On October 27, 2022 Labcorp (NYSE: LH), a leading global life sciences company, reported results for the third quarter ended Sept. 30, 2022, and updated full-year guidance (Press release, LabCorp, OCT 27, 2022, View Source [SID1234622458]).

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"Labcorp made important strategic progress this quarter and is well positioned to deliver sustained value and growth," said Adam Schechter, chairman and CEO of Labcorp. "We are focusing on science, innovation and technology to serve our customers’ needs. Our Diagnostics Base Business performed well, and our Drug Development Base Business fundamentals remain strong, despite challenging year-over-year comparisons due to COVID-19. We continue to manage inflationary headwinds and labor constraints through our LaunchPad initiatives. And, we are accelerating the planned spin-off of our Clinical Development business to mid-2023 pending customary approvals."

Labcorp advanced key partnerships and collaborations during the quarter and, earlier this month, completed transactions that establish its long-term laboratory relationship with Ascension. By acquiring select laboratory assets and managing Ascension hospital labs in 10 states, Labcorp is expanding access to its comprehensive services for patients and health care providers. The company is now performing thousands of tests across the health system.

In July, the company announced a planned spin-off of its Clinical Development business. Since that time, Labcorp has established a Spin Management Office consisting of dedicated resources and external advisors with significant spin transaction experience. In addition, working with advisors, Labcorp is in the process of identifying members of the executive team, the CEO and the Board of Directors of the new company. Labcorp is also defining the transition service agreements and preparing the audited financial statements. With the progress to date, Labcorp is targeting completion of the spin-off with an accelerated timeframe of mid-2023, subject to satisfaction of certain customary conditions, including, among others, the receipt of final approval by the Company’s Board of Directors, the receipt of appropriate assurances regarding the tax-free nature of the separation, and the effectiveness of any required filings with the Securities and Exchange Commission.

Labcorp is focused on innovating and delivering its customers valuable solutions across all clinical areas. The company enhanced its neurology offering and rounded out its portfolio in the quarter with the launch of paraneoplastic and other neuro autoimmune panels. Labcorp continues to experience growing demand for its at-home testing options available through Labcorp OnDemand, and believes its pipeline of consumer-focused offerings is strong. The company is also furthering its leadership position in oncology and maintains the broadest portfolio and capabilities in oncology diagnostics today.

On Oct. 12, 2022, the company announced a quarterly cash dividend of $0.72 per share of common stock, payable on Dec. 9, 2022, to stockholders of record at the close of business on Nov. 17, 2022.

Consolidated Results

Third Quarter Results

Revenue for the quarter was $3.61 billion, a decrease of (11.2%) from $4.06 billion in the third quarter of 2021. The decrease was due to organic revenue of (10.7%) and foreign currency translation of (1.3%), partially offset by acquisitions 0.8%. The (10.7%) decrease in organic revenue was driven by a (11.8%) decrease in COVID-19 PCR and antibody testing (COVID-19 Testing), partially offset by a 1.1% increase in the company’s organic Base Business. Base Business includes Labcorp’s operations except for COVID-19 Testing.

Operating income for the quarter was $469.4 million, or 13.0% of revenue, compared to $766.9 million, or 18.9%, in the third quarter of 2021. The company recorded amortization, restructuring charges, and special items, which together totaled $119.6 million in the quarter, compared to $140.2 million during the same period in 2021. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $589.1 million, or 16.3% of revenue, compared to $907.1 million, or 22.3%, in the third quarter of 2021. The decrease in operating income and margin was primarily due to a reduction in COVID-19 Testing and the impact from acquisitions. Organic Base Business growth and LaunchPad savings were essentially offset by higher personnel expense and other inflationary costs.

Net earnings for the quarter were $352.8 million compared to $587.3 million in the third quarter of 2021. Diluted EPS were $3.90 in the quarter compared to $6.05 during the same period in 2021. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $4.68 in the quarter compared to $6.82 in the third quarter of 2021.

Operating cash flow for the quarter was $373.8 million compared to $767.3 million in the third quarter of 2021. The decrease in operating cash flow was due to lower cash earnings partially offset by favorable working capital. Capital expenditures totaled $103.5 million compared to $117.8 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $270.3 million compared to $649.5 million in the third quarter of 2021.

At the end of the quarter, the company’s cash balance and total debt were $0.4 billion and $5.3 billion, respectively. During the quarter, the company invested $458.7 million on acquisitions, paid out $64.9 million in dividends, and repurchased $400.0 million of stock representing approximately 1.5 million shares.

Year-To-Date Results

Revenue was $11.20 billion, a decrease of (7.1%) from $12.06 billion, in the first nine months of 2022. The decrease was due to lower organic revenue of (6.9%) and foreign currency translation of (0.9%), partially offset by acquisitions net of divestitures of 0.6%. The (6.9%) decrease in organic revenue was due to a (8.9)% decrease in COVID-19 Testing, partially offset by a 2.0% increase in the Company’s organic Base Business.

Operating income was $1,683.2 million, or 15.0% of revenue, compared to $2,528.9 million, or 21.0%, in the first nine months of 2021. The company recorded amortization, restructuring charges, special items, and impairments, which together totaled $356.0 million in the first nine months of 2022 compared to $400.0 million during the same period in 2021. Adjusted operating income (excluding amortization, restructuring charges, special items, and impairments) was $2,039.2 million, or 18.2% of revenue, compared to $2,928.9 million, or 24.3%, in the first nine months of 2021. The decrease in operating income and margin was primarily due to lower COVID-19 Testing and higher personnel costs, partially offset by a recovery in the Base Business.

Net earnings were $1,203.0 million compared to $1,824.3 million in the first nine months of 2021. Diluted EPS were $13.02 in the first nine months of 2022 compared to $18.63 during the same period in 2021. Adjusted EPS (excluding amortization, restructuring charges, special items, and impairments) were $15.77 in the first nine months of 2022 compared to $21.75 during the same period in 2021.

Operating cash flow was $1,302.3 million compared to $2,412.1 million in the first nine months of 2021. The decrease in operating cash flow was primarily due to lower cash earnings. Capital expenditures totaled $364.0 million compared to $310.4 million during the same period in 2021. As a result, free cash flow (operating cash flow less capital expenditures) was $938.3 million compared to $2,101.7 million in the first nine months of 2021.

Third Quarter Segment Results

The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Diagnostics

Revenue for the quarter was $2.21 billion, a decrease of (15.7%) from $2.62 billion in the third quarter of 2021. The decrease was primarily due to organic revenue of (16.4%), partially offset by acquisitions of 0.9%. The (16.4%) decrease in organic revenue was due to a (18.4%) decrease in COVID-19 Testing, partially offset by a 1.9% increase in the Base Business. Total Base Business growth compared to the Base Business in the prior year was 3.7%.

Total volume (measured by requisitions) decreased by (10.3%) as organic volume decreased by (10.9%) and acquisition volume contributed 0.6%. Organic volume was impacted by a (12.8%) decrease in COVID-19 Testing, partially offset by a 1.9% increase in Base Business. Price/mix decreased by (5.4%) due to a decrease in COVID-19 Testing of (5.5%). Base Business volume was up 3.1% compared to the Base Business last year, and price/mix was up 0.6%.

Adjusted operating income for the quarter was $439.8 million, or 19.9% of revenue, compared to $774.9 million, or 29.6%, in the third quarter of 2021. The decrease in adjusted operating income and margin was primarily due to a reduction in COVID-19 Testing. The benefit of Base Business growth and LaunchPad savings were offset by higher personnel expense and other inflationary costs.

Drug Development

Revenue for the quarter was $1.41 billion, a decrease of (3.7%) from $1.46 billion in the third quarter of 2021. The decrease was primarily due to foreign currency translation of (3.4%). The benefit of acquisitions of 0.5% was offset by a (0.7%) decline in Base Business organic growth, which was negatively impacted by approximately 5.0% due to reduced COVID-19 related work and the Ukraine/Russia crisis.

Adjusted operating income for the quarter was $210.7 million, or 15.0% of revenue, compared to $226.1 million, or 15.5%, in the third quarter of 2021. Adjusted operating income and margin decreased due to a reduction in COVID-19 related work, the Ukraine/Russia crisis, inflationary costs, and the mix impact of acquisitions, partially offset by organic Base Business growth and LaunchPad savings.

Net orders and net book-to-bill during the trailing twelve months were $7.20 billion and 1.25, respectively. Backlog at the end of the quarter was $15.25 billion, an increase of 6.0% compared to last year. The company expects approximately $4.66 billion of its backlog to convert into revenue in the next twelve months.

Outlook for 2022

Labcorp is updating 2022 full year guidance to reflect its third quarter performance and fourth quarter outlook. The following guidance assumes foreign exchange rates effective as of September 30, 2022, for the remainder of the year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions, share repurchases and dividends.

(1) 2022 Updated Guidance includes an impact from foreign currency translation of (1.1%), previous 2022 Guidance was (0.8%)

(2) Enterprise level revenue is presented net of intersegment transaction eliminations, including Drug Development COVID-19 Testing revenue

(3) 2022 Updated Guidance includes an impact from foreign currency translation of (0.1%), previous 2022 Guidance was 0.0%

(4) 2022 Updated Guidance includes an impact from foreign currency translation of (2.8%), previous 2022 Guidance was (2.3%)

(5) Free Cash Flow consists of operating cash flow less capital expenditures

Use of Adjusted Measures

The company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, free cash flow, and certain segment information. The company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the company’s operational performance. The company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the company’s financial results with the financial results of other companies. However, the company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and an identification of the components that comprise "special items" used for certain adjusted financial information are included in the tables accompanying this press release.

The company today is providing an investor relations presentation with additional information on its business and operations, which is available in the investor relations section of the company’s website at www.Labcorp.com. Analysts and investors are directed to the website to review this supplemental information.

A conference call discussing Labcorp’s quarterly results will be held today at 9:00 a.m. ET and is available by registering at this link, which will provide a dial-in number and unique PIN to access the call. It is recommended that participants join 10 minutes prior to the start of the call, although participants may register and join at any time during the call. A live webcast of Labcorp’s quarterly conference call on Oct. 27, 2022, will be available at the Labcorp Investor Relations website beginning at 9:00 a.m. ET. This webcast will be archived and accessible through Oct. 13, 2023.

On October 27, 2022 Labcorp (NYSE: LH), a leading global life sciences company, reported results for the third quarter ended Sept. 30, 2022, and updated full-year guidance (Press release, LabCorp, OCT 27, 2022, View Source [SID1234622457]).

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"Labcorp made important strategic progress this quarter and is well positioned to deliver sustained value and growth," said Adam Schechter, chairman and CEO of Labcorp. "We are focusing on science, innovation and technology to serve our customers’ needs. Our Diagnostics Base Business performed well, and our Drug Development Base Business fundamentals remain strong, despite challenging year-over-year comparisons due to COVID-19. We continue to manage inflationary headwinds and labor constraints through our LaunchPad initiatives. And, we are accelerating the planned spin-off of our Clinical Development business to mid-2023 pending customary approvals."

Labcorp advanced key partnerships and collaborations during the quarter and, earlier this month, completed transactions that establish its long-term laboratory relationship with Ascension. By acquiring select laboratory assets and managing Ascension hospital labs in 10 states, Labcorp is expanding access to its comprehensive services for patients and health care providers. The company is now performing thousands of tests across the health system.

In July, the company announced a planned spin-off of its Clinical Development business. Since that time, Labcorp has established a Spin Management Office consisting of dedicated resources and external advisors with significant spin transaction experience. In addition, working with advisors, Labcorp is in the process of identifying members of the executive team, the CEO and the Board of Directors of the new company. Labcorp is also defining the transition service agreements and preparing the audited financial statements. With the progress to date, Labcorp is targeting completion of the spin-off with an accelerated timeframe of mid-2023, subject to satisfaction of certain customary conditions, including, among others, the receipt of final approval by the Company’s Board of Directors, the receipt of appropriate assurances regarding the tax-free nature of the separation, and the effectiveness of any required filings with the Securities and Exchange Commission.

Labcorp is focused on innovating and delivering its customers valuable solutions across all clinical areas. The company enhanced its neurology offering and rounded out its portfolio in the quarter with the launch of paraneoplastic and other neuro autoimmune panels. Labcorp continues to experience growing demand for its at-home testing options available through Labcorp OnDemand, and believes its pipeline of consumer-focused offerings is strong. The company is also furthering its leadership position in oncology and maintains the broadest portfolio and capabilities in oncology diagnostics today.

On Oct. 12, 2022, the company announced a quarterly cash dividend of $0.72 per share of common stock, payable on Dec. 9, 2022, to stockholders of record at the close of business on Nov. 17, 2022.

Consolidated Results

Third Quarter Results

Revenue for the quarter was $3.61 billion, a decrease of (11.2%) from $4.06 billion in the third quarter of 2021. The decrease was due to organic revenue of (10.7%) and foreign currency translation of (1.3%), partially offset by acquisitions 0.8%. The (10.7%) decrease in organic revenue was driven by a (11.8%) decrease in COVID-19 PCR and antibody testing (COVID-19 Testing), partially offset by a 1.1% increase in the company’s organic Base Business. Base Business includes Labcorp’s operations except for COVID-19 Testing.

Operating income for the quarter was $469.4 million, or 13.0% of revenue, compared to $766.9 million, or 18.9%, in the third quarter of 2021. The company recorded amortization, restructuring charges, and special items, which together totaled $119.6 million in the quarter, compared to $140.2 million during the same period in 2021. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $589.1 million, or 16.3% of revenue, compared to $907.1 million, or 22.3%, in the third quarter of 2021. The decrease in operating income and margin was primarily due to a reduction in COVID-19 Testing and the impact from acquisitions. Organic Base Business growth and LaunchPad savings were essentially offset by higher personnel expense and other inflationary costs.

Net earnings for the quarter were $352.8 million compared to $587.3 million in the third quarter of 2021. Diluted EPS were $3.90 in the quarter compared to $6.05 during the same period in 2021. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $4.68 in the quarter compared to $6.82 in the third quarter of 2021.

Operating cash flow for the quarter was $373.8 million compared to $767.3 million in the third quarter of 2021. The decrease in operating cash flow was due to lower cash earnings partially offset by favorable working capital. Capital expenditures totaled $103.5 million compared to $117.8 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) was $270.3 million compared to $649.5 million in the third quarter of 2021.

At the end of the quarter, the company’s cash balance and total debt were $0.4 billion and $5.3 billion, respectively. During the quarter, the company invested $458.7 million on acquisitions, paid out $64.9 million in dividends, and repurchased $400.0 million of stock representing approximately 1.5 million shares.

Year-To-Date Results

Revenue was $11.20 billion, a decrease of (7.1%) from $12.06 billion, in the first nine months of 2022. The decrease was due to lower organic revenue of (6.9%) and foreign currency translation of (0.9%), partially offset by acquisitions net of divestitures of 0.6%. The (6.9%) decrease in organic revenue was due to a (8.9)% decrease in COVID-19 Testing, partially offset by a 2.0% increase in the Company’s organic Base Business.

Operating income was $1,683.2 million, or 15.0% of revenue, compared to $2,528.9 million, or 21.0%, in the first nine months of 2021. The company recorded amortization, restructuring charges, special items, and impairments, which together totaled $356.0 million in the first nine months of 2022 compared to $400.0 million during the same period in 2021. Adjusted operating income (excluding amortization, restructuring charges, special items, and impairments) was $2,039.2 million, or 18.2% of revenue, compared to $2,928.9 million, or 24.3%, in the first nine months of 2021. The decrease in operating income and margin was primarily due to lower COVID-19 Testing and higher personnel costs, partially offset by a recovery in the Base Business.

Net earnings were $1,203.0 million compared to $1,824.3 million in the first nine months of 2021. Diluted EPS were $13.02 in the first nine months of 2022 compared to $18.63 during the same period in 2021. Adjusted EPS (excluding amortization, restructuring charges, special items, and impairments) were $15.77 in the first nine months of 2022 compared to $21.75 during the same period in 2021.

Operating cash flow was $1,302.3 million compared to $2,412.1 million in the first nine months of 2021. The decrease in operating cash flow was primarily due to lower cash earnings. Capital expenditures totaled $364.0 million compared to $310.4 million during the same period in 2021. As a result, free cash flow (operating cash flow less capital expenditures) was $938.3 million compared to $2,101.7 million in the first nine months of 2021.

Third Quarter Segment Results

The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Diagnostics

Revenue for the quarter was $2.21 billion, a decrease of (15.7%) from $2.62 billion in the third quarter of 2021. The decrease was primarily due to organic revenue of (16.4%), partially offset by acquisitions of 0.9%. The (16.4%) decrease in organic revenue was due to a (18.4%) decrease in COVID-19 Testing, partially offset by a 1.9% increase in the Base Business. Total Base Business growth compared to the Base Business in the prior year was 3.7%.

Total volume (measured by requisitions) decreased by (10.3%) as organic volume decreased by (10.9%) and acquisition volume contributed 0.6%. Organic volume was impacted by a (12.8%) decrease in COVID-19 Testing, partially offset by a 1.9% increase in Base Business. Price/mix decreased by (5.4%) due to a decrease in COVID-19 Testing of (5.5%). Base Business volume was up 3.1% compared to the Base Business last year, and price/mix was up 0.6%.

Adjusted operating income for the quarter was $439.8 million, or 19.9% of revenue, compared to $774.9 million, or 29.6%, in the third quarter of 2021. The decrease in adjusted operating income and margin was primarily due to a reduction in COVID-19 Testing. The benefit of Base Business growth and LaunchPad savings were offset by higher personnel expense and other inflationary costs.

Drug Development

Revenue for the quarter was $1.41 billion, a decrease of (3.7%) from $1.46 billion in the third quarter of 2021. The decrease was primarily due to foreign currency translation of (3.4%). The benefit of acquisitions of 0.5% was offset by a (0.7%) decline in Base Business organic growth, which was negatively impacted by approximately 5.0% due to reduced COVID-19 related work and the Ukraine/Russia crisis.

Adjusted operating income for the quarter was $210.7 million, or 15.0% of revenue, compared to $226.1 million, or 15.5%, in the third quarter of 2021. Adjusted operating income and margin decreased due to a reduction in COVID-19 related work, the Ukraine/Russia crisis, inflationary costs, and the mix impact of acquisitions, partially offset by organic Base Business growth and LaunchPad savings.

Net orders and net book-to-bill during the trailing twelve months were $7.20 billion and 1.25, respectively. Backlog at the end of the quarter was $15.25 billion, an increase of 6.0% compared to last year. The company expects approximately $4.66 billion of its backlog to convert into revenue in the next twelve months.

Outlook for 2022

Labcorp is updating 2022 full year guidance to reflect its third quarter performance and fourth quarter outlook. The following guidance assumes foreign exchange rates effective as of September 30, 2022, for the remainder of the year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions, share repurchases and dividends.

The company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, free cash flow, and certain segment information. The company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the company’s operational performance. The company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the company’s financial results with the financial results of other companies. However, the company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and an identification of the components that comprise "special items" used for certain adjusted financial information are included in the tables accompanying this press release.

The company today is providing an investor relations presentation with additional information on its business and operations, which is available in the investor relations section of the company’s website at www.Labcorp.com. Analysts and investors are directed to the website to review this supplemental information.

A conference call discussing Labcorp’s quarterly results will be held today at 9:00 a.m. ET and is available by registering at this link, which will provide a dial-in number and unique PIN to access the call. It is recommended that participants join 10 minutes prior to the start of the call, although participants may register and join at any time during the call. A live webcast of Labcorp’s quarterly conference call on Oct. 27, 2022, will be available at the Labcorp Investor Relations website beginning at 9:00 a.m. ET. This webcast will be archived and accessible through Oct. 13, 2023.

On October 27, 2022 Jounce Therapeutics, Inc. (NASDAQ: JNCE), a clinical-stage company focused on the discovery and development of novel cancer immunotherapies and predictive biomarkers, reported that it will report third quarter 2022 financial results and provide a corporate update on Thursday, November 10, 2022 (Press release, Jounce Therapeutics, OCT 27, 2022, View Source [SID1234622456]). Jounce Therapeutics’ management team will host a webcast and live conference call at 8:00 a.m. ET.

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Conference Call and Webcast
To access the conference call, please register here and please be advised to do so at least 10 minutes prior to joining the call. The live webcast can be accessed under "Events & Presentations" in the Investors and Media section of the company’s website at www.jouncetx.com. The webcast will be archived and made available for replay on the company’s website approximately two hours after the call and will be available for 30 days thereafter.

On October 27, 2022 Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-driven biopharmaceutical company, reported its sales performance for the year to date and the third quarter of 2022 (Press release, Ipsen, OCT 27, 2022, View Source [SID1234622455]).

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Highlights

Total-sales growth in the year to date of 9.5% at CER2, or 15.5% as reported, driven by the growth platforms of Dysport (botulinum toxin type A), Decapeptyl (triptorelin), Cabometyx (cabozantinib) and Onivyde (irinotecan) increasing by 20.8%2; Somatuline (lanreotide) sales down by 2.8%2
In the third quarter, total-sales growth of 7.6% at CER2, or 16.0% as reported, boosted by an increase in Dysport sales of 43.3%2, partly offset by a decline in Somatuline sales of 9.8%2
Completion of the definitive merger agreement under which Ipsen acquired Epizyme, expanding Ipsen’s presence in Oncology
Postponement of the U.S. FDA’s advisory-committee meeting for investigational palovarotene
Full-year 2022 guidance confirmed, with total-sales growth greater than 7.0% at CER2 and a core operating margin greater than 36.0% of total sales

David Loew, Chief Executive Officer, commented:

"I am proud of Ipsen’s performance so far this year as we continue to drive strong sales results. Our growth platforms have delivered a double-digit sales performance, reflecting improving commercial execution and the strength of our portfolio. These results have outweighed the adverse impact from competitive activity on Somatuline in the U.S. and Europe. Based on the strong sales momentum, we are confirming our guidance for the full year.

I was also delighted by the enhancement of our pipeline, portfolio and organization as a result of the recent acquisition of Epizyme. In the near term, we look forward to a number of milestones for our pipeline, including Phase III data readouts in Oncology. I am pleased with the sustained progress we are making as we continue to maximize our brands, strengthen our pipeline, drive efficiencies and focus on our culture."

Full-year 2022 guidance

Ipsen has confirmed its financial guidance for FY 20223:

Total-sales growth greater than 7.0%, at constant exchange rates. Based on the average level of exchange rates in September 2022, an additional favorable impact on total sales of around 6% from currencies is expected
Core operating margin greater than 36.0% of total sales

Business development

In August 2022, Ipsen and Epizyme, Inc. (Epizyme) announced that they had completed a definitive merger agreement under which Ipsen acquired Epizyme, a fully integrated, commercial-stage biopharmaceutical company developing and delivering transformative therapies against novel epigenetic targets for cancer patients. Sales by Ipsen of Tazverik (tazemetostat), consolidated from 1 September 2022, have been reflected in this announcement.

Ipsen and Marengo Therapeutics, Inc. (Marengo) also announced in August 2022 a strategic partnership to advance two of Marengo’s preclinical STAR platform-generated candidates into the clinic. The collaboration will leverage Marengo’s proprietary R&D expertise of a novel mechanism of T-cell activation with Ipsen’s global Oncology footprint for clinical development and commercialization.

Palovarotene

In October 2022, the U.S. FDA announced its decision to postpone the planned Endocrinologic and Metabolic Drugs Advisory Committee meeting for investigational palovarotene until a later date to be confirmed; the original advisory-committee meeting was scheduled for 31 October 2022. The FDA informed Ipsen that the postponement related to an FDA request for new information on palovarotene clinical-trial data and did not relate to the safety profile of palovarotene. The Company is currently working to fulfil the request.

Conference call

A conference call and webcast for investors and analysts will begin today at 1.30pm, Paris time. Participants can access the call and its details by registering here; webcast details can be found here. A recording will be available on ipsen.com.

Calendar

Ipsen intends to publish its full-year results on 9 February 2023.

Notes

All financial figures are in € millions (€m). The performance shown in this announcement covers the nine-month period to 30 September 2022 (the year to date or YTD 2022) and the three-month period to 30 September 2022 (the third quarter or Q3 2022), compared to nine-month period to 30 September 2021 (YTD 2021) and the three-month period to 30 September 2021 (Q3 2021) respectively, unless stated otherwise. Commentary is based on the performance in YTD 2022, unless stated otherwise. The performance of Consumer HealthCare, divested in July 2022, has been excluded from all commentary and comparisons to prior performance.

On October 27, 2022 HUTCHMED (China) Limited ("HUTCHMED") (Nasdaq/AIM:HCM; HKEX:13) reported that it has initiated a Phase II/III trial of fruquintinib in combination with sintilimab as second-line treatment for locally advanced or metastatic renal cell carcinoma ("RCC") in China (Press release, Hutchison China MediTech, OCT 27, 2022, View Source [SID1234622454]). The first patient in China received the first dose on October 27, 2022.

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The study is a randomized, open-label, active-controlled study to evaluate the efficacy and safety of fruquintinib in combination with sintilimab versus axitinib or everolimus monotherapy for the second-line treatment of advanced RCC. The primary endpoint is progression free survival ("PFS") per RECIST 1.1 as assessed by blinded independent central review (BICR). The secondary endpoints include safety, quality of life, disease control rate ("DCR"), duration of response, time to response and overall survival ("OS"). Approximately 260 patients will be enrolled in the study. The leading principal investigators are Dr Dingwei Ye of Fudan University Shanghai Cancer Center and Dr Zhisong He of Peking University First Hospital. Additional details may be found at clinicaltrials.gov, using identifier NCT05522231.

About Kidney Cancer and RCC

It is estimated that approximately 430,000 new patients were diagnosed with kidney cancer worldwide in 2020.1 In China, an estimated 74,000 new patients were diagnosed with kidney cancer in 2020.2 Approximately 90% of kidney tumors are RCC.

The safety and efficacy of fruquintinib for the following investigational uses have not been established and there is no guarantee that it will receive health authority approval or become commercially available in any country for the uses being investigated:

About Fruquintinib and Second-line treatment of RCC

Fruquintinib is a highly selective and potent oral inhibitor of VEGFR-1, -2 and -3. VEGFR inhibitors play a pivotal role in blocking tumor angiogenesis. Fruquintinib was designed to improve kinase selectivity to minimize off-target toxicities, improve tolerability and provide more consistent target coverage. The generally good tolerability in patients to date, along with fruquintinib’s low potential for drug-drug interaction based on preclinical assessment, suggests that it may also be highly suitable for combinations with other anti-cancer therapies.

The U.S. Food and Drug Administration ("FDA") has approved five immune-oncology combination therapies for first-line treatment of advanced RCC, however, no immune-oncology combination therapies have been approved in China, indicating an unmet medical need in these settings. As presented at the 2021 Chinese Society of Clinical Oncology Annual Meeting (CSCO), a Phase Ib/II study of fruquintinib in combination with sintilimab for the second-line treatment of RCC demonstrated promising efficacy and tolerable safety profile in this setting.

As of the data cutoff date of August 31, 2021, all 20 enrolled patients in such Phase Ib/II study were efficacy evaluable. 19 patients previously received VEGFR inhibitors, and one received interferon. The confirmed objective response rate (ORR) was 55.0% (95% CI: 31.5-76.9) and DCR was 85.0% (95% CI: 62.1-96.8). PFS rate at 9 months was 63.6% (95% CI: 38.1-80.9). Both median PFS and OS were not reached. Median treatment time was 38.6 weeks, with the longest being over 50 weeks and ongoing.

About Fruquintinib Development In CRC Monotherapy

Metastatic colorectal cancers ("CRC") in China: Fruquintinib was approved for marketing by the China National Medical Products Administration (NMPA) in September 2018 and commercially launched in China in November 2018 under the brand name ELUNATE. It has been included in the China National Reimbursement Drug List (NRDL) since January 2020. ELUNATE is indicated for the treatment of patients with metastatic CRC who have been previously treated with fluoropyrimidine, oxaliplatin and irinotecan, including those who have previously received anti-VEGF therapy and/or anti-EGFR therapy (RAS wild type). Results of the FRESCO study3, a Phase III pivotal registration trial of fruquintinib in 416 patients with metastatic CRC in China, were published in The Journal of the American Medical Association, JAMA, in June 2018 (NCT02314819).

Metastatic CRC outside China: The FRESCO-2 study is a multi-regional clinical trial ("MRCT") conducted in the U.S., Europe, Japan and Australia that investigated fruquintinib plus best supportive care ("BSC") vs placebo plus BSC in patients with advanced, refractory metastatic CRC. The results were recently presented at the European Society for Medical Oncology Congress 2022. The MRCT FRESCO-2 study demonstrated that treatment with fruquintinib resulted in a statistically significant and clinically meaningful increase in the primary OS endpoint and key secondary PFS endpoint compared to treatment with placebo. The safety profile of fruquintinib in FRESCO-2 was consistent with previously reported fruquintinib studies. We plan to complete new drug application filings in the U.S., Europe and Japan in 2023 (NCT04322539). The U.S. FDA granted Fast Track Designation for the development of fruquintinib for the treatment of patients with metastatic CRC in June 2020.

About Other Fruquintinib Development

Gastric Cancer in China: The FRUTIGA study is a randomized, double-blind, Phase III trial evaluating the efficacy and safety of fruquintinib combined with paclitaxel for the treatment of patients with advanced gastric or esophagogastric junction (GEJ) adenocarcinoma who did not respond to first-line standard chemotherapy. Approximately 700 patients have received either fruquintinib combined with paclitaxel or placebo combined with paclitaxel. The co-primary efficacy endpoints are OS and PFS (NCT03223376).

Immunotherapy combinations: HUTCHMED has entered into collaboration agreements to evaluate the safety, tolerability and efficacy of fruquintinib in combination with PD-1 monoclonal antibodies, including with tislelizumab (developed by BeiGene, Ltd) and sintilimab (developed by Innovent Biologics, Inc.).

Metastatic breast, endometrial, and CRC in the U.S.: HUTCHMED initiated this open-label, multi-center, non-randomized, Phase Ib/II study in the U.S. to investigate if the addition of fruquintinib can potentially induce activity to immune checkpoint inhibitor therapy in advanced, refractory triple negative breast cancer ("TNBC"), endometrial cancer, and CRC (NCT04577963). Safety and preliminary efficacy of fruquintinib as a single agent were demonstrated in advanced solid tumors, including TNBC, in a Phase I study conducted in China (NCT01645215) and a Phase I/Ib study is ongoing in the U.S. (NCT03251378).
Gastric, colorectal and non-small cell lung cancers ("NSCLC") in China & Korea: BeiGene, Ltd. initiated this open-label, multi-center, Phase II study to assess the safety and efficacy of fruquintinib in combination with tislelizumab in patients with advanced or metastatic, unresectable gastric cancer, CRC or NSCLC (NCT04716634).
Endometrial cancer and other solid tumors in China: HUTCHMED initiated this open-label, multi-center, non-randomized, Phase II study to assess the safety and efficacy of fruquintinib in combination with sintilimab in patients with advanced cervical cancer, endometrial cancer, gastric cancer, hepatocellular carcinoma (HCC), NSCLC or RCC. Preliminary results of certain cohorts were presented at the 2021 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting (ASCO) (Free ASCO Whitepaper) and the Chinese Society of Clinical Oncology Annual Meeting (CSCO). Following encouraging data in the advanced endometrial cancer cohort, it has been expanded into a single-arm registrational Phase II study of over 130 patients (NCT03903705).