On October 28, 2020 Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) reported its consolidated financial results for the quarter and the half year ended September 30, 2020 (Press release, Dr Reddy’s, OCT 28, 2020, View Source [SID1234569287]). The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS).

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*Q2 FY21 YoY sales growth of 20% adjusted for proprietary products out-licensing income in previous year

Commenting on the results, Co-chairman & MD, G V Prasad said, "We are pleased to report continued growth across all the markets and improved productivity which is reflected in the healthy EBITDA margin and RoCE. Our research teams are working on several potential remedies for COVID in addition to the already launched products."

All amounts in millions, except EPS. All US dollar amounts based on convenience translation rate of I USD = Rs. 73.54

* Includes income from Investments

All amounts in millions, except EPS. All US dollar amounts based on convenience translation rate of I USD = Rs. 73.54

Cyber Attack Update

On 22nd October 2020, we experienced an information security incident and consequently isolated the impacted IT services. This incident involved a ransom-ware attack. We promptly engaged leading outside cybersecurity experts, launched a comprehensive containment and remediation effort and investigation to address the incident.

As of date, our investigation has not ascertained if any data breaches in the incident pertain to personally identifiable information stored in the Company’s systems.

Recovery and restoration of all applications and data is underway. All critical operations are being enabled in a controlled manner.

COVID-19 Update

We continue our fight against the current pandemic by ensuring health and safety of our employees and business partners by adopting adequate precautionary measures. We continued our operations across plants enabling us to serve our patients across markets.

During the quarter we saw gradual recovery in the market demand across India, Russia and other markets after a low demand in Q1 FY 21, although the demand is yet to fully recover to pre-covid levels.

We launched COVID-19 treatment drugs Avigan (Favipiravir) and Remdesivir. We further strengthened our development pipeline for COVID-19 treatment drugs including the vaccine candidate Sputnik V.

Revenue Analysis

Global Generics (GG)

Revenues from GG segment at Rs. 39.8 billion:

Year-on-year growth of 21% and sequential quarter growth of 14%, were driven primarily on account of new product launches, volume traction in the base business and integration of the acquired business from Wockhardt in India.
North America

Revenues from North America at Rs. 18.3 billion:

Year-on-year growth of 28%, driven by contribution from new products launched, increase in volumes of our base products and aided by a favorable forex rate, which was partially offset by price erosion.
Sequential growth of 6%, on account of volume traction in the base business and new product launches, offset by adverse forex movement and price erosion.
We launched nine new products including Ciprofloxacin & Dexamethasone Otic Suspension, Fulvestrant Injection, OTC Diclofenac and OTC Olapatadine.
We filed two new ANDAs during the quarter. As of 30th September 2020, cumulatively 94 generic filings are pending for approval with the USFDA (92 ANDAs and 2 NDAs under 505(b)(2) route). Of the 92 ANDAs, 50 are Para IVs and we believe 26 have ‘First to File’ status.
Europe

Revenues from Europe at Rs. 3.8 billion:

Year-on-year growth of 36% and sequential growth of 6%, primarily on account of new product launches and favorable forex movement.
We also forayed into a new country Austria, beyond our EU5 markets.
India

Revenues from India at Rs. 9.1 billion:

Year-on-year growth of 21% and sequential growth of 46% is primarily on account of revenues from the acquired business of Wockhardt and contribution from new products including the Avigan (Favipiravir) and Remdesivir launched for treatment of Covid-19.
Emerging Markets

Revenues from Emerging Markets at Rs. 8.6 billion. Year-on-year growth of 4%. Sequential growth of 8%:

Revenues from Russia at Rs. 4.0billion. Year-on-year decline of 3% is primarily on account of weakening Ruble. Sequential growth of 22% contributed by increased volumes with a gradual recovery in market demand after Q1 was impacted due to COVID-19.
Revenues from other CIS countries and Romania market at Rs. 2.0 billion. Year-on-year growth of 19% and sequential growth of 43% driven by both base business and new product launches.
Revenues from Rest of World (RoW) territories at Rs. 2.7billion. Year-on-year growth of 7% driven by new products. Sequential decline of 20% is on account of lower volumes sold for existing products.
Pharmaceutical Services and Active Ingredients (PSAI)

Revenues from PSAI at Rs. 8.5 billion:

Year-on-year growth of 20% driven by new products, growth in the services business and favorable forex rate.
Sequential decline of 1% on account of lower volumes of certain products, partially offset by new products and growth in the services business.
During the quarter we filed DMF for one product in the US.
Proprietary Products (PP) & Others

Revenues from PP & Others at Rs. 622 million:

Year-on-year decline of 92%. Q2 FY 20 was higher due to income from sale of the US and select territory rights for two of Neurology franchise products pertaining to PP.
Sequential growth of 14%.
Income Statement Highlights:

Gross profit margin at 53.9%:
Decline of 360 bps over previous year, which was impacted due to inclusion of revenue from sale of Neurology franchise products in the previous year, partially offset by improvement in productivity and favorable forex rates. Sequentially the margin reduced by 210 bps, primarily on account of lower export incentives, adverse forex and product mix.
Gross profit margin for GG and PSAI business segments are at 59.4% and 26.8% respectively.
SG&A expenses at Rs. 13.1 billion, reduced by 1% year-on-year due to certain one-off expenses last year, which was partly offset by incremental costs post the integration of the acquired divisions from Wockhardt in this year. Sequentially it increased by 3% primarily due to the integration of the acquired divisions from Wockhardt and pickup in sales & marketing activities post un-lock.
R&D expenses at Rs. 4.4 billion. As % to revenues these are: Q2 FY21: 8.9% | Q1 FY 21: 9.0% | Q2 FY20: 7.6%. Our focus continues on building a healthy pipeline of new products across our markets including development of products pertaining to COVID-19 treatment.
Other operating income at Rs. 149 million compared to Rs. 135 million in Q2 FY20.
Net Finance income at Rs. 237 million compared to Rs. 231 million in Q2 FY20.
Profit before Tax at Rs. 8.6 billion, increased by 12% year-on-year and reduced by 2% sequentially.
Profit after Tax at Rs. 7.6 billion. The effective tax rate is ~ 11.6% for the quarter, which is lower primarily due to recognition of deferred tax assets for one of our subsidiaries.
Diluted earnings per share is at Rs. 45.83.
Other Highlights:

EBITDA at Rs. 12.7 billion and the EBITDA margin is 25.9%.
Capital expenditure is at Rs. 2.5 billion.
Free cash-flow generated during the quarter stood at Rs. 6.0 billion.
Net debt of the company is at Rs. 1.4 billion as on September 30, 2020. Consequently, net debt to equity ratio is 0.01.
Earnings Call Details (05:30 pm IST, 08:00 am EDT, Oct 28, 2020)

The management of the Company will host an earnings call to discuss the Company’s financial performance and answer any questions from the participants.

No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call.

Play Back: The play back will be available after the earnings call, till November 4th, 2020. For play back dial in phone No: +91 22 7194 5757 | +91 22 6663 5757, and Playback Code is 97779.

Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com

On October 28, 2020 NRG Oncology reported that Researchers involved in the phase II RTOG 0526 trial studying low dose rate (LDR) prostate brachytherapy (BT) following local recurrence (LR) after external beam radiotherapy (EBRT) for patients with low-to-intermediate risk prostate cancer reported late Grade 3 gastrointestinal and genitourinary adverse events (AEs) occurring in 14% of trial participants (Press release, NRG Oncology, OCT 28, 2020, View Source [SID1234569286]). Results from a follow up of a minimum of 5-years of patients that participated on the trial suggest that 5-year freedom from biochemical failure (BF) stands at 68% and remains steady with the 10-year rate being 54%. This report was presented at the virtual edition of the American Society for Radiation Oncology’s (ASTRO) Annual Meeting in October 2020.

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"Low and intermediate risk prostate cancer typically recurs locally in 10-30% of men following EBRT. Prior to this study, most data available on salvage brachytherapy in prostate cancer was retrospective and stemmed from single-center studies with multiple variables regarding doses and technique. With such a high recurrence rate afflicting this patient population, it was crucial to expand data on this modality in a multicenter study with defined methods," stated Juanita M. Crook, MD, FRCPC, of the Cancer Centre for the Southern Interior at the University of British Columbia and lead author of the NRG-RTOG 0526 abstract.

In order to be eligible for NRG-RTOG 0526, prostate cancer patients needed to have low or intermediate risk prostate cancer prior to EBRT in addition to having a proven LR thirty or more months following their EBRT. 92 patients were analyzed for the study and followed for a minimum of 5 years after their salvage brachytherapy. Participants on NRG-RTOG 0526 received a minimum dose of 140 Gy with I-125 or 120 G with Pd-103. Researchers followed clinical outcomes at 5 year or greater including objectives such as disease-specific survival, overall survival, time to biochemical failure, and patterns of recurrence.

As initially reported, 14% of participants experienced late Grade 3 gastrointestinal and genitourinary AEs at a median follow up of 6.9 years. The median prior EBRT dose was 74 Gy and the median interval since EBRT was received was 85 months. Androgen deprivation therapy was combined with salvage BT in only 16% of cases. The 5-year freedom from biochemical failure rate was 68%, which is comparable to other salvage modalities. At 10 years, the biochemical failure rate was 54% (95% CI: 43-66). Disease-free survival at 5 years was 61% but fell to 33% at 10 years. Nineteen patients died. Four patients had local recurrence (5% at 10 years), and 14 had distant failure with a 10-year rate of 19% (95% CI:10-29). None of the clinical or treatment factors was significantly associated with participants’ overall survival, disease-free survival, or local, distant, or biochemical failure.

This project was supported by grants UG1CA189867 (NRG Oncology NCORP), U10CA180868 (NRG Oncology Operations), U10CA180822 (NRG Oncology SDMC) from the National Cancer Institute (NCI), part of the National Institutes of Health.

Citation

Crook JM, Rodgers JP, Pisansky TM, Trabulsi EJ, Amin MB, Bice, Jr. WS, Morton GC, Pervez N, Vigneault E, Catton CN, Michalski JM, Roach, III M, Beyer DC, Rossi PJ, Horwitz EM, Donavanik V, Sandler HM. (2020, October). Salvage Low Dose Rate Prostate Brachytherapy: Clinical Outcomes of a Phase II Trial for Local Recurrence after External Beam Radiotherapy (NRG/RTOG -0526). Paper presented at the annual meeting of the American Society for Radiation Oncology. Virtual meeting platform.

On October 28, 2020 NRG Oncology reported A genetic analysis of non-small cell lung cancer (NSCLC) patients on the phase III RTOG 0617 clinical trial assessing radiation dose discovered that high dose radiation therapy is associated with shorter survival times among patients with a radiation-sensitive genotype in DNA repair pathway (Press release, NRG Oncology, OCT 28, 2020, View Source [SID1234569285]). These findings were presented at the virtual edition of the American Society for Radiation Oncology’s (ASTRO) Annual Meeting in October 2020.

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The NRG-RTOG 0617 analysis reviewed blood and DNA samples from the 321 eligible patients who participated in the study. The primary focus was to externally validate blood cell ERCC1 and ERCC2 genetic signatures as a radiosensitivity biomarker for tumor and normal tissues. Previous findings in stage I and IV NSCLC patients indicate that high dose radiotherapy typically leads to improved survival, better tumor control, and better survival in inoperable NSCLC.

"Single nucleotide polymorphisms (SNPs) signature in DNA repair pathway and its interaction with radiation dose could provide personalized radiation prescriptions to patients depending on their genotypic signature, and this could improve survival outcomes," stated Feng-Ming (Spring) Kong, MD, PhD, FACR, FASTRO of the Clinical Oncology Center, the University of Hong Kong – Shenzhen Hospital; and Li Ka Shing Faculty of Medicine, The University of Hong Kong; Department of Radiation Oncology, Case Western Reserve University, and the lead author of the NRG-RTOG 0617 abstract. "Previously, the data that indicated the potential for ERCC1 and ERCC2 genes to be biomarkers for normal and tumor tissue in NSCLC patients had only been performed in single institution trials. It was imperative to validate these findings in a multi-institutional clinical setting."

Patients who participated on the initial NRG-RTOG 0617 trial were randomly assigned to receive either standard radiation (RT) dose (60 Gy) or high RT dose (74 Gy). Among the 321 eligible patients, 275 patients had both ERCC1 and ERCC2 SPNs signatures conducted. The median follow up time for the trial was 68 months. Of the 163 patients assigned to 60 Gy arm, 67 patients carried the resistant genotype signature and had a median survival time (MST) of 22 months compared to the radio-sensitive genotype’s MST of 31 months (P=0.076, HR= 1.4 [95%CI: 0.96-2.01]). There were 112 patients assigned to the 74 Gy arm and 36 of these patients were carrying the resistant genotype signature and had a MST of 31 months (95% CI, 20-52). This was significantly better than the MST of 20 months for the sensitive signature type patients on the 74 Gy arm (p=0.025, HR= 0.59 [95% CI: 0.37-0.94]). These results confirm the hypothesis that patients with the radio-sensitive genotype have better survival with 60 Gy, whereas patients with the radiation-resistant genotype fair better in the 74 Gy arm with regard to survival. Interestingly, 63% patients from this study were classified as radiation sensitive according to this signature, and this at least partially explains the result of better survival in patients in the 60 Gy arm.

These findings could benefit from further prospective validation through a study with a larger sample size, and suggest the need of future study on personalized radiation prescription in treating patients with lung cancer.

This project was supported by grants U10CA180868 (NRG Oncology Operations), U10CA180822 (NRG Oncology SDMC), U24CA196067 (NRG Biospecimen Bank) from the National Cancer Institute (NCI), part of the National Institutes of Health, and Eli Lilly, in parts by R01CA142820 and KQTD20180411185028798.

Citation

Kong FMS, Jin JY, Hu C, Wang W, Bogart J, Garces YI, Narayan S, Robinson CG, Kavadi VS, Rothman J, Koprowski CD, Gore E, Welsh J, Gaur R, MacRae RM, Cannon G, Machtay M, Bradley JD, Lu B. (2020, October). RTOG0617 to externally validate blood cell ERCC1/2 genotypic signature as a radiosensitivity biomarker for both tumor and normal tissue for individualized dose prescription. Paper presented at the annual meeting of the American Society for Radiation Oncology. Virtual meeting platform.

On October 28, 2020 XOMA Corporation (Nasdaq: XOMA) reported NIS793, an anti-TGFb monoclonal antibody licensed from XOMA, has advanced to the Phase 2 development stage, triggering a $25 million milestone payment from Novartis (Press release, Xoma, OCT 28, 2020, View Source [SID1234569228]). The Phase 2 trial (NCT04390763) is designed to assess the efficacy and safety of NIS793 in first-line metastatic pancreatic ductal adenocarcinoma (mPDAC).

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"We applaud Novartis for initiating its first Phase 2 study with NIS793 to focus on patients who have one of the highest needs for new treatment options – pancreatic cancer. We are grateful to the patients and their families who have agreed to participate in the NIS793 clinical trials," stated Jim Neal, Chief Executive Officer of XOMA. "This milestone payment further strengthens XOMA’s financial resources as we pursue our royalty aggregation strategy and reduces our Novartis debt obligation to less than $10 million. Importantly, this marks a meaningful clinical advancement of this important asset in our overall portfolio of potential milestones and royalties."

More information about the NIS793 Phase 2 clinical study, officially titled "A Phase II, Open Label, Randomized, Parallel Arm Study of NIS793 (With and Without Spartalizumab) in Combination With SOC Chemotherapy Gemcitabine/Nab-paclitaxel, and Gemcitabine/Nab-paclitaxel Alone in First-line Metastatic Pancreatic Ductal Adenocarcinoma (mPDAC)," can be found at ClinicalTrials.gov.

As specified under the terms the agreements between XOMA and Novartis, approximately 30 percent of the NIS793 milestone will be applied as a partial payment towards XOMA’s debt obligation to Novartis, and the remaining balance will be paid in cash to XOMA.

Under the terms of the 2015 anti-TGFb development and commercialization agreement with Novartis, XOMA has the potential to earn up to $445 million in additional milestone payments. Upon receipt of regulatory approval to commercialize NIS793, XOMA will receive tiered royalties on any net product sales that range from the mid-single digits to the low double digits.

NIS793 is an investigational compound. Efficacy and safety have not been established. There is no guarantee that NIS793 will become commercially available.

On October 28, 2020 PeproMene Bio Inc. reported it has submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) to study a novel chimeric antigen receptor (CAR) T cell therapy, PMB-101, the first CAR T cell therapy targeting the B cell-activating factor receptor (BAFF-R) on cancerous cells, for the potential treatment of refractory or relapsed B cell acute lymphoblastic leukemia (r/r B-ALL) (Press release, PeproMene Bio, OCT 28, 2020, View Source [SID1234569274]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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City of Hope, a world-renowned independent research and treatment center for cancer, diabetes and other life-threatening diseases, has licensed intellectual property relating to PMB-101 under a Licensing and Collaboration agreement with PeproMene. City of Hope will also conduct the proposed first in-human, Phase 1 clinical trial.

The proposed trial is a single-center, open-label trial and will examine the safety and preliminary efficacy of BAFF-R-CAR T cells in cancer patients with r/r/ B-ALL who are ineligible for or have failed CD19-targeted immunotherapy in the U.S.

PMB-101 is a novel CAR T cell therapy which has shown synergistic activity in CD-19 resistant or relapsed animal models in preclinical trials. Animal models with CD19 therapy-resistant human-tumors (including Burkitt, mantel cell, and other non-Hodgkin’s lymphoma subtypes and acute lymphoblastic leukemia) received BAFF-R CAR T therapy. Remarkable tumor regression and prolonged survival were observed after treatment with these CAR T cells. In animal models with human Burkitt lymphoma, BAFF-R CAR T therapy achieved complete tumor regression with 100% long-term survival. The research was published in Science Translational Medicine.

"City of Hope is excited to leverage the numerous and very promising pre-clinical model outcomes of our investigational CAR-T project and to explore its effect in cancer patients for whom few treatments are currently available," said Larry W. Kwak, M.D., Ph.D., vice president and deputy director of City of Hope’s comprehensive cancer center, who along with Hong Qin, Ph.D., are inventors on the licensed intellectual property and Scientific Advisory Board members of PeproMene.

Bryan HW Kim, CEO of PeproMene added: "We are very pleased to announce this important milestone after only three years of the company’s existence; we are grateful to the scientific founders for advancing our project and to our shareholders for their support. We look forward to collaborating closely with leading clinical investigators at City of Hope and the FDA to validate the safety of PMB-101 in humans in a controlled clinical setting."

About PeproMene’s PMB-101
BAFF (B cell activating factor), a soluble cytokine expressed by B cells, is known for its proliferation and differentiation. In particular, BAFF-R (B cell activating factor receptor) is an excellent potential target for B-cell cancers not only because of its specificity to BAFF, but also for its expression level by lympho-proliferative as well as leukemia-proliferative disorders. Successful discovery of anti-BAFF-R humanized monoclonal antibodies (humAbs) C55 and C90 demonstrate high binding affinity to various Non-Hodgkin’s Lymphomas (NHLs). The PeproMene BAFF-R CAR-T was constructed based on the single-chain fragment variable (scFv) antibodies using 2nd generation signaling domains. Research has found that BAFF-R CAR-T cells kill lymphomas and leukemias in vitro and kill established lymphomas as well as leukemias in vivo. During the completion of the IND enabling studies, the company’s scientific and medical founders made key publications:

"Antitumor efficacy of BAFF-R targeting CAR T cells manufactured under clinic-ready conditions" (25. May 2020: View Source

and

"CAR-T cells targeting BAFF-R can overcome antigen loss in B cell malignancies" (Sep 2019: View Source)