On February 26, 2019 Celgene Corporation (NASDAQ:CELG) reported that the U.S. Food and Drug Administration (FDA) has granted Priority Review designation for the company’s supplemental New Drug Application (sNDA) for REVLIMID (lenalidomide) in combination with rituximab (R²) for the treatment of patients with previously treated follicular and marginal zone lymphoma (Press release, Celgene, FEB 26, 2019, View Source [SID1234533706]). Under the Prescription Drug User Fee Act (PDUFA), the FDA has set its action date as June 27, 2019.

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"R2 has the potential to offer patients with previously treated follicular lymphoma and marginal zone lymphoma a chemotherapy free option" said Jay Backstrom, M.D., Chief Medical Officer and Head of Global Regulatory Affairs for Celgene. "We look forward to working with the FDA to bring the R2 regimen to patients as quickly as possible."

The sNDA is based on results from the randomized, double-blind, phase 3 AUGMENT study, which evaluated the efficacy and safety of the investigational R² combination versus rituximab plus placebo in patients with relapsed/refractory follicular and marginal zone lymphoma. Results from the study were presented at the 2018 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition.

Earlier this year, Celgene submitted and had accepted a Marketing Authorization Application (MAA) for R2 to the European Medicines Agency (EMA) for the treatment of relapsed/refractory follicular and marginal zone lymphoma.

REVLIMID alone or in combination with other agents is not approved for use in follicular lymphoma or marginal zone lymphoma in any geography.

Celgene also announced updated timing for the anticipated submission of a Biologics License Application (BLA) with the U.S. FDA for luspatercept in adult patients with anemia related to very low to intermediate myelodysplastic syndromes (MDS) with ring sideroblasts who require red blood cell transfusions, and in adult patients with anemia related to beta-thalassemia who require regular red blood cell transfusions. The company expects to submit the BLA in April 2019.

Luspatercept is not approved in any region for any indication. Acceleron Pharma Inc. and Celgene are jointly developing luspatercept as part of a global collaboration.

About Relapsed/Refractory Indolent Lymphoma

Lymphoma is a blood cancer that develops in lymphocytes, a type of white blood cell in the immune system that helps protect the body from infection.1 There are two classes of lymphoma – Hodgkin’s and non-Hodgkin’s lymphoma (NHL) – each with specific subtypes that determine how the cancer behaves, spreads and should be treated.1,2,3

Indolent lymphomas are slow-growing forms of the disease, which can often be asymptomatic or have fewer symptoms upon diagnosis.4 Indolent lymphomas account for approximately 40 percent of all NHL cases.4 In patients with relapsed/refractory lymphoma, the disease has either responded to treatment but then returned or has not responded to initial treatment.5

About AUGMENT

AUGMENT is a phase 3, randomized, double-blind clinical trial evaluating the efficacy and safety of REVLIMID (lenalidomide) in combination with rituximab (R²) versus rituximab plus placebo in patients with relapsed/refractory follicular and marginal zone lymphoma.

The primary endpoint was progression-free survival, defined as the time from date of randomization to the first observation of disease progression or death due to any cause. Secondary endpoints included overall response rate, durable complete response rate, complete response rate, duration of response, duration of complete response, overall survival, event-free survival and time to next anti-lymphoma therapy.

About REVLIMID

REVLIMID (lenalidomide) in combination with dexamethasone (dex) is indicated for the treatment of patients with multiple myeloma (MM)

REVLIMID is indicated as maintenance therapy in patients with MM following autologous hematopoietic stem cell transplantation (auto-HSCT)

REVLIMID is indicated for the treatment of patients with transfusion-dependent anemia due to low-or intermediate-1–risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality with or without additional cytogenetic abnormalities

REVLIMID is indicated for the treatment of patients with mantle cell lymphoma (MCL) whose disease has relapsed or progressed after two prior therapies, one of which included bortezomib

REVLIMID is not indicated and is not recommended for the treatment of patients with chronic lymphocytic leukemia (CLL) outside of controlled clinical trials

Important Safety Information

WARNING: EMBRYO-FETAL TOXICITY, HEMATOLOGIC TOXICITY, and VENOUS and ARTERIAL THROMBOEMBOLISM

Embryo-Fetal Toxicity

Do not use REVLIMID during pregnancy. Lenalidomide, a thalidomide analogue, caused limb abnormalities in a developmental monkey study. Thalidomide is a known human teratogen that causes severe life-threatening human birth defects. If lenalidomide is used during pregnancy, it may cause birth defects or embryo-fetal death. In females of reproductive potential, obtain 2 negative pregnancy tests before starting REVLIMID treatment. Females of reproductive potential must use 2 forms of contraception or continuously abstain from heterosexual sex during and for 4 weeks after REVLIMID treatment. To avoid embryo-fetal exposure to lenalidomide, REVLIMID is only available through a restricted distribution program, the REVLIMID REMS program.

Information about the REVLIMID REMS program is available at www.celgeneriskmanagement.com or by calling the manufacturer’s toll-free number 1-888-423-5436.

Hematologic Toxicity (Neutropenia and Thrombocytopenia)

REVLIMID can cause significant neutropenia and thrombocytopenia. Eighty percent of patients with del 5q MDS had to have a dose delay/reduction during the major study. Thirty-four percent of patients had to have a second dose delay/reduction. Grade 3 or 4 hematologic toxicity was seen in 80% of patients enrolled in the study. Patients on therapy for del 5q MDS should have their complete blood counts monitored weekly for the first 8 weeks of therapy and at least monthly thereafter. Patients may require dose interruption and/or reduction. Patients may require use of blood product support and/or growth factors.

Venous and Arterial Thromboembolism

REVLIMID has demonstrated a significantly increased risk of deep vein thrombosis (DVT) and pulmonary embolism (PE), as well as risk of myocardial infarction and stroke in patients with MM who were treated with REVLIMID and dexamethasone therapy. Monitor for and advise patients about signs and symptoms of thromboembolism. Advise patients to seek immediate medical care if they develop symptoms such as shortness of breath, chest pain, or arm or leg swelling. Thromboprophylaxis is recommended and the choice of regimen should be based on an assessment of the patient’s underlying risks.

CONTRAINDICATIONS

Pregnancy: REVLIMID can cause fetal harm when administered to a pregnant female and is contraindicated in females who are pregnant. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be apprised of the potential risk to the fetus

Severe Hypersensitivity Reactions: REVLIMID is contraindicated in patients who have demonstrated severe hypersensitivity (e.g., angioedema, Stevens-Johnson syndrome, toxic epidermal necrolysis) to lenalidomide

WARNINGS AND PRECAUTIONS

Embryo-Fetal Toxicity: See Boxed WARNINGS

Females of Reproductive Potential: See Boxed WARNINGS
Males: Lenalidomide is present in the semen of patients receiving the drug. Males must always use a latex or synthetic condom during any sexual contact with females of reproductive potential while taking REVLIMID and for up to 4 weeks after discontinuing REVLIMID, even if they have undergone a successful vasectomy. Male patients taking REVLIMID must not donate sperm
Blood Donation: Patients must not donate blood during treatment with REVLIMID and for 4 weeks following discontinuation of the drug because the blood might be given to a pregnant female patient whose fetus must not be exposed to REVLIMID
REVLIMID REMS Program: See Boxed WARNINGS: Prescribers and pharmacies must be certified with the REVLIMID REMS program by enrolling and complying with the REMS requirements; pharmacies must only dispense to patients who are authorized to receive REVLIMID. Patients must sign a Patient-Physician Agreement Form and comply with REMS requirements; female patients of reproductive potential who are not pregnant must comply with the pregnancy testing and contraception requirements and males must comply with contraception requirements

Hematologic Toxicity: REVLIMID can cause significant neutropenia and thrombocytopenia.Monitor patients with neutropenia for signs of infection. Advise patients to observe for bleeding or bruising, especially with use of concomitant medications that may increase risk of bleeding. MM: Patients taking REVLIMID/dex or REVLIMID as maintenance therapy should have their complete blood counts (CBC) assessed every 7 days for the first 2 cycles, on days 1 and 15 of cycle 3, and every 28 days thereafter. MDS: Patients on therapy for del 5q MDS should have their complete blood counts monitored weekly for the first 8 weeks of therapy and at least monthly thereafter. Patients may require dose interruption and/or dose reduction. Please see the Black Box WARNINGS for further information. MCL: Patients taking REVLIMID for MCL should have their CBCs monitored weekly for the first cycle (28 days), every 2 weeks during cycles 2-4, and then monthly thereafter. Patients may require dose interruption and/or dose reduction

Venous and Arterial Thromboembolism: See Boxed WARNINGS: Venous thromboembolic events (DVT and PE) and arterial thromboses (MI and CVA) are increased in patients treated with REVLIMID. Patients with known risk factors, including prior thrombosis, may be at greater risk and actions should be taken to try to minimize all modifiable factors (e.g., hyperlipidemia, hypertension, smoking). Thromboprophylaxis is recommended and the regimen should be based on patient’s underlying risks. ESAs and estrogens may further increase the risk of thrombosis and their use should be based on a benefit-risk decision

Increased Mortality in Patients with CLL: In a clinical trial in the first-line treatment of patients with CLL, single agent REVLIMID therapy increased the risk of death as compared to single agent chlorambucil. Serious adverse cardiovascular reactions, including atrial fibrillation, myocardial infarction, and cardiac failure, occurred more frequently in the REVLIMID arm. REVLIMID is not indicated and not recommended for use in CLL outside of controlled clinical trials

Second Primary Malignancies (SPM): In clinical trials in patients with MM receiving REVLIMID, an increase of hematologic plus solid tumor SPM, notably AML and MDS, have been observed. Monitor patients for the development of SPM. Take into account both the potential benefit of REVLIMID and risk of SPM when considering treatment

Increased Mortality with Pembrolizumab: In clinical trials in patients with multiple myeloma, the addition of pembrolizumab to a thalidomide analogue plus dexamethasone resulted in increased mortality. Treatment of patients with multiple myeloma with a PD-1 or PD-L1 blocking antibody in combination with a thalidomide analogue plus dexamethasone is not recommended outside of controlled clinical trials

Hepatotoxicity: Hepatic failure, including fatal cases, has occurred in patients treated with REVLIMID/dex. Pre-existing viral liver disease, elevated baseline liver enzymes, and concomitant medications may be risk factors. Monitor liver enzymes periodically. Stop REVLIMID upon elevation of liver enzymes. After return to baseline values, treatment at a lower dose may be considered

Severe Cutaneous Reactions Including Hypersensitivity Reactions: Angioedema and severe cutaneous reactions including Stevens-Johnson syndrome (SJS), toxic epidermal necrolysis (TEN), and drug reaction with eosinophilia and systemic symptoms (DRESS) have been reported. DRESS may present with a cutaneous reaction (such as rash, or exfoliative dermatitis), eosinophilia, fever, and/or lymphadenopathy with systemic complications such as hepatitis, nephritis, pneumonitis, myocarditis, and/or pericarditis. These events can be fatal. Patients with a prior history of Grade 4 rash associated with thalidomide treatment should not receive REVLIMID. REVLIMID interruption or discontinuation should be considered for Grade 2-3 skin rash. REVLIMID must be discontinued for angioedema, Grade 4 rash, exfoliative or bullous rash, or if SJS, TEN, or DRESS is suspected and should not be resumed following discontinuation for these reactions

Tumor Lysis Syndrome (TLS): Fatal instances of TLS have been reported during treatment with lenalidomide. The patients at risk of TLS are those with high tumor burden prior to treatment. These patients should be monitored closely and appropriate precautions taken

Tumor Flare Reaction (TFR): TFR has occurred during investigational use of lenalidomide for CLL and lymphoma. Monitoring and evaluation for TFR is recommended in patients with MCL. Tumor flare may mimic the progression of disease (PD). In patients with Grade 3 or 4 TFR, it is recommended to withhold treatment with REVLIMID until TFR resolves to ≤Grade 1. REVLIMID may be continued in patients with Grade 1 and 2 TFR without interruption or modification, at the physician’s discretion

Impaired Stem Cell Mobilization: A decrease in the number of CD34+ cells collected after treatment (>4 cycles) with REVLIMID has been reported. Consider early referral to transplant center to optimize timing of the stem cell collection

Thyroid Disorders: Both hypothyroidism and hyperthyroidism have been reported. Measure thyroid function before start of REVLIMID treatment and during therapy

Early Mortality in Patients with MCL: In another MCL study, there was an increase in early deaths (within 20 weeks), 12.9% in the REVLIMID arm versus 7.1% in the control arm. Risk factors for early deaths include high tumor burden, MIPI score at diagnosis, and high WBC at baseline (≥10 x 109/L)

ADVERSE REACTIONS

Multiple Myeloma

In newly diagnosed: The most frequently reported Grade 3 or 4 reactions included neutropenia, anemia, thrombocytopenia, pneumonia, asthenia, fatigue, back pain, hypokalemia, rash, cataract, lymphopenia, dyspnea, DVT, hyperglycemia, and leukopenia. The highest frequency of infections occurred in Arm Rd Continuous (75%) compared to Arm MPT (56%). There were more Grade 3 and 4 and serious adverse reactions of infection in Arm Rd Continuous than either Arm MPT or Rd18
The most common adverse reactions reported in ≥20% (Arm Rd Continuous): diarrhea (46%), anemia (44%), neutropenia (35%), fatigue (33%), back pain (32%), asthenia (28%), insomnia (28%), rash (26%), decreased appetite (23%), cough (23%), dyspnea (22%), pyrexia (21%), abdominal pain (21%), muscle spasms (20%), and thrombocytopenia (20%)
Maintenance Therapy Post Auto-HSCT: The most frequently reported Grade 3 or 4 reactions in ≥20% (REVLIMID arm) included neutropenia, thrombocytopenia, and leukopenia. The serious adverse reactions of lung infection and neutropenia (more than 4.5%) occurred in the REVLIMID arm
The most frequently reported adverse reactions in ≥20% (REVLIMID arm) across both maintenance studies (Study 1, Study 2) were neutropenia (79%, 61%), thrombocytopenia (72%, 24%), leukopenia (23%, 32%), anemia (21%, 9%), upper respiratory tract infection (27%, 11%), bronchitis (5%, 47%), nasopharyngitis (2%, 35%), cough (10%, 27%), gastroenteritis (0%, 23%), diarrhea (55%, 39%), rash (32%, 8%), fatigue (23%, 11%), asthenia (0%, 30%), muscle spasm (0%, 33%), and pyrexia (8%, 21%)
After at least one prior therapy: The most common adverse reactions reported in ≥20% (REVLIMID/dex vs dex/placebo): fatigue (44% vs 42%), neutropenia (42% vs 6%), constipation (41% vs 21%), diarrhea (39% vs 27%), muscle cramp (33% vs 21%), anemia (31% vs 24%), pyrexia (28% vs 23%), peripheral edema (26% vs 21%), nausea (26% vs 21%), back pain (26% vs 19%), upper respiratory tract infection (25% vs 16%), dyspnea (24% vs 17%), dizziness (23% vs 17%), thrombocytopenia (22% vs 11%), rash (21% vs 9%), tremor (21% vs 7%), and weight decreased (20% vs 15%)
Myelodysplastic Syndromes

Grade 3 and 4 adverse events reported in ≥ 5% of patients with del 5q MDS were neutropenia (53%), thrombocytopenia (50%), pneumonia (7%), rash (7%), anemia (6%), leukopenia (5%), fatigue (5%), dyspnea (5%), and back pain (5%)
Adverse events reported in ≥15% of del 5q MDS patients (REVLIMID): thrombocytopenia (61.5%), neutropenia (58.8%), diarrhea (49%), pruritus (42%), rash (36%), fatigue (31%), constipation (24%), nausea (24%), nasopharyngitis (23%), arthralgia (22%), pyrexia (21%), back pain (21%), peripheral edema (20%), cough (20%), dizziness (20%), headache (20%), muscle cramp (18%), dyspnea (17%), pharyngitis (16%), epistaxis (15%), asthenia (15%), upper respiratory tract infection (15%)
Mantle Cell Lymphoma

Grade 3 and 4 adverse events reported in ≥5% of patients treated with REVLIMID in the MCL trial (N=134) included neutropenia (43%), thrombocytopenia (28%), anemia (11%), pneumonia (9%), leukopenia (7%), fatigue (7%), diarrhea (6%), dyspnea (6%), and febrile neutropenia (6%)
Adverse events reported in ≥15% of patients treated with REVLIMID in the MCL trial included neutropenia (49%), thrombocytopenia (36%), fatigue (34%), anemia (31%), diarrhea (31%), nausea (30%), cough (28%), pyrexia (23%), rash (22%), dyspnea (18%), pruritus (17%), peripheral edema (16%), constipation (16%), and leukopenia (15%)
DRUG INTERACTIONS

Periodic monitoring of digoxin plasma levels is recommended due to increased Cmax and AUC with concomitant REVLIMID therapy. Patients taking concomitant therapies such as erythropoietin stimulating agents or estrogen containing therapies may have an increased risk of thrombosis. It is not known whether there is an interaction between dex and warfarin. Close monitoring of PT and INR is recommended in patients with MM taking concomitant warfarin

USE IN SPECIFIC POPULATIONS

PREGNANCY: See Boxed WARNINGS: If pregnancy does occur during treatment, immediately discontinue the drug and refer patient to an obstetrician/gynecologist experienced in reproductive toxicity for further evaluation and counseling. There is a REVLIMID pregnancy exposure registry that monitors pregnancy outcomes in females exposed to REVLIMID during pregnancy as well as female partners of male patients who are exposed to REVLIMID. This registry is also used to understand the root cause for the pregnancy. Report any suspected fetal exposure to REVLIMID to the FDA via the MedWatch program at 1-800-FDA-1088 and also to Celgene Corporation at 1-888-423-5436
LACTATION: There is no information regarding the presence of lenalidomide in human milk, the effects of REVLIMID on the breastfed infant, or the effects of REVLIMID on milk production. Because many drugs are excreted in human milk and because of the potential for adverse reactions in breastfed infants from REVLIMID, advise female patients not to breastfeed during treatment with REVLIMID
PEDIATRIC USE: Safety and effectiveness have not been established in pediatric patients
RENAL IMPAIRMENT: Adjust the starting dose of REVLIMID based on the creatinine clearance value and in patients on dialysis

On February 26, 2019 Mylan N.V. (NASDAQ: MYL) reported its financial results for the fourth quarter and the year ended December 31, 2018 and provided 2019 guidance (Press release, Mylan, FEB 26, 2019, View Source [SID1234533701]).

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Fourth Quarter 2018 Financial Highlights

Total revenues of $3.08 billion, down 5% compared to the prior year period
Rest of World segment net sales of $851.4 million, up 4%, up 11% on a constant currency basis
Europe segment net sales of $1.09 billion, up 1%, up 5% on a constant currency basis
North America segment net sales of $1.10 billion, down 16%, on an actual and constant currency basis, primarily due to lower volumes on existing products, which was primarily driven by actions associated with the restructuring and remediation activities at the Morgantown plant and the timing of purchases of our products by customers, as well as the impact of the implementation of new accounting standards
U.S. GAAP diluted earnings per ordinary share ("U.S. GAAP EPS") of $0.10, down 78% over the prior year period
Adjusted diluted earnings per ordinary share ("adjusted EPS") of $1.30, down 9% over the prior year period
Full Year 2018 Financial Highlights

Total revenues of $11.43 billion, down 4% compared to the prior year
Rest of World segment net sales of $3.02 billion, up 7%, up 10% on a constant currency basis
Europe segment net sales of $4.16 billion, up 5%, up 1% on a constant currency basis
North America segment net sales of $4.10 billion, down 18%, on an actual and constant currency basis, primarily due to lower volumes on existing products, including the EpiPen Auto-Injector sales, which was primarily driven by the divestiture of certain contract manufacturing assets, the loss of exclusivity of certain products, actions associated with the restructuring and remediation activities at the Morgantown plant and the timing of purchases of our products by customers, as well as the impact of the implementation of new accounting standards
U.S. GAAP EPS of $0.68, down 47% compared to the prior year
Adjusted EPS of $4.58, up slightly when compared to the prior year
U.S. GAAP net cash provided by operating activities of $2.34 billion, up 13% compared to $2.06 billion in the prior year period
Adjusted free cash flow of $2.71 billion, up 3% compared to $2.63 billion in the prior year period
Mylan is not providing forward looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, acquisition-related expenses, restructuring expenses, asset impairments, litigation settlements and other contingencies, including changes to contingent consideration and certain other gains or losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period.

Mylan CEO Heather Bresch commented: "Our 2018 results were strong, especially in light of the fact that we had lower than expected uptake on generic Copaxone and did not receive our generic Advair approval, demonstrating once again the resiliency of our business model. We adapted quickly and strategically to market conditions, while at the same time remained a leader for the generics industry and an advocate for changes to the current structural issues in the U.S. healthcare system that hinder access to generics.

"Looking forward, I can confidently say, through leveraging the diversification across our commercial, operational and scientific platforms, we feel incredibly positive about our ability to deliver a strong top-line financial performance in 2019. Specifically, we expect to generate total revenues of between $11.5 billion and $12.5 billion, reflecting top-line growth across all three of our geographic segments.

"Our business model is predicated on prioritizing long-term sustainable growth. Therefore, we will be making incremental investments in our sales and marketing and research and development efforts. As a result, we expect to deliver 2019 adjusted EPS in the range of $3.80 to $4.80. Additionally, we expect to generate adjusted free cash flows between $1.9 billion and $2.3 billion. At the same time, we are putting a highly disciplined financial lens to unlock latent value from the assets we’ve integrated as we transition to a business model that is predominantly driven by organic growth."

Mylan President Rajiv Malik added: "We’re pleased with our results from 2018 and continue to be extremely proud of our scientific achievements over the past year. In 2019, you can expect us to move our portfolio and pipeline up the value chain, invest organically in our key brands and execute on our impressive commercial assets around the world. We anticipate growth of more than $1 billion in new launches, nearly all of which have already been approved, and which reflects a heavier weighting on specialty and complex generic products aligned with the evolution of the pharmaceutical industry."

Mylan CFO Ken Parks added: "Mylan continued to generate strong cash flow with more than $2.7 billion of adjusted free cash flow for 2018, an increase of $86 million compared to the prior year and above the high-end of our initial guidance range for 2018. 2018 adjusted free cash flow conversion was healthy at approximately 115 percent of adjusted net earnings of $2.4 billion, another measure of the strength and durability of the cash flow generating capabilities of our business. In 2019, we remain committed to deleveraging and intend to repay at least $1.1 billion of debt during the year. We also remain fully committed to maintaining our investment grade credit rating."

Fourth Quarter 2018 Financial Results

Total revenues were $3.08 billion in the fourth quarter of 2018, compared to $3.24 billion in the prior year period, representing a decrease of $160.2 million, or 5%. Total revenues include both net sales and other revenues from third parties. Net sales for the current quarter were $3.04 billion compared to $3.19 billion for the prior year period, a decrease of $154.3 million, or 5%. Other revenues for the current quarter ended December 31, 2018 were $43.2 million, compared to $49.1 million for the comparable prior year period, a decrease of $5.9 million.

The decrease in net sales included a decrease in the North America segment of 16% which was partially offset by increases in the Europe segment of 1% and in the Rest of World segment of 4%. The overall decrease in net sales was primarily driven by a decrease in net sales from existing products. Net sales from existing products, partially offset by new product launches, decreased on a constant currency basis by approximately $17.2 million primarily as a result of lower volumes and pricing. Net sales were also negatively impacted by approximately $40.0 million due to the adoption of new accounting standards. Mylan’s net sales were unfavorably impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in the European Union (EU), India, and Australia. The unfavorable impact of foreign currency translation on current quarter net sales was approximately $97.2 million, resulting in a decrease in constant currency net sales of approximately $57.1 million, or 2%. Below is a summary of net sales in each of our segments for the three months ended December 31, 2018:

Net sales in the North America segment totaled $1.10 billion in the current quarter, a decrease of $205.8 million or 16% when compared to the prior year period. Net sales were negatively impacted in the current quarter due to a decline in sales of existing products, driven by lower volumes, and to a lesser extent, lower pricing, partially offset by new product sales. The decline in volumes was primarily driven by actions associated with the restructuring and remediation activities at the Morgantown manufacturing plant and the timing of purchases of our products by customers. In addition, net sales were negatively impacted by approximately $50.6 million related to the implementation of new accounting standards. The impact of foreign currency translation on current period net sales was insignificant within North America.
Net sales in the Europe segment totaled $1.09 billion in the current quarter, an increase of $15.8 million or 1% when compared to the prior year period. The increase was primarily the result of higher volumes on existing products and new product sales. These were partially offset by the unfavorable impact of foreign currency translation and lower pricing on existing products. The unfavorable impact of foreign currency translation on the current period was approximately $39.5 million, or 4%. Constant currency net sales increased by approximately $55.3 million, or 5% when compared to the prior year.
Net sales in the Rest of World segment totaled $851.4 million in the current quarter, an increase of $35.7 million or 4% when compared to the prior year period. This increase was primarily driven by new product sales and, to a lesser extent, higher volumes of existing products including higher sales of key brands in China. The increase in net sales as a result of new products was primarily due to new product sales in China, Australia, and Japan. The increase in net sales was partially offset by the unfavorable impact of foreign currency translation and lower pricing in the region. The unfavorable impact of foreign currency translation was $55.2 million, or 7%. Constant currency net sales increased by approximately $90.9 million, or 11% when compared to the prior year.
U.S. GAAP gross profit for the three months ended December 31, 2018 was $1.02 billion and U.S. GAAP gross margins were 33%. For the three months ended December 31, 2017, U.S. GAAP gross profit was $1.29 billion and U.S. GAAP gross margins were 40%. U.S. GAAP gross margins were negatively impacted by approximately 270 basis points related to the incremental amortization from product acquisitions and intangible asset impairment charges and by approximately 240 basis points as a result of incremental manufacturing expenses, site remediation expenses and incremental restructuring charges incurred during the current quarter principally as a result of the activities at the Company’s Morgantown plant. U.S. GAAP gross margins were also negatively impacted as a result of lower gross profit from the sales of existing products partially offset by gross margins on new product introductions primarily in North America. Adjusted gross profit was $1.68 billion and adjusted gross margins were 55% for the three months ended December 31, 2018 compared to adjusted gross profit of $1.80 billion and adjusted gross margins of 55% in the prior year period. Adjusted gross margins were negatively impacted by lower gross profit from sales of existing products partially offset by gross margins on new product introductions primarily in North America.

R&D expense for the three months ended December 31, 2018 was $148.8 million, compared to $202.4 million for the prior year period. This decrease was primarily due to lower expenditures related to the Company’s respiratory programs, lower expenses due to the reprioritization of global programs and higher payments in the prior year period related to licensing arrangements for products in development.

SG&A expense for the three months ended December 31, 2018 was $632.9 million, compared to $659.0 million for the prior year period. The decrease is primarily due to lower restructuring charges and the benefits of integration activities.

During the three months ended December 31, 2018, the Company recorded a net charge of $1.1 million for litigation settlements and other contingencies, net, compared to a net charge of $12.7 million in the comparable prior year period. The decrease from the comparable prior year period was primarily a result of the prior year’s fair value adjustment to the contingent consideration related to the 2016 acquisition of the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, LLC.

U.S. GAAP net earnings decreased by $193.1 million to $51.2 million for the three months ended December 31, 2018, compared to U.S. GAAP net earnings of $244.3 million for the prior year period and U.S. GAAP EPS decreased to $0.10 from $0.46 in the prior year period. The Company recognized a U.S. GAAP income tax provision of $25.8 million for the three months ended December 31, 2018, compared to a U.S. GAAP income tax provision of $82.8 million for the comparable prior year period. Adjusted net earnings decreased by $95.6 million to $669.7 million as compared to $765.3 million for the prior year period and adjusted EPS decreased to $1.30 from $1.43 in the prior year period.

EBITDA was $841.2 million for the current quarter and $962.2 million for the comparable prior year period. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $1.01 billion for the current quarter and $1.12 billion for the comparable prior year period.

Year Ended December 31, 2018 Financial Results

For the year ended December 31, 2018, Mylan reported total revenues of $11.43 billion, compared to $11.91 billion for the prior year period, representing a decrease of $473.8 million, or 4%. Net sales for the year ended December 31, 2018 were $11.27 billion, compared to $11.76 billion for the prior year period, representing a decrease of $491.3 million, or 4%. Other revenues for the year ended December 31, 2018 were $165.2 million, compared to $147.7 million for the prior year period, an increase of $17.5 million. The increase in other revenues was primarily the result of consideration received from the licensing of intellectual property during the current year.

The decrease in net sales included a decrease in the North America segment of 18%. This decrease was partially offset by increases in the Europe segment of 5% and in the Rest of World segment of 7%. The overall decrease in net sales was primarily driven by a decrease in net sales from existing products. Net sales from existing products, partially offset by new product sales, decreased on a constant currency basis by approximately $443.6 million primarily as a result of lower volumes, and to a lesser extent, pricing. Net sales were also negatively impacted by approximately $104.5 million due to the adoption of new accounting standards. Mylan’s net sales were favorably impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in the EU, which was partially offset by the unfavorable impact from changes in the Indian Rupee and the Australian Dollar. The favorable impact of foreign currency translation on current year net sales was approximately $56.7 million resulting in a decrease in constant currency net sales of approximately $548.0 million, or 5%. Below is a summary of net sales in each of our segments for the year ended December 31, 2018.

Net sales in the North America segment totaled $4.10 billion, a decrease of $874.0 million or 18% from the prior year. This decrease was due primarily to lower volumes on existing products, including the EpiPen Auto-Injector, partially offset by new product sales. The decline in volumes was primarily driven by the divestiture of certain contract manufacturing assets, the loss of exclusivity of certain products, actions associated with the restructuring and remediation activities at the Morgantown manufacturing plant and the timing of purchases of our products by customers. In addition, net sales were negatively impacted by $149.7 million related to the implementation of new accounting standards. Pricing also declined when compared to the prior year. The impact of foreign currency translation on current period net sales was insignificant within North America.
Net sales in the Europe segment totaled $4.16 billion, an increase of $199.0 million or 5% from the prior year. This increase was primarily the result of the favorable impact of foreign currency translation, new product sales, and to a lesser extent, higher volumes of existing products. The favorable impact of foreign currency translation was approximately $144.5 million, or 4%. Partially offsetting these items was lower pricing on existing products. Constant currency net sales increased by approximately $54.5 million, or 1% when compared to the prior year.
Net sales in the Rest of World segment totaled $3.02 billion, an increase of $183.7 million or 7% from the prior year. This increase was primarily the result of new product sales, and to a lesser extent, higher volumes of existing products including higher sales of key brands in China. The increase in net sales as a result of new products was primarily due to new product sales from the Company’s anti-retroviral therapy franchise combined with new product sales in Australia, Japan and China. The increase in net sales was partially offset by lower pricing on existing products and the unfavorable impact of foreign currency translation. Overall, net sales from Rest of World were unfavorably impacted by the effect of foreign currency translation of approximately $88.6 million, or 3%. Constant currency net sales increased by approximately $272.3 million, or 10%.
U.S. GAAP gross profit for the year ended December 31, 2018 was $4.00 billion and U.S. GAAP gross margins were 35%. For the year ended December 31, 2017, U.S. GAAP gross profit was $4.78 billion and U.S. GAAP gross margins were 40%. U.S. GAAP gross margins were negatively impacted by approximately 270 basis points related to the incremental amortization from product acquisitions and intangible asset impairment charges. U.S. GAAP gross margins were also negatively affected by approximately 220 basis points as a result of incremental manufacturing expenses, site remediation expenses and incremental restructuring charges incurred during the year principally as a result of the activities at the Company’s Morgantown plant. In addition, U.S. GAAP gross margins were negatively impacted as a result of lower gross profit from the sales of existing products partially offset by gross margins on new product introductions primarily in North America. Adjusted gross profit was $6.18 billion and adjusted gross margins were approximately 54% for the year ended December 31, 2018, compared to adjusted gross profit of $6.42 billion and adjusted gross margins of approximately 54% for the year ended December 31, 2017. Adjusted gross margins were negatively impacted by lower gross profit from sales of existing products partially offset by gross margins on new product introductions primarily in North America.

R&D expense for the year ended December 31, 2018 was $704.5 million, compared to $783.3 million for the prior year, a decrease of $78.8 million. This decrease was primarily due to lower expenditures related to the Company’s respiratory programs and lower expenses due to the reprioritization of global programs.

SG&A expense for the year ended December 31, 2018 was $2.44 billion, compared to $2.58 billion for the prior year, a decrease of $134.7 million. The decrease is primarily due to the benefits of integration activities, lower restructuring charges, lower acquisition-related costs of approximately $48.0 million, and reduced share-based compensation expense primarily due to the reversal of all of the cumulative expense totaling $70.6 million related to the Company’s One-Time Special Performance-Based Five-Year Realizable Value Incentive Program during the year ended December 31, 2018. These decreases were partially offset by an increase in bad debt expense of approximately $26.5 million related to a special business interruption event for one customer, and $20.0 million of compensation expense as an additional discretionary bonus for a certain group of employees. None of the employees eligible for this bonus are named executive officers.

During the year ended December 31, 2018, the Company recorded a net gain of $49.5 million for litigation settlements and other contingencies, net, compared to a net gain of $13.1 million in the prior year. The increase is due to lower charges for litigation settlements partially offset by lower gains on contingent consideration adjustments in 2018 compared to the prior year.

U.S. GAAP net earnings decreased by $343.5 million to $352.5 million for the year ended December 31, 2018, compared to $696.0 million for the prior year. U.S. GAAP EPS decreased from $1.30 to $0.68 in the current year. The Company recognized an income tax benefit of $54.1 million in the current year, compared to an income tax provision of $207.0 million for the prior year period. Adjusted net earnings decreased to $2.36 billion in the current year from $2.44 billion in the prior year and adjusted EPS increased to $4.58 in the current year from $4.56 in the prior year.

EBITDA was $3.03 billion for the year ended December 31, 2018, and $3.30 billion for the prior year period. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $3.62 billion for the year ended December 31, 2018 and $3.79 billion for the prior year period.

Cash Flow

U.S. GAAP net cash provided by operating activities was $2.34 billion for the year ended December 31, 2018 compared to $2.06 billion for the prior year period. Capital expenditures were approximately $252.1 million for the year ended December 31, 2018 compared to approximately $275.9 million for the comparable prior year. Adjusted net cash provided by operating activities was $2.97 billion for the year ended December 31, 2018 compared to $2.88 billion for the prior year period. Adjusted free cash flow, defined as adjusted net cash provided by operating activities less capital expenditures, was $2.71 billion for the year ended December 31, 2018, compared to $2.63 billion in the prior year period.

Guidance

Mylan expects 2019 total revenues in the range of $11.50 billion to $12.50 billion, the midpoint of which represents an increase of 5% versus 2018. As discussed in the "Non-GAAP Financial Measures" section below, Mylan is not otherwise providing forward looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure. Adjusted EPS is expected to be in the range of $3.80 to $4.80, the midpoint of which represents a decrease of 6% versus 2018.

The following table provides a summary of Mylan’s 2019 full year guidance ranges

Q4 2018 Earnings Call and 2019 Guidance

As previously announced, Mylan N.V. will host a webcast at 5:00 p.m. ET today to discuss the Company’s financial results for the fourth quarter and year ended December 31, 2018, along with financial guidance for 2019. The webcast can be accessed live by calling 855.493.3607 or 346.354.0950 for international callers (ID#: 9783018) or at the following address on the Company’s website: investor.mylan.com. The "Q4 2018 Earnings Call & 2019 Guidance" presentation, which will be referenced during the call can be found at investor.mylan.com. A replay of the webcast also will be available on the website.

Non-GAAP Financial Measures

This press release includes the presentation and discussion of certain financial information that differs from what is reported under accounting principles generally accepted in the United States ("U.S. GAAP"). These non-GAAP financial measures, including, but not limited to, adjusted EPS, constant currency net sales, constant currency total revenues, adjusted gross profit, adjusted gross margins, adjusted net earnings, EBITDA, adjusted EBITDA, adjusted R&D, adjusted SG&A, adjusted R&D as a % of total revenues, adjusted SG&A as a % of total revenues, adjusted earnings from operations, adjusted interest expense, adjusted other expense (income), net, adjusted effective tax rate, notional debt to Credit Agreement Adjusted EBITDA, long-term average debt to Credit Agreement Adjusted EBITDA leverage ratio, adjusted net cash provided by operating activities and adjusted free cash flow are presented in order to supplement investors’ and other readers’ understanding and assessment of the financial performance of Mylan N.V. ("Mylan" or the "Company"). Management uses these measures internally for forecasting, budgeting, measuring its operating performance, and incentive-based awards. Primarily due to acquisitions and other significant events which may impact comparability of our periodic operating results, Mylan believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results was limited to financial measures prepared only in accordance with U.S. GAAP. We believe that non-GAAP financial measures are useful supplemental information for our investors and when considered together with our U.S. GAAP financial measures and the reconciliation to the most directly comparable U.S. GAAP financial measure, provide a more complete understanding of the factors and trends affecting our operations. The financial performance of the Company is measured by senior management, in part, using adjusted metrics included herein, along with other performance metrics. Management’s annual incentive compensation is derived, in part, based on the adjusted EPS metric and the adjusted free cash flow metric. In addition, the Company believes that including EBITDA and supplemental adjustments applied in presenting adjusted EBITDA and Credit Agreement Adjusted EBITDA (as defined below) pursuant to our Credit Agreements is appropriate to provide additional information to investors to demonstrate the Company’s ability to comply with financial debt covenants and assess the Company’s ability to incur additional indebtedness. We also report sales performance using the non-GAAP financial measures of "constant currency" total revenues and net sales. These measures provide information on the change in total revenues and net sales assuming that foreign currency exchange rates had not changed between the prior and current period. The comparisons presented at constant currency rates reflect comparative local currency sales at the prior year’s foreign exchange rates. We routinely evaluate our net sales and total revenues performance at constant currency so that sales results can be viewed without the impact of foreign currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides useful information to investors for the same reason. The "Summary of Total Revenues by Segment" table below compares net sales on an actual and constant currency basis for each reportable segment for the quarters and years ended December 31, 2018 and 2017 as well as for total revenues. Also, set forth below, Mylan has provided reconciliations of such non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the reconciliations of the non-GAAP measures to their most directly comparable U.S. GAAP measures set forth below, and investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with U.S. GAAP.

For additional information regarding the components and uses of Non-GAAP financial measures refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations-Use of Non-GAAP Financial Measures section of Mylan’s Annual Report on Form 10-K for the year ended December 31, 2018.

Mylan is not providing forward looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, acquisition-related expenses, restructuring expenses, asset impairments, litigation settlements and other contingencies, including changes to contingent consideration and certain other gains or losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period.

On February 26, 2019 Theravance Biopharma, Inc. ("Theravance Biopharma" or the "Company") (NASDAQ: TBPH) reported financial results for the fourth quarter and full year ended December 31, 2018 (Press release, Theravance, FEB 26, 2019, View Source [SID1234533700]). Revenue for the fourth quarter and full year 2018 was $15.7 million and $60.4 million, respectively. Full year operating loss was $238.8 million or $187.4 million excluding share-based compensation expense, in line with the Company’s previously stated financial guidance. Cash, cash equivalents, and marketable securities totaled $517.1 million as of December 31, 2018.

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Rick E Winningham, chairman and chief executive officer, commented: "Following a highly productive 2018, we begin the year with great momentum and continue to make meaningful progress towards our goal of designing more effective and safer medicines to address unmet patient needs. Early in 2018, we entered into a global collaboration with Janssen for TD-1473, our gut-selective pan-JAK inhibitor for inflammatory intestinal diseases, for which we are beginning late-stage clinical trials. In the middle of the year, we showed positive four-week results for ampreloxetine in neurogenic orthostatic hypotension, providing us with the confidence to advance into a registrational Phase 3 program which is now underway. In the latter part of 2018, we and our partner Mylan achieved product approval for YUPELRI in COPD, and formal launch efforts are now underway. We closed out the year with R&D Day where we described our innovative research and development strategy of organ-selective medicines designed to expand the therapeutic index beyond that of conventional therapy and introduced several new research programs. Underpinning the progress of our own business, GSK’s TRELEGY ELLIPTA for COPD continues its impressive sales trajectory, and we await the results of the Phase 3 CAPTAIN study in asthma in the first half of 2019.

"We anticipate multiple clinical readouts and milestones over the next several months, including supplemental data presentations at upcoming scientific meetings for TD-1473 in ulcerative colitis and ampreloxetine in nOH, as well as Phase 1 data for TD-8236, and initial commercial metrics for YUPELRI. Following our recently completed note financing tied to our economic interest in TRELEGY ELLIPTA, we enter 2019 with a strong cash balance and are well-positioned to execute against our milestones and continue to deliver value to stakeholders."

Program and Corporate Updates

YUPELRITM (revefenacin) inhalation solution (lung-selective nebulized long-acting muscarinic antagonist (LAMA)):

First and only once-daily, nebulized bronchodilator approved in the US for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD)
Formal launch activities underway with partner Mylan; combined sales infrastructures covering the hospital, hospital discharge, and home health settings
TD-1473 (gut-selective pan-Janus kinase (JAK) inhibitor):

First patients dosed in Phase 2 DIONE induction study in Crohn’s disease
Sites initiated in registrational Phase 2b/3 RHEA induction and maintenance study in ulcerative colitis
Results from the Phase 1b study of TD-1473 in patients with ulcerative colitis accepted as an oral presentation at Digestive Disease Week (DDW) in May 2019
Ampreloxetine (TD-9855, norepinephrine reuptake inhibitor (NRI)):

Recently announced initiation of dosing in registrational Phase 3 program in symptomatic neurogenic orthostatic hypotension (nOH)
Phase 2 study in patients with nOH complete; 5-month data further support previously-announced clinical observations after four weeks of treatment. Detailed study data to be submitted for presentation at mid-year scientific meeting
TD-8236 (novel, lung-selective inhaled pan-JAK inhibitor for serious respiratory diseases):

Discovery leverages organizational expertise in respiratory diseases and JAK inhibition
Phase 1 clinical study underway; designed to evaluate safety and provide biomarker data of TD-8236 in healthy volunteers and asthma patients; completion expected in mid-2019
Multiple JAK-dependent pathways clinically validated in asthma and COPD
Potentially broad activity with JAK inhibition across a range of respiratory indications and phenotypes
TD-8236 shown to potently inhibit targeted mediators of Th2-high and Th2-low asthma in human cells in preclinical studies
R&D Day in December 2018:

Highlighted our innovative research and development strategy of organ-selective medicines and introduced several new research programs that we plan to advance towards clinical development, each specifically tailored to the organ of interest
TRELEGY ELLIPTA (first once-daily single inhaler triple therapy for COPD)1:

GSK reported fourth quarter 2018 net sales of $100 million and $207 million for the full year 2018; Theravance Biopharma entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product
Currently available in 26 countries, with additional countries expected over the course of 2019; recent regulatory filings include Japan and China
Expanded COPD indication in Europe for patients not adequately treated with dual bronchodilation, making it the first single inhaler triple therapy indicated for patients with moderate to severe COPD
Completion of Phase 3 CAPTAIN study in asthma patients expected in 1H 2019; if positive, submission of supplemental New Drug Application (sNDA) for TRELEGY ELLIPTA in asthma anticipated in 2H 2019
Completed a non-dilutive private placement of $250.0 million in aggregate principal amount of non-recourse notes secured by a portion of the future payments the Company expects to receive related to royalties due on net sales1 of TRELEGY ELLIPTA
75% share of the payments will be used to satisfy the debt obligations until notes repaid
Remaining 25% of the payments will be directed to benefit the Company on an ongoing basis
Proceeds were approximately $229.0 million net of debt issuance costs and a 5% retention of the notes by the Company
Strategic infusion of cash in late 2018 with retained economics over TRELEGY ELLIPTA’s commercial lifespan; proceeds to support key strategic priorities
VIBATIV (telavancin): Sale of VIBATIV to Cumberland Pharmaceuticals Inc. completed in November 2018

Notes:
1 As reported by Glaxo Group Limited or one of its affiliates (GSK); reported sales converted to USD; economic interest related to TRELEGY ELLIPTA (the combination of fluticasone furoate, umeclidinium, and vilanterol, (FF/UMEC/VI), jointly developed by GSK and Innoviva, Inc.) entitles Company to upward tiering payments equal to approximately 5.5% to 8.5% on worldwide net sales of the product (net of TRC LLC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters)

Fourth Quarter and Full Year Financial Results

Revenue

Revenue for the fourth quarter of 2018 was $15.7 million, comprised of collaboration revenue primarily related to our global collaboration with Janssen for TD-1473 of $10.0 million, profit sharing revenue related to YUPELRI of $3.3 million, and product sales of VIBATIV (telavancin) of $2.4 million. Revenue in the fourth quarter represents an increase of approximately $11.2 million over the same period in 2017. The increase was primarily related to revenue recognized from the upfront payment associated with the global collaboration agreement with Janssen for TD-1473. The increase was partially offset as a full quarter of Product Sales was not recognized due to the sale of VIBATIV to Cumberland Pharmaceuticals in November 2018. Full year 2018 revenue was $60.4 million, comprised of collaboration revenue of $41.8 million primarily associated with the upfront payment from Janssen for TD-1473, product sales of VIBATIV of $15.3 million and profit sharing revenue related to YUPELRI of $3.3 million.

Research and Development (R&D) Expenses

R&D expenses for the fourth quarter of 2018 were $52.3 million, compared to $51.1 million in the same period in 2017. The increase was primarily due to higher external expenses to support our key programs and was partially offset by lower employee-related and share-based compensation expenses. Full year 2018 R&D expenses were $201.3 million, or $175.8 million excluding non-cash share-based compensation.

Selling, General and Administrative (SG&A) Expenses

SG&A expenses for the fourth quarter of 2018 were $25.5 million, compared to $29.5 million in the same period in 2017. The decrease was primarily due to lower expenses related to share-based compensation. Full year 2018 SG&A expenses were $97.1 million, or $71.3 million excluding non-cash share-based compensation.

Cash, Cash Equivalents and Marketable Securities

Cash, cash equivalents and marketable securities totaled $517.1 million as of December 31, 2018, which includes net proceeds of $229.4 million resulting from the private placement of notes secured by a portion of the future payments related to royalties due on net sales of TRELEGY ELLIPTA.

2019 Financial Guidance

The Company expects full-year 2019 operating loss, excluding share-based compensation, of $210 million to $230 million. Operating loss guidance does not include royalty income for TRELEGY ELLIPTA which we recognize in our statement of operations as "income from investment in TRC, LLC." Our share of US profits and losses related to the commercialization of YUPELRI, potential future business development collaborations as well as the timing and cost of clinical studies associated with our key programs, among other factors, could impact our financial guidance.

Conference Call and Live Webcast Today at 5:00 pm ET

Theravance Biopharma will hold a conference call and live webcast accompanied by slides today at 5:00 pm ET. To participate in the live call by telephone, please dial (855) 296-9648 from the US, or (920) 663-6266 for international callers, and use the confirmation code 8086288. Those interested in listening to the conference call live via the internet may do so by visiting Theravance Biopharma’s website at www.theravance.com, under the Investor Relations section, Presentations and Events. Please go to the website 15 minutes prior to the start of the call to register, download, and install any necessary audio software.

A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through March 28, 2019. An audio replay will also be available through 8:00 pm ET on March 5, 2019 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 8086288.

On February 26, 2019 Selexis SA and Turgut Pharmaceuticals (Turgut Ilaclari AS) reported that they have signed two trademark license agreements (CLMs) through which Turgut will operate the SURE Technology Platform and SURE CHO-M Cell Line by Selexis for the development of two high-end biosimilar antibodies: a control point inhibitor for the treatment of certain cancers and a monoclonal antibody for the treatment of HER2-positive metastatic breast cancer (Press release, Selexis FEB 26, 2019, View Source [SID1234533699]). With the addition of these CLMs, companies are now collaborating on the development of multiple biosimilars for cancer and inflammatory diseases. The companies announced the signing of the most recent CLMs in December 2017 .

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"In just under three years, we have signed five brand license agreements, in collaboration with the Turgut team, to advance its high-end biosimilar pipeline. Our technology and our cell line have proven their impact on biosimilar development, which is very important given the huge demand to offer patients expanded access to life-changing organic products, "said Marco Bocci., PhD at DPharm, Vice President of Licensing and Business Development at Selexis. "Turgut shares our passion for bringing advanced medicines to patients faster and at a lower cost. The success we have had with Turgut so far has been fueled by our collaboration and we are very pleased to continue supporting their efforts to bring biosimilars to the market under these new licenses. "

Selexis’ proprietary SURE technology platform facilitates the rapid, stable and cost-effective production of virtually all recombinant proteins, including biosimilars, and provides a seamless integration of the organic product development continuum, from discovery to commercialization. Using the SURE technology platform, Selexis has managed to generate many biosimilars, including marketed products, whose glycan profiles correspond to the originator drugs.

"These two products are innovative treatments that can improve accessibility for a much larger patient population," said Serdar Alpan, MD, PhD, head of the Biotechnology Group at Turgut Pharmaceuticals. "As a cell line development specialist and Turgut’s strong partner, Selexis’ tools and technologies provide us with the competitiveness we need to move forward on our biosimilar programs. We look forward to moving these programs forward. "

The SURE CHO-M cell line from Selexis is a high performance mammalian cell line derived from CHO-K1 cells and used for the production of recombinant therapeutic proteins and monoclonal antibodies. The growth and production properties of the Selexis SURE CHO-M cell line are well defined and the feeding strategy has been optimized to allow for faster and more efficient scaling of the bioreactors. Therapies generated with Selexis SURE CHO-M cells undergo clinical trials and are transformed into marketed products.

On February 26, 2019 Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported its financial results for the fourth quarter and year ended December 31, 2018, in addition to providing an update on the company’s recent activities (Press release, Five Prime Therapeutics, FEB 26, 2019, View Source [SID1234533698]).

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"2018 was a year of significant expansion of our clinical pipeline," said Aron Knickerbocker, Chief Executive Officer of Five Prime Therapeutics. "Thanks to strong execution across our research, preclinical and clinical organizations, along with the contributions of the entire Five Prime team, we are positioned for a year of multiple data readouts. We began 2019 in a strong position with five assets in clinical development as well as the capital and support from our collaborators required to achieve our goals. By the end of 2019, we expect the bema FIGHT Phase 3 to be enrolling across nearly 200 sites globally and to disclose data from FPA150 and FPT155 that will inform the clinical path forward for these first-in-class programs. In addition, we are pleased with the continued progress of our BMS-partnered cabira and TIM-3 programs."

Review of 2018 Business Highlights and 2019 Milestones

Clinical Pipeline:

Bemarituzumab (FPA144) is a first-in-class isoform-selective antibody with enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) in development as a targeted immuno-therapy for tumors that overexpress FGFR2b.

2018

Completed the Phase 1 safety lead-in and dosed the first patient in the randomized Phase 3 FIGHT global registration trial.
2019

Presented safety lead-in data from the Phase 3 FIGHT trial at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal (GI) Cancers Symposium. Trial results showed no dose-limiting toxicities and no impact to the pharmacokinetics of bemarituzumab from the combination of mFOLFOX6 plus bemarituzumab. Signs of clinical activity from the combination were observed in each of the two patients with advanced gastric or gastroesophageal junction (GEJ) cancer who were biomarker-positive.
Expect to open approximately 200 clinical sites in 18 countries in the Phase 3 FIGHT trial by year end. The Phase 3 FIGHT trial is a pivotal global registration trial evaluating bemarituzumab in combination with mFOLFOX6 chemotherapy as front-line treatment of patients with gastric or GEJ cancer that overexpresses FGFR2b.
FPA150 (anti-B7-H4) is a first-in-class anti-B7-H4 antibody designed to target tumor cells by blocking B7-H4 from sending an inhibitory signal to CD8 T cells and by enhancing killing of B7-H4 overexpressing tumors through ADCC. B7-H4 is frequently overexpressed in breast, ovarian and endometrial cancers.

2018

Initiated the Phase 1a monotherapy dose escalation portion of a Phase 1a/1b clinical trial of FPA150 in solid tumors.
Initiated patient dosing in the exploratory cohort of the ongoing Phase 1a portion of the trial to enroll patients with tumors that overexpress B7-H4, as assessed by an immunohistochemistry (IHC) assay.
2019

Completed the Phase 1a monotherapy dose escalation portion of the Phase 1a/1b trial.
Initiated the Phase 1b monotherapy expansion cohorts at the selected 20 mg/kg dose given every three weeks, enrolling patients with breast, ovarian, and endometrial tumors with B7-H4 overexpression.
Plan to present data from the Phase 1a/1b trial at the ASCO (Free ASCO Whitepaper) Annual Meeting in June and the European Society for Medical Oncology’s (ESMO) (Free ESMO Whitepaper) 2019 Annual Congress in September.
FPT155 (CD80-Fc) is a first-in-class CD80-Fc fusion protein that uses the binding interactions of soluble CD80 to directly engage CD28 to enhance its co-stimulatory T cell activity without inducing super agonism and to block CTLA-4 from competing for endogenous CD80, allowing CD28 signaling to prevail in T cell activation in the tumor microenvironment.

2018

Initiated patient dosing in a Phase 1a/1b clinical trial of FPT155. The Phase 1a dose escalation portion of the trial will characterize the safety and pharmacokinetic (PK)/pharmacodynamic (PD) profile of FPT155 to identify a recommended dose for the Phase 1b portion of the trial.
2019

Plan to present data from the Phase 1a dose escalation at the 34th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) in November.
Cabiralizumab (FPA008) is an antibody that inhibits CSF1R and has been shown to block the activation and survival of tumor-associated macrophages.

2018

Bristol-Myers Squibb Company (BMS) initiated a multi-arm, Phase 2 clinical trial (NCT03336216) evaluating cabiralizumab in combination with Opdivo, triggering a $25 million milestone payment to Five Prime.
2019

The Phase 2 trial is currently enrolling patients across sites in the U.S., Canada, Europe, Japan, Korea and Taiwan, and is expected to enroll approximately 160 patients with locally advanced or metastatic pancreatic cancer that has progressed during or after one line of chemotherapy.
BMS-986258 (anti-TIM-3) is a fully-human monoclonal antibody targeting TIM-3 (T cell immunoglobulin and mucin domain-3), an immune checkpoint receptor that may limit the duration and magnitude of T cell responses. This is the first clinical candidate from the discovery collaboration between Five Prime and BMS that includes targets in three immune checkpoint pathways.

2018

BMS initiated the Phase 1 portion of the Phase 1/2 clinical trial of BMS-986258 as a single agent as well as in combination with Opdivo or hyaluronidase, with the objective of evaluating the safety and tolerability of the combination with Opdivo.
2019

Continued progress in the Phase 1/2 clinical trial.
Corporate Highlights

2018

Raised net proceeds of $107.6 million from a public offering of 5,897,435 shares of common stock, including 769,230 shares sold upon the underwriters’ full exercise of their option to purchase additional shares.
2019

Announced a corporate restructuring to focus resources on clinical development and late-stage research programs, primarily eliminating positions in research, pathology, and manufacturing.
Summary of Financial Results and Guidance:

Cash Position: Cash, cash equivalents and marketable securities totaled $270.1 million as of December 31, 2018, compared to $292.7 million as of December 31, 2017. The decrease was primarily attributable to cash used in operating activities which was offset in part by the $107.6 million in net proceeds from the public offering of Five Prime’s common stock in January 2018.

Revenue: Collaboration and license revenue for the fourth quarter of 2018 decreased by $9.2 million, or 70%, to $4.0 million from $13.2 million for the fourth quarter of 2017. The decrease was primarily due to Five Prime’s recognition in the fourth quarter of 2017 of a $5.0 million milestone payment received from BMS under the immuno-oncology research collaboration, lower revenue under the cabiralizumab collaboration agreement with BMS, and lower research and development funding from several older collaboration agreements, partially offset by an increase from Five Prime’s collaboration with Zai Lab.

Collaboration and license revenue for the year ended December 31, 2018 increased by $10.4 million, or 26%, to $49.9 million from $39.5 million for the year ended December 31, 2017. This increase was primarily due to $25.0 million of revenue recognized under Five Prime’s cabiralizumab collaboration agreement with BMS for BMS’s achievement of the developmental milestone for the dosing of the first patient in the Phase 2 clinical trial of cabiralizumab in combination with Opdivo, and an increase from Five Prime’s collaboration with Zai Lab that was partially offset by lower research and development funding from several older collaboration agreements.

R&D Expenses: Research and development expenses for the fourth quarter of 2018 increased by $2.0 million, or 6%, to $34.7 million from $32.7 million primarily due to increased clinical expenses associated with the FIGHT trial and FPA150 program, partially offset by lower companion diagnostic development costs.

Research and development expenses for the year ended December 31, 2018 increased by $5.4 million, or 4%, to $156.3 million from $150.9 million for the year ended December 31, 2017. This increase was primarily related to milestone payments associated with the first patient dosed in Five Prime’s Phase 3 FIGHT trial and companion diagnostic development costs that were partially offset by lower manufacturing and preclinical expenses.

G&A Expenses: General and administrative expenses for the fourth quarter of 2018 decreased by $0.9 million, or 9%, to $9.6 million from $10.5 million, primarily due to lower compensation expenses. General and administrative expenses for the year ended December 31, 2018 were $39.7 million, which were essentially flat with the prior year.

Net Loss: Net loss for the fourth quarter of 2018 was $38.8 million, or $1.12 per basic and diluted share, compared to a net loss of $29.2 million, or $1.04 per basic and diluted share for the fourth quarter of 2017.

Net loss for the full year 2018 was $140.4 million, or $4.13 per basic and diluted share, compared to a net loss of $150.2 million, or $5.38 per basic and diluted share, for the full year 2017.

Shares Outstanding: Total shares outstanding were 34,745,721 as of December 31, 2018.

Cash Guidance: Five Prime expects full-year 2019 net cash used in operating activities to be between $117 and $122 million and estimates ending 2019 with cash, cash equivalents and marketable securities between $148 and $153 million.

Conference Call Information

Five Prime will host a conference call and live audio webcast today at 4:30 p.m. (ET) / 1:30 p.m. (PT) to discuss its financial results and provide a corporate update. To participate in the conference call, please dial (877) 878-2269 (domestic) or (253) 237-1188 (international) and refer to conference ID 9689855. To access the live webcast please visit the "Events & Presentations" page under the "Investors" tab on Five Prime’s website at www.fiveprime.com. An archived copy of the webcast will be available on Five Prime’s website beginning approximately two hours after the conference call. Five Prime will maintain an archived replay of the webcast on its website for at least 30 days after the conference call.