range of $4.24 to $4.36
Cash flow from operations range of $475 million to $550 million

Please refer to "Discussion of Non-GAAP Financial Measures" below for a description of items excluded from expected non-GAAP earnings.

Investor Conference Call

Varian Medical Systems is scheduled to conduct its first quarter fiscal year 2018 conference call at 2 p.m. PT today. To hear a live webcast or replay of the call, visit the investor relations page on our web site at www.varian.com/investor where it will be archived for a year. To access the call via telephone, dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from outside the U.S. The replay can be accessed by dialing 1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside the U.S. and entering confirmation code 13674372. The telephone replay will be available through 5 p.m. PT, Friday, January 26, 2018.

On January 24, 2018 pSivida Corp. (NASDAQ:PSDV) (ASX:PVA), a leader in the development of sustained release drug delivery products primarily for treating eye diseases, will report results for its second quarter of fiscal year 2018 on Wednesday, February 7, 2018 (Press release, pSivida, JAN 24, 2018, View Source [SID1234523568]). Management will host a conference call to review the results at 4:30 p.m. ET on the same day.

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The conference call may be accessed by dialing (877) 312-7507 from the U.S. and Canada, or (631) 813-4828 from international locations. The conference ID is 8399835. A live webcast will be available on the Investor Relations section of the corporate website at View Source

A replay of the call will be available beginning February 7, 2018, at approximately 7:30 p.m. ET and ending on February 14, 2018, at 11:59 p.m. ET. The replay may be accessed by dialing (855) 859-2056 within the U.S. and Canada or (404) 537-3406 from international locations, Conference ID Number: 8399835. A replay of the webcast will also be available on the corporate website during that time.

On January 24, 2018 Diamyd Medical reported its fourth quarter results (Press release, Diamyd Medical, JAN 24, 2018, View Source;ClipID=2797514 [SID1234523564]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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Quarterly Report I 17/18
September 2017 – November 2017, Diamyd Medical AB (publ), Fiscal year 2017/2018
September 1, 2017 – November 30, 2017

R&D-expenses amounted to MSEK -7.6 (-2.0). The cost increase compared with the previous year relates to the preparation of the DIAGNODE-2 trial and production of GAD-65
Net result amounted to MSEK -10.8 (-4.3)
Result per share, before and after dilution, amounted to SEK -0.2 (-0.1)
Cash flow from operating activities amounted to MSEK -12.1 (-4.7)
Liquid assets and short-term investments amounted as of November 30 to MSEK 73.7 (26.4)
Significant events during the reporting period

Phase II-trial DIAGNODE-2 open to include patients
Results of the investigator-initiated prevention trial DiAPREV-IT 2 is brought forward to 2020
The GABA portfolio is strengthened with new license
Strategic development of the study drug RemygenTM
Phase II trial DIAGNODE-2 with the diabetes vaccine Diamyd approved to start in all participating countries
Significant events after the reporting period

The diabetes vaccine Diamyd shows continued positive clinical course when four patients have been followed for 30 months and when all twelve patients have been followed for six months
CEO comments

Dear Shareholders and Readers,

The last two months were dominated by new and promising results from DIAGNODE-1, the ongoing investigator-initiated trial where the diabetes vaccine Diamyd is administered to the lymph node in recently diagnosed patients suffering from Type 1 diabetes. The treatment aims to interrupt the immune system’s attack on the insulin-producing cells and in this way preserve the remaining endogenous insulin production at the time of diagnosis. The value of such treatment is considerable for both patients and society, as even a minor ability to produce insulin means patients find it easier to manage their blood sugar levels, which can substantially reduce future complications, such as cardiovascular diseases, renal failure and impaired vision. In addition, the risk of acute hypoglycemia, meaning low blood sugar that may lead to unconsciousness or at worst a fatal outcome, may be decreased if some of the patient’s endogenous insulin producing capacity is being preserved.

All twelve patients participating in the DIAGNODE-1 trial have now been followed for 6 months, half of the patients for 15 months and four for 30 months since start of the trial, and we can now see a disease progression suggesting the vaccine is slowing down the immune system’s destruction of the insulin-producing cells. At 6 months, the average decrease of the patients’ own insulin production measured as the stimulated C-peptide was 1.7 % (compared with 15 % in untreated patients of the same age according to published research), at 15 months 10.8% (compared with 35%), and at 30 months 32% (compared with 50% or more). This is in line with observations in our own previous trials with patients receiving placebo, inactive treatment. In the ongoing investigator initiated DIAGNODE-1, patients are on average injecting less insulin compared to at the start of the trial, and maintaining better blood sugar levels, which provides further confirmation of results suggesting that the intralymphatic treatment with the vaccine has a positive and long-term effect on the disease progression. Previously published immunological data also shows that intralymphatic treatment produces a strong and desired immunological response.

Our highest priority now is DIAGNODE-2, the follow-up placebo-controlled Phase II trial comprising a total of 80 patients, where our goal is to complete enrollment within 12 months. The first DIAGNODE-2 clinic opened for enrollment in mid-November and 15 out of 17 clinics in Sweden, Spain and the Czech Republic are now open. Information about the trial is given not only by the different clinics but also through campaigns in social media and in local newspapers.

Our commitment toward our shareholders is to increase the value of your investment. I would like to thank you for your trust and look forward to reporting on the progress of our ongoing projects.

Stockholm, January 24, 2018
Ulf Hannelius,
President and CEO

Significant events during the reporting period

Phase II-trial DIAGNODE-2 open to include patients
The diabetes vaccine Diamydfor intralymphatic administration will be delivered to the clinics participating in the pivotal trial DIAGNODE-2 that can begin screening patients. The trial comprises about 80 patients from Spain, the Czech Republic and Sweden 12–24 diagnosed with type 1 diabetes during the last 6 months.

The results of the investigator-initiated prevention trial DiAPREV-IT 2 is brought forward to 2020
The Swedish Medical Products Agency approves a change to the trial led by Associate Professor Helena Elding Larsson, Lund University, where the diabetes vaccine Diamydis administered subcutaneously and vitamin D orally to a group of individuals at high risk of being diagnosed with type 1 diabetes. The change entails that the recruitment will stop at 26 children instead of 80 children and that the childrens’ metabolic and immunological parameters will be followed in total for 2 years after the first injection instead of 5 years.

The GABA portfolio is strengthened with new license
Diamyd Medical concludes a new exclusive licensing agreement with University of California, Los Angeles (UCLA) Technology Development Group on behalf of UC Regents. The license relates to new patent applications for the therapeutic use of GABA (gamma-aminobutyric acid) with positive allosteric modulators of the GABAA receptor to enhance beta cell regeneration, survival and immunomodulation.

Strategic development of the study drug RemygenTM
A preliminary patent application is filed on the formulation and release characteristics of the GABA-based study drug RemygenTM. Based on feedback from a scientific meeting with the Swedish Medical Products Agency, and in collaboration with Diamyd Medical’s scientific network, the Company will commence designing the first clinical trial based on RemygenTM.

Phase II trial DIAGNODE-2 with the diabetes vaccine Diamyd approved to start in all participating countries
Spanish and Czech Competent Authorities and the relevant Ethics Committees approves Diamyd Medical’s application to conduct DIAGNODE-2, a pivotal follow-up placebo-controlled Phase II trial with the diabetes vaccine Diamydto be tested in children and young adults recently diagnosed type 1 diabetes. Previously, the trial has been approved by the Swedish Medical Products Agency and the Ethics Committee.

Significant events after the reporting period

The diabetes vaccine Diamyd shows continued positive clinical course after 30 months and when all patients have been followed for 15 months
Positive effects such as lower insulin requirements and improved blood glucose levels are observed for the first four diabetes patients that have been followed for 30 months in the DIAGNODE-1 trial. Safety looks good and no serious side effects have been reported.

Positive results are also reported from the trial when all patients have been followed for 6 months. A clinically relevant and positive progression can be demonstrated in terms of the body’s own capacity to produce insulin, as well as long-term blood sugar and insulin dose. No serious adverse events have been reported.

On-going clinical trials with Diamyd

Type 1 diabetes is a devastating disease which requires daily treatment with insulin to sustain life. The importance of finding a drug that improves the prospects for diabetic patients is of utmost importance. The diabetes vaccine Diamyd has been used in clinical trials with more than 1 000 patients and has shown a good safety profile. Diamyd is easy to administer in any clinical setting. The potential annual market is estimated to several billion dollars per year. Five clinical trials are ongoing combining Diamyd with various other immunomodulatory compounds; etanercept, vitamin D and GABA.

DIAGNODE -1 – DIAMYD IN LYMPH GLANDS IN COMBINATION WITH VITAMIN D
An open label trial, where Diamyd is administered directly into lymph nodes in combination with treatment with vitamin D. The trial comprises twelve patients between the ages of 12 and 30 newly diagnosed with type 1 diabetes and will continue for a total of 30 months. The trial was fully recruited in June 2017. The aim of the trial is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The trial is led by Professor Johnny Ludvigsson at Linköping University, Sweden.

DIAGNODE -2 – DIAMYD IN LYMPH GLANDS IN COMBINATION WITH VITAMIN D
DIAGNODE-2 is a follow-up double-blind randomized trial where Diamyd is administered directly into lymph nodes in combination with treatment with vitamin D. The trial encompasses approximately 80 patients from Sweden, the Czech Republic and Spain, aged 12–24 years that have recently been diagnosed with type 1 diabetes. The patients are followed for 15 months. The trial is a follow up of DIAGNODE-1. The aim of the trial is to evaluate the patients’ remaining insulin producing capacity. Coordinating Investigator is Professor Johnny Ludvigsson at Linköping University. Diamyd Medical is the Sponsor of the trial.

GABA/ DIAMYD – COMBINING DIAMYD WITH GABA
A placebo-controlled trial, where Diamydis given subcutaneously and being tested in combination with GABA. In accordance with agreement with Jansen Research & Development and JDRF the trial has expanded to comprise 95 patients between the ages of 4 and 18 recently diagnosed with type 1 diabetes. The trial will continue for a total of 12 months. The aim of the combination treatment is to preserve the body’s residual capacity to produce insulin. The trial is led by Professor Kenneth McCormick at the University of Alabama at Birmingham, USA.

EDCR IIa – COMBINING DIAMYD WITH ETANERCEPT AND VITAMIN D
An open label trial, where Diamydis given subcutaneously and being tested in combination with etanercept and vitamin D. The trial comprises 20 patients between the ages of 8 and 18 who have been newly diagnosed with type 1 diabetes and will continue for a total of 30 months. The aim of the trial is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The trial is led by Professor Johnny Ludvigsson at Linköping University, Sweden. 15-month results are expected during the first quarter of 2018.

DiAPREV-IT 2 – COMBINING DIAMYD WITH VITAMIN D
A placebo-controlled trial, where Diamyd is given subcutaneously and being tested in combination with vitamin D in children at high risk of developing type 1 diabetes, meaning that they have been found to have an ongoing autoimmune process but do not yet have any clinical symptoms of diabetes. The trial includes 26 children. The aim of the trial is to evaluate whether Diamyd can delay or prevent the participants from presenting with type 1 diabetes. The trial is led by Dr. Helena Elding Larsson at Lund University, Sweden.

On January 24, 2018 Incyte Corporation (Nasdaq:INCY) reported that it has scheduled its fourth quarter and year end 2017 financial results conference call and webcast for 10:00 a.m. ET on Thursday, February 15, 2018 (Press release, Incyte, JAN 24, 2018, View Source;p=RssLanding&cat=news&id=2328124 [SID1234523546]).

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The schedule for the press release and conference call/webcast is as follows:

Q4 & YE 2017 Press Release: February 15, 2018 at 7:00 a.m. ET
Q4 & YE 2017 Conference Call: February 15, 2018 at 10:00 a.m. ET
Domestic Dial-In Number: 877-407-3042
International Dial-In Number: 201-389-0864
Conference ID Number: 13675376

If you are unable to participate, a replay of the conference call will be available for thirty days. The replay dial-in number for the U.S. is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference ID number 13675376.

The live webcast with slides can be accessed at www.incyte.com under For Investors, Events and Presentations and will be available for replay for 30 days.