On May 13, 2020 Gilead Sciences, Inc. (Nasdaq: GILD) and Kite, a Gilead Company, reported the acceptance of nine abstracts, including three oral presentations across its immuno-oncology research and development program, during the 2020 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting being held from May 29-31, 2020 (Press release, Gilead Sciences, MAY 13, 2020, View Source [SID1234557932]). Data at ASCO (Free ASCO Whitepaper) include abstracts highlighting Kite’s leading cell therapy portfolio and magrolimab, an investigational anti-CD47 monoclonal antibody developed by Forty Seven, Inc., which was recently acquired by Gilead.

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"Gilead has a deep commitment to innovation in oncology. Our colleagues at Kite are driving advances in cell therapy, and our growing immuno-oncology portfolio at Gilead now includes magrolimab, which has the potential to bring significant benefit to patients with certain hematologic malignancies," said Merdad Parsey, MD, PhD, Chief Medical Officer, Gilead Sciences. "The presentations at ASCO (Free ASCO Whitepaper) underscore the strength of our scientific approach in immuno-oncology, and we look forward to sharing this latest research."

Continuing Scientific Advances in Hematologic Malignancies

Updated results from a Phase 1b study of magrolimab in patients with myelodysplactic syndrome (MDS) and acute myeloid leukemia (AML), including highly under-served AML patients with P53 mutations, will be the focus of an oral presentation (Abstract #7507). Magrolimab has the potential to be a first-in-class anti-CD47 antibody based on its mechanism of action and emerging clinical data.

Additionally, new data building on Kite’s leadership in chimeric antigen receptor (CAR) T cell therapy include an interim analysis from the Phase 2 ZUMA-5 study evaluating an investigational use of Yescarta (axicabtagene ciloleucel) in patients with relapsed or refractory indolent non-Hodgkin lymphoma (iNHL). These data will also be featured in an oral presentation (Abstract #8008). Yescarta has been granted Breakthrough Therapy Designation (BTD) by the U.S. Food and Drug Administration (FDA) for relapsed or refractory follicular lymphoma or marginal zone lymphoma (two subtypes of iNHL) after at least two prior systemic therapies.

"At Kite, we are committed to advancing science to bring potentially curative therapies to patients with hematologic malignancies and other cancers," said Ken Takeshita, MD, Kite’s Global Head of Clinical Development. "Our data at ASCO (Free ASCO Whitepaper) represent important progress as we work toward this goal."

Early Progress with Cell Therapy in Solid Tumors

Data focused on T cell receptor (TCR) technology, a promising approach to solid tumor-directed cell therapy under investigation, also will be featured in an oral presentation. Results from a Phase 1 clinical trial conducted by the National Cancer Institute (NCI), as part of a Cooperative Research and Development Agreement (CRADA) between the Experimental Transplantation and Immunology Branch (ETIB) of the NCI and Kite, describe the safety and clinical activity of E7 TCR T cells in patients with highly refractory metastatic human papillomavirus (HPV)-16 cancers, such as vulvar, anal, head and neck, and cervical cancer (Abstract #101). Additionally, Kite has an IND for its own candidate, KITE-439, based on the NCI E7 TCR, and is currently conducting a Phase 1 study of investigational KITE-439 in patients with relapsed or refractory HPV-16-positive cancers (Abstract #TPS3149).

Accepted abstracts are as follows:

Area of Focus and
Presentation Number

Abstract Title

Presentations

MDS and AML
Abstract #7507 (Oral)*

Tolerability and Efficacy of the First-in-Class Anti-CD47 Antibody Magrolimab Combined with Azacitidine in MDS and AML Patients: Phase 1b Results

Non-Hodgkin Lymphoma
Abstract #8008 (Oral)*

Interim Analysis of ZUMA-5: A Phase 2 Study of Axicabtagene Ciloleucel (Axi-Cel) in Patients with Relapsed/Refractory Indolent Non-Hodgkin Lymphoma (R/R iNHL)

Solid Tumors
Abstract #101 (Oral)*
(NCI study: NCT02858310)

Safety and Clinical Activity of Gene-engineered T-Cell Therapy Targeting HPV-16 E7 for Epithelial Cancers

Large B-cell Lymphoma
Abstract #8012 (Poster 345)*

Retreatment of Patients with Refractory Large B-cell Lymphoma with Axicabtagene Ciloleucel (Axi-Cel) in ZUMA-1

Mantle Cell Lymphoma
Abstract #3023 (Poster 87)*

Product Characteristics and Pharmacological Profile of KTE-X19 in Patients With Relapsed/Refractory Mantle Cell Lymphoma (MCL) in the Phase 2 Registrational ZUMA-2 Trial

Large B-cell Lymphoma
Abstract #3022 (Poster 86)*

Tumor Microenvironment Associated With Increased Pretreatment Density of Activated PD-1+ LAG-3+/− TIM-3− CD8+ T Cells Facilitates Clinical Response to Axicabtagene Ciloleucel (Axi-Cel) in Patients with Large B-cell Lymphoma

Trials-In-Progress

Solid Tumors
Abstract #TPS3149 (Poster 213)*

KITE-439: A Phase 1 Study of HPV16 E7 T Cell Receptor-Engineered T Cells in Patients with Relapsed/Refractory HPV16-Positive Cancers

Online Publication

Lymphoma
(Online only)

Health-Related Quality of Life Burden in Patients with Relapsed/Refractory Diffuse Large B-cell Lymphoma and Non-Hodgkin’s Lymphoma

MDS and AML
(Online only)

Pharmacokinetic-Pharamcodynamic Analysis and Receptor Occupancy Data to Support Every Other Week Maintenance Dosing of Magrolimab in Combination with Azacitidine in MDS/AML Patients

*Presentation will be made available on-demand beginning Friday, May 29 at 8:00 am ET.

For more information, including a complete list of abstract titles at the meeting, please visit: View Source

Yescarta was the first CAR T cell therapy to be approved by the U.S. Food and Drug Administration (FDA) for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (DLBCL) not otherwise specified, primary mediastinal large B-cell lymphoma, and high grade B-cell lymphoma and DLBCL arising from follicular lymphoma. Yescarta is not indicated for the treatment of patients with primary central nervous system lymphoma. The Yescarta U.S. Prescribing Information has a BOXED WARNING for the risks of cytokine release syndrome (CRS) and neurologic toxicities, and Yescarta is approved with a risk evaluation and mitigation strategy (REMS) due to these risks; see below for Important Safety Information.

The use of Yescarta in relapsed or refractory iNHL is investigational and not approved globally. It’s efficacy and safety have not been established in this indication. Magrolimab, KTE-X19 and KITE-439 are investigational and not approved anywhere globally. Their efficacy and safety have not been established. More information about clinical trials with magrolimab, KTE-X19 and KITE-439 is available at www.clinicaltrials.gov.

U.S. Important Safety Information for Yescarta

BOXED WARNING: CYTOKINE RELEASE SYNDROME AND NEUROLOGIC TOXICITIES

Cytokine Release Syndrome (CRS), including fatal or life-threatening reactions, occurred in patients receiving Yescarta. Do not administer Yescarta to patients with active infection or inflammatory disorders. Treat severe or life-threatening CRS with tocilizumab or tocilizumab and corticosteroids.
Neurologic toxicities, including fatal or life-threatening reactions, occurred in patients receiving Yescarta, including concurrently with CRS or after CRS resolution. Monitor for neurologic toxicities after treatment with Yescarta. Provide supportive care and/or corticosteroids as needed.
Yescarta is available only through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS) called the Yescarta REMS.
CYTOKINE RELEASE SYNDROME (CRS): CRS occurred in 94% of patients, including 13% with ≥ Grade 3. Among patients who died after receiving Yescarta, 4 had ongoing CRS at death. The median time to onset was 2 days (range: 1-12 days) and median duration was 7 days (range: 2-58 days). Key manifestations include fever (78%), hypotension (41%), tachycardia (28%), hypoxia (22%), and chills (20%). Serious events that may be associated with CRS include cardiac arrhythmias (including atrial fibrillation and ventricular tachycardia), cardiac arrest, cardiac failure, renal insufficiency, capillary leak syndrome, hypotension, hypoxia, and hemophagocytic lymphohistiocytosis/macrophage activation syndrome. Ensure that 2 doses of tocilizumab are available prior to infusion of Yescarta. Monitor patients at least daily for 7 days at the certified healthcare facility following infusion for signs and symptoms of CRS. Monitor patients for signs or symptoms of CRS for 4 weeks after infusion. Counsel patients to seek immediate medical attention should signs or symptoms of CRS occur at any time. At the first sign of CRS, institute treatment with supportive care, tocilizumab or tocilizumab and corticosteroids as indicated.

NEUROLOGIC TOXICITIES: Neurologic toxicities occurred in 87% of patients. Ninety-eight percent of all neurologic toxicities occurred within the first 8 weeks, with a median time to onset of 4 days (range: 1-43 days) and a median duration of 17 days. Grade 3 or higher occurred in 31% of patients. The most common neurologic toxicities included encephalopathy (57%), headache (44%), tremor (31%), dizziness (21%), aphasia (18%), delirium (17%), insomnia (9%) and anxiety (9%). Prolonged encephalopathy lasting up to 173 days was noted. Serious events including leukoencephalopathy and seizures occurred with Yescarta. Fatal and serious cases of cerebral edema have occurred in patients treated with Yescarta. Monitor patients at least daily for 7 days at the certified healthcare facility following infusion for signs and symptoms of neurologic toxicities. Monitor patients for signs or symptoms of neurologic toxicities for 4 weeks after infusion and treat promptly.

YESCARTA REMS: Because of the risk of CRS and neurologic toxicities, Yescarta is available only through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS) called the Yescarta REMS. The required components of the Yescarta REMS are: Healthcare facilities that dispense and administer Yescarta must be enrolled and comply with the REMS requirements. Certified healthcare facilities must have on-site, immediate access to tocilizumab, and ensure that a minimum of 2 doses of tocilizumab are available for each patient for infusion within 2 hours after Yescarta infusion, if needed for treatment of CRS. Certified healthcare facilities must ensure that healthcare providers who prescribe, dispense or administer Yescarta are trained about the management of CRS and neurologic toxicities. Further information is available at www.YESCARTAREMS.com or 1-844-454-KITE (5483).

HYPERSENSITIVITY REACTIONS: Allergic reactions may occur. Serious hypersensitivity reactions including anaphylaxis may be due to dimethyl sulfoxide (DMSO) or residual gentamicin in Yescarta.

SERIOUS INFECTIONS: Severe or life-threatening infections occurred. Infections (all grades) occurred in 38% of patients, and in 23% with ≥ Grade 3. Grade 3 or higher infections with an unspecified pathogen occurred in 16% of patients, bacterial infections in 9%, and viral infections in 4%. Yescarta should not be administered to patients with clinically significant active systemic infections. Monitor patients for signs and symptoms of infection before and after Yescarta infusion and treat appropriately. Administer prophylactic anti-microbials according to local guidelines. Febrile neutropenia was observed in 36% of patients and may be concurrent with CRS. In the event of febrile neutropenia, evaluate for infection and manage with broad spectrum antibiotics, fluids and other supportive care as medically indicated. Hepatitis B virus (HBV) reactivation, in some cases resulting in fulminant hepatitis, hepatic failure and death, can occur in patients treated with drugs directed against B cells. Perform screening for HBV, HCV, and HIV in accordance with clinical guidelines before collection of cells for manufacturing.

PROLONGED CYTOPENIAS: Patients may exhibit cytopenias for several weeks following lymphodepleting chemotherapy and Yescarta infusion. Grade 3 or higher cytopenias not resolved by Day 30 following Yescarta infusion occurred in 28% of patients and included thrombocytopenia (18%), neutropenia (15%), and anemia (3%). Monitor blood counts after Yescarta infusion.

HYPOGAMMAGLOBULINEMIA: B-cell aplasia and hypogammaglobulinemia can occur. Hypogammaglobulinemia occurred in 15% of patients. Monitor immunoglobulin levels after treatment and manage using infection precautions, antibiotic prophylaxis and immunoglobulin replacement. The safety of immunization with live viral vaccines during or following Yescarta treatment has not been studied. Vaccination with live virus vaccines is not recommended for at least 6 weeks prior to the start of lymphodepleting chemotherapy, during Yescarta treatment, and until immune recovery following treatment.

SECONDARY MALIGNANCIES: Patients may develop secondary malignancies. Monitor life-long for secondary malignancies. In the event that a secondary malignancy occurs, contact Kite at 1-844-454-KITE (5483) to obtain instructions on patient samples to collect for testing.

EFFECTS ON ABILITY TO DRIVE AND USE MACHINES: Due to the potential for neurologic events, including altered mental status or seizures, patients are at risk for altered or decreased consciousness or coordination in the 8 weeks following Yescarta infusion. Advise patients to refrain from driving and engaging in hazardous occupations or activities, such as operating heavy or potentially dangerous machinery, during this initial period.

ADVERSE REACTIONS: The most common adverse reactions (incidence ≥ 20%) include CRS, fever, hypotension, encephalopathy, tachycardia, fatigue, headache, decreased appetite, chills, diarrhea, febrile neutropenia, infections-pathogen unspecified, nausea, hypoxia, tremor, cough, vomiting, dizziness, constipation, and cardiac arrhythmias.

On May 13, 2020 DermTech, Inc. (NASDAQ: DMTK) ("DermTech" or the "Company"), a leader in precision dermatology enabled by a non-invasive skin genomics platform, reported business and unaudited financial results for the quarter ended March 31, 2020 and also provided a corporate update (Press release, DermTech International, MAY 13, 2020, View Source [SID1234557931]).

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First Quarter 2020 Financial Highlights

Billable sample volume of 5,811 was a 149% increase over the 2,338 recorded for the first quarter of 2019 and an 18% sequential increase over the fourth quarter of 2019.
Assay revenue of $0.8 million was a 238% increase from the first quarter of 2019 and a 60% sequential increase compared to the fourth quarter of 2019.
Contract revenue of $0.8 million was a 111% increase compared to the first quarter of 2019 and a 30% sequential decrease compared to the fourth quarter of 2019.
Cash and cash equivalents were $67.9 million at the end of the quarter.
"We are pleased with how our messaging and user-experience are resonating with clinicians and patients, which is reflected in the strong sample volume and revenue growth we experienced during the first two and a half months of the first quarter, before the initial effects of the coronavirus pandemic. While the coronavirus pandemic has impacted our business near term, our long-term growth prospects remain strong and we believe may be enhanced by the broad movement of healthcare toward telemedicine services," said John Dobak, M.D., chief executive officer of DermTech. "We recently introduced a telemedicine solution for remote, clinician-guided sample collection by the patient for our non-invasive genomic melanoma rule-out test (the DermTech Pigmented Lesion Assay or DermTech PLA). While we do not expect this telemedicine option to immediately make up for testing volume lost due to stay-at-home orders, we believe this is an important long-term business strategy. By informing dermatologists of the option to serve patients through remote, clinician-guided, sample collection, we leverage the ease of use of our platform and create a new driver for potential business growth."

Corporate Update on COVID-19 Effects and Responses

We have initiated a broad COVID-19 response to drive education and usage despite reduced patient office visits and in-person sales calls. Although most dermatology offices are currently closed, our lab is fully operational, and we are receiving and analyzing samples. In response to the closure of dermatology offices, our sales team has been utilizing virtual sales calls and client education, and we have introduced a telemedicine option for remote, clinician-guided sample collection by the patient for the DermTech PLA test. We have implemented additional safety measures and social distancing within our commercial laboratory operations and have transitioned our administrative functions to working remotely. Although it is still too early to estimate the speed or extent of a recovery, some dermatology practices are reopening, particularly in states that are beginning to relax stay-at-home orders. We expect these reopened dermatology practices may focus initially on essential and time-sensitive dermatology care needs, such as skin cancer assessment, though it is not clear how this will impact our sample volumes. Other activities and effects related to the COVID-19 crisis are detailed below.

We estimate that the various stay-at-home orders implemented throughout the country beginning in March reduced our overall first quarter billable sample volume by approximately 200-300 tests.
April 2020 billable sample volume is down by approximately 80%, commensurate with the closure of dermatology offices, compared to the average monthly billable sample volume for January and February 2020 prior to the beginning of the stay-at-home orders. April 2020 billable sample volume decreased 56% compared to April 2019. Please note that while we are providing this additional information regarding April and first quarter 2020 volume impacts due to the pandemic in this update, we do not intend to continue to provide this type of data going forward.
In April, we announced that clinicians can choose to supervise remote sample collection by patients for the DermTech PLA. If, during a telemedicine visit, a clinician observes a pigmented lesion suspicious of melanoma, the clinician can request that we send the DermTech PLA collection kit to the patient’s home for a clinician-guided remote collection. We believe that our announcement of the availability of this teledermatology option comes at a critical time for patients and physicians, eliminating the need for unnecessary office visits during the COVID-19 pandemic.
Results from an institutional review board approved pilot study of seven cases undergoing clinician-guided remote collection were published in the peer-reviewed dermatology journal SKIN in May 2020. In addition, a larger ongoing internal validation effort has enrolled approximately 100 patients. Findings demonstrate that clinician-guided remote collection by patients is effective and equivalent to in-office collection, in terms of providing sufficient genomic material to generate a DermTech PLA test result.
We have initiated the development of a smartphone teledermatology app that enables the patient to take a picture of the suspicious lesion and securely forward it to a clinician for review. The smartphone teledermatology app also includes functionality to enable the clinician to efficiently order the DermTech PLA collection kits to be sent to patients’ homes for clinician-guided remote collection. We have also initiated a packaging redesign to simplify the sample collection process and clarify instructions for clinician-guided remote sample collection by the patient.
In April, we launched our DermTech PLA educational webinar series, which will occur periodically each month, and to date is being increasingly attended by practicing clinicians. In addition, our solution has been highlighted in several virtual dermatology educational meetings as a core solution for managing pigmented lesions remotely.
The launch of our second-generation product, the PLA plus, has been delayed until the resumption of normal office visits by dermatologists and the normalization of review cycle times by accreditation authorities. Our goal is to have this test available in the second half of the year. The PLA plus will replace our existing Nevome product.
We are continuing sales force recruiting and have several seasoned sales representatives slated to join DermTech in the coming quarters. We expect to have a sales force of 40-50 personnel in place by the end of 2020, with some incremental hires during 2021. The majority of the costs associated with these sales force additions in 2020 are now likely to occur in the second half of the year due to COVID-19.
We have not furloughed or terminated any employees as a result of the COVID-19 related slow down, but additional increases in headcount and spending associated with higher sample volumes and improving internal capabilities will be delayed until the recovery from the pandemic can be better predicted. We expect to continue our originally planned expenditures for research and development and for infrastructure enhancements, including capital equipment.
First Quarter 2020 Review

In January 2020, the Company contracted with a regional health plan to make the DermTech PLA for the early detection of melanoma available to the regional health plan’s commercial and Medicare Advantage membership.
In February 2020, the Company entered into a lease amendment to expand the size of its existing headquarters by approximately 13,300 square feet from approximately 15,355 square feet to approximately 28,655 square feet. The Company plans to use this additional lease space to expand lab operations for higher sample volume and efficiency, and to support the growth of all functions during the scale-up process.
On March 4, 2020, the Company closed a private placement resulting in aggregate gross proceeds to the Company of $65.0 million, with participation from leading healthcare-focused investors and mutual funds, along with strong support from existing stockholders.
In March 2020, the Company announced that the Journal of Drugs and Dermatology published the results of a large registry study confirming the clinical utility of the DermTech PLA. The study also confirmed the value of the Company’s adhesive patch by demonstrating that community-based clinicians using the DermTech PLA were able to reduce unnecessary biopsies by over 90%, to lower healthcare costs and rule out melanoma via a genomics approach that elevates pigmented lesion management beyond what the eye can see.
In the first quarter of 2020, the Company began receiving regular reimbursement payments from Noridian, our local Medicare Administrative Contractor, at the rate of $760, less 2% for sequestration. In addition, the Company began receiving payments from commercial payors under our new CPT code 0089U. While payments from commercial payors remain inconsistent, they have improved over prior quarters, specifically for those commercial payors that have Medicare Advantage plans.
TRUST study enrollment exceeded 50% prior to COVID-19 related stay-at-home orders. The TRUST study is the first of its kind for the Company to provide repeat clinical assessments and genomic testing on pigmented lesions suspicious for melanoma that were initially tested negative with the DermTech PLA. The Company will continue to enroll this study as patients begin to return for in-office visits, though the timeline to completion is currently unclear.
First Quarter 2020 Financial Results

Assay revenue increased 238% to $0.8 million for the three months ended March 31, 2020, compared to $0.2 million for the same period of 2019. Assay revenue for the three months ended March 31, 2020 increased due to higher billable sample volume and revenue recognition of Medicare samples related to the final local coverage determination effective February 10, 2020, compared to the same period of 2019. Contract revenue increased 111% to $0.8 million for the three months ended March 31, 2020, compared to $0.4 million for the same period of 2019. Contract revenue can be highly variable as it is dependent on the pharmaceutical customers’ clinical trial progress, which can be difficult to forecast due to variability of patient enrollment, drug safety and efficacy and other factors. Total revenues increased 161% to $1.6 million for the three months ended March 31, 2020, compared to $0.6 million for the same period in 2019.

Gross margin for the three months ended March 31, 2020 was 23%, compared to -6% for the same period of 2019. The increase in gross margin was largely driven by the increase in the Company’s contract revenue during the three months ended March 31, 2020. Assay gross margin for the three months ended March 31, 2020 was -46%.

Sales and marketing expense increased 241% to $2.9 million for the three months ended March 31, 2020, compared to $0.9 million for the same period of 2019. The increase was primarily attributable to sales force expansion to drive the adoption of the DermTech PLA and additional marketing investment to increase awareness of the DermTech PLA as a non-invasive genomic based diagnostic for melanoma.

Research and development expense increased 57% to $0.9 million for the three months ended March 31, 2020, compared to $0.6 million for the same period of 2019. The increase was primarily attributable to higher compensation and recruiting costs related to expanding the research and development team as well as increased laboratory supplies.

General and administrative expense increased 130% to $3.5 million for the three months ended March 31, 2020, compared to $1.5 million for the same period of 2019. The increase was primarily due to additional public company costs, including higher audit and legal costs related to filings with the Securities and Exchange Commission, higher compensation costs from expanding the general and administrative team and higher insurance costs.

Net loss for the three months ended March 31, 2020 was $7.0 million, which included $1.0 million of non-cash stock-based compensation, compared to a net loss of $5.2 million for the same period of 2019, which included $0.3 million of non-cash stock-based compensation.

Cash and cash equivalents totaled $67.9 million as of March 31, 2020.

On May 13, 2020 Xencor, Inc. (NASDAQ: XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer and autoimmune diseases, reported that Bassil Dahiyat, Ph.D., president and chief executive officer, will participate in a fireside chat at the 2020 RBC Capital Markets Global Healthcare Virtual Conference on Wednesday, May 20, 2020 at 4:15 p.m. ET / 1:15 p.m. PT (Press release, Xencor, MAY 13, 2020, View Source [SID1234557930]).

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A live webcast will be available under "Events & Presentations" in the Investors section of the Company’s website located at www.xencor.com. A replay will be posted on the Xencor website approximately one hour after the live event and will be available for 30 days.

On May 13, 2020 Takeda Pharmaceutical Company Limited (TOKYO: 4502) (NYSE: TAK) ("Takeda") reported financial results for the year ended March 31, 2020 (FY2019) (Press release, Takeda, MAY 13, 2020, View Source [SID1234557929]). As a top 10 global R&D-driven biopharmaceutical company, Takeda is demonstrating its innovation and values in its response to COVID-19 and in positioning itself for long-term success.

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FY2019 reported revenue JPY 3,291 billion, up 57% in first full year following acquisition of Shire.
FY2019 reported operating profit greatly exceeded initial guidance to reach over JPY 100 billion, despite significant non-cash acquisition-related impact.
Core operating profiti increased 110% year on year to JPY 962 billion.
Takeda raised its cost synergy target to $2.3 billion and is on track to deliver on its targets to rapidly pay down debt and continue to divest non-core assets.
Free cash flow up sharply by 156% to JPY 968 billion, enabling Takeda to sustain its well-established dividend policy of 180 yen per share.
Takeda delivered positive reported net profit of JPY 44 billion for FY2019.
Reported operating profit forecast to more than triple to JPY 355 billion in FY2020; Takeda’s growth momentum expected to continue this year and accelerate in the medium term.
Takeda President and Chief Executive Officer Christophe Weber commented:

"Our transformation into a top 10 global biopharmaceutical company accelerated this year and helped us deliver another set of excellent results. We’re fully operating as one Takeda, with growth driven by our five key business areas and a geographic footprint aligned with global market opportunities. Above all, we’re a values-based company that is translating science into life-changing medicines.

"In line with our values, Takeda is taking a lead in meeting the challenges of the COVID-19 outbreak. We initiated a global industry alliance, sharing our world-class Plasma-Derived Therapy R&D, plasma collection and manufacturing capabilities to work collaboratively with other global and regional plasma companies to accelerate development of CoVIg-19, a potential plasma-derived therapy for patients at risk from serious complications of COVID-19. Clinical trials are on track to begin in the summer and if successful, CoVIg-19 has the potential to be one of the earliest approved treatment options."

"Our guidance for FY2020 reflects confidence in Takeda’s growth momentum," Weber continued. "We are positioned for success with our next wave of growth driven by promising product candidates in our R&D pipeline targeted for launch in the next five years, and a potentially transformative early-stage pipeline for longer-term growth."

HIGHLIGHTS

Solid Results as Takeda’s Transformation Accelerated in FY2019

5 key business areas, which represent approx. 79% of total FY2019 revenues, grew 6% year on year pro forma on an underlying basis.
Our leading GI therapy, ENTYVIO, our treatment for rare hereditary angioedema, TAKHZYRO, and our Plasma-Derived Therapies all delivered strong growth. Notable contributors to underlying FY2019 growth include:
ENTYVIO +33% (Gastroenterology);
TAKHZYRO +318% (Rare Diseases);
NINLARO +29% (Oncology);
TRINTELLIX +25% (Neuroscience); and
ALBUMIN/FLEXBUMIN +20% (PDT Immunology).
Our PDT Immunology business area delivered a strong improvement with 9% underlying revenue growth year-on-year.
Revenue growth of Immunoglobulin products accelerated to 17% in Q4 on a pro forma underlying basis compared to the same period last year, driven by successful expansion of subcutaneous IG (SCIG).
During Q4 Takeda received approval for ENTYVIO (Vedolizumab) in China for the treatment of patients with moderate to severe active Ulcerative Colitis (UC) and Crohn’s Disease (CD).
Reported operating profit was over JPY 100 billion, greatly exceeding initial guidance, despite significant non-cash items related to the acquisition of Shire.
Cost synergies and operating expenditure efficiencies contributed to a 110% increase in core operating profit year-on-year to nearly 1 trillion yen (JPY 962 billion), and to a 7 percentage point improvement in underlying core operating margin from 22% last year to 28.9% for FY2019.
Strong free cash flow of nearly 1 trillion yen (JPY 968 billion) from operations and divestitures enabled debt repayment of JPY 701 billion and supported a 180 yen per-share dividend, in line with Takeda’s long-standing dividend policy.
FY2020 Guidance: Growth Momentum Expected to Continue

Takeda has strong growth momentum heading into FY2020 and prospects for accelerated underlying revenue and underlying core operating profit growth and underlying core operating profit margin in the mid-30s over the medium term.

FY2020 reported operating profit is forecast to more than triple as the company will be less impacted by the non-cash acquisition related expenses taken in FY2019. Takeda expects underlying core operating profit growth in the high single digits and underlying core earnings per share growth in the low teens for FY2020. Takeda expects to maintain its dividend to shareholders of 180 yen per share.

Company guidance reflects management’s expectations for continued business momentum across Takeda’s 5 key business areas, underlying revenue growth of our 14 global brands, and accelerated realization of cost synergies. FY2020 guidance also reflects the following key assumptions, including (i) that there will not be an additional 505(b)2 competitor for subcutaneous VELCADE to launch in the U.S. within FY2020; (ii) no impact of any potential further divestitures beyond what has already been disclosed by Takeda; and (iii) management’s current expectations regarding COVID-19.

To date, Takeda has not experienced a material effect on its financial results as a result of the global spread of the novel coronavirus infectious disease COVID-19, despite the various effects on its operations as detailed in Takeda’s Quick Report for the quarter and year ended March 31, 2020, released today. Based on currently available information, Takeda believes that its financial results for FY2020 will not be materially affected by COVID-19 and, accordingly, Takeda’s FY2020 forecast reflects this belief. However, the situation surrounding COVID-19 remains highly fluid, and future COVID-19-related developments in FY2020, including new or additional COVID-19 outbreaks and additional or extended lockdowns, shelter-in-place orders or other government action in major markets, could result in further or more serious disruptions to Takeda’s business, such as slowdowns in demand for Takeda’s products, supply chain related issues or significant delays in its clinical trial programs. These events, if they occur, could result in additional impacts on Takeda’s business, results of operations or financial condition, as well result in significant deviations from Takeda’s FY2020 forecast.

Strategic Update: Multi-year Transformation to Top 10 Global Biopharma Company

Takeda’s FY2019 results underscore the extent of our multi-year transformation. Since FY2014, Takeda has risen from a top 20 to a top 10 global biopharmaceutical company in revenue terms, with revenues nearly doubling to JPY 3,291 billion. Underlying core operating margin has improved by 12 percentage points in that time and is on a medium-term trajectory to industry top-tier levels.

Takeda’s prospects are driven by a much-transformed global business platform and innovation engine for delivering patient impact and shareholder value. The business is focused on 5 key business areas with growing brands – Gastroenterology (21% of FY2019 sales), Rare Diseases (20%), Plasma Derived Therapies (12%), Oncology (13%), and Neuroscience (13%), with growing brands and a strong R&D pipeline of promising therapies in these areas.

Takeda’s geographic footprint is now strongly aligned with global biopharmaceutical industry growth opportunities: United States (48% of FY2019 sales), Japan (18%); Europe and Canada (20%) and Growth and Emerging Markets (14%). Our increased scale strengthens our competitive position and platform for growth from developing and delivering innovative therapies in key geographic markets.

Strong Progress on Cost Synergies, Deleveraging and Divestiture Programs

The integration of Shire is now almost complete, and we are operating fully as one Takeda. We raised our cost synergy target to an annual run rate of $2.3 billion from $2.0 billion by the end of FY2021, with a run rate of $1.1 billion of cost savings already achieved. Takeda paid down JPY 701 billion debt in FY2019, including JPY 230 billion of prepayments, bringing the net debt to EBITDA ratio down to 3.8x as of March 31, 2020 from 4.7x as of March 31, 2019. The company’s $10 billion divestiture program is on track, with 5 transactions worth up to $7.7 billion completed or announced to date.

Next Wave of Growth with Strong R&D Pipeline

Takeda has built a world-class, state-of-the-art R&D engine leveraging our internal research capabilities, while also actively engaging with innovative ecosystems around the world to translate science into highly innovative medicines.

The main drivers for new product launches are 12 unique New Molecular Entities (NMEs) in Wave 1, which represent several potential best-in-class / first-in-class therapies targeted for launch by FY 2024 with potential peak sales of >$10 billion. Our research engine is quickly advancing next generation therapies designed to provide transformative or curative potential for targeted populations with high unmet needs for FY 2025 onward. These programs are based on targets with strong human validation, represent diverse modalities and leverage new platform capabilities in cell therapy, gene therapy and data sciences.

14 global brands with more than 20 ongoing pivotal studies in new indications / geographies.
Expanding in China with more than 15 planned approvals over the next 5 years.
12 best-in-class / first-in-class NMEs with potential approval through FY 2024 and 9 ongoing registration enabling studies.
Sustained growth (FY2025 and beyond) through ~30 clinical-stage early development NMEs and next generation platforms.
38 new R&D collaborations with biotech and academia signed in FY2019, adding to the more than 200 partnerships already in place.

On May 13, 2020 VBL Therapeutics (Nasdaq: VBLT), reported that it has closed the previously announced offering of 5,142,857 ordinary shares of the Company, at a purchase price of $1.575 per share, in a registered direct offering priced at-the-market under Nasdaq rules (Press release, VBL Therapeutics, MAY 13, 2020, View Source [SID1234557928]). Two of the Company’s key current shareholders participated in the offering. VBL has also issued to the investors, in a concurrent private placement, unregistered warrants to purchase up to an aggregate of 5,142,857 of VBL’s ordinary shares. The warrants have an exercise price of $1.45 per ordinary share, are immediately exercisable and will expire on November 11, 2021. The registered direct offering closed on May 13, 2020.

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H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The gross proceeds from this second offering were approximately $8.1 million, before deducting the placement agent’s fees and other estimated offering expenses. The Company intends to use the net proceeds from this offering for working capital and general corporate purposes. The Company raised a total of approximately $18.1 Million in its two, recently completed, registered direct offerings.

The ordinary shares (but not the warrants or the ordinary shares underlying the warrants) were offered by VBL pursuant to a "shelf" registration statement on Form F-3 (File No. 333-222138) previously filed with the Securities and Exchange Commission (the "SEC") on December 18, 2017 and declared effective by the SEC on January 4, 2018. The offering of the ordinary shares was made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the ordinary shares offered have been filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained on the SEC’s website at View Source or by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (646) 975-6996 or e-mail at [email protected].

The warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and, along with the ordinary shares underlying the warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the warrants and underlying ordinary shares may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws.

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