On January 31, 2021 MediciNova, Inc., a biopharmaceutical company traded on the NASDAQ Global Market (NASDAQ:MNOV) and the JASDAQ Market of the Tokyo Stock Exchange (Code Number: 4875), reported the closing of the previously announced private placement transaction under a Securities Purchase Agreement, dated January 11, 2021, pursuant to which MediciNova issued US$20 million in shares of its common stock to 3D Opportunity Master Fund, a fund managed by 3D Investment Partners Pte. Ltd. ("3D") (Press release, MediciNova, JAN 31, 2021, View Source [SID1234574441]).

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MediciNova intends to use the proceeds received from the private placement primarily for the following three programs:

1) To initiate a new clinical trial of MN-166 (ibudilast) for glioblastoma, which could be a pivotal trial.

2) To develop an intravenous formulation of MN-166 (ibudilast), which is ideal for amyotrophic lateral sclerosis (ALS) patients who have difficulty with swallowing.

3) To initiate a Phase 2 clinical trial of MN-001 (tipelukast) in nonalcoholic steatohepatitis (NASH).

On January 29, 2021 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported first-time data from the Phase 3 KEYNOTE-598 study evaluating KEYTRUDA, Merck’s anti-PD-1 therapy, in combination with ipilimumab (Yervoy) compared with KEYTRUDA monotherapy as first-line treatment for patients with metastatic non-small cell lung cancer (NSCLC) without EGFR or ALK genomic tumor aberrations and whose tumors express PD-L1 (tumor proportion score [TPS] ≥50%) (Press release, Merck & Co, JAN 29, 2021, View Source [SID1234574419]). Results of the study showed that the addition of ipilimumab to KEYTRUDA did not improve overall survival (OS) or progression-free survival (PFS) but added toxicity compared with KEYTRUDA monotherapy in these patients. The median OS was 21.4 months for patients randomized to KEYTRUDA in combination with ipilimumab versus 21.9 months for those randomized to KEYTRUDA monotherapy (HR=1.08 [95% CI, 0.85-1.37]; p=0.74). Additionally, the median PFS was 8.2 months for patients in the combination arm versus 8.4 months for those in the KEYTRUDA monotherapy arm (HR=1.06 [95% CI, 0.86-1.30]; p=0.72).

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"In KEYNOTE-598, the addition of ipilimumab to KEYTRUDA did not improve overall survival or progression-free survival, and patients who received the combination were more likely to experience serious side effects than those who received KEYTRUDA monotherapy," said Dr. Michael Boyer, chief clinical officer and conjoint chair of thoracic oncology, Chris O’Brien Lifehouse, Camperdown, NSW, Australia. "KEYTRUDA monotherapy remains a standard of care for the first-line treatment of certain patients with metastatic non-small cell lung cancer whose tumors express PD-L1."

"As a leader in lung cancer, we are pursuing a broad clinical program to better understand the potential of KEYTRUDA-based combinations to improve survival outcomes for patients with this devastating disease," said Dr. Roy Baynes, senior vice president and head of global clinical development, chief medical officer, Merck Research Laboratories. "KEYNOTE-598 is the first head-to-head study designed to answer the question of whether combining KEYTRUDA with ipilimumab provided additional clinical benefits beyond treatment with KEYTRUDA alone in certain patients with metastatic non-small cell lung cancer. The results are clear – the combination did not add clinical benefit but did add toxicity."

These results were presented in the Presidential Symposium at the IASLC 2020 World Conference on Lung Cancer hosted by the International Association for the Study of Lung Cancer on Friday, Jan. 29 and published in the Journal of Clinical Oncology. As previously announced in Nov. 2020, the study was discontinued due to futility based on the recommendation of an independent Data Monitoring Committee (DMC), which determined the benefit/risk profile of KEYTRUDA in combination with ipilimumab did not support continuing the trial. The DMC also advised that patients in the study discontinue treatment with ipilimumab/placebo.

KEYNOTE-598 Study Design and Additional Data (Late-Breaking Abstract #PS01.09)

KEYNOTE-598 (ClinicalTrials.gov, NCT03302234) is a randomized, double-blind, Phase 3 trial designed to evaluate KEYTRUDA in combination with ipilimumab compared to KEYTRUDA monotherapy as first-line treatment for patients with metastatic NSCLC without EGFR or ALK genomic tumor aberrations and whose tumors express PD-L1 (TPS ≥50%). The dual primary endpoints are OS and PFS. Secondary endpoints include objective response rate (ORR), duration of response (DOR) and safety.

The study enrolled 568 patients who were randomized 1:1 to receive KEYTRUDA (200 mg intravenously [IV] on Day 1 of each three-week cycle for up to 35 cycles) in combination with ipilimumab (1 mg/kg IV on Day 1 of each six-week cycle for up to 18 cycles); or KEYTRUDA (200 mg IV on Day 1 of each three-week cycle for up to 35 cycles) as monotherapy. Non-binding futility criteria for the study were based on restricted mean survival time (RMST), an alternative outcome measure estimated as the area under the survival curve through a fixed timepoint. The pre-specified criteria were differences in RMST for KEYTRUDA in combination with ipilimumab and KEYTRUDA monotherapy of ≤0.2 at the maximum observation time and ≤0.1 at 24 months of follow-up.

As of data cut-off, the median study follow-up was 20.6 months. Findings showed the median OS was 21.4 months for patients randomized to KEYTRUDA in combination with ipilimumab (n=284) versus 21.9 months for those randomized to KEYTRUDA monotherapy (n=284) (HR=1.08 [95% CI, 0.85-1.37]; p=0.74). The differences in RMST for KEYTRUDA in combination with ipilimumab and KEYTRUDA monotherapy were -0.56 at the maximum observation time and -0.52 at 24 months, meeting the futility criteria for the trial and confirming the benefit/risk profile of the combination did not support continuing the study. Additionally, the median PFS was 8.2 months for patients randomized to KEYTRUDA in combination with ipilimumab versus 8.4 months for those randomized to KEYTRUDA monotherapy (HR=1.06 [95% CI, 0.86-1.30]; p=0.72). In both arms of the study, ORR was 45.4%; the median DOR was 16.1 months for patients randomized to KEYTRUDA in combination with ipilimumab versus 17.3 months for those randomized to KEYTRUDA monotherapy.

No new safety signals for KEYTRUDA monotherapy were observed. Treatment-related adverse events (TRAEs) occurred in 76.2% of patients treated with KEYTRUDA in combination with ipilimumab versus 68.3% of patients treated with KEYTRUDA monotherapy. Of these TRAEs, 35.1% vs. 19.6% were Grade 3-5, 27.7% vs. 13.9% were serious, 6.0% vs. 3.2% led to discontinuation of ipilimumab or placebo, 19.1% vs. 7.5% led to discontinuation of both drugs and 2.5% vs. 0.0% (no patients) led to death. Additionally, immune-mediated adverse events (AEs) and infusion reactions occurred in 44.7% of patients treated with KEYTRUDA in combination with ipilimumab versus 32.4% of patients treated with KEYTRUDA monotherapy. Of these immune-mediated AEs, 20.2% vs. 7.8% were Grade 3-5, 19.1% vs. 7.1% were serious, 1.8% vs. 1.1% led to discontinuation of ipilimumab or placebo, 12.1% vs. 4.3% led to discontinuation of both drugs and 2.1% vs. 0.0% (no patients) led to death.

About Lung Cancer

Lung cancer, which forms in the tissues of the lungs, usually within cells lining the air passages, is the leading cause of cancer death worldwide. Each year, more people die of lung cancer than die of colon and breast cancers combined. The two main types of lung cancer are non-small cell and small cell. Non-small cell lung cancer (NSCLC) is the most common type of lung cancer, accounting for about 85% of all cases. Small cell lung cancer (SCLC) accounts for about 10% to 15% of all lung cancers. Before 2014, the five-year survival rate for patients diagnosed in the U.S. with NSCLC and SCLC was estimated to be 5% and 6%, respectively.

About KEYTRUDA (pembrolizumab) Injection, 100 mg

KEYTRUDA is an anti-PD-1 therapy that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. KEYTRUDA is a humanized monoclonal antibody that blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2, thereby activating T lymphocytes which may affect both tumor cells and healthy cells.

Merck has the industry’s largest immuno-oncology clinical research program. There are currently more than 1,300 trials studying KEYTRUDA across a wide variety of cancers and treatment settings. The KEYTRUDA clinical program seeks to understand the role of KEYTRUDA across cancers and the factors that may predict a patient’s likelihood of benefitting from treatment with KEYTRUDA, including exploring several different biomarkers.

Selected KEYTRUDA (pembrolizumab) Indications in the U.S.

Melanoma

KEYTRUDA is indicated for the treatment of patients with unresectable or metastatic melanoma.

KEYTRUDA is indicated for the adjuvant treatment of patients with melanoma with involvement of lymph node(s) following complete resection.

Non-Small Cell Lung Cancer

KEYTRUDA, in combination with pemetrexed and platinum chemotherapy, is indicated for the first-line treatment of patients with metastatic nonsquamous non-small cell lung cancer (NSCLC), with no EGFR or ALK genomic tumor aberrations.

KEYTRUDA, in combination with carboplatin and either paclitaxel or paclitaxel protein-bound, is indicated for the first-line treatment of patients with metastatic squamous NSCLC.

KEYTRUDA, as a single agent, is indicated for the first-line treatment of patients with NSCLC expressing PD-L1 [tumor proportion score (TPS) ≥1%] as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations, and is stage III where patients are not candidates for surgical resection or definitive chemoradiation, or metastatic.

KEYTRUDA, as a single agent, is indicated for the treatment of patients with metastatic NSCLC whose tumors express PD-L1 (TPS ≥1%) as determined by an FDA-approved test, with disease progression on or after platinum-containing chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving KEYTRUDA.

Small Cell Lung Cancer

KEYTRUDA is indicated for the treatment of patients with metastatic small cell lung cancer (SCLC) with disease progression on or after platinum-based chemotherapy and at least 1 other prior line of therapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

Head and Neck Squamous Cell Cancer

KEYTRUDA, in combination with platinum and fluorouracil (FU), is indicated for the first-line treatment of patients with metastatic or with unresectable, recurrent head and neck squamous cell carcinoma (HNSCC).

KEYTRUDA, as a single agent, is indicated for the first-line treatment of patients with metastatic or with unresectable, recurrent HNSCC whose tumors express PD-L1 [combined positive score (CPS) ≥1] as determined by an FDA-approved test.

KEYTRUDA, as a single agent, is indicated for the treatment of patients with recurrent or metastatic HNSCC with disease progression on or after platinum-containing chemotherapy.

Classical Hodgkin Lymphoma

KEYTRUDA is indicated for the treatment of adult patients with relapsed or refractory classical Hodgkin lymphoma (cHL).

KEYTRUDA is indicated for the treatment of pediatric patients with refractory cHL, or cHL that has relapsed after 2 or more lines of therapy.

Primary Mediastinal Large B-Cell Lymphoma

KEYTRUDA is indicated for the treatment of adult and pediatric patients with refractory primary mediastinal large B-cell lymphoma (PMBCL), or who have relapsed after 2 or more prior lines of therapy. KEYTRUDA is not recommended for treatment of patients with PMBCL who require urgent cytoreductive therapy.

Urothelial Carcinoma

KEYTRUDA is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) who are not eligible for cisplatin-containing chemotherapy and whose tumors express PD-L1 (CPS ≥10), as determined by an FDA-approved test, or in patients who are not eligible for any platinum-containing chemotherapy regardless of PD-L1 status. This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

KEYTRUDA is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) who have disease progression during or following platinum-containing chemotherapy or within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy.

KEYTRUDA is indicated for the treatment of patients with Bacillus Calmette-Guerin (BCG)-unresponsive, high-risk, non-muscle invasive bladder cancer (NMIBC) with carcinoma in situ (CIS) with or without papillary tumors who are ineligible for or have elected not to undergo cystectomy.

Microsatellite Instability-High or Mismatch Repair Deficient Cancer

KEYTRUDA is indicated for the treatment of adult and pediatric patients with unresectable or metastatic microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR)

solid tumors that have progressed following prior treatment and who have no satisfactory alternative treatment options, or
colorectal cancer that has progressed following treatment with fluoropyrimidine, oxaliplatin, and irinotecan.
This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. The safety and effectiveness of KEYTRUDA in pediatric patients with MSI-H central nervous system cancers have not been established.

Microsatellite Instability-High or Mismatch Repair Deficient Colorectal Cancer

KEYTRUDA is indicated for the first-line treatment of patients with unresectable or metastatic MSI-H or dMMR colorectal cancer (CRC).

Gastric Cancer

KEYTRUDA is indicated for the treatment of patients with recurrent locally advanced or metastatic gastric or gastroesophageal junction (GEJ) adenocarcinoma whose tumors express PD-L1 (CPS ≥1) as determined by an FDA-approved test, with disease progression on or after two or more prior lines of therapy including fluoropyrimidine- and platinum-containing chemotherapy and if appropriate, HER2/neu-targeted therapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

Esophageal Cancer

KEYTRUDA is indicated for the treatment of patients with recurrent locally advanced or metastatic squamous cell carcinoma of the esophagus whose tumors express PD-L1 (CPS ≥10) as determined by an FDA-approved test, with disease progression after one or more prior lines of systemic therapy.

Cervical Cancer

KEYTRUDA is indicated for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy whose tumors express PD-L1 (CPS ≥1) as determined by an FDA-approved test. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

Hepatocellular Carcinoma

KEYTRUDA is indicated for the treatment of patients with hepatocellular carcinoma (HCC) who have been previously treated with sorafenib. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

Merkel Cell Carcinoma

KEYTRUDA is indicated for the treatment of adult and pediatric patients with recurrent locally advanced or metastatic Merkel cell carcinoma (MCC). This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

Renal Cell Carcinoma

KEYTRUDA, in combination with axitinib, is indicated for the first-line treatment of patients with advanced renal cell carcinoma (RCC).

Tumor Mutational Burden-High

KEYTRUDA is indicated for the treatment of adult and pediatric patients with unresectable or metastatic tumor mutational burden-high (TMB-H) [≥10 mutations/megabase] solid tumors, as determined by an FDA-approved test, that have progressed following prior treatment and who have no satisfactory alternative treatment options. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. The safety and effectiveness of KEYTRUDA in pediatric patients with TMB-H central nervous system cancers have not been established.

Cutaneous Squamous Cell Carcinoma

KEYTRUDA is indicated for the treatment of patients with recurrent or metastatic cutaneous squamous cell carcinoma (cSCC) that is not curable by surgery or radiation.

Triple-Negative Breast Cancer

KEYTRUDA, in combination with chemotherapy, is indicated for the treatment of patients with locally recurrent unresectable or metastatic triple-negative breast cancer (TNBC) whose tumors express PD-L1 (CPS ≥10) as determined by an FDA-approved test.

This indication is approved under accelerated approval based on progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

Selected Important Safety Information for KEYTRUDA

Severe and Fatal Immune-Mediated Adverse Reactions

KEYTRUDA is a monoclonal antibody that belongs to a class of drugs that bind to either the programmed death receptor-1 (PD-1) or the programmed death ligand 1 (PD-L1), blocking the PD-1/PD-L1 pathway, thereby removing inhibition of the immune response, potentially breaking peripheral tolerance and inducing immune-mediated adverse reactions. Immune-mediated adverse reactions, which may be severe or fatal, can occur in any organ system or tissue, can affect more than one body system simultaneously, and can occur at any time after starting treatment or after discontinuation of treatment. Important immune-mediated adverse reactions listed here may not include all possible severe and fatal immune-mediated adverse reactions.

Monitor patients closely for symptoms and signs that may be clinical manifestations of underlying immune-mediated adverse reactions. Early identification and management are essential to ensure safe use of anti–PD-1/PD-L1 treatments. Evaluate liver enzymes, creatinine, and thyroid function at baseline and periodically during treatment. In cases of suspected immune-mediated adverse reactions, initiate appropriate workup to exclude alternative etiologies, including infection. Institute medical management promptly, including specialty consultation as appropriate.

Withhold or permanently discontinue KEYTRUDA depending on severity of the immune-mediated adverse reaction. In general, if KEYTRUDA requires interruption or discontinuation, administer systemic corticosteroid therapy (1 to 2 mg/kg/day prednisone or equivalent) until improvement to Grade 1 or less. Upon improvement to Grade 1 or less, initiate corticosteroid taper and continue to taper over at least 1 month. Consider administration of other systemic immunosuppressants in patients whose adverse reactions are not controlled with corticosteroid therapy.

Immune-Mediated Pneumonitis

KEYTRUDA can cause immune-mediated pneumonitis. The incidence is higher in patients who have received prior thoracic radiation. Immune-mediated pneumonitis occurred in 3.4% (94/2799) of patients receiving KEYTRUDA, including fatal (0.1%), Grade 4 (0.3%), Grade 3 (0.9%), and Grade 2 (1.3%) reactions. Systemic corticosteroids were required in 67% (63/94) of patients. Pneumonitis led to permanent discontinuation of KEYTRUDA in 1.3% (36) and withholding in 0.9% (26) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement; of these, 23% had recurrence. Pneumonitis resolved in 59% of the 94 patients.

Pneumonitis occurred in 8% (31/389) of adult patients with cHL receiving KEYTRUDA as a single agent, including Grades 3-4 in 2.3% of patients. Patients received high-dose corticosteroids for a median duration of 10 days (range: 2 days to 53 months). Pneumonitis rates were similar in patients with and without prior thoracic radiation. Pneumonitis led to discontinuation of KEYTRUDA in 5.4% (21) of patients. Of the patients who developed pneumonitis, 42% interrupted KEYTRUDA, 68% discontinued KEYTRUDA, and 77% had resolution.

Immune-Mediated Colitis

KEYTRUDA can cause immune-mediated colitis, which may present with diarrhea. Cytomegalovirus infection/reactivation has been reported in patients with corticosteroid-refractory immune-mediated colitis. In cases of corticosteroid-refractory colitis, consider repeating infectious workup to exclude alternative etiologies. Immune-mediated colitis occurred in 1.7% (48/2799) of patients receiving KEYTRUDA, including Grade 4 (<0.1%), Grade 3 (1.1%), and Grade 2 (0.4%) reactions. Systemic corticosteroids were required in 69% (33/48); additional immunosuppressant therapy was required in 4.2% of patients. Colitis led to permanent discontinuation of KEYTRUDA in 0.5% (15) and withholding in 0.5% (13) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement; of these, 23% had recurrence. Colitis resolved in 85% of the 48 patients.

Hepatotoxicity and Immune-Mediated Hepatitis

KEYTRUDA as a Single Agent

KEYTRUDA can cause immune-mediated hepatitis. Immune-mediated hepatitis occurred in 0.7% (19/2799) of patients receiving KEYTRUDA, including Grade 4 (<0.1%), Grade 3 (0.4%), and Grade 2 (0.1%) reactions. Systemic corticosteroids were required in 68% (13/19) of patients; additional immunosuppressant therapy was required in 11% of patients. Hepatitis led to permanent discontinuation of KEYTRUDA in 0.2% (6) and withholding in 0.3% (9) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement; of these, none had recurrence. Hepatitis resolved in 79% of the 19 patients.

KEYTRUDA with Axitinib

KEYTRUDA in combination with axitinib can cause hepatic toxicity. Monitor liver enzymes before initiation of and periodically throughout treatment. Consider monitoring more frequently as compared to when the drugs are administered as single agents. For elevated liver enzymes, interrupt KEYTRUDA and axitinib, and consider administering corticosteroids as needed. With the combination of KEYTRUDA and axitinib, Grades 3 and 4 increased alanine aminotransferase (ALT) (20%) and increased aspartate aminotransferase (AST) (13%) were seen at a higher frequency compared to KEYTRUDA alone. Fifty-nine percent of the patients with increased ALT received systemic corticosteroids. In patients with ALT ≥3 times upper limit of normal (ULN) (Grades 2-4, n=116), ALT resolved to Grades 0-1 in 94%. Among the 92 patients who were rechallenged with either KEYTRUDA (n=3) or axitinib (n=34) administered as a single agent or with both (n=55), recurrence of ALT ≥3 times ULN was observed in 1 patient receiving KEYTRUDA, 16 patients receiving axitinib, and 24 patients receiving both. All patients with a recurrence of ALT ≥3 ULN subsequently recovered from the event.

Immune-Mediated Endocrinopathies

Adrenal Insufficiency

KEYTRUDA can cause primary or secondary adrenal insufficiency. For Grade 2 or higher, initiate symptomatic treatment, including hormone replacement as clinically indicated. Withhold KEYTRUDA depending on severity. Adrenal insufficiency occurred in 0.8% (22/2799) of patients receiving KEYTRUDA, including Grade 4 (<0.1%), Grade 3 (0.3%), and Grade 2 (0.3%) reactions. Systemic corticosteroids were required in 77% (17/22) of patients; of these, the majority remained on systemic corticosteroids. Adrenal insufficiency led to permanent discontinuation of KEYTRUDA in <0.1% (1) and withholding in 0.3% (8) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement.

Hypophysitis

KEYTRUDA can cause immune-mediated hypophysitis. Hypophysitis can present with acute symptoms associated with mass effect such as headache, photophobia, or visual field defects. Hypophysitis can cause hypopituitarism. Initiate hormone replacement as indicated. Withhold or permanently discontinue KEYTRUDA depending on severity. Hypophysitis occurred in 0.6% (17/2799) of patients receiving KEYTRUDA, including Grade 4 (<0.1%), Grade 3 (0.3%), and Grade 2 (0.2%) reactions. Systemic corticosteroids were required in 94% (16/17) of patients; of these, the majority remained on systemic corticosteroids. Hypophysitis led to permanent discontinuation of KEYTRUDA in 0.1% (4) and withholding in 0.3% (7) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement.

Thyroid Disorders

KEYTRUDA can cause immune-mediated thyroid disorders. Thyroiditis can present with or without endocrinopathy. Hypothyroidism can follow hyperthyroidism. Initiate hormone replacement for hypothyroidism or institute medical management of hyperthyroidism as clinically indicated. Withhold or permanently discontinue KEYTRUDA depending on severity. Thyroiditis occurred in 0.6% (16/2799) of patients receiving KEYTRUDA, including Grade 2 (0.3%). None discontinued, but KEYTRUDA was withheld in <0.1% (1) of patients.

Hyperthyroidism occurred in 3.4% (96/2799) of patients receiving KEYTRUDA, including Grade 3 (0.1%) and Grade 2 (0.8%). It led to permanent discontinuation of KEYTRUDA in <0.1% (2) and withholding in 0.3% (7) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement. Hypothyroidism occurred in 8% (237/2799) of patients receiving KEYTRUDA, including Grade 3 (0.1%) and Grade 2 (6.2%). It led to permanent discontinuation of KEYTRUDA in <0.1% (1) and withholding in 0.5% (14) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement. The majority of patients with hypothyroidism required long-term thyroid hormone replacement. The incidence of new or worsening hypothyroidism was higher in 1185 patients with HNSCC, occurring in 16% of patients receiving KEYTRUDA as a single agent or in combination with platinum and FU, including Grade 3 (0.3%) hypothyroidism. The incidence of new or worsening hypothyroidism was higher in 389 adult patients with cHL (17%) receiving KEYTRUDA as a single agent, including Grade 1 (6.2%) and Grade 2 (10.8%) hypothyroidism.

Type 1 Diabetes Mellitus (DM), Which Can Present With Diabetic Ketoacidosis

Monitor patients for hyperglycemia or other signs and symptoms of diabetes. Initiate treatment with insulin as clinically indicated. Withhold KEYTRUDA depending on severity. Type 1 DM occurred in 0.2% (6/2799) of patients receiving KEYTRUDA. It led to permanent discontinuation in <0.1% (1) and withholding of KEYTRUDA in <0.1% (1). All patients who were withheld reinitiated KEYTRUDA after symptom improvement.

Immune-Mediated Nephritis With Renal Dysfunction

KEYTRUDA can cause immune-mediated nephritis. Immune-mediated nephritis occurred in 0.3% (9/2799) of patients receiving KEYTRUDA, including Grade 4 (<0.1%), Grade 3 (0.1%), and Grade 2 (0.1%) reactions. Systemic corticosteroids were required in 89% (8/9) of patients. Nephritis led to permanent discontinuation of KEYTRUDA in 0.1% (3) and withholding in 0.1% (3) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement; of these, none had recurrence. Nephritis resolved in 56% of the 9 patients.

Immune-Mediated Dermatologic Adverse Reactions

KEYTRUDA can cause immune-mediated rash or dermatitis. Exfoliative dermatitis, including Stevens-Johnson syndrome, drug rash with eosinophilia and systemic symptoms, and toxic epidermal necrolysis, has occurred with anti–PD-1/PD-L1 treatments. Topical emollients and/or topical corticosteroids may be adequate to treat mild to moderate nonexfoliative rashes. Withhold or permanently discontinue KEYTRUDA depending on severity. Immune-mediated dermatologic adverse reactions occurred in 1.4% (38/2799) of patients receiving KEYTRUDA, including Grade 3 (1%) and Grade 2 (0.1%) reactions. Systemic corticosteroids were required in 40% (15/38) of patients. These reactions led to permanent discontinuation in 0.1% (2) and withholding of KEYTRUDA in 0.6% (16) of patients. All patients who were withheld reinitiated KEYTRUDA after symptom improvement; of these, 6% had recurrence. The reactions resolved in 79% of the 38 patients.

Other Immune-Mediated Adverse Reactions

The following clinically significant immune-mediated adverse reactions occurred at an incidence of <1% (unless otherwise noted) in patients who received KEYTRUDA or were reported with the use of other anti–PD-1/PD-L1 treatments. Severe or fatal cases have been reported for some of these adverse reactions. Cardiac/Vascular: Myocarditis, pericarditis, vasculitis; Nervous System: Meningitis, encephalitis, myelitis and demyelination, myasthenic syndrome/myasthenia gravis (including exacerbation), Guillain-Barré syndrome, nerve paresis, autoimmune neuropathy; Ocular: Uveitis, iritis and other ocular inflammatory toxicities can occur. Some cases can be associated with retinal detachment. Various grades of visual impairment, including blindness, can occur. If uveitis occurs in combination with other immune-mediated adverse reactions, consider a Vogt-Koyanagi-Harada-like syndrome, as this may require treatment with systemic steroids to reduce the risk of permanent vision loss; Gastrointestinal: Pancreatitis, to include increases in serum amylase and lipase levels, gastritis, duodenitis; Musculoskeletal and Connective Tissue: Myositis/polymyositis rhabdomyolysis (and associated sequelae, including renal failure), arthritis (1.5%), polymyalgia rheumatica; Endocrine: Hypoparathyroidism; Hematologic/Immune: Hemolytic anemia, aplastic anemia, hemophagocytic lymphohistiocytosis, systemic inflammatory response syndrome, histiocytic necrotizing lymphadenitis (Kikuchi lymphadenitis), sarcoidosis, immune thrombocytopenic purpura, solid organ transplant rejection.

Infusion-Related Reactions

KEYTRUDA can cause severe or life-threatening infusion-related reactions, including hypersensitivity and anaphylaxis, which have been reported in 0.2% of 2799 patients receiving KEYTRUDA. Monitor for signs and symptoms of infusion-related reactions. Interrupt or slow the rate of infusion for Grade 1 or Grade 2 reactions. For Grade 3 or Grade 4 reactions, stop infusion and permanently discontinue KEYTRUDA.

Complications of Allogeneic Hematopoietic Stem Cell Transplantation (HSCT)

Fatal and other serious complications can occur in patients who receive allogeneic HSCT before or after anti–PD-1/PD-L1 treatments. Transplant-related complications include hyperacute graft-versus-host disease (GVHD), acute and chronic GVHD, hepatic veno-occlusive disease after reduced intensity conditioning, and steroid-requiring febrile syndrome (without an identified infectious cause). These complications may occur despite intervening therapy between anti–PD-1/PD-L1 treatments and allogeneic HSCT. Follow patients closely for evidence of these complications and intervene promptly. Consider the benefit vs risks of using anti–PD-1/PD-L1 treatments prior to or after an allogeneic HSCT.

Increased Mortality in Patients With Multiple Myeloma

In trials in patients with multiple myeloma, the addition of KEYTRUDA to a thalidomide analogue plus dexamethasone resulted in increased mortality. Treatment of these patients with an anti–PD-1/PD-L1 treatment in this combination is not recommended outside of controlled trials.

Embryofetal Toxicity

Based on its mechanism of action, KEYTRUDA can cause fetal harm when administered to a pregnant woman. Advise women of this potential risk. In females of reproductive potential, verify pregnancy status prior to initiating KEYTRUDA and advise them to use effective contraception during treatment and for 4 months after the last dose.

Adverse Reactions

In KEYNOTE-006, KEYTRUDA was discontinued due to adverse reactions in 9% of 555 patients with advanced melanoma; adverse reactions leading to permanent discontinuation in more than one patient were colitis (1.4%), autoimmune hepatitis (0.7%), allergic reaction (0.4%), polyneuropathy (0.4%), and cardiac failure (0.4%). The most common adverse reactions (≥20%) with KEYTRUDA were fatigue (28%), diarrhea (26%), rash (24%), and nausea (21%).

In KEYNOTE-054, KEYTRUDA was permanently discontinued due to adverse reactions in 14% of 509 patients; the most common (≥1%) were pneumonitis (1.4%), colitis (1.2%), and diarrhea (1%). Serious adverse reactions occurred in 25% of patients receiving KEYTRUDA. The most common adverse reaction (≥20%) with KEYTRUDA was diarrhea (28%).

In KEYNOTE-189, when KEYTRUDA was administered with pemetrexed and platinum chemotherapy in metastatic nonsquamous NSCLC, KEYTRUDA was discontinued due to adverse reactions in 20% of 405 patients. The most common adverse reactions resulting in permanent discontinuation of KEYTRUDA were pneumonitis (3%) and acute kidney injury (2%). The most common adverse reactions (≥20%) with KEYTRUDA were nausea (56%), fatigue (56%), constipation (35%), diarrhea (31%), decreased appetite (28%), rash (25%), vomiting (24%), cough (21%), dyspnea (21%), and pyrexia (20%).

In KEYNOTE-407, when KEYTRUDA was administered with carboplatin and either paclitaxel or paclitaxel protein-bound in metastatic squamous NSCLC, KEYTRUDA was discontinued due to adverse reactions in 15% of 101 patients. The most frequent serious adverse reactions reported in at least 2% of patients were febrile neutropenia, pneumonia, and urinary tract infection. Adverse reactions observed in KEYNOTE-407 were similar to those observed in KEYNOTE-189 with the exception that increased incidences of alopecia (47% vs 36%) and peripheral neuropathy (31% vs 25%) were observed in the KEYTRUDA and chemotherapy arm compared to the placebo and chemotherapy arm in KEYNOTE-407.

In KEYNOTE-042, KEYTRUDA was discontinued due to adverse reactions in 19% of 636 patients with advanced NSCLC; the most common were pneumonitis (3%), death due to unknown cause (1.6%), and pneumonia (1.4%). The most frequent serious adverse reactions reported in at least 2% of patients were pneumonia (7%), pneumonitis (3.9%), pulmonary embolism (2.4%), and pleural effusion (2.2%). The most common adverse reaction (≥20%) was fatigue (25%).

In KEYNOTE-010, KEYTRUDA monotherapy was discontinued due to adverse reactions in 8% of 682 patients with metastatic NSCLC; the most common was pneumonitis (1.8%). The most common adverse reactions (≥20%) were decreased appetite (25%), fatigue (25%), dyspnea (23%), and nausea (20%).

Adverse reactions occurring in patients with SCLC were similar to those occurring in patients with other solid tumors who received KEYTRUDA as a single agent.

In KEYNOTE-048, KEYTRUDA monotherapy was discontinued due to adverse events in 12% of 300 patients with HNSCC; the most common adverse reactions leading to permanent discontinuation were sepsis (1.7%) and pneumonia (1.3%). The most common adverse reactions (≥20%) were fatigue (33%), constipation (20%), and rash (20%).

In KEYNOTE-048, when KEYTRUDA was administered in combination with platinum (cisplatin or carboplatin) and FU chemotherapy, KEYTRUDA was discontinued due to adverse reactions in 16% of 276 patients with HNSCC. The most common adverse reactions resulting in permanent discontinuation of KEYTRUDA were pneumonia (2.5%), pneumonitis (1.8%), and septic shock (1.4%). The most common adverse reactions (≥20%) were nausea (51%), fatigue (49%), constipation (37%), vomiting (32%), mucosal inflammation (31%), diarrhea (29%), decreased appetite (29%), stomatitis (26%), and cough (22%).

In KEYNOTE-012, KEYTRUDA was discontinued due to adverse reactions in 17% of 192 patients with HNSCC. Serious adverse reactions occurred in 45% of patients. The most frequent serious adverse reactions reported in at least 2% of patients were pneumonia, dyspnea, confusional state, vomiting, pleural effusion, and respiratory failure. The most common adverse reactions (≥20%) were fatigue, decreased appetite, and dyspnea. Adverse reactions occurring in patients with HNSCC were generally similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy, with the exception of increased incidences of facial edema and new or worsening hypothyroidism.

In KEYNOTE-204, KEYTRUDA was discontinued due to adverse reactions in 14% of 148 patients with cHL. Serious adverse reactions occurred in 30% of patients receiving KEYTRUDA; those ≥1% were pneumonitis, pneumonia, pyrexia, myocarditis, acute kidney injury, febrile neutropenia, and sepsis. Three patients died from causes other than disease progression: 2 from complications after allogeneic HSCT and 1 from unknown cause. The most common adverse reactions (≥20%) were upper respiratory tract infection (41%), musculoskeletal pain (32%), diarrhea (22%), and pyrexia, fatigue, rash, and cough (20% each).

In KEYNOTE-087, KEYTRUDA was discontinued due to adverse reactions in 5% of 210 patients with cHL. Serious adverse reactions occurred in 16% of patients; those ≥1% were pneumonia, pneumonitis, pyrexia, dyspnea, GVHD, and herpes zoster. Two patients died from causes other than disease progression: 1 from GVHD after subsequent allogeneic HSCT and 1 from septic shock. The most common adverse reactions (≥20%) were fatigue (26%), pyrexia (24%), cough (24%), musculoskeletal pain (21%), diarrhea (20%), and rash (20%).

In KEYNOTE-170, KEYTRUDA was discontinued due to adverse reactions in 8% of 53 patients with PMBCL. Serious adverse reactions occurred in 26% of patients and included arrhythmia (4%), cardiac tamponade (2%), myocardial infarction (2%), pericardial effusion (2%), and pericarditis (2%). Six (11%) patients died within 30 days of start of treatment. The most common adverse reactions (≥20%) were musculoskeletal pain (30%), upper respiratory tract infection and pyrexia (28% each), cough (26%), fatigue (23%), and dyspnea (21%).

In KEYNOTE-052, KEYTRUDA was discontinued due to adverse reactions in 11% of 370 patients with locally advanced or metastatic urothelial carcinoma. Serious adverse reactions occurred in 42% of patients; those ≥2% were urinary tract infection, hematuria, acute kidney injury, pneumonia, and urosepsis. The most common adverse reactions (≥20%) were fatigue (38%), musculoskeletal pain (24%), decreased appetite (22%), constipation (21%), rash (21%), and diarrhea (20%).

In KEYNOTE-045, KEYTRUDA was discontinued due to adverse reactions in 8% of 266 patients with locally advanced or metastatic urothelial carcinoma. The most common adverse reaction resulting in permanent discontinuation of KEYTRUDA was pneumonitis (1.9%). Serious adverse reactions occurred in 39% of KEYTRUDA-treated patients; those ≥2% were urinary tract infection, pneumonia, anemia, and pneumonitis. The most common adverse reactions (≥20%) in patients who received KEYTRUDA were fatigue (38%), musculoskeletal pain (32%), pruritus (23%), decreased appetite (21%), nausea (21%), and rash (20%).

In KEYNOTE-057, KEYTRUDA was discontinued due to adverse reactions in 11% of 148 patients with high-risk NMIBC. The most common adverse reaction resulting in permanent discontinuation of KEYTRUDA was pneumonitis (1.4%). Serious adverse reactions occurred in 28% of patients; those ≥2% were pneumonia (3%), cardiac ischemia (2%), colitis (2%), pulmonary embolism (2%), sepsis (2%), and urinary tract infection (2%). The most common adverse reactions (≥20%) were fatigue (29%), diarrhea (24%), and rash (24%).

Adverse reactions occurring in patients with MSI-H or dMMR CRC were similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy.

Adverse reactions occurring in patients with gastric cancer were similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy.

Adverse reactions occurring in patients with esophageal cancer were similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy.

In KEYNOTE-158, KEYTRUDA was discontinued due to adverse reactions in 8% of 98 patients with recurrent or metastatic cervical cancer. Serious adverse reactions occurred in 39% of patients receiving KEYTRUDA; the most frequent included anemia (7%), fistula, hemorrhage, and infections [except urinary tract infections] (4.1% each). The most common adverse reactions (≥20%) were fatigue (43%), musculoskeletal pain (27%), diarrhea (23%), pain and abdominal pain (22% each), and decreased appetite (21%).

Adverse reactions occurring in patients with hepatocellular carcinoma (HCC) were generally similar to those in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy, with the exception of increased incidences of ascites (8% Grades 3-4) and immune-mediated hepatitis (2.9%). Laboratory abnormalities (Grades 3-4) that occurred at a higher incidence were elevated AST (20%), ALT (9%), and hyperbilirubinemia (10%).

Among the 50 patients with MCC enrolled in study KEYNOTE-017, adverse reactions occurring in patients with MCC were generally similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy. Laboratory abnormalities (Grades 3-4) that occurred at a higher incidence were elevated AST (11%) and hyperglycemia (19%).

In KEYNOTE-426, when KEYTRUDA was administered in combination with axitinib, fatal adverse reactions occurred in 3.3% of 429 patients. Serious adverse reactions occurred in 40% of patients, the most frequent (≥1%) were hepatotoxicity (7%), diarrhea (4.2%), acute kidney injury (2.3%), dehydration (1%), and pneumonitis (1%). Permanent discontinuation due to an adverse reaction occurred in 31% of patients; KEYTRUDA only (13%), axitinib only (13%), and the combination (8%); the most common were hepatotoxicity (13%), diarrhea/colitis (1.9%), acute kidney injury (1.6%), and cerebrovascular accident (1.2%). The most common adverse reactions (≥20%) were diarrhea (56%), fatigue/asthenia (52%), hypertension (48%), hepatotoxicity (39%), hypothyroidism (35%), decreased appetite (30%), palmar-plantar erythrodysesthesia (28%), nausea (28%), stomatitis/mucosal inflammation (27%), dysphonia (25%), rash (25%), cough (21%), and constipation (21%).

Adverse reactions occurring in patients with TMB-H cancer were similar to those occurring in patients with other solid tumors who received KEYTRUDA as a single agent.

Adverse reactions occurring in patients with cSCC were similar to those occurring in patients with melanoma or NSCLC who received KEYTRUDA as a monotherapy.

In KEYNOTE-355, when KEYTRUDA and chemotherapy (paclitaxel, paclitaxel protein-bound, or gemcitabine and carboplatin) were administered to patients with locally recurrent unresectable or metastatic TNBC who had not been previously treated with chemotherapy in the metastatic setting (n=596), fatal adverse reactions occurred in 2.5% of patients, including cardio-respiratory arrest (0.7%) and septic shock (0.3%). Serious adverse reactions occurred in 30% of patients receiving KEYTRUDA in combination with chemotherapy; the serious reactions in ≥2% were pneumonia (2.9%), anemia (2.2%), and thrombocytopenia (2%). KEYTRUDA was discontinued in 11% of patients due to adverse reactions. The most common reactions resulting in permanent discontinuation (≥1%) were increased ALT (2.2%), increased AST (1.5%), and pneumonitis (1.2%). The most common adverse reactions (≥20%) in patients receiving KEYTRUDA in combination with chemotherapy were fatigue (48%), nausea (44%), alopecia (34%), diarrhea and constipation (28% each), vomiting and rash (26% each), cough (23%), decreased appetite (21%), and headache (20%).

Lactation

Because of the potential for serious adverse reactions in breastfed children, advise women not to breastfeed during treatment and for 4 months after the final dose.

Pediatric Use

In KEYNOTE-051, 161 pediatric patients (62 pediatric patients aged 6 months to younger than 12 years and 99 pediatric patients aged 12 years to 17 years) were administered KEYTRUDA 2 mg/kg every 3 weeks. The median duration of exposure was 2.1 months (range: 1 day to 24 months).

Adverse reactions that occurred at a ≥10% higher rate in pediatric patients when compared to adults were pyrexia (33%), vomiting (30%), leukopenia (30%), upper respiratory tract infection (29%), neutropenia (26%), headache (25%), and Grade 3 anemia (17%).

Merck’s Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, the potential to bring new hope to people with cancer drives our purpose and supporting accessibility to our cancer medicines is our commitment. As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the largest development programs in the industry across more than 30 tumor types. We also continue to strengthen our portfolio through strategic acquisitions and are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers. For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

On January 29, 2021 Amgen (NASDAQ: AMGN) reported that its investigational KRASG12C inhibitor sotorasib was granted Breakthrough Therapy Designation (BTD) by the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) (Press release, Amgen, JAN 29, 2021, View Source [SID1234574989]). The designation is for the treatment of patients with KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) who have received at least one prior systemic therapy. This is the first BTD submission for Amgen in China, as well as the first under Amgen’s strategic collaboration with BeiGene.

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NSCLC is the most common form of lung cancer, accounting for approximately 80-85% of all cases worldwide.1 KRAS G12C is the most common KRAS mutation in NSCLC.2,3 The mutation is a biomarker of poor prognosis in Chinese NSCLC patients, which may be improved by G12C-specific inhibitors.4 Research has shown that about 3-5% have the KRAS G12C mutation – found most commonly in smokers.4,5

"Given that Breakthrough Therapy Designation is a new pathway in China, we are pleased to receive this designation for sotorasib," said David M. Reese, M.D., executive vice president of Research and Development at Amgen. "This designation underscores the importance of sotorasib and we look forward to working with regulatory authorities in China to bring the first potential targeted therapy to NSCLC patients with the KRAS G12C mutation."

The Breakthrough Therapy Designation is supported by the positive CodeBreaK 100 Phase 2 results in patients with advanced NSCLC whose cancer had progressed despite prior treatment with chemotherapy and/or immunotherapy. In the study, treatment with sotorasib demonstrated durable anticancer activity with a positive benefit-risk profile.6 These results will be presented at the International Association for the Study of Lung Cancer (IASLC) 2020 World Conference on Lung Cancer (WCLC) Presidential Symposium from 3:50-4 p.m. PST on Friday, Jan. 29.

The NMPA’s BTD process is designed to expedite the development and review of therapies that are intended for the prevention or treatment of serious life-threatening diseases for which there is no existing treatment and where preliminary evidence indicates advantages of the therapy over available treatment options.7 This designation shows the potential for sotorasib to become the first targeted treatment available in China for KRAS G12C-mutated NSCLC.

Amgen has taken on one of the toughest challenges of the last 40 years in cancer research by developing sotorasib, the first KRASG12C inhibitor to enter the clinic.8 Sotorasib is being studied in the broadest clinical program exploring 10 combinations with global sites spanning across four continents. In just over two years, the sotorasib clinical trial program has also established the deepest clinical data set with nearly 700 patients studied across 13 tumor types.

About CodeBreaK
The CodeBreaK clinical development program for Amgen’s investigational drug sotorasib is designed to treat patients with an advanced solid tumor with the KRAS G12C mutation and address the longstanding unmet medical need for these cancers. As the most advanced KRAS G12C clinical development program, CodeBreaK has enrolled nearly 700 patients across 13 tumor types since its inception.

CodeBreaK 100, the Phase 1 and 2, first-in-human, open-label multicenter study, enrolled patients with KRAS G12C-mutant solid tumors. Eligible patients must have received a prior line of systemic anticancer therapy, consistent with their tumor type and stage of disease. The primary endpoint for the Phase 2 study was centrally assessed objective response rate. The Phase 2 trial in NSCLC enrolled 126 patients, 124 of whom had centrally evaluable lesions by RECIST at baseline. The Phase 2 trial in colorectal cancer is fully enrolled and topline results are expected in 2021.

A global Phase 3 randomized active-controlled study comparing sotorasib to docetaxel in patients with KRAS G12C-mutated NSCLC (CodeBreaK 200) is currently recruiting. Amgen also has more than 10 Phase 1b combination studies across various advanced solid tumors (CodeBreaK 101) open for enrollment.

On January 29, 2021 NEC reported that Consolidated Financial Results for the Nine-month Period Ended December 31, 2020(Press release, NEC, JAN 29, 2021, View Source [SID1234574408])

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1. Consolidated Financial Results for the Nine-month Period Ended December 31, 2020 (April 1, 2020 – December 31, 2020)
2. Dividends
3. Consolidated Financial Results Forecast for the Year Ending March 31, 2021 (April 1, 2020 – March 31, 2021)

On January 29, 2021, the Company will hold a financial results briefing for the institutional investors and analysts.
Presentation materials will be posted on the company website after the release of financial results, and the presentation video and Q&A summary will be also posted on the company website promptly after the financial results briefing. In addition to the above, the Company periodically holds briefings on business and operating results for the individual investors.

Presentation materials and Q&A summary will be posted on the company website promptly after the briefing. For the schedule and details, please check the company website.1. Overview of Business Results As stated in the July 21, 2020 announcement, "NEC to Revise Operating Segments", starting from the first quarter of the consolidated financial results for the fiscal year ending March 31, 2021, the Company announced operating results using revised segments.

Figures for the corresponding period of the previous fiscal year have been restated to conform to the new segments. "Adjusted operating profit (loss)" is an indicator for measuring underlying profitability in order to clarify the contribution of acquired companies to the NEC Group’s overall earnings. It is measured by deducting amortization of intangible assets recognized as a result of M&A and expenses for acquisition of companies (financial advisory fees and other fees) from operating profit (loss). Also, "Adjusted net profit (loss) attributable to owners of the parent" is an indicator for measuring underlying profitability attributable to owners of the parent. It is measured by deducting adjustment items of operating profit (loss) and corresponding amounts of tax and non-controlling interests from net profit (loss) attributable to owners of the parent. (

1) Overview of Operating Results i) Overview of the nine-month period ended December 31, 2020 The world economy and the Japanese economy during the nine-month period ended December 31, 2020 both deteriorated significantly during the first quarter of the fiscal year ending March 31, 2021, due to the effects of restrictions on personal movement and suspension of sales and production activities due to the global pandemic of new coronavirus ("COVID-19").

Although the economy picked up slightly after the second quarter of fiscal year ending March 31, 2021, the economy remained slow. Under this business environment, the NEC Group recorded consolidated revenue of 2,044.4 billion JPY for the nine-month period ended December 31, 2020, a decrease of 131.2 billion JPY (-6.0%) year-on-year. This decrease was mainly due to decreased revenue in the Enterprise business, the Public Solutions business and the Global business, despite increased revenue in the Network Services business. Regarding profitability, operating profit improved by 4.5 billion JPY year-on-year, to an operating profit of 82.4 billion JPY, mainly due to improvement in selling, general and administrative expenses from expenditure efficiency, in addition to improvement in other operating income from gain on sales of land and gain on sales of subsidiaries, despite decreased revenue. Adjusted operating profit improved by 6.4 billion JPY year-on-year, to an adjusted operating profit of 97.0 billion JPY. Profit before income taxes was a profit of 85.8 billion JPY, a year-on-year improvement of 6.9 billion JPY, mainly due to improved operating profit. Net profit attributable to owners of the parent was a profit of 54.5 billion JPY, an improvement of 5.3 billion JPY year-on-year.

This was primarily due to improved profit before income taxes. Adjusted net profit attributable to owners of the parent improved by 6.8 billion JPY year-on-year, to an adjusted net profit attributable to owners of the parent of 63.7 billion JPY. In the Public Solutions business, revenue was 274.2 billion JPY, a decrease of 41.8 billion JPY (-13.2%) year-on-year, mainly due to decreased sales in sectors that include healthcare and regional industries, as well as reduced renewal demand for business PCs.

Adjusted operating profit (loss) worsened by 6.5 billion JPY year-on-year, to an adjusted operating profit of 11.4 billion JPY, mainly due to decreased sales. In the Public Infrastructure business, revenue was 460.5 billion JPY, a decrease of 4.7 billion JPY (-1.0%) year-on-year, mainly due to decreased sales at consolidated subsidiaries, despite increased sales in the government sector mainly from PCs for educational institutions on the back of the Japanese government’s GIGA school initiative. Adjusted operating profit (loss) worsened by 7.1 billion JPY year-on-year, to an adjusted operating profit of 35.3 billion JPY, due to decreased profit at consolidated subsidiaries despite increased profit in the government sector due to increased sales. In the Enterprise business, revenue was 354.4 billion JPY, a decrease of 54.7 billion JPY (-13.4%) year-on-year, mainly due to reduced IT investments in the manufacturing, retail and service sectors, in addition to decreased sales of large-scale projects as compared with the corresponding period of the previous year and reduced renewal demand for business PCs.

Adjusted operating profit (loss) worsened by 10.1 billion JPY year-on-year, to an adjusted operating profit of 26.2 billion JPY, mainly due to decreased sales.In the Network Services business, revenue was 365.8 billion JPY, an increase of 43.1 billion JPY (+13.4%) year-on-year, mainly due to an increase in sales in the mobile network domain and fixed network domain on the back of 5G adoption by telecom operators. Adjusted operating profit (loss) improved by 6.1 billion JPY year-on-year, to an adjusted operating profit of 19.9 billion JPY, mainly due to increased sales.In the Global business, revenue was 325.2 billion JPY, a decrease of 41.1 billion JPY (-11.2%) yearon-year, mainly due to decreased sales in the display area and the de-consolidation of subsidiaries in the display area and decreased sales in the wireless backhaul area, in addition to the termination of part of KMD’s business, which was expected from the time of its acquisition, despite increased sales of submarine systems. Adjusted operating profit (loss) improved by 6.5 billion JPY year-on-year, to an adjusted operating profit of 8.1 billion JPY, mainly due to gain on the sale of shares of subsidiaries, in addition to improved profitability in the business for service providers and increased sales of submarine systems.Adjusted operating profit (loss) worsened by 13.5 billion JPY year-on-year, to an adjusted operating profit of 9.6 billion JPY.

(2) Overview of Financial Position Analysis of the condition of assets, liabilities, equity, and cash flows Total assets were 3,343.9 billion JPY as of December 31, 2020, an increase of 220.6 billion JPY as compared with the end of the previous fiscal year. Current assets as of December 31, 2020 decreased by 67.1 billion JPY compared with the end of the previous fiscal year to 1,631.8 billion JPY, mainly due to the collection of trade and other receivables, despite increased inventories. Noncurrent assets as of December 31, 2020 increased by 287.7 billion JPY compared with the end of the previous fiscal year to 1,712.1 billion JPY.

This was mainly due to an increase in goodwill resulting from the acquisition of Avaloq Group and an increase in other financial assets resulting from the rising market value of equity securities. Total liabilities as of December 31, 2020 increased by 79.5 billion JPY compared with the end of the previous fiscal year to 2,088.2 billion JPY. This was mainly due to an increase in interest-bearing debt from issuance of commercial paper and long-term borrowings, despite a decrease in trade and other payables from the payment of materials cost. The balance of interest-bearing debt amounted to 833.6 billion JPY, an increase of 158.2 billion JPY as compared with the end of the previous fiscal year. The debt-equity ratio as of December 31, 2020 was 0.79 (a worsening of 0.05 points as compared with the end of the previous fiscal year).

The balance of net interest-bearing debt as of December 31, 2020, calculated by offsetting the balance of interest-bearing debt with the balance of cash and cash equivalents, amounted to 465.9 billion JPY, an increase of 149.7 billion JPY as compared with the end of the previous fiscal year. The net debt-equity ratio as of December 31, 2020 was 0.44 (a worsening of 0.09 points as compared with the end of the previous fiscal year). Total equity was 1,255.7 billion JPY as of December 31, 2020, an increase of 141.1 billion JPY as compared with the end of the previous fiscal year, mainly due to the execution of issuance of new shares by way of third-party allotment to Nippon Telegraph and Telephone Corporation ("NTT Corporation"), the increase in other components of equity resulting from the rising market value of equity securities, and the recognition of net profit for the nine-month period ended December 31, 2020, despite payment of dividends. As a result, total equity attributable to owners of the parent (total equity less non-controlling interests) as of December 31, 2020 was 1,049.4 billion JPY, and the ratio of equity attributable to owners of the parent was 31.4% (an improvement of 2.2 points as compared with the end of the previous fiscal year).

Net cash inflows from operating activities for the nine-month period ended December 31, 2020 were 86.6 billion JPY, a year-on-year worsening of 25.6 billion JPY, mainly due to an increase in the amount of reclassification to cash flows from investing activities such as gain on sales of land, despite improved profit before income taxes and working capital. Net cash outflows from investing activities for the nine-month period ended December 31, 2020 were 194.8 billion JPY, an increase of 131.8 billion JPY year-on-year, mainly due to the purchase of shares of newly consolidated subsidiaries resulting from the acquisition of Avaloq Group, despite an increase in proceeds from sales of property, plant and equipment. As a result, free cash flows (the sum of cash flows from operating activities and investing activities) for the nine-month period ended December 31, 2020 totaled cash outflows of 108.2 billion JPY, a year-on-year worsening of 157.4 billion JPY. Net cash flows from financing activities for the nine-month period ended December 31, 2020 totaled cash inflows of 112.7 billion JPY, mainly due to issuance of commercial paper, proceeds from issuance of common shares and proceeds from issuance of bonds, despite redemption of bonds, repayments of lease liabilities and dividends paid. As a result, cash and cash equivalents as of December 31, 2020 amounted to 367.7 billion JPY, an increase of 8.5 billion JPY as compared with the end of the previous fiscal year.

(3) Outlook for the Fiscal Year Ending March 31, 2021 There is no change to the outlook for the fiscal year ending March 31, 2021, as previously disclosed on October 29, 2020.3. Segment Information (1)General information about reportable segments The reportable segments of the NEC Group are determined from operating segments that are identified in terms of similarity of products, services and markets based on business, and are the businesses for which the NEC Group is able to obtain respective financial information separately, and the businesses are investigated periodically in order for the Board of Directors to conduct periodic investigation to determine distribution of management resources and evaluate their business results. The NEC Group has five reportable segments, which are Public Solutions, Public Infrastructure, Enterprise, Network Services, and Global businesses. Descriptions of each reportable segment are as follows: Public Solutions business mainly provides Systems Integration (Systems Implementation, Consulting), Maintenance and Support, Outsourcing / Cloud Services, and System Equipment, for Public, Healthcare, and Regional industries. Public Infrastructure business mainly provides Systems Integration (Systems Implementation, Consulting), Maintenance and Support, Outsourcing / Cloud Services, and System Equipment, for Government, and Media industry.

Enterprise business mainly provides Systems Integration (Systems Implementation, Consulting), Maintenance and Support, Outsourcing / Cloud Services, and System Equipment, for Manufacturing, Retail, Services and Finance industries. Network Services business mainly provides Network Infrastructure (Core Network, Mobile Phone Base Stations, Optical Transmission Systems, Routers / Switches) and Systems Integration (Systems Implementation, Consulting), and Services & Management (OSS/BSS, Service Solutions), for telecom market in Japan. Global business mainly provides Safer Cities (Public Safety, Digital Government), Software Services for Service Providers (OSS/BSS), Network Infrastructure (Submarine Systems, Wireless Backhaul), System Devices (Displays, Projectors), and Energy Storage System. Notes: OSS: Operation Support System, BSS: Business Support System

(2)Basis of measurement for reportable segment revenue and segment profit or loss Segment profit (loss) is measured by deducting amortization of intangible assets recognized as a result of M&A and expenses for acquisition of companies (financial advisory fees and other fees) from operating profit (loss). Intersegment revenues are made at amount that approximates arm’s-length pricesNotes: 1. "Others" mainly includes businesses such as business consulting and package solution services for the three-month period ended December 31, 2019 and 2020. 2. "Reconciling items" in segment profit (loss) includes amounts not allocated to each reportable segment that consist principally of corporate expenses of 13,913 million JPY and (5,744) million JPY for the three-month period ended December 31, 2019 and 2020, respectively.

Corporate expenses are mainly general and administrative expenses and research and development expenses incurred at the headquarters of NEC. Also these reconciling items include the gain on sales of the land of Sagamihara Plant recorded during this third-quarter. (4)Information about revising reportable segments From the first quarter of the fiscal year ending March 31, 2021, the NEC Group’s descriptions of the reportable segments have been revised based on a new performance management system and a new organization structure effective as of April 1, 2020.

Under the former organization structure, among the products and services provided by each business unit to customers, products and services managed by other business units were recorded as revenue in the segment to which the business unit managing the products and services belonged. However, sales revenue of products and services are now recorded in the business unit providing products and services to customers. Along with this, the "System Platform" segment is no longer an operating segment, and, excluding revenue recorded in other operating segments, revenue previously recorded in the "System Platform" segment, is now included in "Others". The NEC Group also made segment changes due to organizational reforms and changes in the management system of subsidiaries that have been implemented to accelerate business development related to digital transformation (DX) and strengthen business execution capabilities by integrating businesses with compatibility. In connection with this revision, segment information for the nine-month period ended December 31, 2019 and the three-month period ended December 31, 2019 has been reclassified to conform to the presentation of the revised segments for the fiscal year ending March 31, 2021.

4. Equity
(1)Increase in equity due to issuance of new shares and disposal of treasury shares by way of third-party allotment The board of directors of the Company passed a resolution as of June 25, 2020, to issue 12,376,600 new shares and dispose of 647,000 treasury shares (a total of 13,023,600 shares) at a price of 4,950 JPY per share, or 64,467 million JPY in total, to NTT Corporation by way of third-party allotment. The board of directors also passed a resolution as of the same date, to execute a capital and business alliance agreement with NTT Corporation, and executed the agreement on the same date. The payment for the shares has completed on July 10, 2020.

(2)Breakdown of other components of equity A breakdown of other components of equity as of March 31 and December 31, 2020, is as follows:5. Finance Income and Finance Costs6. Subsequent Events

On January 29, 2020 Eli Lilly and Company (NYSE: LLY) reported financial results for the fourth quarter and full year of 2020 (Press release, Eli Lilly, JAN 29, 2021, View Source [SID1234574407]).

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Certain financial information for 2020 and 2019 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP), include all revenue and expenses recognized during the periods, and reflect Elanco Animal Health (Elanco) as discontinued operations during the first quarter of 2019. Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release, and assume that the disposition of Elanco occurred at the beginning of 2019 (including the benefit from the reduction in shares of common stock outstanding). The company’s 2021 financial guidance is being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company’s business.

"Lilly closed a complex year by delivering impressive results in the fourth quarter of 2020. We finished the year with strong momentum in our core business areas, as volume-based revenue growth for our newest medicines and initial sales of our COVID-19 antibody therapy, coupled with our ongoing productivity agenda, drove robust margin expansion and solid earnings growth," said David A. Ricks, Lilly’s chairman and CEO. "I am also encouraged by exciting recent data readouts for three of our most important pipeline assets: tirzepatide, LOXO-305 and donanemab. Each of these potential medicines has a chance to significantly improve patient outcomes in areas of high unmet medical need, and, should they go on to receive approvals, reinforce our growth prospects for the decade ahead."

Key Events Over the Last Three Months

COVID-19

The U.S. Food and Drug Administration (FDA) granted Emergency Use Authorization (EUA) for bamlanivimab for the treatment of mild to moderate COVID-19 in adults and pediatric patients 12 years and older with a positive COVID-19 test, who are at high risk for progressing to severe COVID-19 and/or hospitalization. The U.S. government has committed to purchase a total of 1,450,000 doses of bamlanivimab, which includes 950,000 doses already delivered and an agreement earlier this week to deliver 500,000 additional doses no later than March 31, 2021.
The FDA granted Emergency Use Authorization for baricitinib to be used in combination with remdesivir in hospitalized adult and pediatric patients two years of age or older with suspected or laboratory confirmed COVID-19 who require supplemental oxygen, invasive mechanical ventilation, or extracorporeal membrane oxygenation (ECMO).
Lilly and UnitedHealth Group announced a partnership to conduct a pragmatic study of bamlanivimab in high-risk, COVID-19 infected individuals. The study will identify and treat a large, diverse population of high-risk individuals for COVID-19 with bamlanivimab under real-world conditions with a goal of reducing the severity of illness and hospitalizations.
The company announced results from a Phase 3 clinical trial that showed that bamlanivimab significantly reduced the risk of contracting symptomatic COVID-19 among residents and staff of long-term care facilities. The trial was conducted in partnership with the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, and the COVID-19 Prevention Network.
The company announced results from a Phase 3 clinical trial that showed that bamlanivimab 2800 mg and etesevimab 2800 mg together significantly reduced COVID-19-related hospitalizations and deaths in high-risk patients recently diagnosed with COVID-19 by 70 percent, meeting the primary endpoint of the trial. Additionally, initial results from a separate ongoing Phase 2 trial demonstrated lower doses, including bamlanivimab 700 mg and etesevimab 1400 mg together, are similar to bamlanivimab 2800 mg and etesevimab 2800 mg together.
The company announced a collaboration with Vir Biotechnology, Inc. and GlaxoSmithKline plc to evaluate a combination of two COVID-19 therapies, bamlanivimab 700mg and VIR-7831 500mg, in low-risk patients with mild to moderate COVID-19.
Regulatory

The FDA accepted a supplemental New Drug Application for Jardiance which is being investigated as a potential new treatment to reduce the risk of cardiovascular death and hospitalization for heart failure and to slow kidney function decline in adults with chronic heart failure with reduced ejection fraction, including those with and without type 2 diabetes.
Clinical

The company announced results from a Phase 2 study for donanemab, an investigational antibody that targets a modified form of beta amyloid called N3pG, that showed significant slowing of decline in a composite measure of cognition and daily function in patients with early symptomatic Alzheimer’s disease. Donanemab met the primary endpoint of change from baseline to 76 weeks in the Integrated Alzheimer’s Disease Rating Scale, slowing decline by 32 percent relative to placebo, which was statistically significant.
The company announced topline results from a Phase 3 monotherapy study evaluating the efficacy and safety of tirzepatide compared to placebo. Tirzepatide led to superior A1C and body weight reductions from baseline in adults with type 2 diabetes after 40 weeks of treatment. Tirzepatide is a novel, investigational, once-weekly, dual glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonist that integrates the actions of both incretins into a single molecule, representing a new class of medicines being studied for the treatment of type 2 diabetes.
The company presented updated data from the LOXO-305 global Phase 1/2 clinical trial in mantle cell lymphoma (MCL) and other non-Hodgkin lymphomas, as well as in chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL), at the 2020 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting.
Business Development/Other Developments

The company completed the acquisition of Prevail Therapeutics Inc. for $22.50 per share in cash (or an aggregate of approximately $880 million) plus one non-tradable contingent value right worth up to $4.00 per share in cash (or an aggregate of approximately $160 million), for a total consideration of up to $26.50 per share in cash (or an aggregate of approximately $1.040 billion). Prevail is a biotechnology company developing potentially disease-modifying AAV9-based gene therapies for patients with neurodegenerative diseases.
The company announced a license agreement with Asahi Kasei Pharma Corporation, whereby Lilly will acquire the exclusive rights for AK1780, an orally bioavailable P2X7 receptor antagonist that recently completed Phase 1 single and multiple ascending dose and clinical pharmacology studies for the potential treatment of chronic pain conditions.
The company announced a research collaboration and exclusive license agreement between Loxo Oncology at Lilly and Merus N.V. to research and develop up to three CD3-engaging T-cell re-directing bispecific antibody therapies.
The company announced a $30 million investment in Unseen Capital Health Fund LP, a newly-formed venture fund created by racially diverse and historically underrepresented business leaders that is intended to identify, fund and support underrepresented founders of early-stage healthcare companies and those building solutions for marginalized communities.
The company announced a research collaboration and exclusive license agreement with Precision BioSciences, Inc. to utilize Precision’s proprietary ARCUS genome editing platform for the research and development of potential in vivo therapies for genetic disorders, with an initial focus on Duchenne muscular dystrophy and two other undisclosed gene targets.
The company announced a non-exclusive, global agreement with Ypsomed to advance an automated insulin delivery system as part of Lilly’s connected diabetes solutions. Under the terms of the agreement, Lilly will commercialize the system, which is currently in development and will include an insulin pump developed and manufactured by Ypsomed.
The board of directors elected Gabrielle Sulzberger as a new member, effective January 25, 2021. She will serve on both the Audit Committee and the Ethics and Compliance Committee.
Fourth-Quarter Reported Results

In the fourth quarter of 2020, worldwide revenue was $7.440 billion, an increase of 22 percent compared with the fourth quarter of 2019, driven by a 24 percent increase in volume and a 1 percent increase due to the favorable impact of foreign exchange rates, partially offset by a 4 percent decrease due to lower realized prices. The company recognized worldwide revenue of $871.2 million in the fourth quarter of 2020 for bamlanivimab, its COVID-19 antibody therapy. Excluding bamlanivimab revenue, worldwide revenue grew by 7 percent. Key growth products launched since 2014, consisting of Trulicity, Verzenio, Taltz, Tyvyt, Olumiant, Jardiance, Emgality, Cyramza, Retevmo, Baqsimi and Basaglar contributed nearly 12 percentage points of revenue growth and represented approximately 48 percent of total revenue for the quarter, or 55 percent of total revenue excluding bamlanivimab.

Revenue in the U.S. increased 31 percent, to $4.598 billion, driven by a 36 percent increase in volume, partially offset by a 5 percent decrease due to lower realized prices. The company recognized U.S. revenue of $850.0 million in the fourth quarter of 2020 for bamlanivimab. Excluding bamlanivimab revenue, revenue in the U.S. grew by 7 percent. Increased U.S. volume for key growth products, including Trulicity, Taltz, Verzenio, Emgality, Retevmo, Cyramza, Olumiant, Jardiance and Baqsimi, was partially offset by lower volume for certain other products, including Forteo and Tradjenta. Inventory stocking in the fourth quarter of 2020 was approximately $120 million higher than in the fourth quarter of 2019 due to lower than typical year-end stocking in 2019. The decrease in realized prices in the U.S. in the fourth quarter of 2020 was primarily driven by increased rebates to gain and maintain broad commercial access across the portfolio, partially offset by modest list price increases, largely for diabetes, and, to a lesser extent, by changes to estimates for rebates and discounts, most notably for Taltz. Segment mix was not a major driver of U.S. price performance in the fourth quarter of 2020, as increased utilization in more highly-rebated government segments was offset by lower utilization in the 340B segment, primarily for Trulicity and Humalog.

Revenue outside the U.S. increased 10 percent, to $2.842 billion, driven by a 9 percent increase in volume and a 3 percent increase due to the favorable impact of foreign exchange rates, partially offset by a 2 percent decrease due to lower realized prices. The increase in volume outside the U.S. was driven primarily by increased volume for key growth products, including Tyvyt, Trulicity, Olumiant, Taltz, Verzenio, Jardiance, Cyramza, Basaglar, Emgality and Baqsimi, as well as volume gains for Alimta, partially offset by decreased volume for Cialis, Forteo and Trajenta. In addition, revenue outside the U.S. in the fourth quarter of 2019 benefited from a milestone from Bayer Consumer Care AG resulting from its exclusive development and commercialization license for Vitrakvi. The decrease in realized prices outside the U.S. was driven primarily by the inclusion of Tyvyt in the government reimbursement programs in China.

Gross margin increased 18 percent, to $5.720 billion, in the fourth quarter of 2020 compared with the fourth quarter of 2019. Gross margin as a percent of revenue was 76.9 percent, a decrease of 2.1 percentage points compared with the fourth quarter of 2019. The decrease in gross margin percent was primarily due to unfavorable product mix driven by bamlanivimab sales, higher amortization of intangibles expense related to Retevmo, the unfavorable effect of foreign exchange rates on international inventories sold, and the impact of lower realized prices on revenue, partially offset by greater manufacturing efficiencies.

Total operating expenses in the fourth quarter of 2020, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 3 percent to $3.392 billion compared with the fourth quarter of 2019. Research and development expenses increased 16 percent to $1.838 billion, or 24.7 percent of revenue, driven primarily by approximately $265 million of development expenses for COVID-19 antibody therapies and baricitinib. Excluding these COVID-19 expenses, research and development expenses remained flat. Marketing, selling, and administrative expenses decreased 8 percent to $1.554 billion, primarily due to lower marketing expenses, reflecting reduced promotional activity.

In the fourth quarter of 2020, the company recognized acquired in-process research and development charges of $366.3 million related to the previously-announced business development transactions with Innovent Biologics, Inc., Disarm Therapeutics, Inc., and Fochon Pharmaceuticals, Ltd. There were no acquired in-process research and development charges in the fourth quarter of 2019.

In the fourth quarter of 2020, the company recognized income for asset impairment, restructuring and other special charges of $30.1 million, reflecting adjustments to prior period estimates for asset impairment and severance costs. In the fourth quarter of 2019, the company recognized asset impairment, restructuring and other special charges of $151.7 million. These charges were primarily related to the decision to close and sell a research and development facility located in the United Kingdom, as well as severance costs incurred as a result of actions taken to reduce the company’s cost structure.

Operating income in the fourth quarter of 2020 was $1.992 billion, compared to $1.400 billion in the fourth quarter of 2019. The increase in operating income was primarily driven by higher gross margin, lower asset impairment, restructuring and other special charges, and lower marketing expenses, partially offset by higher acquired in-process research and development charges and higher research and development expenses. Operating margin, defined as operating income as a percent of revenue, was 26.8 percent.

Other income was $477.0 million in the fourth quarter of 2020, compared with other income of $262.9 million in the fourth quarter of 2019. The increase in other income was driven primarily by higher net gains on investment securities.

The effective tax rate was 14.3 percent in the fourth quarter of 2020, as compared with 10.1 percent in the fourth quarter of 2019. The effective tax rates for both periods were impacted by net discrete tax items.

In the fourth quarter of 2020, net income and earnings per share were $2.117 billion and $2.32, respectively, compared with net income of $1.496 billion and earnings per share of $1.64 in the fourth quarter of 2019. The increase in net income and earnings per share in the fourth quarter of 2020 was primarily driven by higher operating income and higher other income, partially offset by higher income tax expense.

Fourth-Quarter Non-GAAP Measures

On a non-GAAP basis, fourth-quarter 2020 gross margin increased 20 percent, to $5.848 billion compared with the fourth quarter of 2019. Gross margin as a percent of revenue was 78.6 percent, a decrease of 1.3 percentage points. The decrease in gross margin percent was primarily due to unfavorable product mix driven by bamlanivimab sales, the unfavorable effect of foreign exchange rates on international inventories sold, and the impact of lower realized prices on revenue, partially offset by greater manufacturing efficiencies.

Operating income on a non-GAAP basis increased $850.5 million, or 53 percent, to $2.456 billion in the fourth quarter of 2020 compared with the fourth quarter of 2019, due primarily to higher gross margin and lower marketing expenses, partially offset by higher research and development expenses. Operating margin was 33.0 percent on a non-GAAP basis.

The effective tax rate on a non-GAAP basis was 14.4 percent in the fourth quarter of 2020, as compared with 12.6 percent in the fourth quarter of 2019. The effective tax rates for both periods were impacted by net discrete tax items.

On a non-GAAP basis, in the fourth quarter of 2020 net income increased 58 percent, to $2.509 billion, while earnings per share increased 59 percent, to $2.75, compared with $1.583 billion and $1.73, respectively, in the fourth quarter of 2019. The increase in net income and earnings per share was driven primarily by higher operating income and higher other income, partially offset by higher income tax expense.

For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.

Full Year Reported Results

For the full year 2020, worldwide revenue increased 10 percent to $24.540 billion, compared with $22.319 billion in the same period in 2019. The increase in revenue was driven by a 15 percent increase in volume, partially offset by a 5 percent decrease due to lower realized prices. Excluding bamlanivimab revenue, worldwide revenue grew by 6 percent.

Revenue in the U.S. in 2020 increased 12 percent to $14.229 billion, driven by increased volume for key growth products, including Trulicity, Taltz, Emgality, Verzenio, Jardiance, Cyramza, Baqsimi, Retevmo, Olumiant and Basaglar, as well as the inclusion of revenue for bamlanivimab. Excluding bamlanivimab revenue, U.S. revenue grew 5 percent. The increase in revenue due to volume was partially offset by a decrease in realized prices, as well as lower revenue for Cialis, Tradjenta and Forteo. The decrease in realized prices in the U.S. was primarily driven by increased rebates to gain and maintain broad commercial access across the portfolio and, to a lesser extent, unfavorable segment mix and changes to estimates for rebates and discounts, most notably impacting Humalog. The decrease in realized prices in the U.S. was partially offset by modest list price increases and lower utilization in the 340B segment.

Revenue outside the U.S. in 2020 increased 7 percent to $10.310 billion, due to increased volume for key growth products, including Tyvyt, Trulicity, Olumiant, Verzenio, Taltz, Jardiance, Cyramza, Basaglar, Emgality and Baqsimi, partially offset by decreased volume for Forteo and Trajenta. Volume growth outside the U.S. for Tyvyt and Alimta benefited from inclusion in government reimbursement programs in China. Volume growth outside the U.S. was partially offset by a 6 percent decrease due to lower realized prices, driven primarily by the inclusion of Tyvyt and Alimta in government reimbursement programs in China.

Gross margin increased 8 percent to $19.057 billion in 2020. Gross margin as a percent of revenue was 77.7%, a decrease of 1.1 percentage points compared with 2019. The decrease in gross margin percent was primarily due to the impact of lower realized prices on revenue, the unfavorable effect of foreign exchange rates on international inventories sold, and higher amortization of intangibles expense related to Retevmo, partially offset by prior year charges resulting from the suspension of promotion of Lartruvo and greater manufacturing efficiencies. Gross margin percent for 2020 was also negatively impacted as a result of bamlanivimab sales in the fourth quarter of 2020.

Total operating expenses, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 3 percent to $12.207 billion in 2020. Research and development expenses increased 9 percent to $6.086 billion, or 25 percent of revenue, driven primarily by approximately $450 million of development expenses for COVID-19 antibody therapies and baricitinib. Excluding these COVID-19 expenses, research and development expenses were relatively flat. Marketing, selling and administrative expenses decreased 1 percent to $6.121 billion, primarily due to lower marketing activity.

In 2020, the company recognized acquired in-process research and development charges of $660.4 million resulting from the acquisition of a pre-clinical stage company as well as the previously announced business development transactions with Innovent Biologics, Inc., Disarm Therapeutics Inc., Sitryx Therapeutics Limited, Fochon Pharmaceuticals, Ltd., AbCellera Biologics Inc., Evox Therapeutics Ltd, and Shanghai Junshi Biosciences Co. Ltd. In 2019, the company recognized acquired in-process research and development charges of $239.6 million resulting from business development transactions with AC Immune SA, Centrexion Therapeutics Corporation, ImmuNext, Inc., and Avidity Biosciences, Inc.

In 2020, the company recognized asset impairment, restructuring and other special charges of $131.2 million. The charges were primarily related to severance costs incurred as a result of actions taken worldwide to reduce our cost structure, as well as acquisition and integration costs incurred as part of the acquisition of Dermira, Inc. In 2019, the company recognized asset impairment, restructuring and other special charges of $575.6 million. The charges were primarily associated with the accelerated vesting of Loxo Oncology employee equity awards as part of the acquisition of Loxo Oncology.

Operating income in 2020 increased 22 percent compared with 2019 to $6.058 billion, driven primarily by higher gross margin, lower asset impairment, restructuring and other special charges, and lower marketing expenses, partially offset by higher research and development expenses and higher acquired in-process research and development charges. Operating margin in 2020 was 24.7 percent.

Other income was $1.172 billion in 2020 compared with $291.6 million in 2019. The increase in other income was driven primarily by higher net gains on investment securities.

For the full year 2020, the effective tax rate was 14.3 percent, compared with an effective tax rate of 11.9 percent for the full year 2019, driven by net discrete tax benefits in 2019.

For the full year 2020, net income and earnings per share were $6.194 billion and $6.79, respectively, compared with $8.318 billion and $8.89, respectively, in 2019. The decrease in net income and earnings per share during 2020 were driven primarily by the approximate $3.7 billion gain recognized on the disposition of Elanco in 2019, partially offset by higher operating income and higher other income in 2020.

Full Year Non-GAAP Measures

On a non-GAAP basis for the full year 2020, gross margin increased 9 percent, to $19.472 billion compared with the full year 2019. Gross margin as a percent of revenue for the full year 2020 was 79.3 percent, compared to 80.1 percent for the full year 2019. The decrease in gross margin percent was primarily due to the impact of lower realized prices on revenue and the unfavorable effect of foreign exchange rates on international inventories sold, partially offset by greater manufacturing efficiencies. Gross margin percent for 2020 was also negatively impacted as a result of bamlanivimab sales in the fourth quarter of 2020.

Operating income on a non-GAAP basis increased $1.186 billion, or 20 percent, to $7.265 billion driven by higher gross margin and lower marketing expenses, partially offset by higher research and development expenses. Operating margin was 29.6 percent, which was negatively affected by approximately 60 basis points due to the unfavorable financial impact of COVID-19 therapies.

Other income on a non-GAAP basis was $1.172 billion for the full year 2020, compared with $234.3 million for the full year 2019. The increase in other income was driven primarily by higher net gains on investment securities.

The effective tax rate on a non-GAAP basis was 14.2 percent for the full year 2020, compared with 11.8 percent for the full year 2019, driven by net discrete tax benefits in 2019.

On a non-GAAP basis, net income increased 30 percent and earnings per share increased 31 percent to $7.236 billion, and $7.93, respectively. The increase in net income and earnings per share was primarily driven by higher operating income and higher other income, partially offset by higher income tax expense.

For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information" table later in this press release.

Trulicity

Fourth-quarter 2020 worldwide Trulicity revenue was $1.502 billion, an increase of 24 percent compared with the fourth quarter of 2019. U.S. revenue increased 23 percent, to $1.163 billion, driven by increased demand, partially offset by lower realized prices. Trulicity’s lower realized prices in the U.S. were primarily due to higher contracted rebates, partially offset by a favorable segment mix that reflected lower utilization in the 340B segment, and modest list price increases. Revenue outside the U.S. was $339.7 million, an increase of 28 percent, driven by increased volume and, to a lesser extent, favorable foreign exchange rates.

For the full year 2020, worldwide Trulicity revenue was $5.068 billion, an increase of 23 percent compared with the full year 2019. U.S. revenue increased 22 percent, to $3.836 billion, driven by increased volume, partially offset by lower realized prices, primarily due to higher contracted rebates. Revenue outside of the U.S. increased 27 percent, to $1.232 billion, driven primarily by increased volume.

Humalog

For the fourth quarter of 2020, worldwide Humalog revenue decreased 6 percent compared with the fourth quarter of 2019, to $718.1 million. Revenue in the U.S. decreased 11 percent, to $415.2 million, driven by lower realized prices, as changes to estimates for rebates and discounts were partially offset by lower utilization in the 340B segment. Lower realized prices in the U.S. were partially offset by higher demand. Revenue outside the U.S. increased 3 percent, to $302.9 million, driven by favorable foreign exchange rates and higher realized prices.

For the full year 2020, worldwide Humalog revenue decreased 7 percent to $2.626 billion compared with the full year 2019. U.S. revenue for 2020 was $1.486 billion, an 11 percent decrease, driven by lower realized prices, partially offset by higher demand. Revenue outside the U.S. was $1.140 billion, a 1 percent decrease, primarily driven by unfavorable foreign exchange rates.

Alimta

For the fourth quarter of 2020, worldwide Alimta revenue increased 23 percent compared with the fourth quarter of 2019, to $652.7 million. U.S. revenue increased 6 percent, to $331.8 million, primarily driven by higher realized prices. Revenue outside the U.S. increased 48 percent to $320.9 million, primarily driven by increased volume in Germany and, to a lesser extent, the favorable impact of foreign exchange rates and higher realized prices.

For the full year 2020, worldwide Alimta revenue increased 10 percent to $2.330 billion compared with the full year 2019. U.S. revenue for 2020 was $1.265 billion, a 4 percent increase, primarily driven by higher realized prices. Revenue outside the U.S. was $1.065 billion, a 19 percent increase, primarily driven by increased volume in China and Germany, partially offset by lower realized prices.

Taltz

For the fourth quarter of 2020, worldwide Taltz revenue increased 18 percent compared with the fourth quarter of 2019, to $495.3 million. U.S. revenue increased 9 percent, to $345.7 million, primarily driven by increased demand, partially offset by lower realized prices. Revenue outside the U.S. increased 46 percent, to $149.7 million, primarily driven by increased volume and, to a lesser extent, the favorable impact of foreign exchange rates.

For the full year 2020, Taltz generated worldwide revenue of $1.788 billion, an increase of 31 percent compared with the full year 2019. U.S. revenue was $1.289 billion, an increase of 27 percent, primarily driven by increased demand. Revenue outside the U.S. was $500.0 million, an increase of 43 percent, primarily driven by increased volume.

Humulin

For the fourth quarter of 2020, worldwide Humulin revenue decreased 7 percent compared with the fourth quarter of 2019, to $324.4 million. U.S. revenue decreased 7 percent, to $223.9 million, driven by lower realized prices, partially offset by increased volume. Revenue outside the U.S. decreased 7 percent, to $100.5 million, primarily due to decreased volume.

For the full year 2020, worldwide Humulin revenue was $1.260 billion, a decrease of 2 percent compared with the full year 2019. U.S. revenue was $866.4 million, a 2 percent decrease, driven by lower realized prices, partially offset by higher volume. Revenue outside the U.S. was $393.2 million, a 4 percent decrease, driven by decreased volume and the unfavorable impact of foreign exchange rates, partially offset by higher realized prices.

Jardiance

The company’s worldwide Jardiance revenue during the fourth quarter of 2020 was $313.6 million, an increase of 17 percent compared with the fourth quarter of 2019. U.S. revenue increased 7 percent, to $167.8 million, driven by increased demand. Revenue outside the U.S. was $145.7 million, an increase of 32 percent, driven by increased volume and, to a lesser extent, the favorable impact of foreign exchange rates. Jardiance is part of the company’s alliance with Boehringer Ingelheim. Lilly reports as revenue royalties received on net sales of Jardiance and its portion of Jardiance’s gross margin in 2020 and 2019, respectively.

For the full year 2020, worldwide Jardiance revenue was $1.154 billion, an increase of 22 percent compared with the full year 2019. U.S. revenue increased 10 percent, to $620.8 million, driven by increased volume. Revenue outside of the U.S. increased 41 percent, to $533.0 million, driven primarily by increased volume.

Basaglar

For the fourth quarter of 2020, worldwide Basaglar revenue was $282.1 million, a decrease of 8 percent compared with the fourth quarter of 2019. U.S. revenue decreased 16 percent, to $203.6 million, driven by lower realized prices and, to a lesser extent, decreased demand caused by competitive pressures. Revenue outside the U.S. increased 23 percent, to $78.5 million, driven by increased volume. Basaglar is part of the company’s alliance with Boehringer Ingelheim. Lilly reports as cost of sales payments made to Boehringer Ingelheim for royalties and for its portion of the gross margin in 2020 and 2019, respectively.

For the full year of 2020, Basaglar generated worldwide revenue of $1.124 billion, an increase of 1 percent compared with the full year 2019. U.S. revenue was $842.3 million, a decrease of 4 percent, driven by lower realized prices. Revenue outside of the U.S. was $282.1 million, an increase of 19 percent, driven primarily by increased volume.

Forteo

For the fourth quarter of 2020, worldwide Forteo revenue decreased 29 percent compared with the fourth quarter of 2019, to $254.4 million. U.S. revenue decreased 28 percent, to $123.5 million, driven by decreased demand and, to a lesser extent, lower realized prices. Revenue outside the U.S. decreased 31 percent to $130.8 million, primarily driven by decreased volume and, to a lesser extent, lower realized prices.

For the full year 2020, worldwide Forteo revenue decreased 26 percent to $1.046 billion compared with the full year 2019. U.S. revenue for 2020 was $510.3 million, a 21 percent decrease driven primarily by decreased demand. Revenue outside the U.S. was $536.0 million, a 29 percent decrease driven by decreased volume and, to a lesser extent, lower realized prices.

The company expects further volume declines for Forteo as a result of the anticipated entry of generic and biosimilar competition due to the loss of patent exclusivity in the U.S., Japan and major European markets.

Cyramza

For the fourth quarter of 2020, worldwide Cyramza revenue was $284.2 million, an increase of 16 percent compared with the fourth quarter of 2019. U.S. revenue was $104.2 million, an increase of 19 percent, primarily driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside the U.S. was $180.0 million, an increase of 15 percent, driven primarily by increased volume.

For the full year 2020, worldwide Cyramza revenue was $1.033 billion, an increase of 12 percent compared with the full year 2019. U.S. revenue increased 14 percent, to $381.9 million, driven primarily by increased demand and, to a lesser extent, higher realized prices. Revenue outside of the U.S. increased 10 percent, to $650.8 million, driven primarily by increased volume.

Verzenio

For the fourth quarter of 2020, worldwide Verzenio revenue increased 57 percent compared with the fourth quarter of 2019, to $281.6 million. U.S. revenue was $188.2 million, an increase of 43 percent, primarily driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside the U.S. was $93.4 million, an increase of 95 percent, primarily driven by increased volume and, to a lesser extent, higher realized prices.

For the full year 2020, Verzenio generated worldwide revenue of $912.7 million, an increase of 57 percent compared with the full year 2019. U.S. revenue increased 36 percent compared with the full year 2019 to $618.2 million, driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside of the U.S. was $294.4 million, an increase of $169.5 million driven by higher volume.

Olumiant

For the fourth quarter of 2020, Olumiant generated worldwide revenue of $192.2 million, an increase of 50 percent compared with the fourth quarter of 2019. U.S. revenue was $24.8 million. Revenue outside the U.S. was $167.4 million, an increase of 46 percent, primarily driven by increased volume.

For the full year 2020, Olumiant generated worldwide revenue of $638.9 million, an increase of 50 percent compared with the full year 2019. U.S. revenue was $63.8 million. Revenue outside the U.S. was $575.0 million, an increase of 49 percent, driven primarily by increased volume.

Emgality

For the fourth quarter of 2020, Emgality generated worldwide revenue of $109.9 million, an increase of 66 percent compared with the fourth quarter of 2019. U.S. revenue was $96.6 million, an increase of 53 percent driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside of the U.S. was $13.3 million in the fourth quarter of 2020.

For the full year of 2020, Emgality generated worldwide revenue of $362.9 million, an increase of $200.3 million compared with the full year 2019. U.S. revenue was $325.9 million, an increase of $171.0 million driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside of the U.S. was $37.0 million.

Tyvyt

The company’s Tyvyt revenue in China during the fourth quarter of 2020 was $102.8 million, an increase of $18.3 million compared with the third quarter of 2020.

For the full year 2020, Tyvyt generated revenue in China of $308.7 million, an increase of $174.7 million compared to the full year 2019.

Tyvyt is part of the company’s alliance with Innovent in China. Lilly reports total sales of Tyvyt made by Lilly as revenue, with payments made to Innovent for its portion of the gross margin reported as cost of sales. Lilly also reports as revenue a portion of the gross margin for Tyvyt sales made by Innovent.

Baqsimi

For the fourth quarter of 2020, Baqsimi generated worldwide revenue of $23.8 million, an increase of $3.0 million compared with the third quarter of 2020. U.S revenue was $19.8 million, while revenue outside the U.S. was $4.1 million.

For the full year 2020, Baqsimi generated worldwide revenue of $76.1 million, an increase of $53.8 million compared with the full year 2019. U.S. revenue was $63.7 million. Revenue outside of the U.S. was $12.4 million.

Retevmo

For the fourth quarter of 2020, Retevmo generated U.S. revenue of $18.7 million. Retevmo was approved by the FDA and launched in the U.S. during the second quarter of 2020.

For the full year 2020, Retevmo generated U.S. revenue of $36.6 million.

Change in Non-GAAP Measures Beginning in 2021

Beginning in 2021, the company will exclude the gains and losses on investments in equity securities from its non-GAAP measures for other income (expense) and earnings per share. Reflecting this change in the company’s full year 2020 financial results as detailed above would have lowered the company’s full year 2020 earnings per share on a non-GAAP basis by $1.15.

2021 Financial Guidance

The company has updated certain elements of its 2021 financial guidance on a reported basis. Earnings per share for 2021 are now expected to be in the range of $7.10 to $7.75 on a reported basis and are still expected to be in the range of $7.75 to $8.40 on a non-GAAP basis.

The company still anticipates 2021 revenue between $26.5 billion and $28.0 billion, including an estimated $1 billion to $2 billion of revenue from COVID-19 therapies. Revenue growth is additionally expected to be driven by volume from key growth products, including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, Cyramza, Emgality, Tyvyt and Retevmo, as well as by COVID-19 therapies. Revenue growth is expected to be partially offset by lower revenue for products that have lost patent exclusivity. The company expects mid-single digit net price declines globally in 2021. In the U.S., the company expects low-to-mid-single digit net price declines, driven primarily by increased rebates to maintain broad commercial access and segment mix, partially offset by lower utilization in the 340B segment. Outside the U.S., the company expects net price declines in China, Japan, and Europe.

Gross margin as a percent of revenue for 2021 is still expected to be approximately 77 percent on a reported basis and approximately 79 percent on a non-GAAP basis.

Marketing, selling and administrative expenses for 2021 are still expected to be in the range of $6.2 billion to $6.4 billion. Research and development expenses for 2021 are still expected to be in the range of $6.5 billion to $6.7 billion, including approximately $300 million to $400 million of continued investment in COVID-19 therapies.

Operating margin for 2021 is still expected to be approximately 30 percent on a reported basis and approximately 32 percent on a non-GAAP basis.

Other income (expense) for 2021 is still expected to be expense in the range of $200 to $300 million on both a reported basis and on a non-GAAP basis.

The 2021 effective tax rate is still expected to be approximately 15 percent on both a reported basis and a non-GAAP basis.

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the fourth-quarter 2020 financial results conference call through a link on Lilly’s website at www.lilly.com. The conference call will begin at 9:00 a.m. Eastern time (ET) today and will be available for replay via the website.

Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. F-LLY