On April 27, 2021 commenting on the quarter, Vas Narasimhan, CEO of Novartis, said: "Novartis reported drivers and launches continued their strong momentum with double-digit growth for Entresto, Cosentyx, Oncology growth drivers and Zolgensma (Press release, Novartis, APR 27, 2021, View Source [SID1234578526]). We expect Sandoz performance to stabilize, in the near-term, after a challenging quarter. Our broad pipeline of novel medicines continued to progress, with the US approval of Entresto across the full spectrum of chronic heart failure and the positive readout for our radioligand therapy in prostate cancer. Our progress on building trust with society has been recognized by top rankings on the Access to Medicines Index and Sustainalytics. We remain confident in progressing our leading pipeline and delivering our growth outlook."

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COVID-19 update

The COVID-19 situation continues to evolve and is taking differing courses across the multitude of geographies in which Novartis operates. We continue to take strong actions to help address the pandemic. Our primary concerns remain the health and safety of our associates and patients.

There continues to be COVID-19 related lockdowns and disruptions in several geographies negatively impacting demand, particularly: dermatology, ophthalmology, the breast cancer portfolio, Sandoz Retail and Anti-Infectives. For Sandoz, COVID-19 resulted in a historically weak cough and cold season and softened retail demand. At present, drug development operations are continuing with manageable disruptions (see the Innovation Review Section of the Condensed Interim Financial Report for further information), with our range of digital technologies allowing us to proactively manage our clinical trials portfolio and rapidly mitigate any disruptions. Our operations remain stable and cash collections continue to be according to our normal trade terms, with days sales outstanding at normal levels. Novartis remains well positioned to meet its ongoing financial obligations and has sufficient liquidity to support normal business activities.

Novartis is collaborating with Molecular Partners to develop, manufacture and commercialize two antiviral DARPin candidates, ensovibep (MP0420) and MP0423. These are designed to target multiple different sites on the SARS-CoV-2 virus simultaneously for enhanced antiviral effects and potential use as both prophylactics and treatments. Furthermore, Novartis joined industry-wide efforts to meet global demand for COVID-19 vaccines and therapeutics. An initial agreement was signed to leverage Novartis manufacturing capacity and capabilities to support the production of the Pfizer-BioNTech vaccine (Comirnaty), with production planned to start in the second quarter of 2021. Novartis also signed an initial agreement to manufacture the mRNA and bulk drug product for the vaccine candidate CVnCoV from CureVac, with plans to produce up to 50 million doses in 2021 and up to a further 200 million doses in 2022.

Financials

First quarter

Net sales were USD 12.4 billion (+1%, -2% cc) in the first quarter driven by volume growth of 3 percentage points, price erosion of 2 percentage points and negative impact from generic competition of 3 percentage points. Excluding prior year COVID-19 related forward purchasing, we estimate first quarter net sales grew +1% (cc, +4% USD).

Operating income was USD 2.4 billion (-12%, -14% cc) mainly due to lower gross profit impacted by pricing erosion at Sandoz, manufacturing restructuring, higher impairments, partly offset by lower legal expenses.

Net income was USD 2.1 billion (-5%, -7% cc) mainly due to lower operating income. EPS was USD 0.91 (-5%, -6% cc), declining less than net income, benefiting from lower weighted average number of shares outstanding.

Core operating income was USD 4.0 billion (-5%, -8% cc) mainly due to Sandoz (-35% cc). Core operating income margin was 31.9% of net sales, decreasing by 2.1 percentage points (-1.8 percentage points cc). Excluding prior year COVID-19 related forward purchasing, we estimate core operating income declined -1% (cc, +2% USD).

Core net income was USD 3.4 billion (-4%, -6% cc) mainly driven by the decline in core operating income. Core EPS was USD 1.52 (-3%, -5% cc), declining less than core net income, benefiting from lower weighted average number of shares outstanding.

Cash flows from operating activities amounted to USD 2.1 billion.

Free cash flow amounted to USD 1.6 billion (-21%) compared to USD 2.0 billion in the prior year quarter. This decline was mainly due to the USD 650 million upfront payment to in-license tislelizumab from BeiGene and lower operating income adjusted for non-cash items, partly offset by favorable changes in working capital.

Innovative Medicines net sales were USD 10.1 billion (+4%, 0% cc) with volume contributing 4 percentage points. Generic competition had a negative impact of 4 percentage points. Net pricing had a negligible impact on sales growth. Pharmaceuticals BU sales were in line (0% cc) with continued strong growth from Entresto (+34% cc), Zolgensma (+81% cc) and Cosentyx (+11% cc). Growth was offset by declines in Established Medicines and mature Ophthalmology brands. Oncology BU sales grew 1% (cc) driven by Kymriah (+55% cc), Promacta/Revolade (+13% cc), Kisqali (+19% cc) and Jakavi (+8% cc), partly offset by generic competition, mainly for Glivec, Afinitor and Exjade. Innovative Medicines sales were affected by the negative impact of the COVID-19 pandemic (mainly in dermatology, ophthalmology and breast cancer portfolio) and prior year COVID-19 related forward purchasing. Excluding prior year COVID-19 related forward purchasing, we estimate Innovative Medicines first quarter net sales grew +3% (cc, +7% USD).

Sandoz net sales were USD 2.3 billion (-9%, -13% cc) with a negative price effect of 10 percentage points mainly due to increasing competition and prior year benefit from off-contract sales. Volume declined 3 percentage points from the impact of COVID-19 on prior year forward purchasing and softened retail demand, with a historically weak cough and cold season, partly offset by growth in Biopharmaceuticals. Excluding prior year COVID-19 related forward purchasing, we estimate first quarter net sales declined -9% (cc, -5% USD).

First quarter key growth drivers

Underpinning our financial results in the quarter is a continued focus on key growth drivers including:

Entresto (USD 789 million, +34% cc) sustained strong growth with increased patient share across markets, driven by demand as the essential first choice therapy for heart failure patients
Zolgensma (USD 319 million, +81% cc) had a strong quarter with growth driven by Europe and Emerging Growth Markets, as well as ongoing geographic expansion
Cosentyx (USD 1.1 billion, +11% cc) saw continued growth across indications despite access changes in the US and COVID-19 negatively impacting new patient starts
Kymriah (USD 151 million, +55% cc) grew strongly across all regions. Coverage continued to expand, with more than 300 qualified treatment centers in 28 countries
Promacta/Revolade (USD 463 million, +13% cc) grew across all regions, driven by increased use in chronic immune thrombocytopenia and as first-line for severe aplastic anemia in the US
Kesimpta (USD 50 million) driven by launch uptake and faster than expected conversion from free to paid scripts, resulting in a USD 9 million revenue adjustment relating to Q4 2020
Ilaris (USD 256 million, +20% cc) driven by double-digit volume growth across all regions
Kisqali (USD 195 million, +19% cc) continued to see solid growth in Europe and Emerging Growth Markets, benefiting from the ongoing impact of positive overall survival data
Jakavi (USD 363 million, +8% cc) growth in most markets was driven by strong demand in the myelofibrosis and polycythemia vera indications
Mayzent (USD 55 million, +80% cc) continued to grow, driven by fulfilling an important unmet need in patients with MS showing signs of progression
Adakveo (USD 37 million, +148% cc) US launch continued to progress well, with approximately 800 accounts purchasing Adakveo to date
Xiidra (USD 108 million, +20% cc) grew TRx share in the US during the quarter driven by an increase in demand due to brand awareness among diagnosed patients
Tafinlar + Mekinist (USD 393 million, +4% cc) saw continued demand in adjuvant melanoma and NSCLC; growth was at a slower pace reflecting the ongoing impact of COVID-19
Xolair (USD 335 million, +3% cc) continued growth, mainly driven by the chronic spontaneous urticaria indication
Biopharmaceuticals (USD 511 million, +7% cc) growth was driven by sales in Europe
Emerging Growth Markets* Overall, sales grew 3% (cc), with strong growth in China (+11% cc) to USD 744 million
*All markets except US, Canada, Western Europe, Japan, Australia and New Zealand

R&D update – key developments from the first quarter

New approvals

Entresto

The FDA approved an expanded indication in chronic heart failure patients with left ventricular ejection fraction (LVEF) below normal, based on evidence from PARAGON-HF and other trials, making Entresto the first therapy indicated for heart failure with reduced ejection fraction (HFrEF) and the majority of patients diagnosed with heart failure with preserved ejection fraction (HFpEF)
Kesimpta

Received EMA approval for the treatment of relapsing forms of multiple sclerosis (RMS). Decision was based on two Ph3 ASCLEPIOS studies that showed versus an active comparator (teriflunomide) a nearly 60% reduction of annual relapses and more than 30% relative risk reduction of 3-month confirmed disability progression. Kesimpta is the first and only high efficacy, targeted B-cell therapy that is self-administered, for patients with relapsing multiple sclerosis

Kesimpta was also approved in Japan
Cosentyx

Gained an EU label update to include data for axial manifestations of psoriatic arthritis (PsA), from the Ph3b MAXIMISE trial. MAXIMISE showed treatment with Cosentyx improved the signs and symptoms of axial manifestations of PsA as early as Week 4; response was maintained up to Week 52, with a consistently favorable safety profile. Cosentyx is the first biologic with proven efficacy in all six key manifestations of PsA, and the only biologic with fast and lasting relief of axial manifestations of PsA in a dedicated trial
Regulatory updates

Asciminib
(ABL001) Granted Breakthrough Therapy designations (BTD) by the FDA for:
Treatment of adult patients with Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML) in chronic phase (CP), previously treated with two or more tyrosine kinase inhibitors (TKIs)
Treatment of adult patients with Ph+ CML in CP harboring the T315I mutation
Alpelisib
(BYL719) European Commission designated alpelisib as an orphan medicinal product for treatment of PIK3CA-related overgrowth spectrum
Results from ongoing trials and other highlights

177Lu-PSMA-617 Ph3 VISION study met both primary endpoints, improving OS and radiographic progression-free survival (rPFS) in patients with PSMA-positive metastatic castration-resistant prostate cancer. Data will be presented at an upcoming congress, with regulatory submissions in the US and EU anticipated in 2021
Iptacopan (LNP023) Ph2 study in primary IgA nephropathy met the primary endpoint with efficacy and safety results supporting continuation into Ph3. Data to be presented at an upcoming medical congress

Initial Ph2 study results as add-on therapy in paroxysmal nocturnal hemoglobinuria (PNH) were published in Lancet Haematology. Ph3 study program underway
Canakinumab (ACZ885)

Ph3 CANOPY-2 study evaluating canakinumab, in combination with the chemotherapy agent docetaxel, did not meet its primary endpoint of overall survival in patients with advanced or metastatic non-small cell lung cancer whose cancer progressed while on or after previous treatments. The canakinumab development program continues, with two Ph3 non-small cell lung cancer clinical trials ongoing in first-line and adjuvant setting
Tislelizumab Successfully closed the in-licensing of tislelizumab from BeiGene for development and commercialization in North America, Europe and Japan. In January, BeiGene announced positive topline results for a Ph3 trial in patients with previously treated advanced unresectable or metastatic esophageal squamous cell carcinoma. In April, data from the Ph3 RATIONALE 303 trial was presented, in patients with pre-treated locally advanced or metastatic non-small cell lung cancer. The study achieved its primary endpoint, with tislelizumab significantly prolonging overall survival in all patients, regardless of PD-L1 status
Entresto While numerical trends consistently favored Entresto in a head to head comparison with ramipril, a current standard of care, the Ph3 PARADISE-MI study did not meet its primary composite endpoint of reducing risk of cardiovascular death and heart failure events after an acute myocardial infarction. The safety profile of Entresto was confirmed. Novartis will continue to evaluate the data. Topline results will be presented at the American College of Cardiology 70th Annual Scientific Session
Cosentyx Ph3 study met its primary endpoint in pediatric patients with juvenile psoriatic arthritis and enthesitis-related arthritis – two subtypes of juvenile idiopathic arthritis (JIA). Cosentyx showed significantly longer time to flare (worsening of symptoms) compared to placebo. Sustained efficacy was also demonstrated, with more patients achieving and maintaining ACR Pedi 30 and ACR Pedi 70 responses from Week 12 to Week 104 with Cosentyx compared to placebo
Zolgensma

Data presented at the 2021 Muscular Dystrophy Association and American Academy of Neurology conferences demonstrated age-appropriate development when used early (SPR1NT), real-world benefit in older children ≥6 months of age (RESTORE) and durability in children with SMA now up to six years old and more than five years post-treatment (two long-term follow-up studies)
Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority.

In Q1 2021, Novartis repurchased a total of 19.6 million shares for USD 1.8 billion on the SIX Swiss Exchange second trading line under the up-to USD 2.5 billion share buyback announced in November 2020. With these transactions, this share buyback has been completed with a total of 27.6 million shares repurchased for USD 2.5 billion. In addition, 1.4 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 9.3 million shares (for an equity value of USD 0.2 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Novartis aims to offset the dilutive impact from equity based participation plans of associates over the remainder of the year. Consequently, the total number of shares outstanding decreased by 11.7 million versus December 31, 2020. These treasury share transactions resulted in an equity decrease of USD 1.7 billion and a net cash outflow of USD 1.9 billion.

In Q1 2021, Novartis repaid a EUR 1.25 billion, zero coupon bond issued in March 2017 at maturity.

As of March 31, 2021, the net debt increased to USD 31.8 billion compared to USD 24.5 billion at December 31, 2020. The increase was mainly driven by the USD 7.4 billion annual dividend payment and net cash outflow for treasury share transactions of USD 1.9 billion, partially offset by USD 1.6 billion free cash flow in Q1 2021.

The Group has not experienced liquidity or cash flow disruptions during Q1 2021 due to the COVID-19 pandemic. We are confident that Novartis is well positioned to meet its ongoing financial obligations and has sufficient liquidity to support its normal business activities.

As of Q1 2021, the long-term credit rating for the company is A1 with Moody’s Investors Service and AA- with S&P Global Ratings.

ESG update

ESG momentum continues with increasing recognition by third party rating agencies. We retained our Sustainalytics No.1 ranking, improving our ‘risk score’ from ‘medium’ to ‘low’, as well as our Access to Medicines Index No.2 ranking. Novartis recently joined global initiatives (EV100 and RE100) bringing together businesses committed to environmental sustainability. In addition, we are proud to be recognized for the steps we have taken on diversity and inclusion by the recent Bloomberg Gender-Equality index.

2021 outlook

Barring unforeseen events

Net sales Expected to grow low to mid single digit (cc)

From a divisional perspective, we expect net sales performance (cc) in 2021 to be as follows:
Innovative Medicines: expected to grow mid single digit
Sandoz: expected to decline low to mid single digit (revised from broadly in line)
Core operating income Expected to grow mid single digit, ahead of sales (cc)
Innovative Medicines: expected to grow mid to high single digit, ahead of sales
Sandoz: expected to decline low to mid teens
Our guidance assumes that we see a return to normal global healthcare systems including prescription dynamics by mid 2021. In addition, we assume that no Gilenya and no Sandostatin LAR generics enter in 2021 in the US.

Foreign exchange impact
If late-April exchange rates prevail for the remainder of 2021, the foreign exchange impact for the year would be positive 2 to 3 percentage points on net sales and positive 3 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Q1 net sales declined -2% (cc¹, +1% USD), due to prior year COVID-19 related forward purchasing (approximately USD 0.4 billion)
Pharmaceuticals BU in line with prior year (0% cc, +4% USD) with continued strong growth from Entresto (+34% cc), Zolgensma (+81% cc), and Cosentyx (+11% cc). Kesimpta sales reached USD 50 million
Oncology BU grew +1% (cc, +4% USD) driven by Kymriah (+55% cc), Promacta/Revolade (+13% cc), Kisqali (+19% cc) and Jakavi (+8% cc). Adakveo sales reached USD 37 million
Sandoz sales declined -13% (cc, -9% USD), with Retail -18% (cc) and Biopharmaceuticals growing +7% (cc)
COVID-19 negatively impacted demand, particularly: dermatology, ophthalmology, the breast cancer portfolio, Sandoz Retail and Anti-Infectives
Excluding prior year COVID-19 related forward purchasing, we estimate Q1 net sales grew +1% (cc, +4% USD), with Innovative Medicines growing +3% (cc, +7% USD)²
Core operating income¹ declined -8% (cc, -5% USD), mainly due to Sandoz (-35% cc). Excluding prior year COVID-19 related forward purchasing, we estimate core operating income declined -1% (cc, +2% USD), with Innovative Medicines growing +6% (cc, +9% USD)²
Operating income declined -14% (cc,-12% USD), mainly due to lower gross profit impacted by pricing erosion at Sandoz and manufacturing restructuring
Net income declined -7% (cc, -5% USD), mainly due to lower operating income
Free cash flow¹ of USD 1.6 billion declined, mainly due to the USD 650 million upfront payment to in-license tislelizumab from BeiGene
Key innovation milestones:
Entresto granted an expanded indication by the FDA in chronic heart failure patients (to include HFpEF)
177Lu-PSMA-617 Ph3 VISION study met both primary endpoints in patients with prostate cancer
Tislelizumab deal closed with BeiGene. Positive Ph3 results in esophageal and non-small cell lung cancer
Iptacopan in IgA nephropathy met its primary endpoint in Ph2b enabling Ph3 initiation
ESG momentum continues, maintaining top rankings with Access to Medicines Index and Sustainalytics
2021 group guidance³ confirmed, noting Sandoz sales expected to decline low to mid single digit

Basel, April 27, 2021 – commenting on the quarter, Vas Narasimhan, CEO of Novartis, said: "Novartis growth drivers and launches continued their strong momentum with double-digit growth for Entresto, Cosentyx, Oncology growth drivers and Zolgensma. We expect Sandoz performance to stabilize, in the near-term, after a challenging quarter. Our broad pipeline of novel medicines continued to progress, with the US approval of Entresto across the full spectrum of chronic heart failure and the positive readout for our radioligand therapy in prostate cancer. Our progress on building trust with society has been recognized by top rankings on the Access to Medicines Index and Sustainalytics. We remain confident in progressing our leading pipeline and delivering our growth outlook."

Key figures¹
Q1 2021 Q1 2020 % change
USD m USD m USD cc
Net sales 12 411 12 283 1 -2
Operating income 2 415 2 744 -12 -14
Net income 2 059 2 173 -5 -7
EPS (USD) 0.91 0.96 -5 -6
Free cash flow 1 597 2 021 -21
Core operating income 3 957 4 177 -5 -8
Core net income 3 413 3 549 -4 -6
Core EPS (USD) 1.52 1.56 -3 -5

COVID-19 update

The COVID-19 situation continues to evolve and is taking differing courses across the multitude of geographies in which Novartis operates. We continue to take strong actions to help address the pandemic. Our primary concerns remain the health and safety of our associates and patients.

There continues to be COVID-19 related lockdowns and disruptions in several geographies negatively impacting demand, particularly: dermatology, ophthalmology, the breast cancer portfolio, Sandoz Retail and Anti-Infectives. For Sandoz, COVID-19 resulted in a historically weak cough and cold season and softened retail demand. At present, drug development operations are continuing with manageable disruptions (see the Innovation Review Section of the Condensed Interim Financial Report for further information), with our range of digital technologies allowing us to proactively manage our clinical trials portfolio and rapidly mitigate any disruptions. Our operations remain stable and cash collections continue to be according to our normal trade terms, with days sales outstanding at normal levels. Novartis remains well positioned to meet its ongoing financial obligations and has sufficient liquidity to support normal business activities.

Novartis is collaborating with Molecular Partners to develop, manufacture and commercialize two antiviral DARPin candidates, ensovibep (MP0420) and MP0423. These are designed to target multiple different sites on the SARS-CoV-2 virus simultaneously for enhanced antiviral effects and potential use as both prophylactics and treatments. Furthermore, Novartis joined industry-wide efforts to meet global demand for COVID-19 vaccines and therapeutics. An initial agreement was signed to leverage Novartis manufacturing capacity and capabilities to support the production of the Pfizer-BioNTech vaccine (Comirnaty), with production planned to start in the second quarter of 2021. Novartis also signed an initial agreement to manufacture the mRNA and bulk drug product for the vaccine candidate CVnCoV from CureVac, with plans to produce up to 50 million doses in 2021 and up to a further 200 million doses in 2022.

Financials

First quarter

Net sales were USD 12.4 billion (+1%, -2% cc) in the first quarter driven by volume growth of 3 percentage points, price erosion of 2 percentage points and negative impact from generic competition of 3 percentage points. Excluding prior year COVID-19 related forward purchasing, we estimate first quarter net sales grew +1% (cc, +4% USD).

Operating income was USD 2.4 billion (-12%, -14% cc) mainly due to lower gross profit impacted by pricing erosion at Sandoz, manufacturing restructuring, higher impairments, partly offset by lower legal expenses.

Net income was USD 2.1 billion (-5%, -7% cc) mainly due to lower operating income. EPS was USD 0.91 (-5%, -6% cc), declining less than net income, benefiting from lower weighted average number of shares outstanding.

Core operating income was USD 4.0 billion (-5%, -8% cc) mainly due to Sandoz (-35% cc). Core operating income margin was 31.9% of net sales, decreasing by 2.1 percentage points (-1.8 percentage points cc). Excluding prior year COVID-19 related forward purchasing, we estimate core operating income declined -1% (cc, +2% USD).

Core net income was USD 3.4 billion (-4%, -6% cc) mainly driven by the decline in core operating income. Core EPS was USD 1.52 (-3%, -5% cc), declining less than core net income, benefiting from lower weighted average number of shares outstanding.

Cash flows from operating activities amounted to USD 2.1 billion.

Free cash flow amounted to USD 1.6 billion (-21%) compared to USD 2.0 billion in the prior year quarter. This decline was mainly due to the USD 650 million upfront payment to in-license tislelizumab from BeiGene and lower operating income adjusted for non-cash items, partly offset by favorable changes in working capital.

Innovative Medicines net sales were USD 10.1 billion (+4%, 0% cc) with volume contributing 4 percentage points. Generic competition had a negative impact of 4 percentage points. Net pricing had a negligible impact on sales growth. Pharmaceuticals BU sales were in line (0% cc) with continued strong growth from Entresto (+34% cc), Zolgensma (+81% cc) and Cosentyx (+11% cc). Growth was offset by declines in Established Medicines and mature Ophthalmology brands. Oncology BU sales grew 1% (cc) driven by Kymriah (+55% cc), Promacta/Revolade (+13% cc), Kisqali (+19% cc) and Jakavi (+8% cc), partly offset by generic competition, mainly for Glivec, Afinitor and Exjade. Innovative Medicines sales were affected by the negative impact of the COVID-19 pandemic (mainly in dermatology, ophthalmology and breast cancer portfolio) and prior year COVID-19 related forward purchasing. Excluding prior year COVID-19 related forward purchasing, we estimate Innovative Medicines first quarter net sales grew +3% (cc, +7% USD).

Sandoz net sales were USD 2.3 billion (-9%, -13% cc) with a negative price effect of 10 percentage points mainly due to increasing competition and prior year benefit from off-contract sales. Volume declined 3 percentage points from the impact of COVID-19 on prior year forward purchasing and softened retail demand, with a historically weak cough and cold season, partly offset by growth in Biopharmaceuticals. Excluding prior year COVID-19 related forward purchasing, we estimate first quarter net sales declined -9% (cc, -5% USD).

First quarter key growth drivers

Underpinning our financial results in the quarter is a continued focus on key growth drivers including:

Entresto (USD 789 million, +34% cc) sustained strong growth with increased patient share across markets, driven by demand as the essential first choice therapy for heart failure patients
Zolgensma (USD 319 million, +81% cc) had a strong quarter with growth driven by Europe and Emerging Growth Markets, as well as ongoing geographic expansion
Cosentyx (USD 1.1 billion, +11% cc) saw continued growth across indications despite access changes in the US and COVID-19 negatively impacting new patient starts
Kymriah (USD 151 million, +55% cc) grew strongly across all regions. Coverage continued to expand, with more than 300 qualified treatment centers in 28 countries
Promacta/Revolade (USD 463 million, +13% cc) grew across all regions, driven by increased use in chronic immune thrombocytopenia and as first-line for severe aplastic anemia in the US
Kesimpta (USD 50 million) driven by launch uptake and faster than expected conversion from free to paid scripts, resulting in a USD 9 million revenue adjustment relating to Q4 2020
Ilaris (USD 256 million, +20% cc) driven by double-digit volume growth across all regions
Kisqali (USD 195 million, +19% cc) continued to see solid growth in Europe and Emerging Growth Markets, benefiting from the ongoing impact of positive overall survival data
Jakavi (USD 363 million, +8% cc) growth in most markets was driven by strong demand in the myelofibrosis and polycythemia vera indications
Mayzent (USD 55 million, +80% cc) continued to grow, driven by fulfilling an important unmet need in patients with MS showing signs of progression
Adakveo (USD 37 million, +148% cc) US launch continued to progress well, with approximately 800 accounts purchasing Adakveo to date
Xiidra (USD 108 million, +20% cc) grew TRx share in the US during the quarter driven by an increase in demand due to brand awareness among diagnosed patients
Tafinlar + Mekinist (USD 393 million, +4% cc) saw continued demand in adjuvant melanoma and NSCLC; growth was at a slower pace reflecting the ongoing impact of COVID-19
Xolair (USD 335 million, +3% cc) continued growth, mainly driven by the chronic spontaneous urticaria indication
Biopharmaceuticals (USD 511 million, +7% cc) growth was driven by sales in Europe
Emerging Growth Markets* Overall, sales grew 3% (cc), with strong growth in China (+11% cc) to USD 744 million
*All markets except US, Canada, Western Europe, Japan, Australia and New Zealand
Net sales of the top 20 Innovative Medicines products in 2021

Q1 2021 % change
USD m USD cc
Cosentyx 1 053 13 11
Entresto 789 39 34
Gilenya 707 -8 -11
Lucentis 545 12 4
Tasigna 515 6 3
Promacta/Revolade 463 15 13
Tafinlar + Mekinist 393 7 4
Jakavi 363 14 8
Sandostatin 358 -4 -5
Xolair 335 9 3
Zolgensma 319 88 81
Gleevec/Glivec 272 -17 -20
Galvus Group 262 -22 -24
Ilaris 256 20 20
Afinitor/Votubia 254 -14 -16
Exforge Group 254 -2 -6
Diovan Group 214 -22 -24
Kisqali 195 21 19
Exjade/Jadenu 153 -11 -16
Kymriah 151 62 55
Top 20 products total 7 851 7 4
R&D update – key developments from the first quarter

New approvals

Entresto

The FDA approved an expanded indication in chronic heart failure patients with left ventricular ejection fraction (LVEF) below normal, based on evidence from PARAGON-HF and other trials, making Entresto the first therapy indicated for heart failure with reduced ejection fraction (HFrEF) and the majority of patients diagnosed with heart failure with preserved ejection fraction (HFpEF)
Kesimpta

Received EMA approval for the treatment of relapsing forms of multiple sclerosis (RMS). Decision was based on two Ph3 ASCLEPIOS studies that showed versus an active comparator (teriflunomide) a nearly 60% reduction of annual relapses and more than 30% relative risk reduction of 3-month confirmed disability progression. Kesimpta is the first and only high efficacy, targeted B-cell therapy that is self-administered, for patients with relapsing multiple sclerosis

Kesimpta was also approved in Japan
Cosentyx

Gained an EU label update to include data for axial manifestations of psoriatic arthritis (PsA), from the Ph3b MAXIMISE trial. MAXIMISE showed treatment with Cosentyx improved the signs and symptoms of axial manifestations of PsA as early as Week 4; response was maintained up to Week 52, with a consistently favorable safety profile. Cosentyx is the first biologic with proven efficacy in all six key manifestations of PsA, and the only biologic with fast and lasting relief of axial manifestations of PsA in a dedicated trial
Regulatory updates

Asciminib
(ABL001) Granted Breakthrough Therapy designations (BTD) by the FDA for:
Treatment of adult patients with Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML) in chronic phase (CP), previously treated with two or more tyrosine kinase inhibitors (TKIs)
Treatment of adult patients with Ph+ CML in CP harboring the T315I mutation
Alpelisib
(BYL719) European Commission designated alpelisib as an orphan medicinal product for treatment of PIK3CA-related overgrowth spectrum
Results from ongoing trials and other highlights

177Lu-PSMA-617 Ph3 VISION study met both primary endpoints, improving OS and radiographic progression-free survival (rPFS) in patients with PSMA-positive metastatic castration-resistant prostate cancer. Data will be presented at an upcoming congress, with regulatory submissions in the US and EU anticipated in 2021
Iptacopan (LNP023) Ph2 study in primary IgA nephropathy met the primary endpoint with efficacy and safety results supporting continuation into Ph3. Data to be presented at an upcoming medical congress

Initial Ph2 study results as add-on therapy in paroxysmal nocturnal hemoglobinuria (PNH) were published in Lancet Haematology. Ph3 study program underway
Canakinumab (ACZ885)

Ph3 CANOPY-2 study evaluating canakinumab, in combination with the chemotherapy agent docetaxel, did not meet its primary endpoint of overall survival in patients with advanced or metastatic non-small cell lung cancer whose cancer progressed while on or after previous treatments. The canakinumab development program continues, with two Ph3 non-small cell lung cancer clinical trials ongoing in first-line and adjuvant setting
Tislelizumab Successfully closed the in-licensing of tislelizumab from BeiGene for development and commercialization in North America, Europe and Japan. In January, BeiGene announced positive topline results for a Ph3 trial in patients with previously treated advanced unresectable or metastatic esophageal squamous cell carcinoma. In April, data from the Ph3 RATIONALE 303 trial was presented, in patients with pre-treated locally advanced or metastatic non-small cell lung cancer. The study achieved its primary endpoint, with tislelizumab significantly prolonging overall survival in all patients, regardless of PD-L1 status
Entresto While numerical trends consistently favored Entresto in a head to head comparison with ramipril, a current standard of care, the Ph3 PARADISE-MI study did not meet its primary composite endpoint of reducing risk of cardiovascular death and heart failure events after an acute myocardial infarction. The safety profile of Entresto was confirmed. Novartis will continue to evaluate the data. Topline results will be presented at the American College of Cardiology 70th Annual Scientific Session
Cosentyx Ph3 study met its primary endpoint in pediatric patients with juvenile psoriatic arthritis and enthesitis-related arthritis – two subtypes of juvenile idiopathic arthritis (JIA). Cosentyx showed significantly longer time to flare (worsening of symptoms) compared to placebo. Sustained efficacy was also demonstrated, with more patients achieving and maintaining ACR Pedi 30 and ACR Pedi 70 responses from Week 12 to Week 104 with Cosentyx compared to placebo
Zolgensma

Data presented at the 2021 Muscular Dystrophy Association and American Academy of Neurology conferences demonstrated age-appropriate development when used early (SPR1NT), real-world benefit in older children ≥6 months of age (RESTORE) and durability in children with SMA now up to six years old and more than five years post-treatment (two long-term follow-up studies)
Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority.

In Q1 2021, Novartis repurchased a total of 19.6 million shares for USD 1.8 billion on the SIX Swiss Exchange second trading line under the up-to USD 2.5 billion share buyback announced in November 2020. With these transactions, this share buyback has been completed with a total of 27.6 million shares repurchased for USD 2.5 billion. In addition, 1.4 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 9.3 million shares (for an equity value of USD 0.2 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Novartis aims to offset the dilutive impact from equity based participation plans of associates over the remainder of the year. Consequently, the total number of shares outstanding decreased by 11.7 million versus December 31, 2020. These treasury share transactions resulted in an equity decrease of USD 1.7 billion and a net cash outflow of USD 1.9 billion.

In Q1 2021, Novartis repaid a EUR 1.25 billion, zero coupon bond issued in March 2017 at maturity.

As of March 31, 2021, the net debt increased to USD 31.8 billion compared to USD 24.5 billion at December 31, 2020. The increase was mainly driven by the USD 7.4 billion annual dividend payment and net cash outflow for treasury share transactions of USD 1.9 billion, partially offset by USD 1.6 billion free cash flow in Q1 2021.

The Group has not experienced liquidity or cash flow disruptions during Q1 2021 due to the COVID-19 pandemic. We are confident that Novartis is well positioned to meet its ongoing financial obligations and has sufficient liquidity to support its normal business activities.

As of Q1 2021, the long-term credit rating for the company is A1 with Moody’s Investors Service and AA- with S&P Global Ratings.

ESG update

ESG momentum continues with increasing recognition by third party rating agencies. We retained our Sustainalytics No.1 ranking, improving our ‘risk score’ from ‘medium’ to ‘low’, as well as our Access to Medicines Index No.2 ranking. Novartis recently joined global initiatives (EV100 and RE100) bringing together businesses committed to environmental sustainability. In addition, we are proud to be recognized for the steps we have taken on diversity and inclusion by the recent Bloomberg Gender-Equality index.

2021 outlook

Barring unforeseen events

Net sales Expected to grow low to mid single digit (cc)

From a divisional perspective, we expect net sales performance (cc) in 2021 to be as follows:
Innovative Medicines: expected to grow mid single digit
Sandoz: expected to decline low to mid single digit (revised from broadly in line)
Core operating income Expected to grow mid single digit, ahead of sales (cc)
Innovative Medicines: expected to grow mid to high single digit, ahead of sales
Sandoz: expected to decline low to mid teens
Our guidance assumes that we see a return to normal global healthcare systems including prescription dynamics by mid 2021. In addition, we assume that no Gilenya and no Sandostatin LAR generics enter in 2021 in the US.

Foreign exchange impact
If late-April exchange rates prevail for the remainder of 2021, the foreign exchange impact for the year would be positive 2 to 3 percentage points on net sales and positive 3 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures¹

Group Q1 2021 Q1 2020 % change
USD m USD m USD cc
Net sales 12 411 12 283 1 -2
Operating income 2 415 2 744 -12 -14
As a % of sales 19.5 22.3
Core operating income 3 957 4 177 -5 -8
As a % of sales 31.9 34.0
Net income 2 059 2 173 -5 -7
EPS (USD) 0.91 0.96 -5 -6
Core net income 3 413 3 549 -4 -6
Core EPS (USD) 1.52 1.56 -3 -5
Cash flows from operating activities 2 130 2 528 -16
Free cash flow 1 597 2 021 -21

Innovative Medicines Q1 2021 Q1 2020 % change
USD m USD m USD cc
Net sales 10 104 9 755 4 0
Operating income 2 242 2 755 -19 -20
As a % of sales 22.2 28.2
Core operating income 3 666 3 607 2 -1
As a % of sales 36.3 37.0

Sandoz Q1 2021 Q1 2020 % change
USD m USD m USD cc
Net sales 2 307 2 528 -9 -13
Operating income/(loss) 312 -45 nm nm
As a % of sales 13.5 -1.8
Core operating income 445 673 -34 -35
As a % of sales 19.3 26.6

Corporate Q1 2021 Q1 2020 % change
USD m USD m USD cc
Operating (loss)/income -139 34 nm nm
Core operating loss -154 -103 -50 -45

nm = not meaningful
1 Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 36 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.

On April 27, 2021 Mablink Bioscience, a company developing the next generation of antibody-drug conjugates (ADC) through its proprietary hydrophilic drug-linker PSARlinkTM platform, reported the completion of a €4 Million Seed financing round led by Elaia Partners and along with Pertinence Invest 2 (Sofimac Innovation advised by Mérieux Equity Partners), Sham Innovation Santé (advised by Turenne Capital), Fondation Fournier-Majoie, Simba Santé (Angelor) and Crédit Agricole Création (Press release, Mablink Bioscience, APR 27, 2021, View Source;utm_medium=rss&utm_campaign=mablink-bioscience-the-next-generation-adc-company-raises-e4-million-from-a-syndicate-of-private-investors [SID1234578525]).

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Transforming the field of ADC to treat cancers with high unmet medical needs
ADC is a new class of drugs that work like a guided missile: a monoclonal antibody is used to transport physically linked highly potent cytotoxic molecules directly and specifically into the tumor cells to destroy them, while sparing healthy tissues. Leveraging its proprietary PSARlinkTM technology that links cytotoxic molecules to antibodies, Mablink Bioscience aims at transforming the field of ADC by both multiplying their clinical therapeutic index and by broadening the spectrum of usable compounds, addressable targets and indications they can apply to. Mablink Bioscience will use the proceeds of this financing round to move forward its ADC pipeline directed against several cancers with high unmet medical needs.

A patented platform with a game-changing potential in ADC
In just 2 years, Mablink Bioscience has been able to complete the technological development and preclinical validation of PSARlinkTM, its patented ADC platform that allows for the discovery of homogeneous and easy-to-manufacture next generation ADC bearing best-in-class pharmacological properties1. Warren Viricel, CSO and co-founder of Mablink Bioscience commented that "PSARlinkTM has the potential to be a game-changer in the treatment of cancers and this investment is the first step to quickly bring our ADC candidates to the clinic."

Jean-Guillaume Lafay, CEO and co-founder of Mablink Bioscience added that "We are looking forward to strengthening and accelerating our ADC pipeline, as well as to working with our investors to further develop Mablink Bioscience, bring our disruptive therapeutic technologies to the clinic and help cancer patients with high unmet medical needs."

Florian Denis, Investment Director at Elaia explained: "Elaia is very proud to lead this round of financing and to bring together this investment syndication. Mablink Bioscience’s platform presents a best-in-class approach and has the potential to deliver the next wave of innovation to the promising field of antibody-drug conjugates. Jean-Guillaume Lafay and his team have produced impressive preclinical data that will then expand towards additional value-driving milestones."

Jeremie Waicenberg, Senior Business Analyst at Mérieux Equity Partners commented: "We are thrilled with the investment of Pertinence Invest 2 in Mablink Bioscience to support the company’s platform for developing the next generation of antibody-drug conjugates towards more efficient cancer therapies."

Bervin Bouani, Investment Director at Turenne Capital said: "We are delighted and very excited to be working alongside Mablink Bioscience management and other investors to reinforce and expand the company’s capabilities and assets."

Jerôme Majoie, CEO of the Belgian Fondation Fournier-Majoie, said: "We are proud to bring support to Mablink Bioscience qualified by its Scientific Advisory Board as one of the most promising laureates which will bring to patient bedside improved immuno-oncology therapies."

About PSARlinkTM
PSARlinkTM drug-linkers are a chemical link that can be placed between an antibody and a chosen cytotoxic molecule to be delivered into tumor cells. PSARlinkTM’s unique structure allows "masking" cytotoxic molecules, especially hydrophobic compounds, and provides a "stealthy" property to such antibody drug conjugates, enabling them to stay longer in the body, giving them more time to destroy tumor cells. At the same time, making ADC stealth avoids most of the damage typically caused by such molecules to the clearance organs such as the liver: PSARlinkTM-based ADC are better tolerated. These improvements translate into a 10-fold increase of the therapeutic index, a potentially game-changing factor for future clinical success, compared to what was described at the same stage by ADC currently available for cancer patients.

On April 27, 2021 Astellas Pharma Inc. (TSE: 4503, President and CEO: Kenji Yasukawa, "the Company") reported the financial results for fiscal year 2020 (FY2020) ended March 31, 2021 (Press release, Astellas, APR 27, 2021, View Source [SID1234578523]).

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Consolidated financial results (core basis) in FY2020 are shown in the table below. Revenue, core operating profit and core profit for the year decreased across the board Revenue-Sales of main products XTANDI for the treatment of prostate cancer and XOSPATA for the treatment of acute myeloid leukemia continued to grow.

In addition, growth of the co-promotion revenue of PADCEV for the treatment of urothelial cancer contributed to revenue.-Moreover, sales of Betanis / Myrbetriq / BETMIGA for the treatment of overactive bladder ("OAB") showed steady progress, and new product group in Japan achieved sales growth, including those of EVENITY for the treatment of osteoporosis, Suglat and SUJANU Combination Tablets for the treatment of diabetes mellitus.-However, revenue decreased mainly due to the loss of market exclusivity of Vesicare for the treatment of OAB in Europe, and the termination of sales agreements for Symbicort for the treatment of asthma, human vaccines of KM Biologics Co., Ltd., Micardis family for the treatment of hypertension, and Celecox for the treatment of inflammation and pain in Japan.

Sales were also negatively impacted due to the spread of COVID-19. As a result of the above, revenue in FY2020 decreased by 3.9% compared to those in the previous fiscal year ("year-on-year") to ¥1,249.5 billion. Core operating profit/ Core profit for the year-Gross profit decreased by 2.0% year-on-year to ¥1,003.5 billion. The cost-to-revenue ratio fell by 1.6 percentage points year-on-year to 19.7%, mainly due to changes in product mix.-Selling, general and administrative expenses increased by 1.0% year-on-year to ¥504.3 billion.

There were factors causing a decrease in expenses, including the promotion of the efficient use of expenses and optimization of resource allocation, and also refraining from promotional activities, etc. because of the spread of COVID-19.

Overall, however, total selling, general and administrative expenses slightly increased due to the increase of co-promotion fees associated with the growth of sales of XTANDI in the United States, and also there was a one-off reducing factor on expenses from a reversal of loss allowances in the previous year.-Research and development (R&D) expenses stayed almost flat, showing a 0.1% increase year-on-year to ¥224.5 billion. There was a decrease in development expenses due to the impact of the spread of COVID-19 on the execution of a portion of clinical trials, but total R&D expenses were in the same range as those for the previous fiscal year due to an increase in development expenses for key post-POC pipeline projects, and the addition of R&D expenses from Audentes Therapeutics, Inc.

The R&D cost-to-revenue ratio was up 0.7 percentage points year-on-year to 18.0%.-Amortisation of intangible assets increased by 12.3% year-on-year to ¥23.8 billion. As a result of the above, core operating profit decreased by 9.5% year-on-year to ¥251.4 billion, and core profit for the year decreased by 5.9% year-on-year to ¥209.9 billion. Impact of exchange rate on financial results The exchange rates for the yen in FY2020 are shown in the table below.

The resulting impacts were a ¥4.6 billion decrease in revenue and a ¥7.3 billion decrease in core operating profit compared with if the exchange rates of FY2019 were applied. Consolidated financial results on a full basis in FY2020 are shown in the table below. Revenue, operating profit, profit before tax and profit for the year decreased across the board.

The full basis financial results include "Other income," "Other expenses," which are excluded from the core basis financial results. In FY2020, "Other income" was ¥7.6 billion (¥12.2 billion in the previous fiscal year) and "Other expenses" was ¥123.0 billion (¥45.9 billion in the previous fiscal year). As "Other expenses," the Company recorded impairment losses of ¥30.2 billion in relation to the termination of development for the anti-TIGIT antibody ASP8374/PTZ-201 in the second quarter of FY2020, and impairment losses of ¥58.8 billion in relation to a revision of the development plan for the gene therapy AT132 targeting patients with X-linked myotubular myopathy in the fourth quarter of FY2020, and as a result, in the financial results on a full basis, the decrease in profit was larger compared to the financial results on a core basis.

Prograf: Includes Advagraf, Graceptor, and ASTAGRAF XL.-Sales of XTANDI increased by 14.6% year-on-year to ¥458.4 billion. Sales increased in all regions of Japan, United States, Established Markets, Greater China, and International Markets.-Sales of XOSPATA increased by 67.2% year-on-year to ¥23.8 billion. In addition to an increase in sales in Japan, United States and Established Markets, sales commenced in International Markets in August 2020, and in Greater China in December 2020.-Co-promotion revenue of PADCEV grew significantly in United States, increasing by 607.3% year-on-year to ¥12.8 billion.-Evrenzo for the treatment of renal anemia, which has been sales commenced in Japan since November 2019, steadily increased.-Sales of Betanis / Myrbetriq / BETMIGA increased by 1.2% year-on-year to ¥163.6 billion.

While sales decreased in United States due to decreased demand, etc. associated with the reduction of patient visits to hospitals/clinics as a result of the impact of the spread of COVID-19, sales grew in Japan, Established Markets, Greater China and International Markets.-Sales of Prograf decreased by 5.3% year-on-year to ¥182.7 billion. Sales in Greater China increased, and sales in International Markets achieved similar levels year on year.

On the other hand, sales decreased in other regions.-In Japan, new product group sales continued to increase, including those of EVENITY, Suglat and SUJANU Combination Tablets. On the other hand, the main factor for the decrease in sales was the termination of sales agreements for Symbicort, human vaccines of KM Biologics Co., Ltd., Micardis family and Celecox.-In United States, sales of pharmacologic stress agent Lexiscan decreased due to decreased demand associated with the reduction of patient visits to hospitals/clinics as a result of the impact of the spread of COVID-19, mainly in the first quarter of FY 2020.2) Progress of initiatives for sustainable growth

The Company has been pursuing initiatives for sustainable growth over the mid to long term, based on its Strategic Plan 2018, the final year of which was FY2020, which set forth three main strategic goals toward: "Maximizing Product VALUE and Operational Excellence," "Evolving How We Create VALUE-With Focus Area Approach" and "Developing Rx+ programs."

The following are the main initiatives during the FY2020: The Company has been developing and maximizing the product VALUE of the Company’s growth drivers such as the main products XTANDI for the treatment of prostate cancer and Betanis / Myrbetriq / BETMIGA for overactive bladder (OAB) treatment in addition to XOSPATA for the treatment of acute myeloid leukemia, PADCEV for the treatment of urothelial cancer and Evrenzo for the treatment of renal anemia, which were launched during the Strategic Plan 2018.

・ With regard to XTANDI, the Company worked to further strengthen market access and further increase penetration of XTANDI amongst urologists, and has been making efforts to increase the market penetration of XTANDI to the patients with prostate cancer in earlier stages by utilizing robust data based on clinical trials accumulated after launch.

・ With regard to Betanis / Myrbetriq / BETMIGA, the Company aimed to expand the market through continuous disease education activities, and worked to establish it as the first choice of therapy through the penetration of a balance of efficacy and safety.

・ With regard to XOSPATA, the Company steadily expanded the number of countries/areas where it launched by launching it in Japan and the United States in December 2018, and Europe in November 2019. Furthermore, the Company worked to increase penetration of XOSPATA amongst hematologists/oncologists as a new option for acute myeloid leukemia, and established its position as market leader by increasing product awareness and the rate that testing for FMS-like tyrosine kinase 3 (FLT3) mutations is carried out.

・ With regard to PADCEV, the Company worked to penetrate it into the market rapidly as a new treatment option for urothelial cancer by launching it in the United States in December 2019, and established its position as a preferred treatment option for patients with approved indications.

・ With regard to Evrenzo, the Company launched it in Japan in November 2019, worked to penetrate it into the market by differentiating it through the spread of a new mechanism of action, and worked to expand its market share as a first-in-class HIF-PH inhibitorIncluding these products, the Company is steadily advancing product development by preferentially allocating management resources to key post-POC pipeline projects that will support sustainable growth over the mid-to long-term.

Much progress was made in each project, including an application for approval with the aim of expanding indications of PADCEV in the United States, the obtaining of approval for XOSPATA in China, and the obtaining of approval for supplemental applications for Evrenzo in Japan.

The following are the main progress of each key post-POC pipeline project.

◇ XTANDI (enzalutamide) for the treatment of prostate cancer May 2020 In Japan, the Company obtained approval for supplemental applications for distant metastatic prostate cancer. June 2020 In Europe, the Company submitted an application for approval of its appended documentation giving data on overall survival found in the Phase 3 PROSPER trial on patients with non-metastatic castration-resistant prostate cancer.

October 2020 In the United States, the Company obtained approval of its appended documentation giving data on overall survival found in the Phase 3 PROSPER trial on patients with non-metastatic castration-resistant prostate cancer. November 2020 In China, the Company obtained approval for supplemental applications for non-metastatic castration-resistant prostate cancer. March 2021 In Europe, a positive CHMP (Committee for Medicinal Products for Human Use) opinion for supplemental applications for metastatic hormone-sensitive prostate cancer was adopted.

◇ XOSPATA (gilteritinib) for the treatment of acute myeloid leukemia December 2020 The Company discontinued patient registration for the Phase 3 LACEWING trial for patients with untreated acute myeloid leukemia with FLT3 mutation as it was unable to achieve longer overall survival, which is the primary endpoint. January 2021 In China, the Company obtained conditional approval as a treatment for adult patients with relapsed/refractory acute myeloid leukemia with FLT3 mutation.

March 2021 The Company announced that in the interim analysis of the Phase 3 COMMODORE trial, XOSPATA achieved a primary endpoint (overall survival) among patients with relapsed/refractory acute myeloid leukemia with FLT3 mutation.PADCEV (enfortumab vedotin) for the treatment of urothelial cancer September 2020 The Company announced that in the Phase 3 EV-301 trial, PADCEV statistically demonstrated significantly longer overall survival, which is a primary endpoint, than chemotherapy among patients with locally advanced or metastatic urothelial cancer, which had previously been treated with chemotherapy, including platinum-containing chemotherapy, and PD-1 or PD-L1 inhibitors.

October 2020 The Company announced satisfactory results for cohort 2 in the Phase 2 EV-201 trial among patients with locally advanced or metastatic urothelial cancer who have been treated with PD-1 or PD-L1 inhibitors, and have not been treated with platinumcontaining chemotherapy and are ineligible for cisplatin. February 2021 In the United States, the Company submitted a supplemental Biologics License Application with the aim of converting from accelerated approval to regular approval based on the results of the Phase 3 EV-301 trial among patients with locally advanced or metastatic urothelial cancer, which had previously been treated with chemotherapy, including platinum-containing chemotherapy, and PD-1 or PD-L1 inhibitors.

February 2021 In the United States, the Company submitted a supplemental Biologics License Application with the aim of expanding indications based on the results of cohort 2 in the Phase 2 EV-201 trial among patients with locally advanced or metastatic urothelial cancer who have been treated with PD-1 or PD-L1 inhibitors, and are ineligible for cisplatin. March 2021 In Japan, the Company submitted an application for approval of PADCEV as a treatment for patients with locally advanced or metastatic urothelial cancer who have been treated. March 2021 In Europe, the application for approval of PADCEV as a treatment for locally advanced or metastatic urothelial cancer, which had previously been treated with chemotherapy, including platinumcontaining chemotherapy, and PD-1 or PD-L1 inhibitors, was designated for accelerated assessment.

◇ Evrenzo (roxadustat) for the treatment of renal anemia April 2020 In Europe, the Company submitted an application for approval of Evrenzo as a treatment for renal anemia in adult patients. November 2020 In Japan, the Company obtained approval for a supplemental application for Evrenzo as a treatment for renal anemia in patients on non-dialysis.

◇ Fezolinetant, a selective neurokinin-3 receptor antagonist February 2021 In two Phase 3 trials in patients with moderate-to-severe vasomotor symptoms associated with menopause (SKYLIGHT 1 and SKYLIGHT 2), the Company announced that all primary endpoints were met with statistically significant improvements in the frequency and severity of vasomotor symptoms compared to placebo.

◇ Zolbetuximab, an anti-Claudin 18.2 monoclonal antibody Phase 3 trials for gastric and gastroesophageal junction adenocarcinoma, and a Phase 2 trial for pancreatic adenocarcinoma is underway. In addition to the above, the main developments, including approvals and applications for approvals, were as follows. May 2020 The Company received approval in the United States for an additional indication of neurogenic bladder in pediatric patients aged two years and older for the OAB treatment Vesicare. December 2020 The Company submitted an application in the United States for immunosuppressant agent Prograf for an additional indication of prevention of rejection in lung transplantation. March 2021 The Company obtained the approval of a new formulation, granules for suspension (oral extended-release formulation) and existing tablets (extended-release formulation) for the additional indication of neurogenic detrusor overactivity in children aged three years and older for the OAB treatment Myrbetriq in the United States.

In FY2020, the Company transferred marketing, etc. as follows. October 2020 The Company transferred the marketing authorizations and distribution of the psychotropic/medicine for the treatment of peptic ulcers Dogmatil to Nichi-Iko Pharmaceutical Co., Ltd. in Japan. December 2020 With regard to the non-steroidal Celecox for the treatment of inflammation and pain, the Company has terminated the joint sales promotion activities in Japan with Viatris Pharmaceuticals Japan Inc.

In addition, the Company plans to transfer the manufacturing and marketing authorization of Celecox from the Company to Viatris Pharmaceuticals Japan Inc. and transfer the distribution of the product to Viatris Pharmaceuticals Japan Inc. on July 31, 2021. 11 March 2021 In Japan, the Company has terminated the joint sales promotion activities of Acofide, a treatment for functional dyspepsia, with Zeria Pharmaceutical Co., Ltd. and transferred the distribution and marketing of the product to Zeria Pharmaceutical Co., Ltd. As our approach to pursuit even greater Operational Excellence, the Company has taken a multifaceted approach to reviewing activities and has been working to strengthen its business base. The following are the main initiatives during the FY2020: November 2020 The Company has decided to absorb and merge its wholly owned subsidiaries Astellas Pharma Tech Co., Ltd. and Astellas Green Supply, Inc. (effective date of absorption mergers: April 1, 2022 (planned)) November 2020

The Company has entered into an asset transfer agreement with Tillotts Pharma AG to transfer the manufacturing and marketing authorization of DIFICLIR tablets, a treatment of Clostridium difficile infection, to Tillotts Pharma AG in Europe, the Middle East, Africa, and some regions of the Commonwealth of Independent States, and is proceeding with the succession in the subject countries and regions. January 2021 The Kyushu Distribution Center, the Company’s fourth distribution base in Japan, began operations in Kitakyushu City, Fukuoka Prefecture. January 2021 The Company decided to newly construct a sterile drug production line in the Yaizu Technology Center of Astellas Pharma Tech Co., Ltd., a manufacturing subsidiary of the Company, and started construction.

January 2021 The Company returned to Tolmar International Limited the license for Eligard, a treatment for advanced prostate cancer, which had been marketed by Astellas Pharma Europe Ltd., a subsidiary of the Company, in Europe, the Middle East, the Commonwealth of Independent States, and Asia. In addition, the Company signed an agreement with Recordati Industria Chimica e Farmaceutica S.p.A., which sells Eligard under a new license from Tolmar International Limited, regarding the transfer of manufacturing and marketing authorization and the transfer of distribution, and is proceeding with the succession in the subject countries and regions.

On April 27, 2021 Astellas Pharma Inc. (TSE: 4503, President and CEO: Kenji Yasukawa, Ph.D., "Astellas") reported that it booked an impairment loss in the fourth quarter of the fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021) and that there are differences between the financial forecasts (Full basis), which were reported on October 30, 2020, and the actual results for the fiscal year 2020 (Press release, Astellas, APR 27, 2021, View Source [SID1234578522]).

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(1) Booking and details of impairment loss

Astellas booked an impairment loss of ¥58.8 billion as other expenses in the fourth quarter of fiscal year 2020 not included in the financial forecasts (Full basis) announced on October 30, 2020.

In December 2020, Astellas was notified that the U.S. Food and Drug Administration (FDA) lifted the clinical hold for the ASPIRO clinical trial evaluating investigational gene therapy AT132 in patients with X-linked myotubular myopathy (XLMTM). Astellas then reassessed the development plan and recognized a delay in approval timing in the U.S. and Europe. Astellas also revised the likely approved population from our initial assessment. As a result of these updates, Astellas booked an impairment loss.

Astellas is deeply committed to the continued safe development of AT132 for the families and patients living with XLMTM, a disease with no existing treatments. There is no change to our plan to continue development. We will conduct future discussions with regulators on the path forward toward registration filings for AT132.

(2) The Differences Between Financial Forecasts (announced on October 30, 2020) and Actual results for the Year Ended March 31, 2021 (IFRS basis)

Operating profit and other line items (Full basis) were lower than the forecasts due to the such matters as impairment loss of intangible assets as discussed above.

About Astellas Gene therapies Astellas integrated its wholly owned subsidiary, Audentes Therapeutics, as of April 1, 2021 and establish "Astellas Gene Therapies" within the organization as Astellas Center of Excellence developing genetic medicines with the potential to deliver transformative value for patients. Based on an innovative scientific approach and industry leading internal manufacturing capability and expertise, we are currently exploring three gene therapy modalities: gene replacement, exon skipping gene therapy, and vectorized RNA knockdown and will also advance additional Astellas gene therapy programs toward clinical investigation. We are based in San Francisco, with manufacturing and laboratory facilities in South San Francisco and Sanford, North Carolina.

About X-linked Myotubular Myopathy
XLMTM is a serious, life-threatening, rare neuromuscular disease that is characterized by extreme muscle weakness, respiratory failure and early death. Mortality rates are estimated to be 50 percent in the first 18 months of life. For those patients who survive past infancy, there is an estimated additional 25 percent mortality by the age of 10. XLMTM is caused by mutations in the MTM1 gene that lead to a lack or dysfunction of myotubularin, a protein that is needed for normal development, maturation and function of skeletal muscle cells. The disease affects approximately 1 in 40,000 to 50,000 newborn males.

XLMTM places a substantial burden of care on patients, families and the healthcare system, including high rates of healthcare utilization, hospitalization and surgical intervention. More than 80 percent of XLMTM patients require ventilator support, and the majority of patients require a gastrostomy tube for nutritional support. In most patients, normal developmental motor milestones are delayed or never 3 achieved. Currently, only supportive treatment options, such as ventilator use or a feeding tube, are available. About AT132 for the treatment of X-linked Myotubular Myopathy AT132 is an AAV8 vector containing a functional copy of the MTM1 gene, for the treatment of XLMTM. AT132 may provide patients with significantly improved outcomes based on the ability of AAV8 to target skeletal muscle and increase myotubularin expression in targeted tissues following a single intravenous administration. AT132 has been granted Regenerative Medicine and Advanced Therapy (RMAT), Rare Pediatric Disease, Fast Track, and Orphan Drug designations by the U.S. Food and Drug Administration (FDA), and Priority Medicines (PRIME) and Orphan Drug designations by the European Medicines Agency (EMA).

About the ASPIRO Study
ASPIRO Study (NCT03199469) is multinational, randomized, open-label ascending dose trial to evaluate the safety and preliminary efficacy of AT132 in XLMTM patients less than five years of age. Primary endpoints include safety (adverse events and certain laboratory measures) and efficacy (assessments of neuromuscular and respiratory function). Secondary endpoints include the burden of disease and healthrelated quality-of-life, and muscle tissue histology and biomarkers.

On April 27, 2021 Advaxis, Inc. (NASDAQ: ADXS), a clinical-stage biotechnology company focused on the development and commercialization of immunotherapy products, reported that the Company has achieved the second milestone under its licensing agreement for ADXS31-164, also known as ADXS-HER2, to OS Therapies for evaluation in the treatment of osteosarcoma in humans (Press release, Advaxis, APR 27, 2021, View Source [SID1234578521]).

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Under the terms of the license agreement, OS Therapies, in collaboration with the Children’s Oncology Group (COG), is responsible for the conduct and funding of a clinical study evaluating ADXS-HER2 in recurrent, completely resected osteosarcoma. OS Therapies recently completed a financing, triggering the second milestone payment. Under the agreement, Advaxis has the opportunity to receive additional clinical, regulatory, and sales-based milestone payments as well as royalties on future product sales. Additional details of the financial terms have not been disclosed.

"This funding milestone for OS Therapies brings OST-HER2, originally ADXS-HER2, one step closer to the clinic," said Kenneth A. Berlin, President and Chief Executive Officer of Advaxis. "We are confident in the potential of OST-HER2, which had been approved in the U.S. for the adjuvant treatment of osteosarcoma in canines, and are proud to have played a role in the development of this important new candidate for osteosarcoma patients. We look forward to the team at OST advancing the program, building upon our early Phase 1 data evaluating ADXS-HER2."

Mr. Berlin continued, "This milestone payment will provide Advaxis additional capital as we build momentum across our growing ADXS-HOT neoantigen-directed off-the-shelf clinical programs. To date, we have assembled a robust clinical and translational data set which suggests our unique approach has the potential to enhance and/or restore responses to checkpoint inhibitors in lung cancer. We look forward to leveraging these resources as we advance ADXS-503, currently being evaluated in our Phase 1/2 study in NSCLC, and ADXS-504 for early-stage prostate cancer, which is on-track to enter the clinic in Q2 2021."