On November 5, 2019 Boston Scientific Corporation (the "Company") (NYSE:BSX) reported the pricing terms of the previously announced cash tender offer (the "Tender Offer") for up to $1.0 billion aggregate principal amount (the "Aggregate Maximum Principal Amount") of the outstanding senior notes listed in the table below (the "Securities") (Press release, Boston Scientific, NOV 5, 2019, View Source [SID1234550505]).

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The table below summarizes certain information regarding the Securities and the Tender Offer, including the order of priority and purchase price information for the Securities.

(1) The offer with respect to the Securities is subject to the Aggregate Maximum Principal Amount. The Company will purchase up to the Aggregate Maximum Principal Amount of its Securities, subject to the Acceptance Priority Level as set forth in the table above (each, an "Acceptance Priority Level"). The Company reserves the right, but is under no obligation, to increase the Aggregate Maximum Principal Amount at any time, including on or after November 5, 2019 (the "Price Determination Date"), subject to applicable law.

(2) The Reference Yield was determined at 11:00 a.m. Eastern Standard Time (EST) on November 5, 2019 by the Lead Dealer Managers (identified below).

(3) The Total Consideration (as defined below) for Securities validly tendered prior to or at the Early Tender Date (as defined below) and accepted for purchase was calculated using the applicable Fixed Spread and is inclusive of the Early Tender Payment (as defined below). The Total Consideration takes into account the applicable par call date for each series of Securities, if any.

The Tender Offer is being made pursuant to an Offer to Purchase, dated October 22, 2019 (the "Offer to Purchase"), which sets forth the terms and conditions of the Tender Offer. The Tender Offer will expire at midnight EST, on November 19, 2019 (one minute after 11:59 p.m. EST on November 19, 2019), or any other date and time to which such Tender Offer is extended (such date and time, as it may be extended with respect to a Tender Offer, the "Expiration Date"), unless earlier terminated. However, because the aggregate principal amount of Securities validly tendered and not validly withdrawn would cause the Aggregate Maximum Principal Amount to be exceeded and the Company does not expect to increase the Aggregate Maximum Principal Amount, the Company does not expect to accept any further tenders of Securities.

Holders of Securities that validly tendered and did not validly withdraw their Securities prior to 5:00 p.m. EST on November 4, 2019 (the "Early Tender Date"), are eligible to receive the Total Consideration (as defined below), which is inclusive of the "Early Tender Payment" of $30 per $1,000 principal amount of validly tendered and accepted Securities.

The consideration (the "Total Consideration") offered per $1,000 principal amount of Securities of each series of Securities validly tendered and accepted for purchase pursuant to the Tender Offer was determined in the manner described in the Offer to Purchase by reference to the applicable "Fixed Spread" for such Securities specified in the table above plus the applicable yield to maturity based on the bid-side price of the applicable "U.S. Treasury Reference Security" specified in the table above as quoted on the applicable page on the Bloomberg Bond Trader at 11:00 a.m. EST on November 5, 2019.

All holders of Securities accepted for purchase will also receive accrued and unpaid interest on Securities validly tendered and accepted for purchase from the applicable last interest payment date up to, but not including, the settlement date.

Securities tendered prior to or at the Early Tender Date and accepted for purchase will be accepted based on the Acceptance Priority Levels noted on the table above, with 1 being the highest Acceptance Priority Level and 4 being the lowest Acceptance Priority Level, and will have priority over Securities tendered after the Early Tender Date, regardless of the Acceptance Priority Levels of the Securities tendered after the Early Tender Date. Because the aggregate principal amount of Securities validly tendered and not validly withdrawn prior to the Early Tender Date would cause the Aggregate Maximum Principal Amount to be exceeded, such Securities will be purchased subject to the Acceptance Priority Levels and subject to proration as described in the Offer to Purchase. The Company plans to accept all Securities tendered with Acceptance Priority Levels 1 and 2, Securities tendered with Acceptance Priority Level 3, using a proration factor of approximately 49.1% in accordance with the Offer to Purchase, and none of the Securities tendered with Acceptance Priority Level 4. Any tendered Securities not accepted for purchase will be promptly credited to the Holder’s account with DTC or otherwise returned to the Holder without cost.

The settlement date for the Securities that are validly tendered on or prior to the Early Tender Date is expected to be November 12, 2019, the fifth business day after the Early Tender Date, assuming the conditions to the satisfaction of the Tender Offer are satisfied.

Withdrawal rights for the Tender Offer expired at 5:00 p.m. EST on November 4, 2019, and, accordingly, Securities validly tendered in the Tender Offer may no longer be withdrawn except where additional withdrawal rights are required by law.

The Company’s obligation to accept for payment and to pay for the Securities validly tendered in the Tender Offer is not subject to any minimum tender condition but is subject to the satisfaction or waiver of the conditions described in the Offer to Purchase, including the financing condition that the Company shall have closed one or more debt financings resulting in net proceeds in an amount, together with cash on hand, not less than the amount required, upon the terms and subject to the conditions of the Tender Offer, to purchase all the Securities validly tendered and accepted for purchase in the Tender Offer and to pay accrued interest thereon and fees and expenses associated therewith. The Company reserves the right, subject to applicable law, to: (i) waive any and all conditions to the Tender Offer; (ii) extend or terminate the Tender Offer; (iii) increase or decrease the Aggregate Maximum Principal Amount; or (iv) otherwise amend the Tender Offer in any respect.

The Company or its affiliates may also from time to time, after completion of the Tender Offer, purchase additional Securities in the open market, in privately negotiated transactions, through tender or exchange offers or otherwise, or the Company may redeem Securities that are redeemable pursuant to their terms.

Information Relating to the Tender Offer
Barclays Capital Inc., BofA Securities and Goldman Sachs & Co. LLC are acting as the lead dealer managers (the "Lead Dealer Managers") for the Tender Offer. The information agent and tender agent for the Tender Offer is D.F. King & Co., Inc. (the "Tender and Information Agent"). Copies of the Offer to Purchase are available by contacting the Tender and Information Agent at (866)-406-2285 (U.S. toll-free) or (212)-269-5550 (banks and brokers) or email at [email protected]. Questions regarding the Tender Offer should be directed to Barclays Capital Inc., Liability Management Group at (212) 528-7581 (collect) or (800) 438-3242 (toll free), BofA Securities, Liability Management Group at (980) 387-3907 (collect) or (888) 292-0070 (toll-free) or Goldman Sachs & Co. LLC, Liability Management Group at (212) 902-6351 (collect) or (800) 828-3182 (toll-free). Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as the co-dealer managers for the Tender Offer (collectively with the Lead Dealer Managers, the "Dealer Managers").

None of the Company, its affiliates, their respective boards of directors or managing members, the Dealer Managers, the Tender and Information Agent or the trustee with respect to any series of Securities is making any recommendation as to whether holders of Securities should tender any Securities in response to the Tender Offer, and neither the Company nor any such other person has authorized any person to make any such recommendation. Holders of Securities must make their own decision as to whether to tender any of their Securities, and, if so, the principal amount of Securities to tender.

This press release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Tender Offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.

The full details of the Tender Offer, including complete instructions on how to tender Securities, are included in the Offer to Purchase. The Offer to Purchase contains important information that should be read by holders of Securities before making a decision to tender any Securities.

On November 5, 2019 Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) reported that members of its senior management team will present at the upcoming investor conferences (Press release, Arena Pharmaceuticals, NOV 5, 2019, View Source [SID1234550504]):

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Credit Suisse 28th Annual Healthcare Conference – Presenting on Tuesday, November 12, at 10:00 AM ET (8:00 AM MT)
Guggenheim Healthcare Talks | Idea Forum | Neuro/Immunology Day – Presenting on Monday, November 18, at 1:45 PM ET
A live audio webcast of each presentation will be available under the investor relations section of Arena’s website at www.arenapharm.com. A replay of each presentation will be available for 30 days following the event.

On November 5, 2019 CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader using its CytoSorb blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients around the world, reported financial and operational results for the quarter ending September 30, 2019 (Press release, Cytosorbents, NOV 5, 2019, View Source [SID1234550502]).

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Third Quarter 2019 Financial Results:

Total Q3 2019 revenues were $6.1 million, including both product sales and grant income, an increase of approximately 6%, up from $5.7 million in Q3 2018
Product sales for Q3 2019 were approximately $5.7 million, compared to $5.1 million for Q3 2018, an increase of approximately 12%
Excluding the change in the Euro to dollar exchange rate from Q3 2018 to Q3 2019, CytoSorb product sales would have been approximately $239,000 higher than actually reported, or approximately $6.0 million, an increase of 18% over Q3 2018 product sales
Blended product gross margins for Q3 2019 rose to 77%, compared to 72% for Q3 2018, and 76% from Q2 2019
Cash and cash equivalents were approximately $16 million at the end of the quarter
Third Quarter 2019 Operational Highlights:

More than 73,000 CytoSorbents treatments delivered cumulatively, up from 51,000 a year ago
Received renewal of CytoSorb CE Mark through May 2024 and annual ISO 13485:2016 certification through September 2022
Publication of a key study demonstrating 28-day mortality benefit and the potential for CytoSorb to save 19 additional lives out of every 100 patients with septic shock on continuous renal replacement therapy
Initiation of first study to evaluate the use of CytoSorb as a treatment of cytokine release syndrome in CAR T-cell immunotherapy
Extended CytoSorb distribution to a total of 58 countries, with Latin America expansion to Brazil, Colombia, and Costa Rica
Two of the three distributor/partners discussed in the Q1 2019 earnings call ordered in Q3 2019
Near completion of the Germany-funded REMOVE endocarditis randomized controlled trial, with the achievement of the targeted enrollment of 250 patients. Well-ahead of schedule, the trial will continue to enroll up to 15 additional patients to account for potential dropouts, which is expected to be completed by the end of 2019
Advancement of the U.S. pivotal REFRESH 2-AKI trial, currently at 144 patients enrolled of a total of 400 patients, and positioned to exceed end-of-year enrollment target of 150
Continued expectation to file HemoDefend IDE to FDA before year end
Strengthened cash position with addition of $5M of debt from Bridge Bank with interest-only period extended to November 2020, provided certain conditions are met
Dr. Phillip Chan, Chief Executive Officer of CytoSorbents stated, "Product sales for the third quarter were just shy of our record Q2 2019 results, despite the summer seasonality and foreign exchange effects. In addition, our blended product gross margins were 77%, nearing our guidance of achieving 80% blended product gross margins on a quarterly basis this year. Though encouraging, we expect the growth in 2020 to be far more robust, driven by a number of important catalysts. Importantly, we have the following already in place:

What we believe to be strong underlying demand for CytoSorb in Germany and other countries, with our limited ability to harvest the opportunity in 2019 due to a lack of manpower and challenge in the timely hiring of the right people
We have invested heavily in our expansion and have increased headcount at the company by approximately 50% in the past year, with most of the key people joining in the past 3-6 months. We have doubled customer facing sales representatives and market specialists, and brought on others who have a direct impact on sales including new sales and marketing directors, and specialists in application and clinical support, reimbursement, manufacturing, and others
Increased the number of direct sales countries from 5 to 10, where CytoSorb is sold to hospitals directly with our own sales reps, leveraging our focused product messaging and positioning, higher product gross margins, and market development that has taken place for the better part of a year
Expanded distribution of CytoSorb to 58 countries, with a number of new countries expected to achieve product registration and contribute to sales in 2020, including Mexico, South Korea, Brazil, Colombia, and others
New published data in major current indications such as septic shock, ECMO, and cardiac surgery, as well as investigational applications, such as anti-thrombotic drug removal in patients undergoing emergency cardiac surgery that was recently reported to reduce perioperative bleeding risk and reduce costs
Potential new data from the REMOVE endocarditis trial that is expected to read out in mid-2020, the recently announced U.K. TISORB trial using CytoSorb to remove the anti-platelet drug ticagrelor in emergency cardiac surgery patients and an associated companion study, and data from a number of investigator-initiated studies
Increased commitment from strategic partnerships to expand CytoSorb commercialization
Dr. Chan continued, "We expect a solid finish to 2019, consistent with our prior guidance that 2H 2019 will be stronger than 1H 2019 and current guidance that Q4 2019 product sales will exceed those in Q4 2018. More importantly, we believe the pieces that we have labored to put into place positions us well to return to more aggressive sales growth of CytoSorb in 2020 and beyond as the leader in this space. In the meantime, we remain committed to our clinical trials program, intended to drive CytoSorb as standard of care in multiple applications."

"Please join us on our earnings conference call today, details for which are below."

Conference Call Details:
Date: Tuesday, November 5, 2019
Time: 4:45 PM Eastern Time
Participant Dial-In: 877-451-6152
Conference ID: 13695453
Live Presentation Webcast: View Source

It is recommended that participants dial in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live webcast of the conference call that can be accessed through the following audio feed link: View Source

An archived recording of the conference call will be available under the Investor Relations section of the Company’s website at View Source

Results of Operations

Comparison for the three months ended September 30, 2019 and 2018:

Revenues:

Revenue from product sales was approximately $5,728,000 for the three months ended September 30, 2019, as compared to approximately $5,103,000 for the three months ended September 30, 2018, an increase of approximately $625,000, or 12%. This increase was driven by an increase in direct sales of approximately $891,000 resulting from sales to both new customers and repeat orders from existing customers, offset by a decrease in distributor sales of approximately $266,000. In addition, sales were negatively impacted by approximately $239,000 as a result of the decrease in the average exchange rate of the Euro to the U.S. dollar. For the three months ended September 30, 2019, the average exchange rate of the Euro to the U.S. dollar was $1.11 as compared to an average exchange rate of $1.16 for the three months ended September 30, 2018.

Grant income was approximately $367,000 for the three months ended September 30, 2019 as compared to approximately $640,000 for the three months ended September 30, 2018, a decrease of approximately $273,000 or 43%. This decrease was a result of the completion of certain grants prior to the three months ended September 30, 2019 and timing of certain other grant revenue.

Total revenues were approximately $6,095,000 for the three months ended September 30, 2019, as compared to total revenues of approximately $5,743,000 for the three months ended September 30, 2018, an increase of approximately $352,000, or 6%.

Cost of Revenues:

For the three months ended September 30, 2019 and 2018, cost of revenue was approximately $1,696,000 and $2,053,000, respectively, a decrease of approximately $357,000. Product cost of revenues decreased approximately $66,000 during the three months ended September 30, 2019 as compared to the three months ended September 30, 2018 due to achieved production efficiencies. Product gross margins were approximately 77% for the three months ended September 30, 2019 and approximately 72% for the three months ended September 30, 2018.

Research and Development Expenses:

For the three months ended September 30, 2019, research and development expenses were approximately $3,185,000 as compared to research and development expenses of approximately $1,943,000 for the three months ended September 30, 2018. The increase of approximately $1,242,000 was due to an increase in clinical trial and related costs of approximately $863,000, which includes expenditures related to our REFRESH 2-AKI study, decreases in direct labor and other costs being deployed toward grant-funded activities of approximately $290,000, which had the effect of increasing the amount of our non-reimbursable research and development costs and an increase in non-clinical research and development salary related costs of approximately $104,000.

Legal, Financial and Other Consulting Expense:

Legal, financial and other consulting expenses were approximately $733,000 for the three months ended September 30, 2019, as compared to approximately $417,000 for the three months ended September 30, 2018. The increase of approximately $316,000 was due to an increase in legal fees of approximately $147,000 related to patent matters and certain corporate initiatives and an increase in employment agency fees of approximately $222,000 related to the hiring of senior level personnel. These increases were offset by a decrease in accounting fees of approximately $37,000 and a decrease in consulting fees of approximately $16,000.

Selling, General and Administrative Expense:

Selling, general and administrative expenses were approximately $6,108,000 for the three months ended September 30, 2019, as compared to approximately $4,041,000 for the three months ending September 30, 2018, an increase of $2,067,000. This increase is related to an increase in salaries, commissions and related costs of approximately $613,000, additional sales and marketing costs, which include advertising and conferences of approximately $462,000, an increase in royalty expenses of approximately $46,000 due to the increase in product sales, an increase in non-cash stock compensation of approximately $529,000 related to options granted and an increase in restricted stock expense of approximately $481,000 related to restricted stock units granted to the Company executive officers.

Interest Expense, net:

For the three months ended September 30, 2019, interest expense was approximately $302,000, as compared to interest expense of approximately $185,000 for the three months ended September 30, 2018. This increase in interest expense of approximately $117,000 was primarily a result of the additional interest incurred related to the draw down of the $5,000,000 Term B Loan with Bridge Bank on July 31, 2019.

Gain (Loss) on Foreign Currency Transactions:

For the three months ended September 30, 2019, the non-cash loss on foreign currency transactions was approximately $956,000 as compared to a loss of approximately $109,000 for the three months ended September 30, 2018. The 2019 loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar at September 30, 2019 as compared to June 30, 2019. The spot exchange rate of the Euro to the U.S. dollar was $1.09 per Euro at September 30, 2019, as compared to $1.14 per Euro at June 30, 2019. The 2018 loss is directly related to the decrease in the exchange rate of the Euro to the U.S. dollar at September 30, 2018 as compared to June 30, 2018. The exchange rate of the Euro to the U.S. dollar was $1.16 per Euro at September 30, 2018, as compared to $1.17 per Euro at June 30, 2018.

Comparison for the nine months ended September 30, 2019 and 2018:

Revenues:

Revenue from product sales was approximately $16,155,000 for the nine months ended September 30, 2019, as compared to approximately $14,782,000 for the nine months ended September 30, 2018, an increase of approximately $1,373,000, or 9%. This increase was driven by an increase in direct sales of approximately $2,053,000 resulting from sales to both new customers and repeat orders from existing customers, offset by a decrease in distributor sales of approximately $680,000. In addition, sales were negatively impacted by approximately $977,000 as a result of the decrease in the average exchange rate of the Euro to the U.S. dollar. For the nine months ended September 30, 2019, the average exchange rate of the Euro to the U.S. dollar was $1.12 as compared to an average exchange rate of $1.19 for the nine months ended September 30, 2018.

Grant income was approximately $1,364,000 for the nine months ended September 30, 2019 as compared to approximately $1,641,000 for the nine months ended September 30, 2018, a decrease of approximately $277,000 or 17%.

Total revenues were approximately $17,519,000 for the nine months ended September 30, 2019, as compared to total revenues of approximately $16,423,000 for the nine months ended September 30, 2018, an increase of approximately $1,096,000, or 7%.

Cost of Revenues:

For the nine months ended September 30, 2019 and 2018, cost of revenue was approximately $5,269,000 and $5,406,000, respectively, a decrease of approximately $137,000. Product cost of revenues increased approximately $17,000 during the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018 due to increased sales, offset by achieved production efficiencies. Product gross margins were approximately 76% for the nine months ended September 30, 2019 and approximately 73% for the nine months ended September 30, 2018.

Research and Development Expenses:

For the nine months ended September 30, 2019, research and development expenses were approximately $8,533,000 as compared to research and development expenses of approximately $5,299,000 for the nine months ended September 30, 2018. The increase of approximately $3,234,000 was due to an increase in clinical trial and related costs of approximately $2,856,000, which includes expenditures related to our REFRESH 2-AKI study, an increase in non-clinical research and development salary related costs of approximately $133,000, decreases in direct labor and other costs being deployed toward grant-funded activities of approximately $154,000, which had the effect of increasing the amount of our non-reimbursable research and development costs and an increase in other non-clinical research and development costs of approximately $91,000.

Legal, Financial and Other Consulting Expense:

Legal, financial and other consulting expenses were approximately $1,887,000 for the nine months ended September 30, 2019, as compared to approximately $1,291,000 for the nine months ended September 30, 2018. The increase of approximately $596,000 was due to an increase in legal fees of approximately $342,000 related to patent matters and certain corporate initiatives, an increase in employment agency fees of approximately $217,000 related to the hiring of senior level personnel, and an increase in consulting fees of approximately $57,000. These increases were offset by a decrease in accounting fees of approximately $20,000.

Selling, General and Administrative Expense:

Selling, general and administrative expenses were approximately $15,372,000 for the nine months ended September 30, 2019, as compared to approximately $14,426,000 for the nine months ending September 30, 2018. The increase of $946,000 was due to an increase in salaries, commissions and related costs of approximately $1,790,000, additional sales and marketing costs, which include advertising and conference attendance of approximately $660,000, an increase in royalty expenses of approximately $107,000 due to the increase in product sales, and an increase in restricted stock expense of approximately $273,000 related to restricted stock units granted to the Company’s executive officers. These increases were offset by a decrease in non-cash stock compensation of approximately $1,689,000 and a decrease in travel and entertainment and other general and administrative expenses of approximately $195,000.

Interest Expense, net:

For the nine months ended September 30, 2019, interest expense was approximately $722,000, as compared to interest expense of approximately $1,264,000 for the nine months ended September 30, 2018. This decrease in interest expense of approximately $542,000 was primarily a result of the settlement of the Success Fee in the amount of $637,000 that became due in May 2018 in accordance with the terms of the 2016 Success Fee Letter, offset by an increase in interest due to the draw down of the $5,000,000 Term B Loan with Bridge Bank on July 31, 2019.

Gain (Loss) on Foreign Currency Transactions:

For the nine months ended September 30, 2019, the non-cash loss on foreign currency transactions was approximately $1,052,000 as compared to a loss of approximately $544,000 for the nine months ended September 30, 2018. The 2019 loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar at September 30, 2019 as compared to December 31, 2018. The spot exchange rate of the Euro to the U.S. dollar was $1.09 per Euro at September 30, 2019, as compared to $1.15 per Euro at December 31, 2018. The 2018 loss is directly related to the decrease in the exchange rate of the Euro to the U.S. dollar at September 30, 2018 as compared to December 31, 2017. The exchange rate of the Euro to the U.S. dollar was $1.16 per Euro at September 30, 2018, as compared to $1.20 per Euro at December 31, 2017.

History of Operating Losses:

We have experienced substantial operating losses since inception. As of September 30, 2019, we had an accumulated deficit of approximately $184,840,000, which included losses of approximately $15,316,000 and $11,808,000 for the nine-month periods ended September 30, 2019 and 2018, respectively. Historically, losses have resulted principally from costs incurred in the research and development of our polymer technology, clinical studies, and general and administrative expenses.

Liquidity and Capital Resources

Since inception, our operations have been primarily financed through the issuance of debt and equity securities. At September 30, 2019, we had current assets of approximately $22,351,000 including cash on hand of approximately $15,978,000 and current liabilities of approximately $9,302,000. On July 31, 2019, the Company executed an Amendment to its Loan Agreement with Bridge Bank and, simultaneous with this Amendment, received $5 million in proceeds from an additional term loan. In addition, the Amendment extends the interest-only period of the loan for an additional six months through April 2020, with the ability to further extend the interest-only period for another six months through October 2020 should the Company meet certain conditions. We believe that we have sufficient cash to fund our operations into 2020.

Fourth Quarter 2019 Revenue Guidance

CytoSorbents has not historically given specific financial guidance on quarterly results until the quarter has been completed. However, we expect our fourth quarter 2019 product sales will exceed sales reported in the fourth quarter of 2018. In addition, we expect that second half 2019 product sales will exceed first half 2019 product sales.

For additional information, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 7, 2019 on View Source

On November 5, 2019 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the third quarter of 2019 and updated 2019 financial guidance (Press release, Jazz Pharmaceuticals, NOV 5, 2019, View Source [SID1234550501]).

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"In the third quarter, we delivered strong revenue and adjusted EPS growth ahead of our expectations. As a result, we are raising our revenue and adjusted EPS guidance for 2019," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "Following the recent presentation of the positive JZP-258 Phase 3 data at the World Sleep Congress, we are looking forward to submitting the NDA in January 2020 and plan to redeem our priority review voucher for this submission. The quarter included our U.S. new product launch of Sunosi and execution on other key commercial, R&D and corporate development goals, further positioning us for long-term sustainable growth."

"We made significant progress during the quarter, advancing multiple development programs and expanding our pipeline with the acquisition of Cavion, including JZP-385, a Phase 2 investigational candidate for the treatment of essential tremor," said Robert Iannone, M.D., M.S.C.E., executive vice president, research and development, of Jazz Pharmaceuticals. "Importantly, given the urgent patient need, we finalized the protocol for the Phase 2/3 study of JZP-458, our recombinant Erwinia asparaginase, for acute lymphoblastic leukemia and one year after submitting our IND, we are working toward recruiting the first patient in this pivotal study."

GAAP net income for the third quarter of 2019 was $102.3 million, or $1.78 per diluted share, compared to $149.3 million, or $2.41 per diluted share, for the third quarter of 2018. GAAP net income and EPS for the third quarter of 2019 included the impact of acquired in-process research and development expense primarily related to the company’s acquisition of Cavion, Inc. (Cavion).

Non-GAAP adjusted net income for the third quarter of 2019 was $235.3 million, or $4.10 per diluted share, compared to $221.7 million, or $3.58 per diluted share, for the third quarter of 2018. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

Key Corporate and R&D Updates

In August 2019, the company acquired Cavion in a merger transaction. Under the terms of the agreement, the former Cavion shareholders received an upfront payment of $52.5 million and have the potential to receive additional payments of up to $260.0 million upon the achievement of certain clinical, regulatory and commercial milestones, for a total potential consideration of $312.5 million. Cavion’s lead molecule, CX-8998, now JZP-385, has been evaluated in a Phase 2 randomized, placebo-controlled clinical study and demonstrated proof-of-concept as a potential treatment for essential tremor.

In September 2019, the company presented positive results from the Phase 3 study of JZP-258, which demonstrate the efficacy of JZP-258 for the treatment of cataplexy and excessive daytime sleepiness (EDS) in adults with narcolepsy. The JZP-258 study met its primary and key secondary endpoints demonstrating highly statistically significant differences in weekly number of cataplexy attacks and Epworth Sleepiness Scale scores compared to placebo. JZP-258 is a novel oxybate formulation with a unique composition of cations resulting in 92% less sodium, or approximately 1 to 1.5 grams less sodium per night, than Xyrem (sodium oxybate) oral solution.

In October 2019, the company announced that the first patient was enrolled in an exploratory Phase 2 clinical trial evaluating the ability of defibrotide to prevent neurotoxicity in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) receiving chimeric antigen receptor t-cell (CAR T-cell) therapy.

In October 2019, U.S. Food and Drug Administration (FDA) granted Fast Track designation to JZP-458 for the treatment of acute lymphoblastic leukemia (ALL)/lymphoblastic lymphoma (LBL).

Today, the company announced that it expects to submit the JZP-258 New Drug Application (NDA) in January 2020 and plans to redeem its priority review voucher for this submission.

Today, the company announced that Mike Miller will retire from his role as Executive Vice President, U.S. Commercial effective March 31, 2020. Mr. Miller will continue as an employee of the company through June 30, 2020, to ensure a smooth transition to new leadership. The company plans to begin a search for Mr. Miller’s successor soon.

Select 2019 Milestones*

Xyrem (sodium oxybate) oral solution

Launched for the treatment of cataplexy or EDS in pediatric narcolepsy in March

JZP-258

Announced positive top-line results from Phase 3 narcolepsy study in March

Received Orphan Drug Designation from FDA for idiopathic hypersomnia indication

Presented positive results from Phase 3 narcolepsy study at World Sleep Congress meeting in September

NDA submission as early as year-end (now intend to submit January 2020)

Sunosi (solriamfetol)

Received FDA approval for EDS in narcolepsy or obstructive sleep apnea (OSA) in March

Received U.S. Drug Enforcement Agency scheduling decision in June

Launched in the U.S. in July

Identified EDS associated with Major Depressive Disorder as a new area of interest

Obtain EU approval for EDS in narcolepsy or OSA as early as year-end (now anticipate Committee for Medicinal Products for Human Use (CHMP) opinion November 2019; expect European Medicines Agency (EMA) decision early 2020)

Vyxeos (daunorubicin and cytarabine) liposome for injection

Positive data presented by Children’s Oncology Group (COG) in children and young adults with relapsed/refractory acute myeloid leukemia (AML) at American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) in June

Activated sites for Phase 1 attenuated dose finding study of Vyxeos in higher risk myelodysplastic syndrome (MDS) through MD Anderson collaboration (FPI 2Q19)

Activated sites for Phase 1b study of low intensity therapy of Vyxeos in combination with venetoclax in first-line, unfit AML (FPI 4Q19)

Activated sites for Phase 3 study in adult patients with newly diagnosed standard- and high-risk AML through the AML Study Group, a cooperative group (FPI 3Q19)

Activated sites for Phase 2 study in patients with high-risk MDS through the European Myelodysplastic Syndromes Cooperative Group (FPI 3Q19)

Activate sites for Phase 1b master trial of Vyxeos in combination with various targeted agents in first-line, fit AML

Potential interim combination data results from studies conducted through MD Anderson collaboration

Activate sites in the COG Phase 3 study in newly diagnosed pediatric patients with AML

Activate sites for Phase 2 study in newly diagnosed, fit, older adults with high-risk AML

Activate sites for Phase 2 study in a broader age range of adults with high-risk AML

Defitelio (defibrotide sodium) / defibrotide

Positive results from DEFIFrance study presented at European Society for Blood and Marrow Transplant meeting in March

Nippon Shinyaku Co., Ltd. received marketing authorization for Defitelio in Japan in June and launched in September

Activated sites for exploratory Phase 2 study in CAR T-cell therapy associated neurotoxicity (FPI 4Q19)

Completed enrollment in prevention of acute graft-vs-host disease Phase 2 study

Conduct interim analysis (IA) in the prevention of hepatic veno-occlusive disease (VOD) study (now expect to conduct 1H20)

Activate sites for Phase 2 study in transplant-associated thrombotic microangiopathy (activities discontinued)

JZP-458

FDA granted Fast Track designation to JZP-458 for the treatment of ALL/LBL

Activate sites for single-arm, pivotal Phase 2/3 clinical study in ALL/LBL

CombiPlex

Continue Investigational New Drug enabling activities for a solid tumor combination; progress exploratory activities for other hematology/oncology candidates

* Milestones denoted as ✔=completed, x=not completed, •=milestones planned for 2019. FPI = First Patient In

Total revenues increased 15% in the third quarter of 2019 compared to the same period in 2018.

Xyrem net product sales increased 19% in the third quarter of 2019 compared to the same period in 2018.

Erwinaze/Erwinase net product sales decreased 17% in the third quarter of 2019 compared to the same period in 2018 due to ongoing supply and manufacturing issues at the sole manufacturer, resulting in limited product availability during the quarter. The company anticipates ongoing manufacturing issues and supply disruptions for the fourth quarter of 2019 and in 2020.

Defitelio/defibrotide net product sales increased 4% in the third quarter of 2019 compared to the same period in 2018. The company continues to expect inter-quarter variability in Defitelio net sales.

Vyxeos net product sales increased 41% in the third quarter of 2019 compared to the same period in 2018 primarily due to the ongoing EU launch. The company continues to implement its education and outreach initiatives while advancing a development program to support potential expanded uses of Vyxeos.

Sunosi net product sales were $1.0 million in the third quarter of 2019, following the U.S. launch in July 2019.

Operating expenses changed over the prior year period primarily due to the following:

Selling, general and administrative (SG&A) expenses increased in the third quarter of 2019 compared to the same period in 2018 on a GAAP and on a non-GAAP adjusted basis primarily due to expenses related to the expansion of the company’s business, including the U.S. launch of Sunosi.
Research and development (R&D) expenses increased in the third quarter of 2019 on a GAAP and on a non-GAAP adjusted basis primarily due to expenses related to the company’s expanding pre-clinical and clinical development programs and support of its partner programs, including a milestone of $11.0 million payable to Pfenex, Inc. under a license and option agreement to develop and commercialize multiple early stage hematology product candidates.
Cash Flow and Balance Sheet

As of September 30, 2019, cash, cash equivalents and investments were $1.1 billion, and the outstanding principal balance of the company’s long-term debt was $1.8 billion. During the nine months ended September 30, 2019, the company generated $688.6 million of cash from operations, used $191.1 million to repurchase shares under the company’s share repurchase program, made milestone payments totaling $80.5 million related to Sunosi, and made upfront payments of $52.5 million to acquire Cavion, Inc. and $56.0 million to Codiak BioSciences, Inc. (Codiak) under a collaboration agreement.

In the nine months ended September 30, 2019, the company repurchased approximately 1.5 million ordinary shares under the company’s share repurchase program at an average cost of $131.48 per ordinary share. As of September 30, 2019, the remaining amount authorized for share repurchases was $188.1 million. In October 2019, the company’s board of directors increased the share repurchase program by $500 million.

2019 Financial Guidance

Jazz Pharmaceuticals is updating its full year 2019 financial guidance as follows (in millions, except per share amounts and percentages):

Includes minimal net sales contribution from Sunosi in the U.S.

Excludes $6-$8 million of share-based compensation expense from estimated GAAP gross margin.

Excludes $82-$90 million of share-based compensation expense from estimated GAAP SG&A expenses.

Excludes $22-$27 million of share-based compensation expense from estimated GAAP R&D expenses.

Includes an income tax benefit of $112.3 million related to an intra-entity intellectual property asset transfer.

Excludes the income tax effect of adjustments between GAAP reported and non-GAAP adjusted net income and the income tax benefit related to an intra-entity intellectual property asset transfer.

Includes expected intangible asset amortization of $111 million in the fourth quarter of 2019 as a result of the Company’s notification to the FDA of its intention to redeem its priority review voucher for the planned NDA submission for JZP-258.

See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the table titled "Reconciliation of GAAP to Non-GAAP Adjusted 2019 Net Income Guidance" at the end of this press release.

Conference Call Details

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. EST (9:30 p.m. GMT) to provide a business and financial update and discuss its 2019 third quarter results. The live webcast may be accessed from the Investors section of the company’s website at www.jazzpharmaceuticals.com. Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. Investors may participate in the conference call by dialing +1 855 353 7924 in the U.S., or +1 503 343 6056 outside the U.S., and entering passcode 9398898.

A replay of the conference call will be available through November 12, 2019 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 9398898. An archived version of the webcast will be available for at least one week in the Investors section of the company’s website at www.jazzpharmaceuticals.com.

On November 5, 2019 Neurocrine Biosciences, Inc. (NASDAQ: NBIX) reported that Neurocrine Biosciences management will present at the following investor conferences (Press release, Neurocrine Biosciences, NOV 5, 2019, View Source [SID1234550498]):

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Matt Abernethy, Chief Financial Officer, will present at the Credit Suisse 28th Annual Healthcare Conference at 1:50 p.m. Mountain Time (3:50 p.m. Eastern Time) on Tuesday, Nov. 12, 2019, in Scottsdale, Arizona.
Kevin Gorman, Chief Executive Officer, will present at the Jefferies London Healthcare Conference at 10:00 a.m. Greenwich Mean Time (5:00 a.m. Eastern Time) on Wednesday, Nov. 20, 2019, in London.
The live presentations will be webcast and may be accessed on the Company’s website under Investors at www.neurocrine.com. A replay of the presentations will be available on the website approximately one hour after the conclusion of the event and will be archived for approximately one month.