On November 3, 2022 Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) reported results for the quarter ended September 30, 2022 (Press release, Teva, NOV 3, 2022, View Source [SID1234622997]).

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Mr. Kåre Schultz, Teva’s President and CEO: "Teva delivered a solid third quarter on the backdrop of significant foreign exchange headwinds due to appreciation of the U.S. dollar. Generics revenues grew in Europe and International Markets in local currency terms, reflecting market growth and successful new product launches. Our key specialty brands also performed well, with continued growth momentum across all regions – AUSTEDO showed 30% U.S. revenue growth and is on track to reach ~$1 billion 2022 annual revenues. AJOVY shows continued growth in revenues and market share in U.S. and Europe, and reached 28% volume market share in Japan."

Opioid Litigation Updates: Substantial progress toward a nationwide settlement

In July 2022, the parties reached an agreement in principle on the financial terms of a nationwide settlement similar in structure to the nationwide settlements of other defendants.
During the third quarter of 2022, Teva, the working group of States’ Attorneys General and the Multi-District Litigation Plaintiffs’ Executive Committee made substantial progress toward finalizing the non-financial terms of the proposed nationwide settlement agreement.
Teva and Allergan have resolved their dispute with respect to Teva’s indemnification obligations.
Teva has also reached an agreement in principle with the Attorney General of New York that settles the state’s and its subdivisions’ opioid-related claims. We have updated the reserve to account for the premium.
Immediately following the finalization of the documentation for the nationwide settlement agreement, the sign-on process for states will begin, followed by a similar sign-on process for the states’ subdivisions and special districts. Given the high participation rate in other nationwide opioids settlements and Teva’s settlements with Florida, Louisiana, Rhode Island, Texas, West Virginia and San Francisco and agreement in principle with New York, we remain optimistic that we will see a high participation rate in this nationwide settlement, enabling us to put these cases behind us and continue to focus on the patients we serve every day.
Third Quarter 2022 Consolidated Results

Revenues in the third quarter of 2022 were $3,595 million, a decrease of 8% compared to the third quarter of 2021. In local currency terms, revenues decreased by 2%, mainly due to a decrease in revenues from generic products in our North America segment, COPAXONE in our North America and Europe segments, and BENDEKA and TREANDA in our North America segment, partially offset by higher revenues from AUSTEDO in our North America segment and generic products in our Europe segment.

Exchange rate movements during the third quarter of 2022, net of hedging effects, negatively impacted our revenues by $215 million compared to the third quarter of 2021. Exchange rate movements during the third quarter of 2022, net of hedging effects, negatively impacted our GAAP and non-GAAP operating income by $53 million and $58 million, respectively, compared to the third quarter of 2021.

GAAP gross profit was $1,669 million in the third quarter of 2022, a decrease of 7% compared to the third quarter of 2021. GAAP gross profit margin was 46.4% in the third quarter of 2022, compared to 46.2% in the third quarter of 2021. This increase was mainly driven by higher revenues from AUSTEDO, a favorable mix of generic products in our Europe segment, and higher revenues from the positive impact of hedging activities, partially offset mainly by higher operational costs due to macroeconomic headwinds and lower revenues from COPAXONE. Non-GAAP gross profit was $1,906 million in the third quarter of 2022, a decrease of 9% compared to the third quarter of 2021. Non-GAAP gross profit margin was 53.0% in the third quarter of 2022, compared to 53.6% in the third quarter of 2021. This decrease was mainly driven by higher operational costs due to macroeconomic headwinds and lower revenues from COPAXONE, partially offset by higher revenues from AUSTEDO, a favorable mix of generic products in our Europe segment and higher revenues from the positive impact of hedging activities.

GAAP Research and Development (R&D) expenses in the third quarter of 2022 were $175 million or 4.9% of quarterly revenues, a decrease of 21%, compared to $222 million, or 5.7% of quarterly revenues in the third quarter of 2021. Non-GAAP R&D expenses were $171 million, or 4.8% of quarterly revenues, in the third quarter of 2022, compared to $217 million, or 5.6%, in the third quarter of 2021. In the third quarter of 2022, our R&D expenses related primarily to specialty product candidates in neuroscience (such as migraine, movement disorders/ neurodegeneration and neuropsychiatry, including post-approval commitments), immunology (such as respiratory medicines) and selected other areas, as well as generic products and biosimilars. Our lower R&D expenses in the third quarter of 2022, compared to the third quarter of 2021, were mainly due to a decrease in neuroscience (in the pain and migraine and headache therapeutic areas) and immunology (in the respiratory therapeutic area) as well as various generics projects, and an adjustment in payments pursuant to a contract with one of our R&D partners in the third quarter of 2022, partially offset by higher R&D expenses related to our biosimilar products pipeline.

GAAP Selling and Marketing (S&M) expenses in the third quarter of 2022 were $539 million, a decrease of 10% compared to the third quarter of 2021. Non-GAAP S&M expenses were $510 million, or 14.2% of quarterly revenues, in the third quarter of 2022, compared to $567 million, or 14.6%, in the third quarter of 2021.

GAAP General and Administrative (G&A) expenses in the third quarter of 2022 were $283 million, a decrease of 3% compared to the third quarter of 2021. Non-GAAP G&A expenses were $250 million, or 7.0% of quarterly revenues, in the third quarter of 2022, compared to $275 million, or 7.1%, in the third quarter of 2021.

GAAP other income in the third quarter of 2022 was $2 million, compared to $25 million in the third quarter of 2021. Non-GAAP other income in the third quarter of 2022 was $2 million, compared to $18 million in the third quarter of 2021.

GAAP operating income in the third quarter of 2022 was $419 million, compared to $623 million in the third quarter of 2021. The decrease in operating income in the third quarter of 2022 compared to the third quarter of 2021 was mainly due to legal settlements and loss contingencies as well as lower gross profit, partially offset by lower S&M and R&D expenses. Non-GAAP operating income in the third quarter of 2022 was $977 million, a decrease of 6%, compared to $1,042 million in the third quarter of 2021. This decrease in non-GAAP operating income was mainly due to lower gross profit, as discussed above. Non-GAAP operating margin was 27.2% in the third quarter of 2022, compared to 26.8% in the third quarter of 2021 mainly due to lower S&M and R&D expenses, partially offset by lower gross margin.

Adjusted EBITDA was $1,089 million in the third quarter of 2022, a decrease of 7% compared to $1,170 million in the third quarter of 2021.

GAAP financial expenses, net were $252 million in the third quarter of 2022, compared to $241 million in the third quarter of 2021. Non-GAAP financial expenses, net were $238 million in the third quarter of 2022, compared to $235 million in the third quarter of 2021. Financial expenses in the third quarters of 2022 and 2021 were mainly comprised of interest expenses of $230 million and $232 million, respectively.

In the third quarter of 2022, we recognized a GAAP tax expense of $107 million, on pre-tax income of $166 million. In the third quarter of 2021, we recognized a tax expense of $76 million, on pre-tax income of $382 million. Non-GAAP income taxes in the third quarter of 2022 were $74 million, or 10%, on pre-tax non-GAAP income of $739 million. Non-GAAP income taxes in the third quarter of 2021 were $137 million, or 17%, on pre-tax non-GAAP income of $807 million. Our non-GAAP tax rate in the third quarter of 2022 was mainly affected by the mix of products we sold, interest expense disallowances and adjustments to valuation allowances on deferred tax assets.

We expect our annual non-GAAP tax rate for 2022 to be 12%-14%, lower than our non-GAAP tax rate for 2021, which was 16.4%, mainly due to the effect of a portion of the realization of losses related to an investment in one of our U.S. subsidiaries.

GAAP net income attributable to Teva and GAAP diluted earnings per share were $56 million and $0.05, respectively, in the third quarter of 2022, compared to net income of $292 million and diluted earnings per share of $0.26 in the third quarter of 2021. The decrease in net income in the third quarter of 2022 was mainly due to lower operating income and higher income taxes, as discussed above. Non-GAAP net income attributable to Teva and non-GAAP diluted earnings per share in the third quarter of 2022 were $658 million and $0.59, respectively, compared to $651 million and $0.59 in the third quarter of 2021.

The weighted average diluted shares outstanding used for the fully diluted share calculation for the three months ended September 30, 2022 and 2021 were 1,119 million and 1,109 million shares, respectively. The weighted average diluted shares outstanding used for the fully diluted share calculation on a non-GAAP basis for the three months ended September 30, 2022 and 2021 was 1,119 million and 1,109 million shares, respectively.

As of September 30, 2022 and 2021, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,144 million and 1,128 million shares, respectively.

Non-GAAP information: Net non-GAAP adjustments in the third quarter of 2022 were $602 million. Non-GAAP net income and non-GAAP EPS for the third quarter of 2022 were adjusted to exclude the following items:

Legal settlements and loss contingencies of $195 million;
Amortization of purchased intangible assets of $165 million, of which $145 million is included in cost of sales and the remaining $20 million in S&M expenses;
Accelerated depreciation of $45 million;
Impairment of long-lived assets of $28 million;
Equity compensation expenses of $26 million;
Restructuring expenses of $25 million;
Finance expenses of $14 million;
Contingent consideration expense of $6 million;
Costs related to regulatory actions taken in facilities of $2 million;
Other non-GAAP items of $68 million;
Items attributable to non-controlling interests of $4 million; and
Tax expense of $33 million.
Teva believes that excluding such items facilitates investors’ understanding of its business.

Commencing the first quarter of 2022, we no longer exclude IPR&D acquired in development arrangements from our non-GAAP financial measures. In our comparable non-GAAP financial measures for the third quarter of 2021, no IPR&D acquired in development arrangements was recorded. We have made this change to our presentation of non-GAAP financial measures to improve comparability of our non-GAAP presentation to those of other companies in the pharmaceutical industry that made a similar change to their presentations beginning in the first quarter of 2022.

For further information, see the tables below for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures and the information under "Non-GAAP Financial Measures." Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operating activities during the third quarter of 2022 was $543 million, compared to $529 million in the third quarter of 2021. The increase in the third quarter of 2022 resulted mainly from changes in the deferred purchase price under our securitization agreement, partially offset by changes in working capital items, primarily a lower reduction in our inventory levels compared to the third quarter of 2021.

Free cash flow (defined as cash flow generated from operating activities, cash used for capital investments, beneficial interest collected in exchange for securitized accounts receivables, proceeds from divestitures of businesses and other assets and cash used for acquisition of businesses, net of cash acquired) was $685 million in the third quarter of 2022, compared to $795 million in the third quarter of 2021. This decrease in the third quarter of 2022 resulted mainly from changes in working capital items, primarily a lower reduction in our inventory levels compared to the third quarter of 2021.

As of September 30, 2022, our debt was $21,266 million, compared to $23,043 million as of December 31, 2021. This decrease was mainly due to $1,139 million from exchange rate fluctuations and $661 million senior notes repaid at maturity. Our debt as of September 30, 2022 was effectively denominated in the following currencies: 65% in U.S. dollars, 33% in euros and 2% in Swiss francs. The portion of total debt classified as short-term as of September 30, 2022 was 13%, compared to 6% as of December 31, 2021. Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 69% as of September 30, 2022, compared to 67% as of December 31, 2021. Our average debt maturity was approximately 5.9 years as of September 30, 2022, compared to 6.4 years as of December 31, 2021.

Segment Results for the third Quarter of 2022

North America Segment

Our North America segment includes the United States and Canada.

The following table presents revenues, expenses and profit for our North America segment for the three months ended September 30, 2022 and 2021:

Revenues from our North America segment in the third quarter of 2022 were $1,809 million, a decrease of $66 million, or 4%, compared to the third quarter of 2021, mainly due to a decrease in revenues from generic products, COPAXONE and BENDEKA and TREANDA, partially offset by higher revenues from AUSTEDO.

On October 1, 2022, we discontinued marketing ProAir HFA, while focusing our marketing efforts on albuterol sulfate inhalation aerosol (our ProAir authorized generic) and ProAir Digihaler (albuterol sulfate 117 mcg). ProAir HFA and ProAir Digihaler results are included in "Other" in the revenues table below, and were not material during the third quarter of 2022.

Revenues in the United States, our largest market, were $1,685 million in the third quarter of 2022, a decrease of $69 million or 4% compared to the third quarter of 2021.

Revenues by Major Products and Activities

The following table presents revenues for our North America segment by major products and activities for the three months ended September 30, 2022 and 2021:

Generic products revenues in our North America segment (including biosimilars) in the third quarter of 2022 were $806 million, a decrease of 6% compared to the third quarter of 2021, mainly due to increased competition.

In the third quarter of 2022, our total prescriptions were approximately 303 million (based on trailing twelve months), representing 8.2% of total U.S. generic prescriptions according to IQVIA data.

AJOVY revenues in our North America segment in the third quarter of 2022 increased by 23% to $57 million, compared to the third quarter of 2021, mainly due to growth in volume. In the third quarter of 2022, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 25% compared to 21% in the third quarter of 2021.

AUSTEDO revenues in our North America segment in the third quarter of 2022 increased by 30%, to $260 million, compared to $201 million in the third quarter of 2021, mainly due to growth in volume.

BENDEKA and TREANDA combined revenues in our North America segment in the third quarter of 2022 decreased by 20% to $77 million, compared to the third quarter of 2021, mainly due to the availability of alternative therapies and intense competition in anticipation of the orphan drug exclusivity expiration in December 2022.

COPAXONE revenues in our North America segment in the third quarter of 2022 decreased by 21% to $105 million, compared to the third quarter of 2021, mainly due to generic competition in the United States and a decrease in glatiramer acetate market share due to availability of alternative therapies.

Anda revenues in our North America segment in the third quarter of 2022 increased by 2% to $371 million, compared to $363 million in the third quarter of 2021, mainly due to higher demand.

North America Gross Profit

Gross profit from our North America segment in the third quarter of 2022 was $942 million, a decrease of 3%, compared to $967 million in the third quarter of 2021.

Gross profit margin for our North America segment in the third quarter of 2022 increased to 52.1%, compared to 51.6% in the third quarter of 2021. This increase was mainly due to a favorable change in the mix of products.

North America Profit

Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our North America segment in the third quarter of 2022 was $477 million, an increase of 4% compared to $458 million in the third quarter of 2021, mainly due to a favorable change in the mix of products, cost efficiencies and lower R&D expenses, as discussed above.

Europe Segment

Our Europe segment includes the European Union, the United Kingdom, and certain other European countries.

Revenues from our Europe segment in the third quarter of 2022 were $1,069 million, a decrease of 12%, or $151 million, compared to the third quarter of 2021. In local currency terms, revenues increased by 1%, mainly due to higher demand for generic products, together with higher revenues from generic product launches. In the third quarter of 2022, our revenues were negatively impacted by exchange rate fluctuations of $162 million, net of hedging effects, compared to the third quarter of 2021. Revenues in the third quarter of 2022 included $24 million from a positive hedging impact, which is included in "Other" in the table below.

Revenues by Major Products and Activities

Generic products revenues (including OTC and biosimilar products) in our Europe segment in the third quarter of 2022, decreased by 10% to $803 million, compared to the third quarter of 2021. In local currency terms, revenues increased by 5%, mainly due to higher demand for generic and OTC products, together with higher revenues from generic product launches.

On August 29, 2022 the European Commission granted a marketing authorization for RANIVISIO (ranibizumab), a biosimilar to Lucentis, across all five indications in adults for which Lucentis is authorized, including age-related macular degeneration (AMD) and four other ophthalmology indications.

AJOVY revenues in our Europe segment in the third quarter of 2022 increased to $30 million, compared to $23 million in the third quarter of 2021, mainly due to growth in European countries in which AJOVY had previously been launched, as well as launches and reimbursements in additional European countries.

COPAXONE revenues in our Europe segment in the third quarter of 2022 decreased by 34% to $63 million, compared to the third quarter of 2021. In local currency terms, revenues decreased by 23%, due to price reductions and a decline in volume resulting from competing glatiramer acetate products.

Respiratory products revenues in our Europe segment in the third quarter of 2022 decreased by 27% to $62 million compared to the third quarter of 2021. In local currency terms, revenues decreased by 15%, mainly due to net price reductions and lower volumes.

Europe Gross Profit

Gross profit from our Europe segment in the third quarter of 2022 was $634 million, a decrease of 11% compared to $714 million in the third quarter of 2021, mainly due to exchange rate fluctuations.

Gross profit margin for our Europe segment in the third quarter of 2022 increased to 59.3%, compared to 58.6% in the third quarter of 2021. This increase was mainly due to higher revenues from the positive impact of hedging activities discussed above, as well as lower cost of goods sold, mainly due to a better mix of products and decrease in write-offs.

Europe Profit

Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in the third quarter of 2022 was $360 million, a decrease of 8%, compared to $394 million in the third quarter of 2021. This decrease was mainly due to exchange rate fluctuations.

International Markets Segment

Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The countries in our International Markets segment include highly regulated, pure generic markets, such as Israel, branded generics-oriented markets, such as Russia and certain Latin America markets and hybrid markets, such as Japan.

In February 2022, Russia launched an invasion of Ukraine. As of the date of this press release, sustained conflict and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results. We have no manufacturing or R&D facilities in these markets. During the third quarter of 2022, the impact of this conflict on our International Markets segment results of operations and financial condition was immaterial.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended September 30, 2022 and 2021:

Revenues from our International Markets segment in the third quarter of 2022 were $475 million, a decrease of 10% in U.S. dollars, or 3% in local currency terms compared to the third quarter of 2021. Revenues in the third quarter of 2021 included a milestone payment of $35 million received from Otsuka related to the launch of AJOVY in Japan.

In the third quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of $38 million, net of hedging effects, compared to the third quarter of 2021. Revenues in the third quarter of 2022 included $4 million from a positive hedging impact, which is included in "Other" in the table below.

Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the three months ended September 30, 2022 and 2021:

Generic products revenues in our International Markets segment in the third quarter of 2022, which include OTC products, decreased by 5% in U.S. dollars to $393 million. In local currency terms, revenues increased by 3% compared to the third quarter of 2021. This increase was mainly due to higher revenues in certain markets, as well as price increases largely as a result of rising costs due to inflationary pressure, partially offset by lower sales in Japan due to regulatory price reductions and generic competition to off-patented products in Japan.

AJOVY was launched in certain markets in our International Markets segment, including in Japan in August 2021. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the third quarter of 2022 were $6 million, compared to $39 million in the third quarter of 2021. Revenues in the third quarter of 2021 included a milestone payment of $35 million received from Otsuka related to the launch of AJOVY in Japan.

COPAXONE revenues in our International Markets segment in the third quarter of 2022 were $9 million compared to $10 million in the third quarter of 2021.

AUSTEDO was launched in early 2021 in China for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia, and was also launched in Israel during 2021. During the third quarter of 2022, AUSTEDO was launched in Brazil. We continue with additional submissions in various other markets.

International Markets Gross Profit

Gross profit from our International Markets segment in the third quarter of 2022 was $252 million, a decrease of 15% compared to $296 million in the third quarter of 2021.

Gross profit margin for our International Markets segment in the third quarter of 2022 decreased to 53.0%, compared to 55.9% in the third quarter of 2021. This decrease was mainly due to the impact of a milestone payment of $35 million related to AJOVY in the third quarter of 2021 mentioned above, as well as regulatory price reductions and generic competition to off-patented products in Japan in the third quarter of 2022, partially offset by price increases largely as a result of rising costs due to inflationary pressure.

International Markets Profit

Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in the third quarter of 2022 was $112 million, a decrease of 27%, compared to $152 million in the third quarter of 2021. This decrease was mainly due to lower gross profit, as discussed above.

Other Activities

We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("APIs") to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our North America, Europe or International Markets segments described above.

Our revenues from other activities in the third quarter of 2022 were $241 million, a decrease of 8% compared to the third quarter of 2021. In local currency terms, revenues decreased by 3%.

API sales to third parties in the third of 2022 were $149 million, a decrease of 7% in both U.S. dollars and local currency terms, compared to the third quarter of 2021.

Conference Call

Teva will host a conference call and live webcast including a slide presentation on Thursday, November 3, 2022, at 8:00 a.m. ET to discuss its third quarter 2022 results and overall business environment. A questions and answers session will follow.

In order to participate, please register in advance here to obtain a local or toll-free phone number and your personal pin.

A live webcast of the call will be available on Teva’s website at: ir.tevapharm.com.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva’s website.

On November 3, 2022 Theseus Pharmaceuticals, Inc. (NASDAQ: THRX) (Theseus or the Company), a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development, and commercialization of transformative targeted therapies, reported financial results for the third quarter ended September 30, 2022 (Press release, Theseus Pharmaceuticals, NOV 3, 2022, View Source [SID1234622996]).

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"This quarter brought progress throughout our growing pipeline of novel kinase inhibitors with strong execution across our programs," said Tim Clackson, Ph.D., President and Chief Executive Officer of Theseus. "We opened all sites in the Phase 1 portion of the Phase 1/2 trial of THE-630, a next-generation KIT inhibitor, in GIST patients and remain on track to share initial data from dose escalation in the second quarter of 2023. At EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper), we shared compelling preclinical data, characterizing THE-349 as a significantly differentiated fourth-generation EGFR inhibitor candidate: a single molecule with potent activity against all major classes of EGFR activating and resistance mutations, meaningful selectivity over wild-type EGFR, and activity in the central nervous system. We look forward to evaluating THE-349 in the clinic and anticipate submitting an IND application for this candidate in the second half of next year."

Recent Pipeline Highlights and Upcoming Expected Milestones:

THE-630: a single molecule, pan-variant inhibitor of the receptor tyrosine kinase KIT, designed for patients with gastrointestinal stromal tumors (GIST) that have developed resistance to earlier lines of therapy.

●A Phase 1/2 dose-escalation and expansion clinical trial evaluating THE-630 in patients with advanced GIST is ongoing. Phase 1 site activation was completed in the third quarter of 2022 and the study continues to enroll patients in the dose-escalation portion of the trial.
●Initial safety and pharmacokinetic data, as well as initial analysis of circulating tumor DNA, from the dose-escalation portion of the clinical trial are expected to be presented at a scientific conference in the second quarter of 2023.
●Additional data from the Phase 1 portion of the clinical trial is expected to be presented in the fourth quarter of 2023.

THE-349: a fourth-generation epidermal growth factor receptor (EGFR) inhibitor with potent activity against single-, double-, and triple-mutant EGFR variants, including T790M and C797X, found in the tumors of patients with EGFR-mutant non-small cell lung cancer (NSCLC) who have developed resistance to first- or later-line osimertinib.

●During the third quarter, Theseus nominated THE-349 as the development candidate for its fourth-generation EGFR inhibitor program, targeting the treatment of EGFR-driven NSCLC.
● In a poster presentation at the 2022 EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) Symposium, Theseus shared preclinical data characterizing THE-349, demonstrating it can potently inhibit all major classes of EGFR activating and resistance mutations observed in a post-first- or later-line osimertinib setting consisting of single-, double-, and triple-EGFR mutant variants, including T790M and C797X, with kinome and wild-type selectivity and central nervous system activity.
● Theseus expects to submit an Investigational New Drug (IND) application for THE-349 to the U.S. Food and Drug Administration in the second half of 2023.

R&D Portfolio: Theseus’ discovery platform incorporates its structure-guided drug design and predictive resistance assay (PRA) to develop selective, next-generation, pan-variant inhibitor molecules targeting all major cancer-causing and treatment-resistance mutations of tyrosine kinase targets.

●In addition to its lead programs, Theseus continues to advance its preclinical discovery pipeline and has selectively prioritized additional small molecule research programs with established targets of unmet medical need. Theseus expects to prioritize a new kinase target program by the end of 2022.

Business Highlights:

●In October 2022, Theseus announced the appointment of Steven Stein, M.D., to its Board of Directors. Dr. Stein brings over 15 years of oncology expertise to the Board, including an extensive track record of bringing effective medicines through development. He currently serves as Executive Vice President, Chief Medical Officer of the global biopharmaceutical company, Incyte.

Third Quarter Financial Results:

Cash Position: As of September 30, 2022, Theseus had cash, cash equivalents and short-term and long-term investments of $221.0 million. Theseus expects its cash, cash equivalents, and investments to fund operations and capital expenditures into the fourth quarter of 2024 based on its current operating plan.

R&D Expenses: Research and development expenses were $11.4 million for the third quarter of 2022, as compared to $5.0 million for the same period in 2021. This increase was primarily due to $4.3 million of increased employee-related costs, and $1.7 million of increased expenses for clinical and preclinical studies as Theseus advanced THE-630 and THE-349 in clinical and preclinical studies, respectively, as well as increased expense for its discovery programs.

G&A Expenses: General and administrative expenses were $4.5 million for the third quarter of 2022, as compared to $2.4 million for the same period in 2021. This increase was primarily due to $1.2 million of increased employee-related costs, as well as $1.0 million of increased professional fees.

Net Loss: Net loss was $14.7 million for the third quarter of 2022, as compared to a net loss of $7.4 million for the same period in 2021.

On November 3, 2022 Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a biopharmaceutical company focused on novel and targeted oncology therapies, reported it will host a conference call to discuss the third quarter 2022 financial results and provide a corporate update on Thursday, November 10, 2022, at 4:30 p.m. Eastern/1:30 p.m. Pacific (Press release, Spectrum Pharmaceuticals, NOV 3, 2022, View Source [SID1234622995]).

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Conference Call and Webcast:

Thursday, November 10, 2022 @ 4:30 p.m. Eastern/1:30 p.m. Pacific

To access the live call by phone, please go to this link (registration link), and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

A live webcast of the call will be available online in the Investor Relations section of the company’s website at View Source and will be archived there shortly after the live event.

On November 3, 2022 Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies for the treatment of cancer and related conditions, reported a corporate and financial update for the third quarter ended September 30, 2022 (Press release, Athenex, NOV 3, 2022, View Source [SID1234622994]).

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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

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"We are excited by the promise of our innovative, first-in-class NKT cell therapy platform with potential for improved efficacy, safety, and accessibility over current cell therapy approaches. This quarter, we continued to implement efficiencies by reducing cash used for operations by 53% and strengthening our balance sheet with our $30 million equity raise," said Dr. Johnson Lau, Chief Executive Officer of Athenex. "As we look ahead, we have several exciting upcoming milestones and expect to report Phase 1 study data updates for our KUR-501 cell therapy program and our allogeneic KUR-502 cell therapy program by the first half of 2023. We also look forward to clinical updates from the Phase 2 trial of Oral Paclitaxel with a checkpoint inhibitor in neoadjuvant breast cancer, which is expected to complete by year-end."

Third Quarter 2022 and Recent Business Highlights

Business Updates

Announced pricing of $30 million public offering of common stock and warrants
Successful Nasdaq hearing confirming the company can continue its listing on The Nasdaq Stock Market subject to demonstrating compliance with the minimum bid price requirement by March 14, 2023
Athenex has met all closing conditions for the sale of the China API operations for approximately $18 million and is in the final stages of closing the transaction, which is expected to occur as soon as COVID-related restrictions are lifted. At closing, the company expects to receive 70% of the proceeds, with 20% and 10% of proceeds receivable within three months and six months of closing, respectively. Furthermore, the company anticipates entering into a supply agreement for API and a waiver of the rights of its senior secured lender to receive any additional proceeds from the sale
Cash Flows from Operating Activities in Continuing Operations was -$15.7M, a 53% year-over-year decrease
NKT Cell Therapy Programs

KUR-501: Autologous GD2 CAR-NKT cell therapy for relapsed/refractory high-risk neuroblastoma

Ongoing sequential enrollment of two additional cohorts in single-institution Phase 1 dose escalation GINAKIT2 study at the 2 highest dose levels (DL5: 3×108 cells/m2; DL6: 1×109 cells/m2)
Early Phase 1 GINAKIT2 study dose escalation data at the American Society of Gene-Cell Therapy (ASGCT) (Free ASGCT Whitepaper) annual meeting in May 2022 demonstrated:
Expansion of CAR-NKT cells in all patients, with dose response observed
2 out of 3 responses at the 1×108 cells/m2 dose level, including a durable complete response lasting more than 12 months
Responses correlating with CD62L+ NKT cell expression as well as CAR-NKT cell exposure (area under the curve [AUC]).
Well-tolerated with no dose-limiting toxicity, no immune effector cell-associated neurotoxicity syndrome (ICANS), and 1 case of Grade 2 cytokine release syndrome (CRS)
KUR-502: Allogeneic CD19 CAR-NKT cell therapy for relapsed/refractory B-cell malignancies

Ongoing multicenter expansion of Phase 1 dose escalation ANCHOR study
Early Phase 1 ANCHOR study dose escalation data at the American Society of Transplantation and Cellular Therapy (ASTCT)/Center for International Blood & Marrow Transplant Research (CIBMTR) Tandem Meetings in April 2022 demonstrated:
60% ORR and 6-month CR rate of 40% in 5 patients from the NHL cohort, including 1 ongoing CR at 34 weeks
Encouraging responses at the lowest dose levels, including 2 durable responses in patients whose NHL failed prior autologous CAR-T cell therapy
Well-tolerated with no cases of CRS in the NHL cohort, ICANS, or graft versus host disease (GvHD)
KUR-503: Allogeneic GPC3 CAR-NKT cell therapy for hepatocellular carcinoma

Pre-clinical data at the ASCO (Free ASCO Whitepaper) Annual Meeting in June 2022 demonstrated:
BATF3 CAR overexpression enhances NKT cell proliferation, long-term tumor control, and survival compared to IL-15 CAR-NKT cells
Commercial Update

Specialty Pharmaceutical Business

Athenex Pharmaceutical Division (APD) currently markets a total of 34 products with 62 SKUs.
Athenex Pharma Solutions (APS) currently markets 4 products with 13 SKUs.
Key Anticipated Milestones

Oral Paclitaxel:
Update on Phase 2 data from I-SPY 2 trial evaluating Oral Paclitaxel in combination with dostarlimab in neoadjuvant breast cancer
Regulatory interactions with UK MHRA for Oral Paclitaxel in advanced breast cancer remain on track with responses to questions submitted in Q3 2022
KUR-501:
Phase 1 GINAKIT2 study dose escalation, safety, and preliminary efficacy data update in 1H 2023
KUR-502:
Next clinical trial data update from the ongoing ANCHOR study anticipated in 1H 2023
KUR-503:
IND application filing for KUR-503 in advanced GPC3-expressing hepatocellular carcinoma planned in 2023
Special Shareholder Meeting

Athenex is hosting a special meeting of stockholders virtually on November 22, 2022 at 9:30 am EST. This special meeting is being held to vote on three matters, including: (1) to effect an increase in the total number of authorized shares of common stock of the Company, (2) to authorize a reverse stock split of the Company’s common stock, which is intended to increase the per share price of the common stock and enable the Company to regain compliance with the Nasdaq continued listing requirements, and (3) to increase the number of shares available for issuance under the Company’s 2017 Omnibus Incentive Plan.

Please refer to the definitive proxy statement filed by the Company with the SEC on October 11, 2022 at the SEC’s website (View Source) and accessible at the Company’s website (View Source) for more information about the special meeting, including instructions for voting and attending the special meeting.

Third Quarter 2022 Financial Highlights

Revenues from product sales increased to $31.3 million for the three months ended September 30, 2022, from $26.3 million for the three months ended September 30, 2021, an increase of $5.0 million or 19%. This increase was primarily attributable to an increase in APD specialty product sales, which increased by $3.8 million as the result of increases in shortage product sales and product launches during 2022. 503B product sales increased by $1.0 million from additional product launches.

License fees and other revenue for the three months ended September 30, 2022, was $2.2 million, compared to $5.1 million for the same period in 2021, a decrease of $2.9 million.

Cost of sales for the three months ended September 30, 2022, totaled $27.7 million, an increase of $2.6 million, or 11%, as compared to $25.1 million for the three months ended September 30, 2021. The increase was primarily due to an increase of $1.5 million in cost of APD product sales and an increase of $1.1 million in cost of 503B product sales.

R&D expenses totaled $9.2 million for the three months ended September 30, 2022, a decrease of $8.5 million, or 48%, as compared to $17.7 million for the three months ended September 30, 2021. This decrease was primarily due to a decrease in costs of clinical and regulatory operations, compensation costs, drug licensing costs, cell therapy costs, and preclinical operations.

SG&A expenses totaled $9.4 million for the three months ended September 30, 2022, a decrease of $8.7 million, or 48%, as compared to $18.1 million for the three months ended September 30, 2021. The decrease was primarily due to a $5.2 million gain on change in earnout liability related to the Kuur contingent consideration, while 2021 had a $3.2 million loss on change in earnout liability. Additionally, there was a $1.4 million decrease in costs for preparing to commercialize Oral Paclitaxel. These decreases were partially offset by a $1.2 million increase in compensation-related and operating costs.

Interest expense totaled $6.3 million and $5.1 million, respectively, for the three months ended September 30, 2022, and 2021. Interest expense in 2022 was related to the Senior Credit Agreement with Oaktree and the Royalty financing liability, while interest expense in 2021 was related to the Senior Credit Agreement only. The increase in interest expense during the three months ended September 30, 2022 was due to the Royalty interest financing carrying a higher effective interest rate.

Income tax expense for the three months ended September 30, 2022, amounted to $0.6 million, compared to $0.3 million expense for the same period in 2021. Income tax expense in the current period is primarily attributable to foreign income tax withholdings on our license revenue.

Net loss attributable to Athenex for the three months ended September 30, 2022, was $19.7 million, or ($0.14) per diluted share, as compared to a net loss of $36.1 million, or ($0.33) per diluted share, for the same period in 2021.

For further details on the Company’s financial results, including the results for the three months ended September 30, 2022, refer to the Form 10Q filed with the SEC.

2022 Financial Guidance

Athenex expects to maintain product sales growth in the range of 20-25% over the prior year period.

Cash Conservation Update

As of September 30, 2022, the Company had cash and cash equivalents, restricted cash, and short-term investments of $41.4 million. The Company is implementing cost savings programs and monetizing non-core assets, and as the Company completes such activities, the Company plans to extend its cash runway into next year.

Conference Call and Webcast Information

Athenex will host a conference call and live audio webcast today, Thursday, November 3, 2022, at 8:00 a.m. Eastern Time to discuss the financial results and provide a business update.

To participate in the call, dial either the domestic or international number fifteen minutes before the conference call begins:

The live conference call and replay can also be accessed via audio webcast here and on the Investor Relations section of the Company’s website under "Events and Presentations", located at View Source

On November 3, 2022 Deciphera Pharmaceuticals, Inc. (NASDAQ: DCPH), a biopharmaceutical company focused on discovering, developing, and commercializing important new medicines to improve the lives of people with cancer, reported financial results for the third quarter ended September 30, 2022 and provided a corporate update (Press release, Deciphera Pharmaceuticals, NOV 3, 2022, View Source [SID1234622993]).

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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

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"Our strong third quarter results continue the exceptional progress we have made across our business in 2022: QINLOCK delivered another quarter of record revenue, we reported exciting data at ESMO (Free ESMO Whitepaper) for our two clinical programs and we nominated the next clinical development candidate from our proprietary research platform," said Steve Hoerter, President and Chief Executive Officer of Deciphera Pharmaceuticals. "We have already begun building upon this momentum in the fourth quarter with key milestones including our announcement today of the opening of enrollment in our combination escalation cohorts in the Phase 1 study of DCC-3116 and the treatment of the first patient."

Mr. Hoerter continued, "We remain inspired by QINLOCK’s impact on the treatment of patients with GIST, in the U.S., Europe, and other countries around the world, as we focus on expanding the geographic reach of this breakthrough medicine. We achieved important milestones in the third quarter in our two clinical programs, vimseltinib and DCC-3116, with exciting data updates at the ESMO (Free ESMO Whitepaper) Congress in September. The best-in-class potential of vimseltinib in TGCT was underscored by the high response rates and the preliminary patient-reported outcome results, which found clinically meaningful improvements in both pain and stiffness. We also presented first-in-human data for DCC-3116 demonstrating a favorable safety and pharmacokinetic profile and strong target inhibition across all dose levels studied. Building upon this quarter’s clinical success and leveraging the full potential of our switch control kinase inhibitor discovery platform, we are excited to announce our new clinical development candidate, DCC-3084, that has best-in-class potential as a pan-RAF inhibitor."

Third Quarter 2022 Highlights and Upcoming Milestones

QINLOCK (ripretinib)

Recorded $32.3 million in QINLOCK net product revenue in the third quarter of 2022, including $24.5 million in U.S. net product revenue and $7.8 million in international net product revenue, an increase of 49% from net product revenue of $21.7 million in the third quarter of 2021.
Announced that the Journal of Clinical Oncology published results from the Company’s INTRIGUE Phase 3 study of QINLOCK in patients with advanced gastrointestinal stromal tumor (GIST) previously treated with imatinib. Although QINLOCK did not offer a statistically significant improvement in progression-free survival (PFS) compared to sunitinib, QINLOCK showed meaningful clinical activity with fewer Grade 3/4 treatment-emergent adverse events (TEAEs) and improved tolerability.
Vimseltinib

Presented updated results from the ongoing Phase 1/2 study of vimseltinib in tenosynovial giant cell tumor (TGCT) in two poster presentations at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2022 in September. The results showed an objective response rate of 69% in Phase 1, 53% in Phase 2 Cohort A, and 46% in Phase 2 Cohort B, with a demonstrated clinical benefit rate of 100% across all Phase 1/2 patients. Preliminary patient-reported outcome data in the Phase 2 portion demonstrated clinically meaningful improvements in pain and stiffness at week 25 compared to baseline. Treatment with vimseltinib across all Phase 1/2 patients was well-tolerated. Duration of treatment continued to increase from the data cut at ESMO (Free ESMO Whitepaper) 2021 including 17.5 months of median treatment duration for patients in the Phase 1 portion of the study.
Continued patient enrollment in the pivotal Phase 3 MOTION study of vimseltinib for the treatment of TGCT. MOTION is a two-part, randomized, double-blind, placebo-controlled study of vimseltinib to assess the efficacy and safety in patients with TGCT who are not amenable to surgery. The primary endpoint of the study is objective response rate at week 25 as measured by RECIST v1.1 by blinded independent radiologic review.
DCC-3116

Presented initial clinical data in an oral presentation as a Proffered Paper at the ESMO (Free ESMO Whitepaper) Congress 2022 from the single agent dose escalation portion of the Phase 1 study of DCC-3116 in patients with advanced or metastatic tumors with a mutant RAS or RAF gene. The results showed DCC-3116 was well-tolerated at doses from 50 to 300 mg twice daily with no dose limiting toxicities or treatment-related serious adverse events observed. Pharmacokinetic and pharmacodynamic data across all dose levels demonstrated exposure and ULK 1/2 inhibition associated with anti-cancer efficacy in preclinical studies.
Completed enrollment in the single agent dose escalation Phase 1 study in the fourth quarter of 2022; single-agent DCC-3116 did not reach a maximum tolerated dose; and selected 50 mg twice daily as the starting dose for the combination dose escalation cohorts.
Opened enrollment in three Phase 1b combination dose escalation cohorts and treated the first patient in the fourth quarter of 2022:
In combination with trametinib, a Food and Drug Administration (FDA)-approved MEK inhibitor, in patients with advanced or metastatic solid tumors with RAS, NF1, or RAF mutations.
In combination with binimetinib, an FDA-approved MEK inhibitor, in patients with advanced or metastatic solid tumors with RAS, NF1, or RAF mutations.
In combination with sotorasib, an FDA- approved KRASG12C inhibitor, in patients with advanced or metastatic solid tumors with KRASG12C mutations.
DCC-3084

Nominated DCC-3084 as the Company’s new pan-RAF clinical development candidate. DCC-3084 is a selective inhibitor of BRAF/CRAF kinases that inhibits Class I, II and III BRAF mutants, BRAF fusions and NRAS mutant cell lines using the Company’s novel switch-control kinase inhibitor platform. Preclinical studies of DCC-3084 demonstrate both single-agent and combination activity and favorable pharmaceutical properties, a key potential differentiator from other pan-RAF programs in development.
Corporate Update

Appointed Lisa Amaya Price as Senior Vice President and Chief Human Resources Officer to lead the Company’s human resources, recruitment, and talent development strategy. Ms. Amaya Price brings over 20 years of experience with a strong track record of developing human resource strategies and leading talent recruitment, selection, and development in the biopharmaceutical industry.
Third Quarter 2022 Financial Results

Revenue: Total revenue for the third quarter of 2022 was $36.0 million, which includes $32.3 million of net product revenue of QINLOCK and $3.7 million of collaboration revenue compared to $23.2 million of total revenue, including $21.7 million of net product revenue of QINLOCK and $1.5 million of collaboration revenue, for the same period in 2021.
Cost of Sales: Cost of sales were $3.3 million in the third quarter of 2022, which includes $0.7 million in cost of product sales, compared to $0.9 million for the third quarter of 2021, which included $0.2 million in cost of product sales. In the third quarter of 2022, the Company completed the sales of zero cost inventories of QINLOCK that had been expensed prior to FDA approval.
R&D Expenses: Research and development expenses for the third quarter of 2022 were $47.5 million, compared to $66.4 million for the same period in 2021. The decrease was primarily due to lower clinical trial costs related to QINLOCK, including INTRIGUE, the Phase 3 study for the treatment of second-line GIST for which top-line results were announced in November 2021, the discontinuation of the rebastinib program following the corporate restructuring implemented in the fourth quarter of 2021, and preclinical costs including the recognition of a $4.0 million up-front payment to Sprint Bioscience (Sprint) in the prior year, partially offset by an increase in clinical trial costs related to the Phase 3 study of vimseltinib and the Phase 1 study of DCC-3116. Non-cash, stock-based compensation was $5.3 million and $5.4 million for the third quarters of 2022 and 2021, respectively.
SG&A Expenses: Selling, general, and administrative expenses for the third quarter of 2022 were $30.0 million, compared to $35.5 million for the same period in 2021. The decrease was primarily due to a decrease in personnel-related costs and professional and consultant fees. Non-cash, stock-based compensation was $7.1 million and $6.4 million for the third quarters of 2022 and 2021, respectively.
Net Loss: For the third quarter of 2022, Deciphera reported a net loss of $43.0 million, or $0.55 per share, compared with a net loss of $79.8 million, or $1.37 per share, for the same period in 2021.
Cash Position: As of September 30, 2022, cash, cash equivalents, and marketable securities were $371.6 million, compared to $393.1 million as of June 30, 2022. Based on its current operating plans, Deciphera expects its current cash, cash equivalents, and marketable securities together with anticipated product, royalty, and supply revenues, but excluding any potential future milestone payments under its collaboration or license agreements, will enable the Company to fund its operating and capital expenditures into 2025.
Conference Call and Webcast

Deciphera will host a conference call and webcast to discuss this announcement today, November 3, 2022, at 8:00 AM ET. The conference call may be accessed via this link: https://register.vevent.com/register/BIddf165cd801a473885dd3605fd55f7da. A live webcast of the conference call will be available in the "Events and Presentations" page in the "Investors" section of the Company’s website at View Source A replay will be available on the Company’s website approximately two hours after the conference call and will be available for 30 days following the call.