On February 15, 2022 Incyte (Nasdaq:INCY) reported that it will present at the virtual Cowen 42nd Annual Health Care Conference on Monday, March 7, 2022 at 9:50 a.m. ET (Press release, Incyte, FEB 15, 2022, View Source [SID1234608113]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

The presentation will be webcast live and can be accessed at Investor.Incyte.com and will be available for replay for 30 days.

On February 15, 2022 Ipsen (Euronext: IPN; ADR: IPSEY) reported two-year (25.4 months minimum; 32.9 months median) follow-up results from analyses of the Phase III CheckMate -9ER trial, which demonstrated sustained survival and response rate benefits (abstract #350)1, as well as health-related quality of life (HRQoL) improvements (abstract 323)2, with the combination of Cabometyx (cabozantinib) and Opdivo (nivolumab) versus sunitinib in the first-line treatment of advanced renal cell carcinoma (aRCC) (Press release, Ipsen, FEB 15, 2022, View Source [SID1234608108]). These updated results will be featured in two poster presentations at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium (ASCO GU) from February 17 to 19, 2022.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Dr. Cristina Suárez, M.D. PhD, Medical Oncologist at the Vall d´Hebron University Hospital, Barcelona, Spain and a lead investigator on the Phase III CheckMate -9ER trial said, "I am delighted to see the extent of the efficacy benefits demonstrated with the combination of Cabometyx and Opdivo in the CheckMate 9ER trial. These new data showcase the possibilities we can offer patients for their advanced disease, presenting the opportunity to significantly reduce their risk of death, and for some patients, achieve a complete response, whilst maintaining quality of life. There has been a dramatic evolution in the treatment landscape across lines of therapy for people living with renal cell carcinoma over recent years; this is an exciting time to be a treating physician in this area."

With a median follow-up of 32.9 months (25.4 months minimum), Cabometyx in combination with Opdivo continued to show superiority across efficacy endpoints of overall survival (OS), progression-free survival (PFS), objective response rate (ORR) and disease control rate (DCR), including increased complete response (CR) rates compared to sunitinib.1 For the secondary endpoint of median OS, the combination demonstrated a maintained clinically meaningful improvement (37.7 months vs. 34.3 months), with a 30% reduction in the risk of death (hazard ratio [HR]: 0.70; 95% confidence interval [CI]: 0.55 to 0.90) compared to sunitinib.1 PFS benefits, the primary endpoint of the study, were also maintained, with the combination continuing to double median PFS vs. sunitinib (16.6 months vs. 8.3 months, respectively; HR: 0.56; 95% CI: 0.46 to 0.68).1 Additionally, both superior ORR and DCR benefits were shown to be sustained with increased follow-up for the combination versus sunitinib; ORR 55.7% vs 28.4% and DCR 88.2% vs 69.3%. Moreover, among patients treated with the combination, 12.4% had a complete response vs 5.2% for sunitinib.1 In a further exploratory analysis of depth of response in target lesions by organ site, a higher percentage of patients experienced tumor shrinkage benefits with Cabometyx in combination with Opdivo vs. sunitinib across all organ sites assessed (kidney, liver, lung, lymph node and bone).1

The safety profile identified in the CheckMate -9ER trial was consistent with that previously observed for Cabometyx and Opdivo. 97.2% of patients treated with the combination experienced a treatment-related adverse event (TRAE) of any grade, compared to 93.1% of patients treated with sunitinib.1 Overall, 10.6% discontinued Opdivo only, 9.1% discontinued Cabometyx only, and 7.5% discontinued both Cabometyx and Opdivo (simultaneously or sequentially).1

In a separate analysis, with 32.9 months median follow-up, patients continued to report clinically meaningful HRQoL benefits with Cabometyx in combination with Opdivo compared to sunitinib.2 These exploratory outcomes were measured using the Functional Assessment of Cancer Therapy Kidney Symptom Index-19 (FKSI-19) which assessed quality of life (QoL) associated specifically to kidney cancer as well as EQ-5D-3L instruments which assessed QoL more generally. HRQoL scores from these instruments were found to be improved or maintained over time amongst patients treated with the combination, while reductions in scores were observed with sunitinib. Additionally, those who received the combination were 48% less likely to be notably bothered by treatment side effects than patients in the sunitinib arm.2 These updated data follow the publication of 23.5 month median follow-up HRQoL data in The Lancet Oncology, published on 12 January 2022.3

Steven Hildemann, M.D. PhD, Executive Vice President, Chief Medical Officer, Head of Global Medical Affairs and GlobalPatient Safety, Ipsen said "These new data from the CheckMate -9ER trial build on the previously demonstrated sustained efficacy benefits of the combination of Cabometyx and Opdivo, across patient risk groups. We are delighted to see that these extended survival benefits are further supported by a continued maintenance of health-related quality of life. Evaluating the patient perspective has been an integral element of the CheckMate -9ER trial analyses, ensuring that data are representative of the patient population and their priorities. With this growing body of evidence for the combination of Cabometyx and Opdivo, we are confident of the potential for these data to be realized in real world settings worldwide."

Ipsen thanks the patients and investigators involved in the CheckMate -9ER clinical trial.

About renal cell carcinoma (RCC)

There were over 400,000 new cases of kidney cancer diagnosed worldwide in 2020.4 Of these, RCC is the most common type of kidney cancer, accounting for approximately 90% of cases.5,6 It is almost twice as common in men, and male patients account for over two thirds of deaths.4 If detected in the early stages, the five-year survival rate is high, but for people living with advanced or late-stage metastatic RCC, the survival rate is much lower, around 12%, with no identified cure for this disease.7,8

About the CheckMate -9ER trial

CheckMate -9ER was an open-label, randomized, multi-national Phase III trial evaluating people living with previously untreated advanced or metastatic RCC. A total of 651 patients (23% favorable risk, 58% intermediate risk, 20% poor risk; 25% PD-L1 ≥1%) were randomized to Cabometyx plus Opdivo (n= 323) versus sunitinib (n= 328). The primary endpoint is progression-free survival (PFS). The secondary endpoints include overall survival (OS) and objective response rate (ORR). The primary efficacy analysis compared the doublet combination versus sunitinib in all randomized patients. The trial was sponsored by Bristol Myers Squibb and Ono Pharmaceutical Co and co-funded by Exelixis, Ipsen and Takeda Pharmaceutical Company Limited.

About Cabometyx (cabozantinib)

In the U.S., Cabometyx tablets are approved for the treatment of patients with advanced renal cell carcinoma (RCC); for the treatment of patients with hepatocellular carcinoma who have been previously treated with sorafenib; for patients with advanced RCC as a first-line treatment in combination with nivolumab; and for adult and pediatric patients 12 years of age and older with locally advanced or metastatic DTC that has progressed following prior VEGFR-targeted therapy and who are radioactive iodine-refractory or ineligible. Outside the U.S., Cabometyx is currently approved in 60 countries, including in the European Union, Great Britain, Norway, Iceland, Australia, New Zealand, Switzerland, South Korea, Canada, Brazil, Taiwan, Hong Kong, Singapore, Macau, Jordan, Lebanon, the Russian Federation, Ukraine, Turkey, the United Arabic Emirates (U.A.E.), Saudi Arabia, Serbia, Israel, Mexico, Chile, Peru, Panama, Guatemala, the Dominican Republic, Ecuador, Thailand, Malaysia, Colombia and Egypt for the treatment of advanced RCC in adults who have received prior VEGF-targeted therapy; in the European Union, Great Britain, Norway, Iceland, Canada, Australia, New Zealand, Brazil, Taiwan, Hong Kong, Singapore, Lebanon, Jordan, the Russian Federation, Ukraine, Turkey, the U.A.E., Saudi Arabia, Israel, Serbia, Mexico, Chile, Peru, Panama, Guatemala, the Dominican Republic, Ecuador, Thailand, Egypt and Malaysia for previously untreated intermediate- or poor-risk advanced RCC; and in the European Union, Great Britain, Norway, Iceland, Canada, Australia, Switzerland, Saudi Arabia, Serbia, Israel, Taiwan, Hong Kong, South Korea, Singapore, Jordan, the Russian Federation, Ukraine, Turkey, Lebanon, the

U.A.E., Peru, Panama, Guatemala, Chile, the Dominican Republic, Ecuador, Thailand, Brazil, New Zealand, Egypt and Malaysia for HCC in adults who have previously been treated with sorafenib. Cabometyx is also approved in combination with nivolumab as first-line treatment for people living with advanced RCC, in the European Union, Great Britain, Norway, Iceland, Switzerland, Taiwan, Singapore, the U.A.E., Australia, Chile, Israel and the Russian Federation.

The detailed recommendations for the use of Cabometyx are described in the Summary of Product Characteristics (EU SmPC) and in the U.S. Prescribing Information (USPI).

Ipsen has exclusive rights for the commercialization of Cabometyx outside the U.S. and Japan. Cabometyx is marketed by Exelixis, Inc. in the U.S. and by Takeda Pharmaceutical Company Limited in Japan. Cabometyx is a registered trademark of Exelixis, Inc.

On February 15, 2022 Lantern Pharma (NASDAQ: LTRN), a Dallas-based clinical stage biopharmaceutical company using its proprietary artificial intelligence ("A.I.") platform to transform the cost, pace, and timeline of oncology drug discovery and development, reported that it is expanding opportunities for its portfolio of drug candidates and A.I. drug discovery platform into additional rare pediatric cancers through a collaboration with The Greehey Children’s Cancer Research Institute (GCCRI) at the University of Texas Health Science Center at San Antonio (UTHSCSA) (Press release, Lantern Pharma, FEB 15, 2022, View Source [SID1234608104]). GCCRI is one of only two research institutions in the United States focused exclusively on pediatric cancer research and therapy development.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

The research collaboration will focus on further validating findings from RADR regarding the effectiveness of Lantern’s LP-184 and LP-284 in genomically-defined pediatric cancers, including several without any effective therapeutic approach. The collaboration will initially leverage GCCRI’s pediatric tumor research models and knowledge base to advance Lantern’s drug candidate, LP-184, for the treatment of rare pediatric cancers including rhabdomyosarcoma, Ewing sarcoma, MRT (malignant rhabdoid tumor), Wilms tumor, and ATRT (atypical teratoid rhabdoid tumor). The National Cancer Institute describes several of these tumor types to have limited treatment options available, and many of these tumors continue to progress after standard therapy.

"Transforming the pace at which we develop new therapies for pediatric and rare cancers requires that we make constant use of data, advanced approaches and models, and machine learning to maximize the therapeutic potential of our portfolio. This collaboration with Dr. Houghton and his lab will help us potentially validate multiple new pediatric indications and also generate insights that may lead to new therapies, and all of this is being done at a fraction of the cost of traditional drug development." says Lantern Pharma’s, President and CEO, Panna Sharma.

About the GCCRI and Dr. Houghton
The GCCRI is one of two research institutions in the United States solely dedicated to pediatric cancer research, with a mission to advance scientific knowledge in childhood cancers and to accelerate this knowledge to develop novel therapeutics. The research collaboration between Lantern Pharma and the GCCRI will be led by Dr. Peter Houghton, the former director of the GCCRI. Dr. Houghton has dedicated his career to developing scientific approaches to the understanding and treatment of pediatric cancers including sarcomas, low-grade gliomas, and ATRTs.

In response to the research collaboration, Dr. Houghton commented, "The Greehey Children’s Cancer Research Institute is excited to partner with Lantern Pharma to test LP-184, a novel agent, to evaluate its antitumor activity against a broad range of preclinical pediatric models of sarcoma and to further its pediatric cancer development plan. The success of current therapies for treating advanced cancers in children is limited due to the development of drug resistance and a lack of novel agents. One of the main goals of GCCRI is to identify novel drugs that can be advanced to pediatric cancer trials. We have developed the most comprehensive preclinical models of pediatric solid tumors and leukemias to facilitate testing new agents and their clinical development."

An integral component of Dr. Houghton’s research success has been the development and use of Patient-Derived Xenografts (PDX), which are clinically relevant cancer models that allow researchers to test novel therapeutics – such as LP-184 – in-vivo, and to directly study how tumors respond to treatment. Based on in-silico studies conducted by Lantern Pharma using the RADR platform, LP-184 and LP-284 have the potential to address multiple pediatric cancers.

In January of 2022, Lantern Pharma announced that it had received Orphan Drug and Rare Pediatric Disease designations for its experimental drug candidate LP-184 for the treatment of pediatric patients with ATRT, an aggressive and rapidly growing cancer of the central nervous system occurring primarily in children under 3.

International Childhood Cancer Research Day and ATRT
The announcement of the collaboration between Lantern Pharma and the GCCRI comes on International Childhood Cancer Research Day (ICCD). ICCD shines a spotlight on the over 400,000 children and adolescents diagnosed with cancer around the world each year. Cancer is the leading cause of childhood deaths, with a child dying of cancer every three minutes. Improving outcomes for these pediatric patients will require a global effort to provide more accurate diagnoses, innovative and effective treatment options, and community participation and support. This is especially true for children diagnosed with rare and ultra-rare cancers that have limited clinical research information and few to no treatment options available.

One such cancer is ATRT, which is a type of neurological tumor that primarily affects children under three. These clinically aggressive tumors have a median survival of 6-12 months and a low 5-year survival rate of 30%. The National Cancer Institute estimates that there are 600 living patients with ATRTs and 60 newly diagnosed cases each year. There is no standard of care treatment for children diagnosed with ATRTs, and patients have an imperative need for novel therapeutics to treat this cancer.

Lantern’s Chief Scientific Officer, Dr. Kishor Bhatia stated, "International Childhood Cancer Day reminds us of both success in our abilities to fight pediatric cancer – as much as 80% are treatable – as well as existing gaps in this fight. Although many solid tumors in children are treatable, sub-groups with refractory tumors and poor prognosis require development of novel strategies as do several rare pediatric cancers. Our collaboration with GCCRI is particularly focused on addressing this gap and accelerating our path to targeted pediatric cancer trials."

Recent Developments with LP-184
Lantern Pharma’s drug candidate LP-184 is a synthetic small molecule drug that preferentially damages DNA in cancer cells overexpressing specific biomarkers. LP-184 is currently in preclinical development for certain genomically-defined solid tumors, including ATRT, glioblastomas, and pancreatic cancer. In addition to potential use as a monotherapy, LP-184 has potential to be used as a synergistic agent in combination with other drugs. The collaboration between Lantern Pharma and the GCCRI will expand LP-184’s development focus into additional pediatric cancers, and will examine opportunities for LP-184 as a mono- or combination therapy.

In early 2022, Lantern Pharma announced that it had received Rare Pediatric Disease and Orphan Drug Designations from the U.S. Food and Drug Administration (FDA) for Lantern’s drug candidate LP-184 for the treatment of pediatric patients with ATRT. In obtaining these designations and establishing its collaboration with the GCCRI, Lantern Pharma is aiming to progress LP-184 for ATRT into a clinical trial in late 2022. In addition to these recent FDA designations, LP-184 has also been granted Orphan Drug Designation for the treatment of malignant gliomas and pancreatic cancer.

On February 15, 2022 ImmunoGen Inc. (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reported a global, multi-year definitive licensing agreement whereby it granted Eli Lilly and Company (Lilly) exclusive rights to research, develop, and commercialize ADCs directed to targets selected by Lilly based on ImmunoGen’s novel camptothecin technology (Press release, ImmunoGen, FEB 15, 2022, View Source [SID1234608103]). ImmunoGen retains full rights to the camptothecin platform for all targets not covered by the Lilly license.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

As part of the agreement, Lilly will pay ImmunoGen an upfront payment of $13 million, reflecting initial targets selected by Lilly. Lilly may select a pre-specified number of additional targets, with ImmunoGen eligible to receive an additional $32.5 million in exercise fees if Lilly licenses the full number of targets. ImmunoGen is eligible to receive up to $1.7 billion in potential target program exercise fees and milestone payments based on the achievement of pre-specified development, regulatory, and commercial milestones. ImmunoGen is also eligible for tiered royalties as a percentage of worldwide commercial sales by Lilly. Lilly is responsible for all costs associated with research and development.

Camptothecins are an important class of anticancer drugs targeting Type I topoisomerase. ImmunoGen’s proprietary class of camptothecin linker-payloads are designed to optimize existing camptothecin technology to potentially deliver a wider therapeutic window with enhanced safety and efficacy.

"Lilly has a proven track record of bringing transformative oncology medicines to market, and we are pleased that they selected our novel camptothecin technology to integrate with their efforts to develop next-generation ADCs," said Stacy Coen, ImmunoGen’s Senior Vice President and Chief Business Officer. "This licensing agreement demonstrates ImmunoGen’s continued innovation in ADCs, creates value from our intellectual property around a proprietary platform, and further enhances our ability to re-invest in our business as we build out our pipeline and accelerate our transformation into a fully-integrated oncology company."

On February 15, 2022 Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500 technology, engineering, and science company, reported financial results for the fourth quarter and fiscal year 2021 (Press release, Leidos, FEB 15, 2022, View Source [SID1234608102]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Roger Krone, Leidos Chairman and Chief Executive Officer, commented: "2021 was a banner year for Leidos, with industry-leading organic revenue growth and expanded profitability. In addition, we enhanced our market presence during the year with strategic acquisitions and investments that added important technical capabilities. Despite the ongoing impact of COVID-19 and an extended Continuing Resolution, we are positioned to grow in 2022, bolstered by our scale, differentiated technical offerings, and dedicated workforce."

As of December 31, 2021, Leidos ended the three-year forecast period laid out at its 2019 Investor Day, exceeding or achieving all financial targets. Over the period, Leidos grew revenues at a compound annual growth rate of 10%, achieved a net income margin of 5.5% and converted 164% of its net income attributable to Leidos stockholders into cash flows from operations. In addition, Leidos grew organically at a compound annual growth rate of 7% (versus 5% target), achieved an adjusted EBITDA margin of 10.8% (versus 10% or greater target) and converted 116% of its adjusted net income into free cash flow (versus 100% or greater target).

Summary Operating Results

Revenues were $3.49 billion for the quarter and $13.74 billion for the year, up 7% and 12% over the comparable 2020 periods, respectively. Excluding acquired revenues of $52 million for the quarter and $325 million for the year, organic revenues increased 6% and 9%, respectively. For the year revenues grew organically across all reportable segments. The largest contributors for the quarter and the year were the increase in veterans’ disability examinations after the pause from the COVID-19 pandemic and the ramp-up of the Navy Next Generation Enterprise Network Recompete (NGEN-R) Service Management, Integration and Transport (SMIT) contract.

Net income was $176 million, or $1.23 per diluted share, for the quarter, and $759 million, or $5.27 per diluted share, for the year. Net income margin for the quarter was 5.0%. The weighted average diluted share count for the quarter was 142 million, compared to 144 million in the prior year quarter. For the year net income and diluted EPS were both up 21% compared to fiscal year 2020. Net income margin for the year increased to 5.5% from 5.1% in fiscal year 2020 as a result of strong program management, higher volumes on certain fixed price programs and $26 million net benefit from an adjustment to legal reserves related to the Mission Support Alliance joint venture recorded in the first quarter of fiscal year 2021.

Adjusted EBITDA was $359 million for the fourth quarter, representing an adjusted EBITDA margin of 10.3%. For the year adjusted EBITDA was $1.51 billion (11.0% margin), up 14% over fiscal year 2020. Non-GAAP net income was $224 million for the quarter and $952 million for the year, which generated non-GAAP diluted EPS of $1.56 for the quarter and $6.62 for the year. For the year non-GAAP net income and non-GAAP diluted EPS were up 13% and 14%, respectively, compared to fiscal year 2020.

Cash Flow Summary

Net cash provided by operating activities for the quarter was $210 million for an operating cash flow conversion ratio of 121%. After adjusting for payments for property, equipment and software, quarterly free cash flow was $177 million for a free cash flow conversion ratio of 80%. For the year net cash provided by operating activities was $1.03 billion (137% conversion) and free cash flow was $927 million (98% conversion).

For the quarter Leidos used $37 million in investing activities and $69 million in financing activities. For the year Leidos used $730 million in investing activities and $113 million in financing activities. On November 22, 2021, Leidos signed a definitive agreement within the Defense Solutions segment to dispose of its Aviation & Missile Solutions LLC ("AMS") business to focus on leading-edge and technologically advanced services, solutions and products. The sales price will be approximately $18 million, subject to certain adjustments, and the sale is expected to be completed during the first quarter of fiscal year 2022.

During fiscal year 2021, Leidos made open market repurchases of common stock for an aggregate purchase price of $237 million and returned $199 million to shareholders as part of its regular quarterly cash dividend program. In addition, Leidos borrowed $380 million, paid down $106 million of debt and completed strategic acquisitions and investments for preliminary purchase consideration of approximately $627 million. As of December 31, 2021, the Company had $727 million in cash and cash equivalents and $5.1 billion in debt.

On February 11, 2022, the Leidos Board of Directors declared that Leidos will pay a cash dividend of $0.36 per share on March 31, 2022, to stockholders of record at the close of business on March 15, 2022. In addition, the Board authorized a stock repurchase program under which Leidos may repurchase up to 20 million shares of its common stock, which supersedes the prior February 2018 share repurchase authorization. Stock repurchases may be made on the open market at prevailing market prices or in privately negotiated transactions including through accelerated share repurchase or derivative transactions, transactions with Leidos retirement and deferred compensation plans, transactions under 10b5-1 plans or 10b-18 plans or any of the foregoing combined or otherwise. Whether repurchases are made and the timing and actual number of shares repurchased depends on a variety of factors including price, corporate capital requirements, other market conditions and regulatory requirements. The repurchase program may be accelerated, suspended, delayed or discontinued at any time.

New Business Awards

Net bookings totaled $3.2 billion in the fourth quarter of fiscal year 2021 and $15.5 billion for fiscal year 2021, representing a book-to-bill ratio of 0.9 and 1.1, respectively. As a result, backlog at the end of fiscal year 2021 was $34.5 billion, of which $7.4 billion was funded. Included in the quarterly bookings were several notable awards:

Air Combat Command Intelligence, Surveillance and Reconnaissance Program. Leidos was awarded a task order by the Air Combat Command (ACC) Acquisition Management and Integration Center (AMIC) to continue its support to ACC intelligence, surveillance and reconnaissance (ISR) operations. Under the contract, Leidos will provide subject matter expertise and threat mitigation support for ACC ISR operations along with a full range of intelligence support and ISR operational services that encompass analysis and assessment support, ISR training support and intelligence support for HQ ACC Staff, subordinate NAF Staffs, Centers and Wings. The single-award, firm-fixed price task order has a one-year base period of performance, four one-year options and a total contract value of up to approximately $531 million if all options are exercised.
Hypersonic Thermal Protection System Capability. Dynetics, a wholly owned subsidiary of Leidos, was awarded a contract to develop Hypersonic Thermal Protection System (TPS) prototypes for the U.S. Army’s Rapid Capabilities and Critical Technologies Office (RCCTO). Under the contract, Dynetics will also support materials research, novel inspection and acceptance efforts. The cost-plus-fixed fee award has a total value of up to $479 million over six years.
Federal Parent Locator Service. Leidos was awarded a new prime contract to continue supporting the Office of Child Support Enforcement (OCSE) within the Department of Health and Human Services, Administration of Children and Families. Under the contract, Leidos will continue to support OCSE’s Federal Parent Locator Service (FPLS) with operations and maintenance, continuation of system development and enhancement, data center operations and a disaster recovery center. The single award contract has a maximum value of $76 million and a period of performance of approximately five years if all options are exercised.
Forward Guidance

Leidos is initiating fiscal year 2022 guidance as specified in the table below.

Measure

A provision of the Tax Cuts and Jobs Act of 2017 went into effect on January 1, 2022, that requires companies to capitalize and amortize research and development costs over five years rather than deducting such costs in the year incurred for tax purposes. The guidance for cash flows provided by operating activities does not take into account the effects of this legislative change, because it assumes that the provision will be deferred, modified or repealed. If the provision remains in effect, Leidos currently estimates that cash flows provided by operating activities would decrease by approximately $150 million in fiscal 2022 and net deferred tax assets would increase by a similar amount. The actual impact on cash flows provided by operating activities will depend on the amount of research and development costs the Company will incur, on whether Congress modifies or repeals this provision and on whether new guidance and interpretive rules are issued by the US Treasury, among other factors.

For information regarding adjusted EBITDA margin and non-GAAP diluted EPS, see the related explanations and reconciliations to GAAP measures included elsewhere in this release.

Leidos does not provide a reconciliation of forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to net income margin or diluted EPS, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, Leidos is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income margin, diluted EPS or net income attributable to Leidos shareholders at this time. The amounts of these deductions may be material and, therefore, could result in projected net income margin, net income attributable to Leidos shareholders and diluted EPS being materially less than projected adjusted EBITDA margins and non-GAAP diluted EPS.

Conference Call Information

Leidos management will discuss operations and financial results in an earnings conference call beginning at 8 A.M. eastern time on February 15, 2022. Analysts and institutional investors may participate by dialing +1 (877) 869-3847 (U.S. dial-in) or +1 (201) 689-8261 (international dial-in).

A live audio broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Leidos Investor Relations website (View Source).

After the call concludes, an audio replay can be accessed on the Leidos Investor Relations website or by dialing +1 (877) 660-6853 (toll-free U.S.) or +1 (201) 612-7415 (international) and entering conference ID 13726189.