On August 24, 2022 Nykode Therapeutics reported 1H 2022 Financial result (Press release, Nykode Therapeutics, AUG 24, 2022, View Source [SID1234618594])

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Highlights for 2Q 2022:
• Nykode Therapeutics announced positive interim results from its Phase II trial with VB10.16 in combination
with atezolizumab in advanced cervical cancer
• Anti-tumor activity of VB10.16 in combination with atezolizumab was observed in a heavily pre-treated
population of patients with HPV16-positive advanced cervical cancer. Strong overall response rate
(ORR) was observed in both PD-L1 positive patients (ORR of 27%, including two complete responses)
and in PD-L1 negative patients (ORR of 17%)
• VB10.16 in combination with atezolizumab demonstrated a high disease control rate (DCR, which
includes patients who have achieved complete response, partial response and stable disease) of 77%
in PD-L1 positive patients and 58% in PD-L1 negative patients
• The anti-tumor activity seen in the PD-L1 negative population may potentially open up for treatment of
a new subset of patients
• In addition, a DCR of 71% was observed in patients with non-inflamed tumors, including both immune
desert and T cell excluded tumors
• Nykode will initiate a study in head and neck squamous cell carcinoma (HNSCC) and update the
VB10.16 development plan
• At the 2022 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting, Nykode presented exciting
preclinical data from its second generation Vaccibody vaccine technology demonstrating a potential to
further increase and control immune responses
• Nykode presented preclinical data from its tolerizing vaccine research for use in autoimmune disorders at its
Capital Markets Day demonstrating the ability to increase antigen specific T regulatory cells and to shift the
cytokine balance towards an immune suppressive profile in mice models
• Nykode Therapeutics AS converted to Nykode Therapeutics ASA, a public limited liability company, and listed
its shares on the main list of the Oslo Stock Exchange
• Elaine Sullivan and Anne Whitaker were elected to join the Board of Directors at the Company’s AGM
• Nykode appointed Klaus Edvardsen as Chief Development Officer
Highlights after June 30, 2022:
• Nykode appointed Louise Stubbe as Chief Legal Officer

Michael Engsig, Chief Executive Officer at Nykode, comments:
"The highlight of the second quarter was the positive interim results from the VB C-02 phase II study with our
Vaccibody construct VB10.16 in combination with atezolizumab in HPV-16 positive cervical cancer. I’m personally
excited about the impressive and high disease control rates observed in hard-to-treat patients and the fact that we
observed this in both PD-L1 positive as well as PD-L1 negative patients. It is still early days, but these data and
other important findings from the study so far strengthens our belief in the program and we are committed to
further developing VB10.16 in cervical cancer and expand the use to other HPV16-positive indications including
head and neck cancer."

Michael Engsig continues: "I am pleased to note that the collaborations with our external partners aiming at
identifying clinical candidates for further development in man progress. We were also thrilled to announce the up
listing to the main list of the Oslo Stock Exchange and the continued internationalization of the executive
management group and the Board of Directors. We are financially well positioned, which combined with the
positive read-outs from the VB C-02 trial and the exciting advancements and prospects coming from our
preclinical pipeline gives us a strong outset to continue our journey of successful business growth."
R&D update
Nykode’s modular technology platform is versatile and may be adapted to generate immunotherapies inducing
specific and controlled immune responses adapted to each disease. Hence, Nykode’s platform may be applied
across a broad range of immunotherapy areas as innovative solutions to an unmet medical need.
Please find below an update on Nykode’s current research and development activities.

Oncology
VB10.16
VB10.16 is a therapeutic HPV vaccine directed against HPV16+ induced malignancies and wholly-owned by
Nykode:
• Clinical trial VB C-02:
• VB10.16 in combination with atezolizumab
• Cancer indication: HPV16+ advanced, non-resectable cervical cancer
• Clinical stage: Phase II
• Fully enrolled
• ClinicalTrials.gov Identifier: NCT04405349
Status and highlights
The trial is fully enrolled and reported positive interim efficacy and safety data on May 9, 2022. Interim results
from 39 patients with a median follow up of 6 months show durable responses with a very high disease control
rate (DCR) of 64% in heavily pre-treated advanced cervical cancer patients. Anti-tumor efficacy was observed in
both PD-L1 positive and negative patients, with 27% overall response rate (ORR) and 77% DCR in PD-L1
positive patients and 17% ORR and 58% DCR in PD-L1 negative patients, respectively. DCR of 71% was
observed in patients with non-inflamed tumors, including both immune desert and T cell excluded tumors.
The anti-tumor activity seen in the PD-L1 negative population may potentially open up for treatment of a new
subset of patients. HPV16-specific IFN-γ T cell responses were associated with clinical efficacy and complete
clearance of HPV16 ctDNA was significantly correlated with clinical outcomes.

VB10.16 in combination with atezolizumab is well-tolerated and has a safety profile comparable to atezolizumab
monotherapy. Nykode expects to report updated key efficacy data read-outs from the VB C-02 trial covering all
patients during the first half of 2023.

The encouraging clinical efficacy and favorable safety profile which was observed with VB10.16 has led Nykode
to focus on updating the development strategy for VB10.16 which is expected during second half of 2022. This
includes expansion into additional HPV16+ indications and a dose escalation trial of VB10.16 in combination with
CPI in patients with HPV16-positive HNSCC where safety, efficacy, and immunogenicity of multiple VB10.16 dose
levels will be assessed.

VB10.NEO
VB10.NEO is an individualized neoantigen cancer vaccine, exclusively licensed to Genentech:
• Clinical trial VB N-01:
• VB10.NEO in combination with immune checkpoint inhibitor
• Cancer indications: Melanoma, non-small cell lung cancer (NSCLC), clear renal cell carcinoma,
urothelial cancer or squamous cell carcinoma of the head and neck (HNSCC)
• Clinical stage: Phase I/IIa
• Fully enrolled
• ClinicalTrials.gov Identifier: NCT03548467
• Clinical trial VB N-02:
• VB10.NEO in combination with atezolizumab
• Cancer indications: Locally advanced and metastatic tumors
• Clinical stage: Phase Ib
• ClinicalTrials.gov Identifier: NCT05018273
Infectious Diseases
Nykode’s infectious disease initiative continues to generate data supporting the potential of the platform to control
immune responses in addition to explore and evaluate a diverse set of pathogens as potential next future clinical
vaccine targets.

VB10.COV2
Nykode has chosen a 2-arm strategy for its VB10.COV2 project to fight SARS-CoV-2 variants of concern (VoC).
VB10.2129 (RBD candidate) and VB10.2210 (T cell candidate) are two vaccine candidates designed using
Nykode’s modular and Antigen Presenting Cell (APC) targeted technology.
• Clinical trial VB-D-01, investigating the two vaccine candidates, VB10.2129 and VB10.2210
• Pathogen: SARS-CoV-2
• Clinical stage: Phase I/II
• ClinicalTrials.gov Identifier: NCT05069623
VB10.2129 – 2nd generation vaccine addressing multiple variants of concern
VB10.2129 contains the RBD domain of the Beta variant of concern B1.351. Nykode’s RBD vaccine candidate
has shown in preclinical studies a potential to induce rapid and strong levels of neutralizing antibody responses
addressing several variants of concern supported by strong Th1 and CD8 T cell responses.

VB10.2210 – 3rd generation universal broadly protective T cell vaccine
Based on efficacy studies with approved Spike based vaccines, T cells appear central in maintaining the
protection against severe disease and death across current VoCs. Vaccines inducing a broader T cell immunity
against additional SARS-CoV-2 antigens less prone to mutations may therefore be a promising way to prevent
severe disease across future VoCs. Nykode aims to broaden the T cell responses against a broad set of epitopes
from multiple SARS-CoV-2 antigens based on a collaboration with Adaptive Biotechnologies. Preclinical data
confirm induction of strong T cell responses against the broad set of SARS-CoV-2 antigens in several animal
models. Nykode’s CCL3L1 targeted technology has shown induction of clinically relevant T cell responses in
multiple preclinical and clinical studies. The aim is to induce long-lasting protective immunity across all population
groups and across current and future variants.

VB-D-01 trial
The VB-D-01 trial is a Phase I/II, open label, dose escalation trial to determine safety and immunogenicity of two
SARS-CoV-2 vaccine candidates VB10.2129 and VB10.2210.
Status and highlights
• VB10.2129 (RBD candidate): First subject dosed November 3, 2021. The trial is fully enrolled at two out
of three dose levels in the dose-escalation cohort. Recruitment is on-going
• VB10.2210 (T cell candidate): First subject dosed December 27, 2021. The trial is fully enrolled at all
three dose levels in the dose-escalation cohort
• Nykode plans to report key results from the trial and guide on the future development strategy during the
second half of 2022
Autoimmune disorders
Autoimmune disorders are caused by unwanted immunogenicity to self-antigens. Antigen-specific tolerization for
the treatment of autoimmune diseases has the potential to suppress autoimmunity without compromising normal
immune function.
Nykode’s platform is uniquely positioned to induce tolerogenic T cell responses through specific targeting of
tolerizing antigen specific cells. Initial preclinical proof-of-concept studies with tolerizing vaccine constructs are
encouraging. Nykode has demonstrated the ability to increase antigen specific T regulatory cells and to shift the
cytokine balance towards an immune suppressive profile in mice models. Patent applications have been filed to
Nykode Therapeutics ASA | Gaustadalléen 21, N-0349 Oslo, Norway | W: nykode.com | Org.no. N-990 646 066 MVA
protect the overall concepts.The Company plans to provide further preclinical data from the tolerization project
within the next 12 months.

4th Module, novel vaccine formats
The 4th module platform allows Nykode to introduce additional new coding regions to the vaccine with the
purpose of further boosting or directing the immune responses.
Nykode presented a poster on the 4th module concept at the American Association for Cancer Research (AACR) (Free AACR Whitepaper)
Annual Meeting in April 2022. Here it was demonstrated how the Vaccibody molecule can be co-expressed with
immune-stimulatory proteins from one plasmid using a multicistronic design. Compared to the Vaccibody
molecule alone, the simultaneous expression of selected immune stimulatory cytokines was shown to boost the
overall immune response and to stimulate an enhanced anti-tumor immune response in preclinical models. At
Nykode’s Capital Markets Day, data on 4th module cytokines boosting T cell and antibodies responses induced by
a SARS-COV-2 subunit vaccine was presented.

An additional 5th and 6th module may be added to further boost and/or direct the immune responses. Nykode will
continue to explore the potential of additional immune modulatory polypeptides and combinations of these.

Other
Due to the growth ambitions and the creation of an international biotech company, Nykode has strived to further
strengthen the Board of Directors. Elaine Sullivan and Anne Whitaker were elected to join the Board of Directors
at the AGM on May 12, 2022, both bringing significant international executive, drug development and commercial
experience from biotech and big pharma.

Klaus Edvardsen was appointed Chief Development Officer, effective July 1, 2022. He brings international
leadership experience in directing successful drug development programs at major biopharmaceutical companies.
Further, Louise Stubbe was appointed Chief Legal Officer. She brings over a decade of life sciences industry
experience from both private and listed companies and has experience from building and managing global legal
departments.

Nykode converted to a public limited liability company and listed its shares on the main list of the Oslo Stock
Exchange (OSE) with first day of trading on June 16, 2022.Financial review
(Numbers in brackets are for the corresponding period the previous year unless otherwise specified)
Income statement
The net result for the six months ended June 30, 2022 was a net loss of USD 15.6 million compared to a net loss
of USD 12.8 million for the same period in 2021. The change in net loss was mainly due to increased activities
and operations in Nykode, leading to increased operating expenses. This was partially offset by an increase in
total revenue as well as a decrease in the social security cost accrual related to share-based payments included
under employee benefit expenses.

Revenue and other income
Total revenue and other income amounted to USD 4.4 million in the six months ended June 30, 2022 (USD 2.7
million). The increase was mainly due to increased R&D service activities under the agreements with Genentech
and Regeneron.

Operating expenses
Total operating expenses amounted to USD 23.3 million in the six months ended June 30, 2022, compared to
USD 17.8 million for the same period in 2021. Other operating expenses increased from USD 11.1 million in the
first six months of 2021 to USD 17.7 million six months ended June 30, 2022, driven by increased operating
activity. Employee benefit expenses were USD 4.7 million in the six months ended June 30, 2022 (USD 6.6
million). The decrease in employee benefit expenses in 2022 is primarily due to the reduction of the social
security cost accrual related to share-based payments. This accrual is dependent on the share price as Nykode is
required to accrue for the social security cost for all warrants and options that are in-the-money at the balance
sheet date. This relates to both the current and the non-current portion. As the share price decreased during the
period the accrual is also reduced. The corresponding reduction is USD 6.6 million (USD 1,5 million increase).
The decrease is offset by the planned increase in headcount.

Net financial income and expenses
Net financial income and expenses was negative USD 0.6 million in the six months ended June 30, 2022 (USD
0.6 million negative). Finance income and finance expenses mainly relate to movements in foreign currency
exchange rates and fair value adjustments of financial instruments.

Income tax expenses
The Group recognized tax income of USD 3.8 million in the six months ended June 30, 2022 and USD 3.0 million
in the same period of 2021. The income tax expense is primarily related to movement in deferred tax. Statement of financial position
Cash and cash equivalents
At June 30, 2022, the Group had a cash position of USD 213.3 million compared to USD 216.2 million at
December 31, 2021. The decrease in cash is mainly a result from operating and investing activities.
Other current financial assets
At June 30, 2022, total other current financial assets amounted to USD 10.0 million compared to USD 12.2 million
at December 31, 2021. Other current financial assets comprise of liquid money marked funds.
Equity
At June 30, 2022, total equity amounted to USD 181.1 million, compared to USD 194.1 million at December 31,
2021. The change mainly reflects the net loss of the period of USD 15.6 million, the exercise of warrants and
options and recognition of share-based payments.

Trade receivables
At June 30, 2022, trade receivables amounted to USD 2.7 million, compared to USD 23.8 million at December 31,
2021. The decrease is mainly due to the receipt of the USD 20 million milestone payment from Genentech in the
first quarter of 2022.
Trade and other payables
At June 30, 2022, trade and other payables amounted to USD 5.4 million, compared to USD 8.5 million at
December 31, 2021.

On August 24, 2022 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported that it obtained regulatory approval today from the Ministry of Health, Labour and Welfare for the anticancer agent/antimicrotubule binding anti-CD79b monoclonal antibody Polivy intravenous infusion 30 mg and 140 mg [generic name: polatuzumab vedotin (genetical recombination)] for an additional indication of treatment of patients with previously untreated diffuse large B-cell lymphoma (DLBCL) (Press release, Chugai, AUG 24, 2022, View Source [SID1234618592]).

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"We are very pleased to be able to offer the first new treatment in 20 years to patients with previously untreated diffuse large B-cell lymphoma (DLBCL) through this line extension approval," said Chugai’s President and CEO Dr. Osamu Okuda. "Based on our long experience and expertise in hematological cancer, we will continue to provide information on the proper use of Polivy for the benefit of patients with untreated DLBCL, as well as those with relapsed or refractory DLBCL."

Polivy is an antibody-drug conjugate, which is a combination of an antibody and a small molecule compound. This approval is based on the global phase III clinical study (POLARIX study) in patients with previously untreated DLBCL. The study, which Japan participated in, is a phase III, randomized, double-blind, placebo-controlled study evaluating the efficacy, safety and pharmacokinetics of Polivy plus R-CHP versus R-CHOP. 879 patients were enrolled, and the primary endpoint was progression-free survival (PFS) as assessed by the investigator using the Lugano Response Criteria for malignant lymphoma.

As a leading company in the field of oncology in Japan, Chugai is committed to contribute to patients and medical professionals through offering innovative drugs to fulfill unmet medical needs in cancer treatment.

Approval Information *Changes are underlined.

Indication:
Diffuse large B-cell lymphoma

Dosage and administration:
The usual adult dosage is 1.8 mg/kg (body weight) polatuzumab vedotin (genetical recombination) administered by intravenous infusion every 3 weeks for 6 doses, in combination with the antineoplastic agents given below. Administer the first infusion over 90 minutes. If the first infusion is well tolerated, subsequent infusions may be administered over a shorter time of at least 30 minutes. Reduce the dose as necessary in accordance with the patient’s condition.

Administration in combination with rituximab (genetical recombination), cyclophosphamide hydrate, doxorubicin hydrochloride, and prednisolone or methylprednisolone
Administration in combination with bendamustine hydrochloride preparation and rituximab (genetical recombination)
[Reference Information]
Chugai Files for Additional Indication of Polivy for Previously Untreated Diffuse Large B-cell Lymphoma (Press release issued on December 10, 2021)
View Source

Roche’s Polivy combination reduced the risk of disease worsening or death by 27% in people with previously untreated aggressive form of lymphoma (Press release issued by Roche on December 14, 2021)
View Source

About Polivy (polatuzumab vedotin)
Polatuzumab vedotin was developed by Roche using Seagens’ ADC technology. It is a first-in-class anti-CD79b antibody-drug conjugate (ADC), comprising the anti-CD79b humanized monoclonal antibody and a tubulin polymerization inhibitor attached together using a linker. The CD79b protein is expressed specifically in the majority of B-cells, making it a promising target for the development of new therapies.1, 2) Polatuzumab vedotin binds to CD79b and destroys these B-cells through the delivery of an anti-cancer agent, which is thought to suppress the effects on normal cells.3, 4) Polatuzumab vedotin was granted accelerated approval in the US in June 2019 and conditional marketing authorization in the EU in January 2020, respectively.

About POLARIX study
POLARIX (NCT03274492) is an international phase III, randomized, double-blind, placebo-controlled study evaluating the efficacy, safety and pharmacokinetics of Polivy plus Rituxan (rituximab), cyclophosphamide, doxorubicin and prednisone (R-CHP) versus Rituxan, cyclophosphamide, doxorubicin, vincristine and prednisone (R-CHOP) in people with previously untreated diffuse large B-cell lymphoma (DLBCL). 879 patients were randomized 1:1 to receive either Polivy plus R-CHP plus a vincristine placebo for six cycles, followed by Rituxan for two cycles; or R-CHOP plus a Polivy placebo for six cycles, followed by two cycles of Rituxan.

The primary outcome measure is progression-free survival as assessed by the investigator using the Lugano Response Criteria for malignant lymphoma.
Data from the pivotal phase III POLARIX study showed a significant improvement in PFS with Polivy plus R-CHP versus R-CHOP in patients with previously untreated DLBCL after a median follow-up of 28.2 months (hazard ratio [HR] 0.73; 95% CI: 0.57–0.95; P<0.02).The safety profile was comparable for Polivy plus R-CHP versus R-CHOP, including rates of grade 3-4 adverse events (AEs; 57.7% versus 57.5%), serious AEs (34.0% versus 30.6%), grade 5 AEs (3.0% versus 2.3%), and AEs leading to dose reduction (9.2% versus 13.0%), respectively.5)

POLARIX is being conducted in collaboration with The Lymphoma Study Association (LYSA) and The Lymphoma Academic Research Organisation (LYSARC).

About the LYSA and the LYSARC
The Lymphoma Study Association, or LYSA, is the internationally leading cooperative group for lymphoma research in Europe, conducting clinical studies ranging from the first tests of new medicines in humans to the establishment of reference therapeutic strategies. LYSA includes in its network more than 120 care centers distributed throughout three countries (France, Belgium, Portugal), and collaborates with many scientific teams at the international level.
The Lymphoma Academic Research Organisation, or LYSARC, is the LYSA operational structure that conducts clinical research projects on lymphomas at the international level.

About diffuse large B-cell lymphoma (DLBCL)
DLBCL is the most common form of non-Hodgkin lymphoma (NHL), accounting for about one in three cases of NHL.6) DLBCL is an aggressive type of NHL.7) While it is generally responsive to treatment in the frontline, as many as 40% of patients will relapse or have refractory disease, at which time salvage therapy options are limited and survival is short.7) Approximately 150,000 people worldwide are estimated to be diagnosed with DLBCL each year.8)

Salvage therapy: Salvage chemotherapy or salvage therapy is used to treat patients with hematologic malignancy who experienced no therapeutic effects (refractory), or recurrence/relapse of the disease. Applicable treatment may vary depending on the type of cancer. Combination therapies of multiple drugs including anticancer agents9) are generally used.

Trademarks used or mentioned in this release are protected by law.

On August 24, 2022 LumaBridge (formerly known as Cancer Insight), a clinical research organization (CRO) dedicated to discovering, developing, and testing emerging biotechnologies related to cancer therapies, and the Parker Institute for Cancer Immunotherapy (PICI), the largest network of immuno-oncology expertise in the world, reported a new strategic partnership aimed at accelerating breakthrough immunotherapies from bench to bedside with greater ease (Press release, Cancer Insight, AUG 24, 2022, View Source [SID1234618589]). The new collaboration offers affiliated scientists and organizations a one-stop shop to advance research studies.

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The two organizations are collaborating to provide PICI Affiliated Partners—PICI Network institutions and investigators, affiliated companies, and nonprofit collaborators—direct access to the full suite of clinical trial services from LumaBridge. Offerings range from clinical trial design through regulatory strategy support, including patient accrual, clinical operations, quality assurance, data management, medical writing and biostatistics, pharmacovigilance, and beyond.

"PICI was founded to clear the path from scientific idea to best possible clinical outcomes," said Ute Dugan, MD, PhD, chief medical officer of PICI, based in San Francisco. "By combining our focus with additional expertise in clinical trial design and oversight, we aim to streamline the development process and ultimately accelerate novel immunotherapies to patients."

PICI’s first valued CRO partner, LumaBridge also is focused on accelerating the development of immunological cures for cancer through innovative science, advanced technologies, and new modes of research collaboration. Through this mission-focused alliance, PICI Affiliated Partners gain preferred access to and pricing for an array of clinical trial services and expertise, including early consulting on clinical trial design and development, protocol development, regulatory support, and full-service clinical trial support.

"Patients awaiting new therapies deserve an effective, efficient process," said George E. Peoples, MD, FACS, founder and chief medical officer of San Antonio-based LumaBridge. "Through this partnership, we will harness our pioneering experience in immuno-oncology research alongside the expertise of academic, clinical, and industry partners to reduce turnaround time and safely test the most promising novel therapies for our cancer patients."

More specifically, available LumaBridge services include:

Regulatory support for pre-investigational new drug meetings and investigational new drug (IND) preparation, publishing, filing, and maintenance
Clinical trial design, execution, and support such as medical monitoring, clinical operations, data management, and quality assurance
Medical writing and biostatistics support such as statistical analysis, US Food and Drug Administration (FDA) application writing, and abstract or journal publication preparation
Guidance in navigating government/military contracts and funding
Clinical development and commercialization strategies for Cancer Prevention and Research Institute of Texas (CPRIT) applicants
The partnership advances PICI’s focus on bringing together top researchers, nonprofits and industry collaborators, providing resources and eliminating barriers to get treatments to patients faster.

"Collaboration is critical to achieving our mission," said Tarak Mody, PhD, chief business officer of PICI. "By offering access to LumaBridge’s services and expertise to our PICI Affiliated Partners, we intend to accelerate breakthrough scientific discoveries, moving them into the clinic sooner to deliver patient impact."

On August 24, 2022 Almac Discovery, a research driven biotech company and member of the Almac Group, reported that is delighted that its novel AKT kinase inhibitor (known as VAD044) is being advanced into a proof-of-concept Phase 1b clinical study for patients suffering from Hereditary Haemorrhagic Telangiectasia (HHT) (Press release, Almac, AUG 24, 2022, View Source [SID1234618588]).

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This patent-protected, allosteric subtype selective AKT kinase inhibitor, which was discovered and taken into early pre-clinical development by Almac Discovery, was out-licensed for all uses, worldwide, to Vaderis Therapeutics AG in May 2020.

After Vaderis’s successful Phase 1a, VAD044 will now be studied by Vaderis Therapeutics AG in their INSIGHT proof-of-concept trial, which aims to provide a thorough understanding of the safety of a once daily, orally administered, AKT inhibitor medication in HHT patients. A total of 80 HHT patients across North America and Europe will be randomised in a double-blind, controlled trial comparing two doses of the medication to placebo. Initiation of the INSIGHT trial follows Health Authority approvals including FDA, Health Canada and key European agencies.

Professor Tim Harrison, Vice President Drug Discovery, commented: "This excellent news from our out-licensing partner, Vaderis Therapeutics AG, represents a further example of Almac Discovery’s mission to discover new, innovative drug candidates for development through external partnerships and collaboration. We look forward, with great anticipation, to monitoring the findings of the INSIGHT trial and wish Vaderis every success as they emerge from stealth mode and progress through the next phase of clinical development for the benefit of HHT patients across the globe."

About Almac Discovery

Almac Discovery is a research driven biotech company dedicated to the discovery and development of First in Class therapeutics across a range of therapeutic areas including neuroscience, muscle-wasting, oncology and inflammation. Almac Discovery focuses on the discovery to preclinical stage, seeking to licence programmes and/or collaborate with a pharmaceutical partner for further development and commercialisation.

On August 24, 2022 Medtronic plc (NYSE:MDT) reported financial results for its first quarter of fiscal year 2022, which ended July 30, 2021 (Press release, Medtronic, AUG 24, 2022, View Source [SID1234618565]).

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Key Highlights

Q1-FY22-Earnings-infographic
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Revenue of $8.0 Billion Increased 23% Reported and 19% Organic
GAAP Diluted EPS of $0.56; Non-GAAP Diluted EPS of $1.41
Company Reiterates FY22 Revenue Guidance; Raises Lower End of FY22 EPS Guidance by 5 cents

"FY22 is off to a strong start – Q1 reflects solid execution & continued procedure recovery"
Chairman & CEO Geoff Martha

The company reported first quarter worldwide revenue of $7.987 billion, an increase of 23% as reported and 19% on an organic basis, which excludes the $245 million benefit of foreign currency translation. Revenue growth rates have not been adjusted for the negative impact of the extra selling week in the first quarter of last fiscal year. The company’s first quarter results reflect a strong recovery from the impact of the COVID-19 pandemic on elective procedures that the company experienced in 2020. Unless otherwise stated, all revenue growth rates in this press release are stated on an organic basis, which excludes the impact of foreign currency translation.

As reported, first quarter GAAP net income and diluted earnings per share (EPS) were $763 million and $0.56, respectively, increases of 57% and 56%, respectively. As detailed in the financial schedules included at the end of this release, first quarter non-GAAP net income and non-GAAP diluted EPS were $1.908 billion and $1.41, respectively, increases of 128% and 127%, respectively.

First quarter U.S. revenue of $4.101 billion represented 51% of company revenue and increased 22%. Non-U.S. developed market revenue of $2.601 billion represented 33% of company revenue and increased 20% as reported and 11% organic. Emerging Markets revenue of $1.286 billion represented 16% of company revenue and increased 31% as reported and 25% organic.

"Fiscal 2022 is off to a strong start with our first quarter results coming in ahead of our expectations, reflecting solid execution and continued procedure volume recovery, with most of our businesses at or above pre-COVID levels," said Geoff Martha, Medtronic chairman and chief executive officer. "In addition, we drove market share gains across a number of our businesses, including three of our largest: Cardiac Rhythm Management, Surgical Innovations, and Cranial & Spinal Technologies. Looking ahead, we have some big opportunities in front of us, with near-term milestones in both our renal denervation and surgical robotics businesses. These opportunities, combined with the broader investments we’re making in our pipeline, set us up well to accelerate our top line growth."

Cardiovascular Portfolio
The Cardiovascular Portfolio includes the Cardiac Rhythm & Heart Failure (CRHF), Structural Heart & Aortic (SHA), and Coronary & Peripheral Vascular (CPV) divisions. Cardiovascular first quarter revenue of $2.890 billion increased 19% as reported and 15% organic, driven by low-twenties organic growth in SHA, mid-teens organic growth in CRHF, and high-single digit growth in CPV.

Cardiac Rhythm & Heart Failure first quarter revenue of $1.483 billion increased 19% as reported and 15% organic. Adjusting for the discontinuation of HVAD System sales, CRHF revenue increased 19% organic. Cardiac Rhythm Management revenue increased in the high-teens, driven by low-double digit growth in Defibrillation Solutions and low-twenties growth in Cardiac Pacing Therapies, including low-thirties growth in Leadless Pacemakers on the continued global adoption of the Micra transcatheter pacing system. Cardiac Ablation Solutions revenue increased in the low-thirties on strong adoption of Arctic Front Advance cryoballoon catheters and consoles. Cardiovascular Diagnostics revenue grew in the low-double digits.
Structural Heart & Aortic first quarter revenue of $787 million increased 26% as reported and 21% organic. Structural Heart grew in the high-thirties, driven by mid-thirties growth in transcatheter aortic valves (TAVR), including high-forties TAVR growth in the United States. Cardiac Surgery increased in the high-teens. Aortic declined in the low-single digits, as the financial impact of the previously announced global recall of the Valiant Navion thoracic stent graft system offset low-twenties growth in abdominal aortic aneurysm (AAA) stent grafts.
Coronary & Peripheral Vascular first quarter revenue of $620 million increased 11% as reported and 7% organic. Coronary & Renal Denervation (CRDN) declined in the low-single digits, given the impact of previously announced coronary tenders in China. Excluding China, CRDN revenue grew in the high-single digits. Peripheral Vascular Health increased in the low-twenties, with mid-teens growth in IN.PACT drug-coated balloons and mid-fifties endoVenous growth on strong sales of VenaSeal and ClosureFast superficial vein products and Abre venous stents.
Medical Surgical Portfolio
The Medical Surgical Portfolio includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical Surgical first quarter revenue of $2.322 billion increased 29% as reported and 25% organic, with high-thirties organic growth in SI and mid-single digit organic growth in RGR.

Surgical Innovations first quarter revenue of $1.554 billion increased 44% as reported and 39% organic. The division had low-forties growth in Vessel Sealing and high-thirties growth in Advanced Stapling, driven by the continued adoption of the company’s LigaSure, Sonicision, and Tri-Staple technologies. Hernia & Wound Management increased in the mid-thirties, with strength in sutures and hernia product lines.
Respiratory, Gastrointestinal & Renal first quarter revenue of $768 million increased 7% as reported and 3% organic. Patient Monitoring increased in the mid-twenties, with mid-thirties growth in the company’s Nellcor pulse oximetry products. Respiratory Interventions decreased in the mid-twenties, with sales of ventilators declining in the low-forties as demand returns to pre-pandemic levels. Gastrointestinal revenue increased in the high-twenties on low-fifties growth in Esophageal & Gastric. Renal Care Solutions increased in the mid-single digits with strong growth in acute therapies.
Neuroscience Portfolio
The Neuroscience Portfolio includes the Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation divisions. Neuroscience first quarter revenue of $2.204 billion increased 29% as reported and 26% organic, with high-thirties growth in Neuromodulation and Specialty Therapies and high-teens growth in CST, all on an organic basis.

Cranial & Spinal Technologies first quarter revenue of $1.123 billion increased 19% as reported and 17% organic. Spine & Biologics grew in the low-double digits and Neurosurgery increased in the low-twenties, as spine surgeons continue to adopt the Medtronic ecosystem of spine implants and enabling technology, including Mazor robotics, StealthStation navigation, O-arm imaging, and Midas Rex powered surgical instruments.
Specialty Therapies first quarter revenue of $641 million increased 42% as reported and 37% organic. Neurovascular increased in the high-single digits and ENT increased in the mid-thirties. Pelvic Health increased 134%, driven by continued strong adoption of the InterStim Micro sacral neuromodulation system.
Neuromodulation first quarter revenue of $440 million increased 40% as reported and 37% organic. Brain Modulation increased in the high-thirties, driven by the launch of the Percept PC deep brain stimulation system. Pain Therapies increased in the low-forties, with Targeted Drug Delivery revenue more than doubling on the backlog recovery of replacement procedures, and Pain Stim revenue growing in the mid-twenties on strong uptake of Intellis with DTM SCS therapy. Interventional grew in the low-twenties.
Diabetes
Diabetes first quarter revenue of $572 million increased 2% as reported and declined 3% organic. Diabetes quarterly revenue performance was driven by high-single digit growth in durable pumps, including strong growth in international markets on the continued launch of the MiniMed 780G system. This was offset by mid-teens declines in U.S. sales of consumables and continuous glucose monitoring (CGM) products.

Guidance
The company today reiterated its revenue growth guidance and raised the lower end of its EPS guidance range for fiscal year 2022.

The company continues to expect revenue growth in its fiscal year 2022 to approximate 9% on an organic basis. If current exchange rates hold, revenue growth in fiscal year 2022 would be positively affected by approximately $100 to $200 million.

The company increased its fiscal year 2022 diluted non-GAAP EPS guidance from the prior range of $5.60 to $5.75 to the new range of $5.65 to $5.75, including an estimated 5 to 10 cent positive impact from foreign currency exchange versus a 10 to 15 cent positive impact previously.

"We’re reiterating our revenue guidance for the year while increasing the lower end of our EPS range on the back of our first quarter results," said Karen Parkhill, Medtronic chief financial officer. "We remain focused on accelerating our long-term revenue growth and generating strong returns for our shareholders. In addition to growing our dividend, we are increasing our investments at the front end of major product launches, growing our R&D spend broadly across the company, and executing disciplined tuck-in acquisitions."

Webcast Information
Medtronic will host a webcast today, August 24, at 8:00 a.m. EDT (7:00 a.m. CDT) to provide information about its businesses for the public, investors, analysts, and news media. This webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com(opens new window) and this earnings release will be archived at news.medtronic.com(opens new window). Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com(opens new window).

Medtronic plans to report its fiscal year 2022 second, third, and fourth quarter results on November 23, 2021, February 22, 2022, and May 26, 2022, respectively. Confirmation and additional details will be provided closer to the specific event.