On February 6, 2020 Cardinal Health (NYSE: CAH) reported financial results for the second quarter of fiscal 2020 ended December 31, 2019 (Press release, Cardinal Health, FEB 6, 2020, View Source [SID1234553972]). Second quarter revenue was $39.7 billion, an increase of 5% from the second quarter of last year.

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Second quarter GAAP operating earnings decreased 34% to $334 million, which included a $96 million charge in connection to the recently announced voluntary surgical gown-related recalls. Non-GAAP operating earnings increased 1% to $646 million. GAAP diluted earnings per share (EPS) decreased 19% to $0.75, while non-GAAP diluted EPS increased 18% to $1.52. Non-GAAP diluted EPS benefited from a lower effective tax rate and a lower share count.

"With the first half of the year behind us, we are raising our fiscal year 2020 guidance," said Mike Kaufmann, CEO of Cardinal Health. "This increase was driven by improved performance across our Pharmaceutical segment, particularly within our generics program. As we look forward, we remain focused on executing our strategic growth initiatives."

Second quarter revenue for the Pharmaceutical segment increased 6% to $35.7 billion, due to sales growth from Pharmaceutical Distribution and Specialty Solutions customers.

Pharmaceutical segment profit increased 4% to $462 million in the second quarter, reflecting positive performance in the company’s generics program and Specialty Solutions business. This was partially offset by the adverse impact of Pharmaceutical Distribution customer contract renewals.

Medical segment

1Medical segment profit does not include the $96 million charge incurred for inventory write-offs and certain remediation and supply disruption costs associated with the recently announced voluntary surgical gown-related recalls.

Second quarter revenue for the Medical segment was flat at $4.0 billion. Growth in Cardinal Health at Home was offset by a decline in products and distribution.

Medical segment profit increased 4% to $195 million in the second quarter. This increase reflects benefits from cost savings initiatives, partially offset by a decline in products and distribution.

Tax rate

During the second quarters of fiscal 2020 and 2019, GAAP effective tax rates were 21.0% and 31.0%, respectively. Non-GAAP effective tax rates were 24.8% and 28.5%, respectively. The GAAP effective tax rate benefitted from jurisdictional mix and discrete items recognized in the second quarter of 2020, largely driven by changes as a result of tax reform. The Non-GAAP effective tax rate benefitted from jurisdictional mix.

Fiscal year 2020 outlook

The company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation.

The company raises its fiscal year 2020 guidance range for non-GAAP diluted earnings per share attributable to Cardinal Health, Inc. to the range of $5.20 to $5.40 from the range of $4.85 to $5.10.

Recent highlights

For the 12th consecutive year in a row, Cardinal Health was honored as one of the "Best Places to Work for LGBTQ Equality" by the Human Rights Campaign (HRC) Foundation, achieving 100% on the HRC’s 2020 Corporate Equality Index (CEI).
Cardinal Health was recognized by the Women’s Forum of New York for having at least 40% of board seats held by women.
Webcast

Cardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss second quarter results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required.

Presentation slides and a webcast replay will be available until February 5, 2021.

Upcoming webcasted investor events

Barclays Global Healthcare Conference on March 10 at 8:30 a.m. Eastern in Miami Beach, Fla.

On February 6, 2020 Sierra Oncology, Inc. (SRRA), a late-stage drug development company focused on the development and commercialization of momelotinib, a JAK1, JAK2 & ACVR1 inhibitor with a potentially differentiated therapeutic profile for the treatment of myelofibrosis, reported that the Series A convertible voting preferred stock issued in its recently completed $103.0 million financing (gross proceeds) have been fully converted into shares of common stock (Press release, Sierra Oncology, FEB 6, 2020, View Source [SID1234553971]).

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In addition, Gilead Sciences, Inc. (Gilead) has been issued 725,283 shares of common stock and a warrant to purchase an equivalent amount of common stock, in consideration for meaningfully reduced royalty rates and elimination of a near term milestone in an amendment to the Asset Purchase Agreement with Gilead for momelotinib, as previously announced.

"These announcements bring clarity to Sierra’s simplified go-forward capital structure. We are fortunate to have built both a healthy balance sheet and a critical mass of high quality, supportive shareholders, led by Vivo Capital, Longitude Capital, OrbiMed and Abingworth, investors in our recent financing and from which we appointed four new directors to Sierra’s Board, as well as Gilead. These stakeholders are aligned with Management in our focus on achieving regulatory and commercial success with our Phase 3 drug candidate, momelotinib, which has the potential to become an important therapeutic for both first and second line myelofibrosis patients, including the majority that suffer from anemia and thrombocytopenia," said Dr. Nick Glover, President and CEO of Sierra Oncology.

There are now 10,395,732 total shares of common stock outstanding and warrants to purchase 11,102,251 shares of common stock, with an exercise price equal to $13.20 per share. Of these warrants, warrants to purchase approximately 2,574,727 shares of common stock (the Series B warrants) may only be exercised by paying the exercise price in cash, and will expire on the 75th day anniversary following the announcement of top-line data from MOMENTUM, Sierra Oncology’s ongoing Phase 3 clinical trial of momelotinib. If these Series B warrants are fully exercised, the company will receive approximately $34.0 million in proceeds.

Sierra Oncology previously reported its cash and cash equivalents totaled $67.7 million as of September 30, 2019, and that subsequently it had closed an underwritten public offering with gross proceeds to Sierra Oncology of $103.0 million. Prior to the end of 2019, a term loan of $5.0 million was repaid to Silicon Valley Bank.

On February 6, 2020 Palatin Technologies, Inc. (NYSE American: PTN) reported that it will announce its second quarter fiscal year 2020 operating results on Tuesday, February 11, 2020 before the open of the U.S. financial markets (Press release, Palatin Technologies, FEB 6, 2020, View Source [SID1234553970]).

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Palatin will also conduct a conference call and live audio webcast hosted by its executive management team on February 11, 2020 at 11:00 a.m. ET. The conference call will include a review of the company’s operating results and an update on programs under development.

Schedule for the Operating Results Press Release, Conference Call / Audio Webcast

Q2 Fiscal Year 2020 Financial Results Press Release

2/11/2020 at 7:30 a.m. ET

Q2 Fiscal Year 2020 Conference Call-Live

2/11/2020 at 11:00 a.m. ET

US/Canada Dial-In Number:

1-800-353-6461

International Dial-In Number:

1-334-323-0501

Conference ID:

7551093

Q2 Fiscal Year 2020 Conference Call-Replay

2/11/2020-2/18/2020

US/Canada Dial-In Number:

1-888-203-1112

International Dial-In Number:

1-719-457-0820

Replay Passcode:

7551093

Audio Webcast Live and Replay Access

View Source

The audio webcast and replay can be accessed by logging on to the "Investors-Webcasts" section of Palatin’s website at View Source.

On February 6, 2020 Kleo Pharmaceuticals, Inc., an immuno-oncology company developing next-generation, fully synthetic bispecific compounds designed to emulate or enhance the activity of biologics, reported that it has received Investigational New Drug (IND) authorization to proceed from the U.S. Food and Drug Administration (FDA) to initiate a safety and tolerability clinical study combining KP1237, a CD38-targeting antibody recruiting molecule (ARM), with patients’ own Natural Killer (NK) cells to treat multiple myeloma (MM) in post-transplant patients (Press release, Kleo Pharmaceuticals, FEB 6, 2020, View Source [SID1234553969]).

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The single-arm study will be conducted in 25-30 patients with exploratory endpoints that assess the MRD (minimal residual disease) conversion rate at 90-100 days after transplantation. Recent clinical trials have identified MRD negativity post-transplant as a potential surrogate of long-term remission in MM. The trial is expected to begin enrollment in the first half of 2020, and topline data are expected in the second half of 2021.

"We are excited to have clearance to initiate a clinical trial in the US that addresses a significant unmet medical need in newly diagnosed, post-transplant multiple myeloma patients," said Kleo CEO Doug Manion, MD. "Approximately 30,000 individuals are diagnosed with multiple myeloma in the United States each year, with at least 1/3 of those patients undergoing autologous stem cell transplants."

In this trial, KP1237 is being investigated as a "cell homing" molecule to target the patient’s activated NK cells to the CD38-expressing tumor. Current anti-CD38 therapeutic antibodies kill NK cells and are not approved for use in this clinical settingi.

Nonclinical efficacy data presented at the 2019 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting demonstrated that CD38-ARMs are able to kill multiple myeloma cells by antibody-dependent cellular cytotoxicity without depleting CD38-expressing immune cells. Nonclinical data also demonstrated that the CD38-ARM molecule did not induce complement-dependent cytotoxicity (CDC) suggesting it is not likely to cause CDC in humans. Kleo’s 2019 ASH (Free ASH Whitepaper) posters can be viewed here and here.

On February 6, 2020 Epic Sciences, Inc. reported it will present two abstracts at the 2020 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium to be held in San Francisco, February 13-15, 2020 (Press release, Epic Sciences, FEB 6, 2020, View Source [SID1234553968]). The abstracts feature two analyses of the PROPHECY trial cohort. One abstract evaluates the androgen-receptor splice variant 7 (AR-V7) in CTCs as a predictor of resistance to anti-androgen therapy. The second abstract reports new data on CTC-based biomarkers of chromosomal instability and small-cell neuroendocrine transformation and their association to resistance to anti-androgen therapy.

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"This analysis of PROPHECY builds on previous evidence demonstrating AR-V7 as a predictive biomarker, reinforcing the clinical utility of AR-V7 to guide treatment decisions for patients with metastatic prostate cancer and improve patient outcomes," said Rick Wenstrup, MD, chief medical officer at Epic Sciences. "Further, the research also demonstrated that CTC phenotypes of both chromosomal instability and small-cell neuroendocrine identify AR-V7 negative patients who are resistant to anti-androgen therapy. We believe patient selection strategies based on CTC phenotypes to identify patients more or less likely to respond to the various drug classes in prostate cancer will help in optimizing drug sequencing and associated treatment outcomes for patients."

Epic demonstrated its expertise in the development of blood-based tests that predict therapy response with the launch of the Oncotype Dx© AR-V7 Nucleus Detect test, commercially available and reimbursed by Medicare. The test, which is offered in the U.S. through Epic’s partnership with Exact Sciences for patients with mCRPC, assists physicians in choosing between androgen receptor-directed therapies or taxane chemotherapy.

Following are the details for the two poster sessions:

Title: AR-V7 and prediction of benefit with taxane therapy: Final analysis of PROPHECY
First Author: Andrew Armstrong, MD
Date and Time: Thursday, February 13, 2020 11:30 AM-1:00 PM and 5:30 PM-6:30 PM
Poster Session: A
Abstract: 184
Poster Board: H20

Title: Association of circulating tumor cell chromosomal instability with worse outcomes in men with mCRPC treated with abiraterone or enzalutamide
First Author: Landon Brown, MD
Date and Time: Thursday, February 13, 2020 11:30 AM-1:00 PM and 5:30 PM-6:30 PM
Poster Session: A
Abstract: 183
Poster Board: BOARD H19