On October 27, 2021 Lupin Limited [BSE: 500257 | NSE: LUPIN] reported its financial performance for the quarter ending September 30, 2021 (Press release, Lupin, OCT 27, 2021, View Source [SID1234592081]). These unaudited results were taken on record by the Board of Directors at a meeting held today.

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Income Statement highlights – Q2 FY2022
Gross Profit was INR 23,769 mn compared to INR 27,094 mn in Q1 FY2022, with margin of 59.4%.
Personnel cost was 18.9% of sales at INR 7,586 mn compared to INR 7,837 mn in Q1 FY2022
Manufacturing and other expenses were 28.5% of sales at INR 11,425 mn compared to INR 10,309 mn in Q1 FY2022
Investment in R&D for the quarter was INR 3,300 mn (8.2% of sales)
EBITDA for Q2 FY2022 includes an adverse impact of ~80bps for one-time costs related to US Specialty Restructuring
During the quarter, the company booked a provision of INR 18,796 mn [including INR 387 mn towards litigation and settlement related expenses] under Glumetza class actions towards business compensation expense based on the agreement to settle the dispute with two plaintiff groups as well as Impairment expense of INR 7,077 mn for Solosec IP
Balance Sheet highlights
Operating working capital was INR 60,526 mn as on September 30, 2021
Capital Expenditure for the quarter was INR 1,451 mn and was INR 2,508mn for H1 FY2022
Net Debt as on September 30, 2021 stands at INR (-)715 mn
Net Debt-Equity for the company as on September 30, 2021 stands at (-)0.01
Commenting on the results, Mr. Nilesh Gupta, Managing Director, Lupin Limited said,"Our sustained efforts to drive growth have helped us cross INR 4,000cr sales this quarter. We remain focused on ramping up our revenues in the U.S. while continuing our robust growth in India. With the restructuring in the U.S., we have significantly scaled down the Specialty burn. We remain committed to our journey of margin improvement through sustainable growth and cost optimization, while ensuring the safety of our people and the highest standards of compliance."

Consolidated Financial Results – Q2 FY2022

*Adjusted for NCE Licensing income of INR 3,734 mn in Q1, Gross Margin in Q1 FY2022 would be 60.5% to sales, EBITDA Margin would be 16.0% to sales and PBT Margin would be 9.8% to sales. Further, on an adjusted basis, sales growth in Q2 FY2022 is 3.6% and EBITDA as well as Adjusted PBT Growth is 1.5%

Royalty/Profit Share Expenses on certain in-licensed/partnered products have been reclassified to Material Costs from Manufacturing and Other expenses starting Q1 FY2022. On a comparable basis, the Gross Margin adjusted for such change would be 62.7% of sales in Q2 FY2021. Manufacturing & Other Expenses adjusted for this change related to Royalty/Profit Share Expenses would be 29.1% of sales in Q2 FY2021.
Includes one-time costs related to US Specialty Restructuring of INR 326 mn
Includes Provision of INR 18,796 mn [including INR 387 mn towards litigation and settlement related expenses] under Glumetza class actions towards business compensation expense based on the agreement to settle the dispute with two plaintiff groups
Impairment Expense of INR 7,077 mn for impairment of Solosec IP
Royalty/Profit Share Expenses on certain in-licensed/partnered products have been reclassified to Material Costs from Manufacturing and Other expenses starting Q1 FY2022. On a comparable basis, the Gross Margin adjusted for such change would be 62.7% of sales in H1 FY2021. Manufacturing & Other Expenses adjusted for this change related to Royalty/Profit Share Expenses would be 28.1% of sales in H1 FY2021.
Includes one-time costs related to US Specialty Restructuring of INR 326 mn
Includes Provision of INR 18,796 mn [including INR 387 mn towards litigation and settlement related expenses] under Glumetza class actions towards business compensation expense based on the agreement to settle the dispute with two plaintiff groups
Impairment Expense of INR 7,077 mn for impairment of Solosec IP
Operational Highlights
North America
Lupin’s North America sales for Q2 FY2022 were INR 14,291 mn, up 7.2% compared to INR 13,330 mn in Q1 FY2022, up 2.2% as compared to INR 13,984 mn in Q2 FY2021; accounting for 36% of Lupin’s global sales.

Q2 FY2022 sales were USD 184 mn compared to USD 172 mn in Q1 FY2022 and USD 180 mn in Q2 FY2021

The Company filed 4 ANDAs in the quarter, received 1 ANDA approval from the U.S. FDA, and launched 3 products in the quarter in the U.S. market. The Company now has 165 products in the U.S. generics market.

Lupin continues to be the 3rd largest pharmaceutical player in both U.S. generic market and US total market by prescriptions (IQVIA MAT September 2021). Lupin is the market leader in 55 products in the U.S. generics market and amongst the Top 3 in 120 of its marketed products (market share by extended units, IQVIA June 2021)

During the quarter, we scaled down the US Specialty operations and have reduced the burn going forward. We also booked one-time costs of INR 326 mn related to US Specialty business.

India

Lupin’s India formulation sales for Q2 FY2022 were INR 15,435 mn, down 5.7% as compared to INR 16,362 mn in Q1 FY2022, up 15.9% as compared to INR 13,323 mn in Q2 FY2021; accounting for 38% of Lupin’s global sales.

India Region Formulations sales grew by 16.0% in the quarter as compared to Q2 FY2021.

Lupin is the 6th largest company in the Indian Pharmaceutical Market (IQVIA MAT September 2021).

Growth Markets (LATAM and APAC)

Lupin’s Growth Markets registered sales of INR 3,490 mn for Q2 FY2022, up 4.9% compared to INR 3,328 mn in Q1 FY2022, up 19.6% as compared to INR 2,918 mn in Q2 FY2021; accounting for 9% of Lupin’s global sales.

Lupin’s Brazil sales were BRL 48 mn for Q2 FY2022 compared to BRL 63 mn for Q1 FY2022 and BRL 59 mn for Q2 FY2021.

Lupin’s Mexico sales were MXN 172 mn for Q2 FY2022 compared to MXN 163 mn for Q1 FY2022 and MXN 155 mn for Q2 FY2021.

Lupin’s Philippines sales were PHP 643 mn for Q2 FY2022 compared to PHP 362 mn for Q1 FY2022 and PHP 341 mn for Q2 FY2021.

Lupin’s Australia sales were AUD 18.3 mn for Q2 FY2022 compared to AUD 17.1 mn for Q1 FY2022 and AUD 14.4 mn for Q2 FY2021.

Europe, Middle-East and Africa (EMEA)

Lupin’s EMEA sales for Q2 FY2022 were INR 3,484 mn, up 33.3% compared to INR 2,613 mn in Q1 FY2022, up 6.9% compared to INR 3,259 mn in Q2 FY2021; accounting for 9% of Lupin’s global sales.

Lupin’s South Africa sales for Q2 FY2022 were ZAR 357 mn, compared to ZAR 273 mn in Q1 FY2022 and ZAR 304 mn in Q2 FY2021.

Lupin is the 6th largest player in South Africa in the total generics market (IQVIA August 2021).

Lupin’s Germany sales for Q2 FY2022 were EUR 7.9 mn, compared to EUR 7.4 mn in Q1 FY2022 and EUR 8.1 mn in Q2 FY2021.

Global API

Lupin’s Global API sales for Q2 FY2022 were INR 2,678 mn, up 8.9% compared to INR 2,459 mn in Q1 FY2022, down 28.4% as compared to INR 3,739 mn in Q2 FY2021; accounting for 7% of Lupin’s global sales.

Research and Development

Investment in R&D amounted to INR 3,300 mn (8.2% of sales) for Q2 FY2022 as compared to INR 3,737 mn (8.8% of sales) for Q1 FY2022.

Lupin received approval for 1 ANDA from the U.S. FDA in the quarter. Cumulative ANDA filings with the U.S. FDA stand at 444 as of September 30, 2021, with the company having received 292 approvals to date.

The Company now has 51 First-to-File (FTF) filings including 20 exclusive FTF opportunities. Cumulative U.S. DMF filings stand at 202 as of September 30, 2021.

On October 27, 2021 Checkmate Pharmaceuticals, Inc. (Nasdaq: CMPI) ("Checkmate"), a clinical stage biopharmaceutical company focused on developing its proprietary technology to harness the power of the immune system to combat cancer, reported that Alan Fuhrman has been appointed as interim President and CEO (Press release, Checkmate Pharmaceuticals, OCT 27, 2021, View Source [SID1234592077]). Mr. Fuhrman succeeds Barry Labinger, who has transitioned from his roles as President and CEO and Director.

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"We believe that vidutolimod has significant potential as a novel investigational therapeutic for melanoma and other difficult to treat tumor types. Our strategic priority is to rapidly advance our vidutolimod clinical program toward meaningful clinical data, and I am excited to lead the Company at this important time," said Alan Fuhrman interim President and CEO.

"On behalf of the entire Board, I want to thank Barry for his contributions to Checkmate, and we wish him much success with his future endeavors," said Mike Powell, Chairman of the Board of Directors.

The Board has initiated a candidate search to identify a permanent CEO.

On October 27, 2021 Monteris Medical, the leader in MR-guided laser interstitial thermal therapy (LITT or laser ablation), reported that Cigna, a global health services company and one of the largest commercial payors in the United States, has released a national coverage policy supporting the use of LITT for people with brain tumors and drug-resistant epilepsy (Press release, Monteris Medical, OCT 27, 2021, View Source [SID1234592020]).

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The medical coverage policy by Cigna considers LITT medically necessary in the treatment of drug-resistant epilepsy and symptomatic brain tumors and radiation necrosis when medical necessity is met, and the patient is not suitable for open brain surgery.

"Many patients with brain tumors face situations in which traditional, open surgery is neither possible, nor the preferred approach. This policy decision by Cigna offers appropriate patients greater access to a targeted, minimally invasive technology that can positively impact their care and improve their quality of life," said Dr. Peter Fecci, director of the Brain Tumor Immunotherapy Program and the Center for Brain and Spine Metastasis at Duke University School of Medicine in Durham, N.C.

A growing body of peer-reviewed clinical evidence continues to show medical advantages of minimally invasive, MR-guided laser ablation technology due to decreased morbidity, faster recovery time, shorter hospital and intensive care stay, and an ability to access lesions not amenable to open surgery. Laser ablation also represents an alternative to surgery for patients with significant comorbidities.

"Cigna and other national payors have progressively widened access to care for the patients we serve. This policy announcement is the latest in a continuum of advancements for LITT, establishing its position in the care pathway for patients and their families afflicted by brain tumors and epilepsy," said Martin J. Emerson, president and chief executive officer of Monteris Medical.

The Cigna coverage policy follows recently issued position statements on the use of LITT for epilepsy and brain tumors, respectively, by the major neurosurgical societies, inclusion of LITT in guidelines issued by the National Comprehensive Cancer Network, and Category Level 1 CPT codes approved by the American Medical Association with an effective date of January, 2022.

On October 27, 2021 Biofrontera AG reported that its US-subsidiary Biofrontera Inc. intends to raise capital by means of an initial public offering and a stock exchange listing in the United States ("IPO") (Press release, Biofrontera, OCT 27, 2021, View Source [SID1234592075]). On October 1, 2021, Biofrontera AG announced that within the scope of the IPO, up to 3,450,000 shares of Biofrontera Inc. are to be placed with US-investors with a price range of USD 5.00 to USD 7.00 per share and that no existing shares of Biofrontera Inc. held by Biofrontera AG will be offered.

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Based on consultation with the underwriters, Biofrontera Inc. now intends to modify these terms and conditions: Up to 3,565,000 units ("Units") consisting of one new Biofrontera Inc. share and one warrant entitling the holder to one additional new Biofrontera Inc. share shall be offered in the IPO. The price range for the Units offered in the IPO is USD 5.00 to USD 7.00 per Unit. The price of a Unit is allocated between the share and the warrant. Each warrant has an exercise price equal to the initial public offering price and expires five years from the date of issuance.

The Management Board has resolved, with the consent of the Supervisory Board, that it is in favor of the above adjustments to the terms and conditions of the IPO being made by Biofrontera Inc.

A registration statement relating to the securities to be offered in the IPO has been filed with the U.S. Securities and Exchange Commission (SEC) but has not yet become effective. These securities may not be sold nor may offers to buy these securities be accepted prior to the time the registration statement becomes effective. This offering is being made only by means of a prospectus which has been filed with the SEC as part of a registration statement once it is effective.

This public disclosure of inside information according to article 17 MAR shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

On October 27, 2021 DiaCarta Inc., a precision molecular diagnostics company and leading developer of novel oncology tests using liquid biopsy, reported the publication of a study in PLOS ONE that demonstrates that DiaCarta’s ColoScape Xenonucleic Acid (XNA)-mediated quantitative real-time polymerase chain reactions (qPCR) clamping assay detects mutant cell-free DNA (cfDNA) from precancerous colorectal cancer (CRC) lesions and colorectal cancer (Press release, DiaCarta, OCT 27, 2021, View Source [SID1234592074]).

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The paper entitled, "A novel xenonucleic acid-mediated molecular clamping technology for early colorectal cancer screening," evaluated the performance of XNA-mediated qPCR clamping technology for the simultaneous and qualitative detection of somatic mutations in CRC patients.1 Nineteen mutations in a panel of genes associated with early events in CRC pathogenesis are targeted in the ColoScape assay.

The ColoScape XNA-mediated qPCR clamping assay is a novel multi-gene mutation diagnostic assay for the qualitative detection of colorectal cancer-associated gene mutations in liquid biopsy and FFPE tissue samples. ColoScape utilizes XNA technology, innovative synthetic Xenonucleic acid molecular oligomers that hybridize with target wild-type DNA sequences. The XNA oligomers act as molecular clamps to enable the accurate amplification of mutant sequences only, using qPCR.

In this study, a total of 380 clinical samples, including plasma cfDNA and FFPE samples from patients with precancerous and different stages of CRC, were analyzed with the ColoScape assay.1 With liquid biopsy the preliminary assay clinical specificity for CRC was 100% and the clinical sensitivity was 92.2%; for precancerous lesions clinical specificity was 95% and clinical sensitivity was 62.5%.1 With FFPE samples the preliminary assay clinical specificity for CRC was 96% and the clinical sensitivity was 92%, making this assay robust, specific and highly sensitive. Currently, DiaCarta has large clinical trials ongoing in Europe, Asia, and US.

"This study validates the diagnostic application of the ColoScape assay in the early detection of precancerous lesions and colorectal cancer based on the amplification and detection of cfDNA mutants from one tube of blood," said Aiguo (Adam) Zhang, Ph.D., CEO, DiaCarta, Inc. "Our technology has the potential to disrupt the standard method of FFPE or stool samples used for the diagnosis of colorectal cancer. ColoScape’s sensitivity and specificity may yield detection of colorectal cancer before the disease progresses to more acute stages. In addition, our new generation of ColoScape test includes a panel of methylation genes powered by XNA, which generates even higher sensitivity, especially for the precancerous lesions."