On February 13, 2020 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the fourth-quarter and full-year 2019 and introduced full-year 2020 financial guidance (Press release, West Pharmaceutical Services, FEB 13, 2020, View Source [SID1234554258]).

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Fourth-Quarter and Full-Year 2019 Summary (comparisons to prior-year period)

Fourth-quarter 2019 net sales of $470.6 million grew 11.4%; organic sales growth was 12.7%; sales from a recent acquisition contributed an additional 30 basis points of growth; currency translation reduced sales by 160 basis points.
Full-year 2019 net sales of $1.840 billion grew 7.1%; organic sales growth was 10.0%; sales from a recent acquisition contributed an additional 10 basis points of growth; currency translation reduced sales by 300 basis points.
Fourth-quarter 2019 reported-diluted EPS of $0.84 increased 22%. Full-year 2019 reported-diluted EPS of $3.21 increased 17%.
Fourth-quarter 2019 adjusted-diluted EPS of $0.82 increased 12%. Full-year 2019 adjusted-diluted EPS of $3.24 increased 15%.
Company is introducing full-year 2020 financial guidance of net sales in a range of $1.95 billion to $1.97 billion and reported-diluted EPS in a range of $3.45 to $3.55.
"Adjusted-diluted EPS" and "organic sales growth" are Non-U.S. GAAP measurements. See discussion under the heading "Non-U.S. GAAP Financial Measures" in this release.

"I am pleased to report strong fourth-quarter 2019 sales and EPS growth, which continues a trend seen throughout the year," said Eric M. Green, President and Chief Executive Officer. "We had double-digit organic sales growth in all three market units of our Proprietary Products segment. High-value products (HVPs) once again fueled sales growth and gross margin expansion, led by Daikyo and Westar components."

Mr. Green continued, "We are introducing full-year 2020 financial guidance that is in line with our long-term financial construct of organic sales growth and operating margin expansion. Our end markets are stable and growing, and we are off to a good start to 2020 with a strong book of committed orders for our high value products, such as NovaPure and Envision components, as well as Daikyo Crystal Zenith containers and our portfolio of self-injection delivery platforms. Our teams across the globe have demonstrated their passion for customers throughout 2019, with new product and services offerings, and are poised to deliver another strong year of sales and profit growth for our business in 2020."

Proprietary Products Segment
In the fourth-quarter 2019, net sales grew 13.3% to $352.7 million. Organic sales growth was 14.7%, with incremental sales from a recent acquisition contributing 40 basis points of Proprietary Products growth and currency translation decreasing sales by 180 basis points. HVPs represented over 60% of segment sales and generated double-digit organic sales growth.

In the fourth-quarter 2019, the Biologics market unit had strong double-digit organic sales growth, led by customer purchases of Daikyo, Westar and Flurotec components. The Generics market unit posted double-digit organic sales growth, led by sales of Westar components and self-injection delivery platforms. The Pharma market unit had double-digit organic sales growth, led by HVPs and a favorable year-over-year comparison due to the fourth-quarter 2018 financial impact from the previously reported voluntary recall of the Vial2Bag product.

In the full-year 2019, net sales grew 6.9% to $1.399 billion. Organic sales growth was 9.9% with incremental sales from a 2019 acquisition contributing 30 basis points of growth and currency translation decreasing sales by 330 basis points. HVPs represented over 60% of segment sales and generated double-digit organic sales growth.

Contract-Manufactured Products Segment
In the fourth-quarter 2019, net sales grew 5.9% to $117.9 million. Organic sales growth was 7.2% with currency translation decreasing sales by 130 basis points. Segment performance was led by sales of healthcare-related injection and diagnostic devices.

For the full-year 2019, net sales grew 7.9% to $441.5 million. Organic sales growth was 10.2% with currency translation decreasing sales by 230 basis points.

Full-Year 2019 Financial Highlights
Operating cash flow was $367.2 million, an increase of 27%. Capital expenditures were $126.4 million, compared to $104.7 million over the same period last year, and represented 6.9% of full-year 2019 net sales. Free cash flow (operating cash flow minus capital expenditures) was $240.8 million, an increase of over 30%.

The Company recorded $4.9 million of restructuring and related charges in 2019 from previously announced actions that have streamlined its manufacturing network. This restructuring plan is now considered complete. Implemented in first-quarter 2018, cumulative expenses over the plan period were approximately $14.0 million. The Company anticipates that the plan will provide annualized savings of approximately $14.0 million.

Full-Year 2020 Financial Guidance

The Company expects full-year 2020 net sales guidance to be in a range of $1.95 billion to $1.97 billion.
Organic sales growth is expected to be in the range of 7% to 8%.
Net sales guidance includes an estimated headwind of $15 million for the full-year 2020 based on current foreign exchange rates.
The Company expects full-year 2020 reported-diluted EPS to be in the range of $3.45 to $3.55.
This includes an estimated headwind of approximately $0.04 based on current foreign currency exchange rates.
This reported-diluted EPS guidance range assumes a full-year 2020 tax rate of 24%, which does not include potential tax benefits from stock-based compensation. As in prior years, we are not including potential 2020 tax benefits from stock-based compensation, as they are out of the Company’s control. Any tax benefits associated with stock-based compensation that we receive in 2020 would provide a positive adjustment to our full-year EPS guidance.
Full-year 2020 capital spending is expected to be approximately 7% of expected full-year 2020 net sales.
Fourth-Quarter and Full-Year 2019 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call, please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 5587337.

A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, February 20, 2020, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 5587337.

On February 13, 2020 Veracyte, Inc. (Nasdaq: VCYT) reported that Bonnie H. Anderson, chairman and chief executive officer, is scheduled to present at the 9th Annual SVB Leerink Global Healthcare Conference in New York City on Thursday, February 27, 2020 at 10:30 a.m. Eastern Time (Press release, Veracyte, FEB 13, 2020, View Source [SID1234554257]).

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The link to the live audio webcast of the company’s presentation will be available by visiting Veracyte’s website at View Source A replay of the webcast will be available for 90 days following the conclusion of the live presentation broadcast.

On February 13, 2020 Foundation Medicine, Inc. and Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported that they have entered into an agreement with the National Cancer Center (NCC) for the use of FoundationOne Liquid, Foundation Medicine’s laboratory-developed liquid biopsy test, in the third stage of SCRUM-Japan, the largest cancer genomic screening consortium in Japan (Press release, Chugai, FEB 13, 2020, View Source [SID1234554251]). The multinational program provides genomic screening in collaboration with hospitals on a regional scale in Japan and other countries in Asia, and aims to accelerate the development of innovative biomarker-driven precision medicine cancer therapies.

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The third stage of SCRUM-Japan is structured in two programs – LC-SCRUM-Asia and MONSTAR-SCREEN. LC-SCRUM-Asia is investigating genomic changes with the aim of delivering precision medicine to lung cancer patients. MONSTAR-SCREEN is investigating genomic changes across all types of advanced solid tumors, expanding beyond gastrointestinal cancer which was the focus of the second stage.

"The SCRUM-Japan program is a model of how collaboration between industry and academia is making precision medicine a reality for people in need of new treatment approaches," said Brian Alexander, chief medical officer of Foundation Medicine. "Utilization of FoundationOne Liquid in this program underscores its value in informing potential therapy selection for advanced-stage cancer patients. We look forward to continuing to expand access to comprehensive genomic profiling through this collaboration."

"SCRUM-Japan is a groundbreaking program to find therapies for patients with advanced cancer. There is an increasing need for blood-based genomic testing in patients who cannot give tissue samples including those who are unable to undergo invasive tumor biopsy," said Dr. Minoru Watanabe, Vice President, head of Chugai’s Foundation Medicine Unit. "We believe that this collaboration with the NCC, which has led a genome screening in Japan will pave the way to realize true precision medicine across the country."

"With the aim of delivering optimal treatments to patients, SCRUM-Japan was started with a view to detect cancer genomic alterations. The important achievements we saw from the first two stages include registration of over 10,000 patients’ clinical and genomic data, and approval of five therapeutic drugs and six in vitro diagnostics products based on clinical studies conducted by utilizing the data," said Atsushi Ohtsu, M.D., Ph.D. Director of National Cancer Center Hospital East and Representative of SCRUM-Japan. "Cancers remain leading causes of deaths in Japan and lung cancer has been ranked as the first leading cause of death among all cancer types. By incorporating FoundationOne Liquid into LC-SCRUM-Asia and MONSTAR-SCREEN, we believe the third stage of SCRUM-Japan will further prove the benefit of comprehensive genomic profiling tests such as FoundationOne Liquid."

Lung and gastrointestinal cancers are among the leading causes of cancer-related deaths in Japan, accounting for over 72 percent of cancer deaths in 2018 according to the World Health Organization. Through this collaboration, Foundation Medicine and Chugai will provide FoundationOne Liquid to academic centers participating in LC-SCRUM-Asia and MONSTAR-SCREEN.

In April 2018, Foundation Medicine received Breakthrough Device Designation from the U.S. Food and Drug Administration (U.S. FDA) on a forthcoming version of Foundation Medicine’s liquid biopsy test, which is currently under U.S. FDA review. Chugai and Foundation Medicine are preparing for the regulatory filing of this version of the test in Japan with the intention that the product will be approved for use under the National Health Insurance coverage in Japan. The parties intend that both LC-SCRUM-Asia and MONSTAR-SCREEN will transition from the existing FoundationOne Liquid test to the forthcoming version of Foundation Medicine’s liquid biopsy test following its anticipated approval by the U.S. FDA and subject to the terms of the agreement.

About SCRUM-Japan
SCRUM-Japan is the largest cancer genomic screening consortium in Japan and aims to accelerate the development of innovative biomarker-driven precision medicine cancer therapies. Since its launch in 2015, more than 10,000 patients with advanced cancers have participated in SCRUM-Japan. The third stage of SCRUM-Japan started in June 2019, and includes two programs – LC-SCRUM-Asia and MONSTAR-SCREEN. LC-SCRUM-Asia is investigating genomic changes with the aim of delivering precision medicine to lung cancer patients. More than 200 hospitals in Japan and Taiwan have joined the program and its scope area is expanding across Asia. MONSTAR-SCREEN is investigating genomic changes across all types of advanced solid tumors including gastrointestinal cancer. 28 hospitals have registered in Japan, and it aims for patients with various types of cancer to participate in the program.

On February 13, 2020 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported that polatuzumab vedotin in combination with bendamustine and rituximab (hereafter, BR therapy) achieved the primary endpoint of complete response rate (CRR) by PET-CT at the timing of Primary Response Assessment (PRA) in the Japanese Phase II study (JO40762/P-DRIVE study) (Press release, Chugai, FEB 13, 2020, View Source [SID1234554250]). P-DRIVE is an open label, single-arm study to evaluate the combination therapy of polatuzumab vedotin with BR therapy as a treatment for people with relapsed or refractory diffuse large B-cell lymphoma (DLBCL). Combination of polatuzumab vedotin and BR therapy observed no new safety signals in the study compared with the previous studies for polatuzumab vedotin.

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"We are very pleased that polatuzumab vedotin in combination with BR therapy showed efficacy in treating relapsed or refractory DLBCL patients," said Chugai’s Executive Vice President, Co-Head of Project & Lifecycle Management Unit, Dr. Yasushi Ito. "About 40% of patients experience relapse of the disease after standard therapy and subsequent treatment options are limited. Chugai is committed to file for approval based on these results to provide patients with this potential treatment option as early as possible."

The Ministry of Health, Labour and Welfare granted the Orphan Drug designation for polatuzumab vedotin in DLBCL in November, 2019. Polatuzumab vedotin was granted accelerated approval in the US in June, 2019 and conditional marketing authorization in EU in January, 2020 respectively. In addition to the P-DRIVE study, the global phase III POLARIX study in patients with untreated DLBCL is ongoing in Japan.

Chugai Receives Orphan Drug Designation for Polatuzumab vedotin in Diffuse Large B-Cell Lymphoma from the MHLW (Press release issued by Chugai on November 20, 2019)
View Source

About JO40762 (P-DRIVE) study
JO40762 (P-DRIVE) is an open label, single-arm study investigating polatuzumab vedotin in combination with BR therapy in 35 patients with relapsed or refractory DLBCL. Primary endpoint is investigator’s assessment of CRR by PET-CT at the timing of PRA (six to eight weeks after last administration of the investigational drugs). Patients received treatment for one cycle of three weeks and was administered up to a total of 6 cycles.

About polatuzumab vedotin
Polatuzumab vedotin is a first-in-class anti-CD79b antibody-drug conjugate (ADC), comprising the anti-CD79b humanized monoclonal antibody and a tubulin polymerization inhibitor attached together using a linker. The CD79b protein is expressed specifically in the majority of B-cells, making it a promising target for the development of new therapies1, 2). Polatuzumab vedotin binds to CD79b and destroys these B-cells through the delivery of an anti-cancer agent, which is thought to suppress the effects on normal cells3, 4). Polatuzumab vedotin is being developed by Roche using Seattle Genetics’ ADC technology and is currently being investigated for the treatment of several types of non-Hodgkin’s lymphoma.

About diffuse large B-cell lymphoma (DLBCL)
DLBCL is one of the histologic subtypes of non-Hodgkin’s lymphoma (NHL), which is categorized as aggressive disease that progresses on a monthly basis. DLBCL is the most common form of NHL, accounting for 30-40 percent of NHL5-7). DLBCL frequently occurs in middle-aged and older people, mainly in their 60’s8). The median age at diagnosis has been reported to be 649).

The combination of rituximab and chemotherapy is the standard therapy for untreated DLBCL; however, recurrence has been observed in about 40% of the patients due to insufficient therapeutic effect10). In addition, although autologous stem cell transplantation (ASCT) is recommended in eligible patients with recurrent or refractory DLBCL, ASCT cannot be performed in about half of these patients due to failure of salvage chemotherapy prior to ASCT11). Furthermore, no standard therapy has been established for patients ineligible for ASCT due to reasons including age or complications12).

Salvage chemotherapy: A therapy mainly used in patients with hematologic malignancy who experienced no therapeutic effects (refractory), or recurrence/relapse of the disease is referred to as a salvage chemotherapy or salvage therapy. Applicable treatment may vary depending on the type of cancer, most of which will be combination therapies consisting of multiple drugs including anticancer agents13).

About orphan drugs
Based on Pharmaceuticals and Medical Devices Law, orphan drugs are designated by the Minister of Health, Labour and Welfare and granted priority review. The designation criteria are as follows: The number of patients who may use the drug is less than 50,000 in Japan; The drug is indicated for the treatment of serious diseases and there is a significant medical value such as no alternative appropriate drug or treatment, or high efficacy or safety expected compared to existing products; there is a theoretical rationale for using the product for the targeted disease and the development plan is reasonable.

On January 13, 2019 Editas Medicine, Inc. (Nasdaq: EDIT), a leading genome editing company, and Sandhill Therapeutics, Inc., a cellular immuno-oncology company, reported a strategic research collaboration, license, and option agreement to combine their respective genome editing and cell therapy technologies to discover, develop, and manufacture allogeneic engineered natural killer (NK) cells and non-alpha beta T cell medicines for the treatment of cancer (Press release, Editas Medicine, FEB 13, 2020, View Source [SID1234553822]).

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This collaboration brings together Editas Medicine’s leading genome editing technology and Sandhill’s BINATE product process, a novel universal donor technology to extract, isolate, and expand NK cells and non-alpha beta T cells, to develop novel medicines for the treatment of solid tumor cancers.

"We are excited to work with Sandhill, combining CRISPR-based genome editing with BINATE cells to accelerate the development of numerous, transformative medicines for people with cancer and improve patient outcomes," said Charles Albright, Ph.D., Executive Vice President and Chief Scientific Officer, Editas Medicine. "We continue to increase our commitment to oncology, and we believe our portfolio of multiple immune system cell types, including T cells, NK cells, and induced pluripotent stem cells (iPSCs), will be effective in making the next generation of allogeneic medicines to fight many common cancers."

"The team at Editas Medicine has one of the most innovative technology platforms, and we look forward to combining our technologies to create new medicines for the treatment of cancer. Together, we are dedicated to transforming cellular immuno-oncology and developing new therapies," said Annemarie Moseley, M.D., Ph.D., Chief Executive Officer, Sandhill Therapeutics, Inc.

Under the terms of the agreement, Editas Medicine obtains an exclusive license to Sandhill’s technology to research, develop and commercialize immuno-oncology engineered cell medicines for solid tumors originating within a given area of the body and an option to expand such license to two additional areas. In return, Sandhill will receive an upfront payment, development and sales-based milestone payments, and royalties on sales of resulting Editas products.

RBC Capital Markets acted as exclusive financial advisor to Sandhill for the transaction.