Perrigo To Release Fourth Quarter And Calendar Year 2019 Financial Results On February 27, 2020

On February 13, 2020 Perrigo Company plc (NYSE; TASE: PRGO) reported that it will release its fourth quarter and calendar year 2019 financial results on Thursday, February 27, 2020 (Press release, Perrigo Company, FEB 13, 2020, View Source [SID1234554293]). The Company will also host a conference call beginning at 8:30 a.m. (EST).

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The conference call will be available live via webcast to interested parties in the investor relations section of the Perrigo website at View Source or by phone at 888-317-6003, International 412-317-6061, and reference ID #2906859. A taped replay of the call will be available beginning at approximately 12:00 p.m. (EST) Thursday, February 27, until midnight Thursday, March 12, 2020. To listen to the replay, dial 877-344-7529, International 412-317-0088, and use access code 10139406.

LabCorp Announces 2019 Fourth Quarter and Full Year Results and Provides 2020 Guidance

On February 13, 2020 LabCorp (or the Company) (NYSE: LH) reported results for the fourth quarter and year ended December 31, 2019, and provided 2020 guidance (Press release, LabCorp, FEB 13, 2020, View Source [SID1234554292]).

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"We had a strong finish to 2019, a year where we delivered solid revenue growth, adjusted EPS, and free cash flow," said Adam H. Schechter, president and CEO of LabCorp. "We start 2020 with a clear strategy that leverages our science, technology, and delivery focused on our customers to improve health and improve lives. We are well positioned to drive continued growth and shareholder value in 2020 and beyond."

Consolidated Results

Fourth Quarter Results

Revenue for the quarter was $2.95 billion, an increase of 6.0% over $2.79 billion in the fourth quarter of 2018. The increase in revenue was due to acquisitions of 4.5% and organic growth of 2.3% (which includes the negative impact from lower Medicare and Medicaid pricing as a result of PAMA of 0.9%), partially offset by the disposition of businesses of 0.6% and negative foreign currency translation of 0.2%.

Operating income for the quarter was $336.4 million, or 11.4% of revenue, compared to $307.7 million, or 11.0%, in the fourth quarter of 2018. The increase in operating income and margin was primarily due to acquisitions, organic growth, and LaunchPad savings, partially offset by the negative impact from PAMA and higher personnel costs. The Company recorded restructuring charges, special items, and amortization, which together totaled $85.6 million in the quarter, compared to $87.2 million during the same period in 2018. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $422.0 million, or 14.3% of revenue, compared to $394.9 million, or 14.2%, in the fourth quarter of 2018. Excluding the negative impact from PAMA, adjusted operating income and margin grew $53.3 million and 90 basis points, respectively, over last year.

Net earnings for the quarter were $227.1 million, compared to $157.9 million in the fourth quarter of 2018. Diluted EPS were $2.32 in the quarter, an increase of 48.7% compared to $1.56 in the same period in 2018. During the fourth quarter of 2019, the Company recorded $19.0 million in net gains on venture fund investments, partially offset by losses of $1.4 million on the disposition of businesses and a cost of $3.1 million related to debt refinancing. In the fourth quarter of 2018, the Company recorded a $24.6 million loss on the disposition of its U.S. forensics laboratory testing business, a non-cash pension settlement charge of $7.5 million, and a loss of $5.2 million on a venture fund investment. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $2.86 in the quarter, an increase of 13.5% over $2.52 in the fourth quarter of 2018.

Operating cash flow for the quarter was $569.8 million, compared to $486.4 million in the fourth quarter of 2018, which was negatively impacted by approximately $105 million from the net tax payment in the fourth quarter of 2018 related to the disposition of businesses. The increase in operating cash flow was primarily due to higher cash earnings, partially offset by increased working capital to support growth. Capital expenditures totaled $128.2 million, compared to $122.2 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $441.6 million, compared to $364.2 million in the fourth quarter of 2018.

At the end of the quarter, the Company’s cash balance and total debt were $337.5 million and $6.2 billion, respectively. During the quarter, the Company invested $23.1 million in acquisitions, repurchased $50.0 million of stock, representing approximately 0.3 million shares, and paid down $402.7 million of debt. As of December 31, 2019, the Company had $900.0 million of authorization remaining under its share repurchase program.

Full Year Results

Revenue was $11.55 billion, an increase of 2.0% over last year’s $11.33 billion. The increase in revenue was due to growth from acquisitions of 2.3% and organic growth of 1.6% (which includes the negative impact from PAMA of 0.9%), partially offset by the disposition of businesses of 1.4% and negative foreign currency translation of 0.5%.

Operating income was $1,330.2 million, or 11.5% of revenue, compared to $1,325.7 million, or 11.7%, in 2018. The Company recorded restructuring charges, special items, and amortization which together totaled $380.6 million, compared to $397.6 million during the same period in 2018. Adjusted operating income (excluding amortization, restructuring charges, and special items) was $1,710.8 million, or 14.8% of revenue, compared to $1,723.3 million, or 15.2%, in 2018. The decrease in operating income and margin was primarily due to the negative impact from PAMA, higher personnel costs, disposition of businesses, cybersecurity investments, and a favorable one-time legal settlement in 2018, partially offset by organic growth, the Company’s LaunchPad initiatives, and acquisitions. Excluding the negative impact from PAMA, adjusted operating income and margins grew $94.5 million and 40 basis points, respectively, over last year.

Net earnings in 2019 were $823.8 million, or $8.35 per diluted share, compared to $883.7 million, or $8.61 per diluted share, last year. During 2019, the Company recorded net gains of $20.9 million on venture fund investments, partially offset by losses of $13.3 million on the disposition of businesses and a cost of $3.1 million related to debt refinancing. During 2018, the Company recorded a net gain of $184.8 million on the disposition of businesses, partially offset by a charge of $45.0 million due to the implementation of the Tax Cuts and Jobs Act of 2017 (TCJA), a non-cash pension settlement charge of $7.5 million, and a $5.2 million loss on a venture fund investment.

Adjusted EPS (excluding amortization, restructuring, and special items) were $11.32, an increase of 2.7% compared to $11.02 in 2018.

Operating cash flow was $1,444.7 million, compared to $1,305.4 million in 2018, which was negatively impacted by approximately $105 million from the net tax payment in the fourth quarter of 2018 related to the disposition of businesses. The increase in operating cash flow was due to higher cash earnings, partially offset by increased working capital to support growth. Capital expenditures totaled $400.2 million, compared to $379.8 million in 2018. As a result, free cash flow (operating cash flow less capital expenditures) was $1,044.5 million, compared to $925.6 million in 2018.

During the year, the Company invested $876.0 million in acquisitions and repurchased $450.0 million of stock representing approximately 2.9 million shares.

***

The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Fourth Quarter Segment Results

LabCorp Diagnostics

Revenue for the quarter was $1.76 billion, an increase of 3.7% over $1.69 billion in the fourth quarter of 2018. The 3.7% increase in revenue was due to acquisitions of 3.5% and organic growth of 0.8%, partially offset by the negative impact from the disposition of businesses of 0.5%. The organic revenue increase of 0.8% includes the negative impact from PAMA of 1.5%.

Total volume (measured by requisitions), excluding the disposition of businesses, increased by 2.6%, as acquisition volume contributed 1.8% and organic volume increased by 0.8%. Organic volume includes the negative impact from managed care contract changes and lower consumer genetics demand, which largely offset the benefit of one additional revenue day. Excluding the disposition of businesses, revenue per requisition increased by 1.6% due to acquisitions and favorable mix, partially offset by the negative impact from PAMA and the nonrenewal of the BeaconLBS – UnitedHealthcare contract pertaining to the Florida market.

Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $277.1 million, or 15.8% of revenue, compared to $279.3 million, or 16.5%, in the fourth quarter of 2018. The $2.2 million decline in adjusted operating income and 70 basis point decline in adjusted operating margin were primarily due to the negative impact from PAMA of $26.2 million and 130 basis points, higher personnel costs, and cybersecurity investments, partially offset by LaunchPad savings, organic growth, and acquisitions. The Company remains on track to deliver approximately $200 million of net savings from its three-year Diagnostics LaunchPad initiative by the end of 2021.

Covance Drug Development

Revenue for the quarter was $1.20 billion, an increase of 9.3% over $1.10 billion in the fourth quarter of 2018. The increase in revenue was due to acquisitions of 6.0% and organic growth of 4.6%, partially offset by the disposition of the Covance Research Products business of 0.9% and negative foreign currency translation of 0.4%. Excluding pass-throughs, organic revenue grew mid-to-high single digits.

Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $183.2 million, or 15.2% of revenue, compared to $153.5 million, or 14.0%, in the fourth quarter of 2018. The $29.7 million increase in adjusted operating income and 130 basis point increase in adjusted operating margin were primarily due to LaunchPad savings, acquisitions, and organic growth, partially offset by higher personnel costs. The Company remains on track to deliver approximately $150 million of net savings from its three-year Drug Development LaunchPad initiative by the end of 2020.

Net orders and net book-to-bill during the trailing twelve months were $5.91 billion and 1.29, respectively. Backlog at the end of the quarter was $11.30 billion, compared to $10.71 billion last quarter, and the Company expects approximately $4.2 billion of its backlog to convert into revenue in the next twelve months.

***

Outlook for 2020

The following guidance assumes foreign exchange rates effective as of December 31, 2019 for the full year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions and share repurchases.

Revenue growth of 4.0% to 6.0% over 2019 revenue of $11.55 billion, which includes the negative impact from the disposition of business of approximately 0.2% as well as the benefit from foreign currency translation of 0.4%.
Revenue growth in LabCorp Diagnostics of 0.5% to 2.5% over 2019 revenue of $7.00 billion, which includes the negative impact from PAMA of approximately 1.3% as well as the benefit from one additional revenue day of 0.4% and foreign currency translation of 0.1%.
Revenue growth in Covance Drug Development of 7.0% to 9.5% over 2019 revenue of $4.58 billion, which includes the negative impact from the disposition of business of approximately 0.5% as well as the benefit from foreign currency translation of 0.7%.
Adjusted EPS of $11.75 to $12.15, an increase of 3.8% to 7.3% over 2019 adjusted EPS of $11.32.
Free cash flow (operating cash flow less capital expenditures) of $950 million to $1.05 billion, compared to $1.04 billion in 2019.
Use of Adjusted Measures

The Company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, free cash flow, and certain segment information. The Company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s operational performance. The Company further believes that the use of these non-GAAP financial measures provide an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the Company’s financial results with the financial results of other companies. However, the Company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and an identification of the components that comprise "special items" used for certain adjusted financial information are included in the tables accompanying this press release.

The Company today is providing an investor relations presentation with additional information on its business and operations, which is available in the investor relations section of the Company’s website at View Source." target="_blank" title="View Source." rel="nofollow">View Source Analysts and investors are directed to the website to review this supplemental information.

A conference call discussing LabCorp’s quarterly results will be held today at 9:00 a.m. EST and is available by dialing 844-634-1444 (615-247-0253 for international callers). The access code is 8663007. A telephone replay of the call will be available through Feb. 27, 2020, and can be heard by dialing 855-859-2056 (404-537-3406 for international callers). The access code for the replay is 8663007. A live online broadcast of LabCorp’s quarterly conference call on Feb. 13, 2020, will be available at View Source or at View Source beginning at 9:00 a.m. EST. This webcast will be archived and accessible through Jan. 29, 2021.

ImmunSYS Presents at the 2020 BIO CEO & Investor Conference

On February 13, 2020 ImmunSYS reported that Charles Link, M.D., President and Chief Medical Officer, presented this week on February 11th at the 2020 BIO CEO & Investor Conference in New York (Press release, ImmunSYS, FEB 13, 2020, View Source [SID1234554291]).

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Now in its 22nd year, the conference is one of the largest independent investor conferences focused on established and emerging publicly traded and select private biotech companies. It involves two days of partnering meetings with institutional and early-stage investors, industry analysts, and senior biotechnology executives, in one location.

To learn more about the meeting, please visit the BIO website: View Source

Novel targeted drug shows promise in advanced kidney cancer

On February 13, 2020 Dana-Farber Cancer Institute reported Scientists report promising activity of a novel drug that targets a key molecular driver of clear cell renal cell carcinoma (ccRCC) in patients with metastatic disease (Press release, Dana-Farber Cancer Institute, FEB 13, 2020, View Source [SID1234554290]).

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Researchers from Dana-Farber Cancer Institute report a response rate of 24 percent across all risk categories of patients given an oral first-in-class agent that targets hypoxia-inducible factor (HIF) 2-a, which promotes new blood vessel growth that fuels kidney tumors.

Results of treatment with the drug, known as MK-6482, are being presented in an abstract of a phase I/II study at the ASCO (Free ASCO Whitepaper) 2020 Genitourinary Cancers Symposium. Based on these findings, a phase III trial has been launched.

"A new drug as a single agent showing an overall response rate of 24 percent across all risk categories – poor, intermediate, and good and in a heavily refractory population – is quite promising," said Toni Choueiri, MD, first author of the abstract. Choueiri is director of the Lank Center for Genitourinary Oncology and the Jerome and Nancy Kohlberg Professor of Medicine at Harvard Medical School.

The drug targets a component of the body’s mechanism for sensing oxygen levels and turning on genes that enable the body to adjust to hypoxia – a shortage of oxygen – by making more red blood cells and forming new blood vessels. Dana-Farber scientist and Choueiri’s mentor and collaborator William G. Kaelin Jr., MD shared the 2019 Nobel Prize in Medicine with two other researchers for unraveling this complex mechanism, which can be hijacked by cancer to help tumors survive and grow.

In the vast majority of patients with clear cell renal carcinoma, a tumor suppressor protein known as Von Hippel-Lindau (VHL) is not functional. As a result, hypoxia inducible factor (HIF) proteins accumulate inside the tumor cell, wrongly signaling there is a shortage of oxygen, and activating the formation of blood vessels, fueling tumor growth. Understanding this abnormal process has paved the way for new cancer drugs – MK-6482 being one of them and is distinct in that it targets HIF-2a directly leading to blocking cancer cell growth, proliferation, and abnormal blood vessel formation.

The study of MK-6482 included 55 patients with advanced clear cell kidney cancer who had an average of 3 prior lines of therapies.

After a median follow-up period of 13 months, the overall response rate was 24 percent. Forty-one patients had stable disease with a disease control rate (complete response plus partial response plus stable disease) of 80 percent. There were partial responses in two of five favorable-risk patients; 10 of 40 intermediate-risk patients; and one of 10 poor-risk patients.

The median duration of response had not been reached: 81 percent of patients had an estimated response of more than six months, and 16 patients continued treatment beyond 12 months. The median progression-free response rate was 11 months.

The authors concluded that MK-6482 "is well-tolerated with a favorable safety profile and demonstrated promising single-agent activity in heavily pre-treated patients" with clear-cell kidney cancer across the various risk groups.

The presentation (Abstract 611) is scheduled for Oral Abstract Session C: Renal Cell Cancer on Saturday, February 15, 2020, at 8:00 a.m. (PT) at the ASCO (Free ASCO Whitepaper) 2020 Genitourinary Cancers Symposium in the Moscone West Building, San Francisco, CA.

Funding for this research was provided by Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA. Choueiri has pending patents for biomarkers of immune checkpoint blockers. Choueiri’s disclosures include grants, personal fees or nonfinancial support from Agensys, Alexion, Alligent, Analysis Group, AstraZeneca, Bayer, Bristol-Myers Squibb, Calithera, Cerulean, Clinical Care Options, Corvus, Eli Lilly, Esai, Exelixis, Foundation Medicine Inc., Genentech, Roche, F. Hoffman-La Roche, GlaxoSmithKline, Heron Therapeutics, Harborside Press, American Society of Medical Oncology, Ipsen, NCCN, Kidney Cancer Journal, L-path, Merck, Michael J. Hennessy Associates, Research to Practice, Navinata Healthcare, NEJM, Novartis, Peloton, Pfizer, EMD Serono, Platform Q, Prometheus Labs, Sanofi/Aventis, Takeda, Tracon, Pionyr, Tempest, The Lancet Oncology and Up-to-Date.

DiaMedica Therapeutics Announces Closing of $8.5 Million Public Offering of Common Shares

On February 13, 2020 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biotechnology company, reported the closing of its previously announced underwritten public offering of an aggregate of 2,125,000 shares of its voting common shares at a public offering price of $4.00 per share (Press release, DiaMedica, FEB 13, 2020, View Source [SID1234554289]).

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The gross proceeds of the offering were $8.5 million, before deducting the underwriting discount and other offering expenses.

DiaMedica intends to use the net proceeds from the offering to continue its clinical and product development activities and for other working capital and general corporate purposes.

Craig-Hallum Capital Group LLC acted as the sole managing underwriter for the offering.

The securities described above were offered pursuant to a prospectus supplement and an accompanying base prospectus forming part of a shelf registration statement on Form S-3 (File No. 333-235775), which was declared effective by the U.S. Securities and Exchange Commission (SEC) on January 9, 2020. A final prospectus supplement relating to the offering was filed with the SEC and is available on the SEC’s website located at View Source Copies of the final prospectus supplement and the accompanying base prospectus may be obtained for free by contacting Craig-Hallum Capital Group LLC at 222 South Ninth Street, Suite 350, Minneapolis, Minnesota 55402, Attention: Equity Capital Markets, by telephone at 612-334-6300, or by email at [email protected].

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.