On November 1, 2022 CRISPR Therapeutics (Nasdaq: CRSP), a biopharmaceutical company focused on creating transformative gene-based medicines for serious diseases, reported financial results for the third quarter ended September 30, 2022 (Press release, CRISPR Therapeutics, NOV 1, 2022, View Source [SID1234622687]).

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"We are poised to end the year having made significant strides advancing our broad clinical pipeline of potentially curative gene edited therapies," said Samarth Kulkarni, Ph.D., Chief Executive Officer of CRISPR Therapeutics. "CRISPR Therapeutics and Vertex remain on course to submit exa-cel for rolling FDA review this month and for EMA and MHRA review by year end, working with urgency to advance a gene edited therapy with potential to transform the lives of patients with sickle cell disease and beta thalassemia. Concurrently, we continue to enroll and dose patients in our immuno-oncology trials, CTX110 and CTX130, and remain on track to bring our next generation CAR-T programs to the clinic early next year. Finally, we’ve progressed our regenerative medicine portfolio for the treatment of type 1 diabetes with the clearance of our CTA for VCTX211 by Health Canada."

Recent Highlights and Outlook

Hemoglobinopathies

In September, CRISPR Therapeutics and Vertex Pharmaceuticals concluded discussions with the U.S. Food and Drug Administration (FDA), and the FDA granted exagamglogene autotemcel (exa-cel) a rolling review for the potential treatment of sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). The companies expect to submit the biologics licensing applications (BLA) for exa-cel for rolling review, beginning in November 2022 and expect to complete the submission by the end of Q1 2023. In the U.S., exa-cel has been granted Fast Track, Regenerative Medicine Advanced Therapy (RMAT), Rare Pediatric Disease and Orphan Drug Designations.

CRISPR Therapeutics and Vertex have completed discussions with the European Medicines Agency (EMA) and the Medicines and Healthcare products Regulatory Agency (MHRA) on the submission package for exa-cel and are on track to submit for regulatory approvals of exa-cel for SCD and TDT in Europe and the U.K. by the end of 2022. Exa-cel has been granted Orphan Drug Designation from the European Commission and Priority Medicines (PRIME) designation from the EMA, for both SCD and TDT.

Two additional Phase 3 clinical trials, CLIMB-141 and CLIMB-151, for exa-cel in pediatric patients with TDT and SCD respectively, are ongoing.

CRISPR Therapeutics continues to advance its anti-CD117 (c-Kit) antibody-drug conjugate (ADC), its internal targeted conditioning program, towards clinical studies.

Immuno-Oncology

CRISPR Therapeutics continues to enroll and dose patients in the pivotal trial of CTX110, its wholly-owned allogeneic chimeric antigen receptor T cell (CAR-T) investigational therapy targeting CD19+ B-cell malignancies. The Company expects to report additional data in 2022.

In September, CRISPR Therapeutics announced that the FDA granted RMAT designation to CTX130, the Company’s wholly-owned allogeneic CAR-T cell therapy targeting CD70, for the treatment of Mycosis Fungoides and Sézary Syndrome (MF/SS), types of cutaneous T-cell lymphoma (CTCL).

In October, CRISPR Therapeutics announced the acceptance of an oral presentation for CTX130 for the treatment of relapsed or refractory renal cell carcinoma (RCC) and a poster presentation of pre-clinical anti-CD83 CAR-T data at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 37th Annual Meeting, taking place in Boston, MA or virtually from November 8 to 12, 2022.

CRISPR Therapeutics announced the clearance of its Investigational New Drug (IND) application by the FDA for CTX112, its next generation chimeric antigen receptor T cell (CAR-T) candidate targeting CD19+ B-cell malignancies. The Company expects to initiate clinical trials for CTX112 in the first half of 2023.

Regenerative Medicine

Enrollment and dosing are ongoing in the Phase 1 clinical trial evaluating the safety and tolerability of VCTX210 for the treatment of type 1 diabetes (T1D). VCTX210 is an investigational, allogeneic, gene-edited, stem cell-derived product candidate, developed in collaboration with ViaCyte that applies CRISPR Therapeutics’ gene-editing technology to ViaCyte’s proprietary stem cell capabilities for the generation of pancreatic cells designed to evade recognition by the immune system.

In addition, CRISPR Therapeutics and ViaCyte, Inc. announced the clearance of its Clinical Trial Application (CTA) by Health Canada for VCTX211, its next generation, allogeneic, gene-edited, stem cell-derived product candidate for T1D, which includes novel edits to promote cell survival. This immune-evasive cell replacement therapy is designed to enable patients to produce their own insulin. The companies continue to progress their third program, VCTX212, in pre-clinical development for the treatment of Type 1 and Type 2 diabetes. In the third quarter of 2022, Vertex announced it had acquired ViaCyte.

In Vivo

Based upon ongoing progress with its in vivo approaches for liver gene editing utilizing both non-viral and viral delivery vehicles, CRISPR Therapeutics expects to move multiple programs utilizing in vivo approaches into the clinic in the next 12 to 15 months, including programs in cardiovascular disease. The Company’s lead program, CTX310, targeting angiopoietin-related protein 3 (ANGPTL3) is currently in IND-enabling studies.
Third Quarter 2022 Financial Results

Cash Position: Cash, cash equivalents and marketable securities were $1,973.1 million as of September 30, 2022, compared to $2,379.1 million as of December 31, 2021. The decrease in cash of $406.0 million was primarily driven by cash used in operating activities to support ongoing research and development of the Company’s clinical and pre-clinical programs.
Revenue: Total collaboration revenue was $0.1 million for the third quarter of 2022, compared to $0.3 million for the third quarter of 2021.
R&D Expenses: R&D expenses were $116.6 million for the third quarter of 2022, compared to $83.5 million for the third quarter of 2021. The increase in expense was driven by development activities supporting the advancement of our pipeline programs, as well as increased headcount costs to support these programs.
G&A Expenses: General and administrative expenses of $27.0 million for the third quarter of 2022 were consistent with general and administration expenses of $23.7 million for the third quarter of 2021.
Collaboration Expense: Collaboration expense, net, was $38.9 million for the third quarter of 2022, compared to $22.5 million for the third quarter of 2021. The increase in collaboration expense, net, was primarily driven by increased pre-commercial and manufacturing scale-up costs associated with our hemoglobinopathies programs under our collaboration with Vertex.
Net Loss: Net loss was $174.5 million for the third quarter of 2022, compared to net loss of $127.2 million for the third quarter of 2021.
About exagamglogene autotemcel (exa-cel)
Exa-cel, formerly known as CTX001, is an investigational, autologous, ex vivo CRISPR/Cas9 gene-edited therapy that is being evaluated for patients with TDT or SCD characterized by recurrent VOCs, in which a patient’s own hematopoietic stem cells are edited to produce high levels of fetal hemoglobin (HbF; hemoglobin F) in red blood cells. HbF is the form of the oxygen-carrying hemoglobin that is naturally present during fetal development, which then switches to the adult form of hemoglobin after birth. The elevation of HbF by exa-cel has the potential to alleviate transfusion requirements for patients with TDT and reduce painful and debilitating sickle crises for patients with SCD. Earlier results from these ongoing trials were published in The New England Journal of Medicine in January of 2021.

Based on progress in this program to date, exa-cel has been granted Regenerative Medicine Advanced Therapy (RMAT), Fast Track, Orphan Drug, and Rare Pediatric Disease designations from the FDA for both TDT and SCD. Exa-cel has also been granted Orphan Drug Designation from the European Commission, as well as Priority Medicines (PRIME) designation from the European Medicines Agency (EMA), for both TDT and SCD.

Among gene-editing approaches being evaluated for TDT and SCD, exa-cel is the furthest advanced in clinical development.

About CLIMB-111 and CLIMB-121
The ongoing Phase 1/2/3 open-label trials, CLIMB-111 and CLIMB-121, are designed to assess the safety and efficacy of a single dose of exa-cel in patients ages 12 to 35 years with TDT or with SCD, characterized by recurrent VOCs, respectively. The trials are now closed for enrollment. Patients will be followed for approximately two years after exa-cel infusion. Each patient will be asked to participate in CLIMB-131, a long-term follow-up trial.

About CLIMB-131
This is a long-term, open-label trial to evaluate the safety and efficacy of exa-cel in patients who received exa-cel in CLIMB-111, CLIMB-121, CLIMB-141 or CLIMB-151. The trial is designed to follow participants for up to 15 years after exa-cel infusion.

About CLIMB-141 and CLIMB-151
The ongoing Phase 3 open-label trials, CLIMB-141 and CLIMB-151, are designed to assess the safety and efficacy of a single dose of exa-cel in patients ages 2 to 11 years with TDT or with SCD, characterized by recurrent VOCs, respectively. The trials are now open for enrollment and currently enrolling patients ages 5 to 11 years of age and will plan to extend to patients 2 to less than 5 years of age at a later date. Each trial will enroll approximately 12 patients. Patients will be followed for approximately two years after infusion. Each patient will be asked to participate in CLIMB-131, a long-term follow-up- trial.

About the CRISPR-Vertex Collaboration
CRISPR Therapeutics and Vertex Pharmaceuticals entered into a strategic research collaboration in 2015 focused on the use of CRISPR/Cas9 to discover and develop potential new treatments aimed at the underlying genetic causes of human disease. Exa-cel represents the first potential treatment to emerge from the joint research program. Under a recently amended collaboration agreement, Vertex will lead global development, manufacturing and commercialization of exa-cel and split program costs and profits worldwide 60/40 with CRISPR Therapeutics.

About CTX110 and CARBON Trial
CTX110, a wholly owned program of CRISPR Therapeutics, is a healthy donor-derived gene-edited allogeneic CAR-T investigational therapy targeting cluster of differentiation 19, or CD19. CTX110 is being investigated in the ongoing CARBON trial, a Phase 1 single-arm, multi-center, open label clinical trial, CARBON, is designed to assess the safety and efficacy of several dose levels of CTX110 for the treatment of relapsed or refractory B-cell malignancies. CTX110 has been granted RMAT designation by the FDA.

About CTX130 and COBALT Trials
CTX130, a wholly-owned program of CRISPR Therapeutics, is a healthy donor-derived gene-edited allogeneic CAR-T investigational therapy targeting cluster of differentiation 70, or CD70, an antigen expressed on various solid tumors and hematologic malignancies. CTX130 is being developed for the treatment of both solid tumors, such as renal cell carcinoma (COBALT-RCC), and T-cell and B-cell hematologic malignancies (COBALT-LYM). CTX130 is being investigated in two ongoing independent Phase 1, single-arm, multi-center, open-label clinical trials that are designed to assess the safety and efficacy of several dose levels of CTX130 for the treatment of relapsed or refractory renal cell carcinoma and various subtypes of lymphoma, respectively. CTX130 has been granted Orphan Drug designation for the treatment of T-cell lymphoma by the FDA and RMAT designation for the treatment of relapsed or refractory Mycosis Fungoides and Sézary Syndrome (MF/SS), types of cutaneous T-cell lymphoma (CTCL).

About VCTX210
VCTX210 is an investigational, allogeneic, gene-edited, immune-evasive, stem cell-derived therapy for the treatment of T1D. VCTX210 is being developed under a co-development and co-commercialization agreement between CRISPR Therapeutics and ViaCyte, Inc.

On November 1, 2022 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported the company has completed the expected tax-free spin-off of its OmniAb antibody discovery business which has become OmniAb, Inc., an independent publicly traded company (Press release, Ligand, NOV 1, 2022, View Source [SID1234622686]). OmniAb will begin regular-way trading November 2, 2022 on NASDAQ under the stock ticker symbol "OABI." Ligand continues to trade under the stock ticker symbol "LGND."

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"For the last decade, Ligand has been focused on providing the tools and technologies needed by the pharmaceutical industry and sharing in the promise of drug innovation with our shareholders. Today, Ligand has a diversified portfolio of growing royalty revenue and a large portfolio of late-stage programs," said John Higgins, CEO. "With the spin-off completed, we are focused on creating financial growth for years to come. We wish Matt Foehr and the OmniAb team well as they continue to enable development of innovative therapeutics as an independent publicly traded company."

Ligand Leadership Updates

In conjunction with the spin-off, Ligand is also announcing Executive management appointments. Ligand is led by a team of experienced executives with a record of building businesses with strong financial growth and disciplined business investing.

"I’m delighted to announce changes in leadership at Ligand. Matt Korenberg and Tavo Espinoza are expanding their responsibilities within Ligand, and we are pleased to have Andrew Reardon join our executive leadership team. Matt has been promoted to President and Chief Operating Officer. He has led the financial and strategic efforts at Ligand over the previous seven years as Chief Financial Officer. I am excited for Matt to continue his leadership in this elevated and expanded role," said John Higgins, Chief Executive Officer.

"Tavo joins our executive leadership team as Chief Financial Officer after six years leading the Accounting and Finance functions at Ligand. Andrew joins the team as Chief Legal Officer and brings a wealth of knowledge and experience in royalty transactions. I am confident this experienced team will continue to drive the pursuit of growth through Ligand’s exciting new chapter."

Octavio (Tavo) Espinoza is joining Ligand’s executive leadership team as Chief Financial Officer. Mr. Espinoza has been with Ligand since 2016 serving in a variety of finance leadership roles at Ligand, most recently as Senior Vice President, Finance. Prior to joining Ligand, Mr. Espinoza served as Senior Director, Finance for Receptos, a publicly traded drug-discovery company, that was acquired by Celgene (now Bristol-Myers Squibb). Before Receptos, Mr. Espinoza was Senior Director, Accounting for Illumina, a publicly traded life sciences analytics and genetics sequencing tools company, and prior to Illumina, served as Senior Manager, Accounting at Intuit. Mr. Espinoza began his professional career in public accounting at PricewaterhouseCoopers and holds a B.S. in business administration from San Diego State University and a license as a Certified Public Accountant in the State of California.

Andrew Reardon joins Ligand’s executive leadership team as Chief Legal Officer. Prior to joining Ligand, Mr. Reardon was the Chief Legal Officer at HealthCare Royalty Management, a manager of investment funds investing in biopharmaceutical products primarily through royalty and structured credit transactions. Before joining HealthCare Royalty, Mr. Reardon was a senior associate with the law firm Willkie Farr & Gallagher, where he focused on corporate transactions, including finance and mergers and acquisitions. Mr. Reardon is a former officer with the United States Army National Guard. He earned his J.D. from the University of Iowa College of Law and received his B.A. from the State University of New York College at Old Westbury.

As part of the planned business separation, in connection with the closing of the business combination, Jennifer Cochran, Ph.D., Sarah Boyce and Sunil Patel stepped down from the Ligand board of directors and joined the OmniAb board. These changes reduce Ligand’s number of directors to eight.

Other Updates

In conjunction with the spin-out OmniAb will retain the current Ligand address for its corporate headquarters and Ligand will transfer its headquarters to Las Vegas, Nevada in approximately two months. Ligand has leased office space in Nevada since 2019 and Nevada has been the primary distribution point for Captisol shipments originating in the United States since that time.

On November 1, 2022 Arvinas, Inc. (Nasdaq: ARVN), a clinical-stage biotechnology company creating a new class of drugs based on targeted protein degradation, reported that it will participate in two upcoming conferences (Press release, Arvinas, NOV 1, 2022, View Source [SID1234622685]):

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Society for Neuroscience (SFN) Annual Meeting: Saturday, November 12, 4:00-5:00 p.m. PT. Angela Cacace, Ph.D., Senior Vice President of Neuroscience and Platform Biology, will deliver a poster presentation titled, "Orally Administered PROTAC Molecules Selectively Clear Pathologic Neurodegenerative Proteins in CNS & Muscle."
Stifel Healthcare Conference: Tuesday, November 15 at 11:30 a.m. ET. Ron Peck, M.D., Chief Medical Officer, and Randy Teel, Ph.D., Senior Vice President, Corporate and Business Development, will participate in a fireside chat. A live audio webcast of the presentation will be available here and on the Events & Presentations section of the Investors & Media section of the Company’s website.

On November 1, 2022 Johnson & Johnson (NYSE: JNJ), the world’s largest, most diversified healthcare products company, and Abiomed (NASDAQ: ABMD), a world leader in breakthrough heart, lung and kidney support technologies, reported that they have entered into a definitive agreement under which Johnson & Johnson will acquire through a tender offer all outstanding shares of Abiomed, for an upfront payment of $380.00 per share in cash, corresponding to an enterprise value of approximately $16.6 billion which includes cash acquired (Press release, Johnson & Johnson, NOV 1, 2022, View Source [SID1234622684]). Abiomed shareholders will also receive a non-tradeable contingent value right (CVR) entitling the holder to receive up to $35.00 per share in cash if certain commercial and clinical milestones are achieved. The transaction was unanimously approved by both companies’ boards of directors.

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The transaction broadens Johnson & Johnson MedTech’s (JJMT) position as a growing cardiovascular innovator, advancing the standard of care in one of healthcare’s largest unmet need disease states: heart failure and recovery. Cardiovascular disease is the number one cause of death. All forms of cardiovascular disease lead to heart failure, which is a significant cost to health systems due to hospitalizations and extended length of stay.

Abiomed is a leading, first-to-market provider of cardiovascular medical technology with a first-in-kind portfolio for the treatment of coronary artery disease and heart failure, an extensive innovation pipeline of life-saving technologies, and an 18-year track record of profitable growth. Abiomed operates in one of the fastest growing medtech segments with significant expansion opportunities in indication, geography, and product.

"The addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech," said Joaquin Duato, Chief Executive Officer of Johnson & Johnson. "We have committed to enhancing our position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders."

"Abiomed’s skilled workforce and strong relationships with clinicians, along with its innovative cardiovascular portfolio and robust pipeline, complement our MedTech portfolio, global footprint and robust clinical expertise. Together, we have the incredible opportunity to bring lifesaving innovations to more patients around the world," said Ashley McEvoy, Executive Vice President and Worldwide Chairman of MedTech at Johnson & Johnson. "We are committed to investing for growth and look forward to welcoming the talented team and working together to foster our shared patient-first mindset and winning culture of innovation."

"We are pleased to have reached an agreement that reflects the remarkable value Abiomed created with our revolutionary Impella heart pump platform and promising pipeline," said Michael R. Minogue, Abiomed’s Chairman, President and Chief Executive Officer. "This transaction partners us with an organization that shares our patients-first mindset and creates immediate value for our patients, customers, employees and shareholders. It will enable us to leverage Johnson & Johnson’s global scale, commercial strength and clinical expertise to accelerate our mission of making heart recovery the global standard of care."

Benefits of the Transaction

Diversifies and expands JJMT’s portfolio with a leadership platform in heart failure and recovery: Impella heart pumps – a breakthrough technology with exclusive FDA approvals for patients with severe coronary artery disease requiring high-risk PCI (percutaneous coronary intervention), treatment of AMI (acute myocardial infarction) cardiogenic shock, or right heart failure – will complement JJMT’s portfolio, which includes the leading Biosense Webster electrophysiology business, and further accelerate JJMT’s shift into high-growth markets.
Benefits patients by advancing mission to make heart recovery the global standard of care: Johnson & Johnson’s footprint, leading capabilities in physician education, commercial excellence, and robust clinical expertise will complement Abiomed’s capabilities, accelerating access and adoption of these lifesaving technologies to more patients around the world.
Expands market opportunity through a robust pipeline of technologies and clinical studies: This combination broadens Johnson & Johnson’s position as a cardiovascular innovator by adding a world-leading portfolio in heart recovery – with innovative R&D programs, exclusive FDA approvals, and multiple randomized controlled trials underway with the aim of achieving Class I clinical guidelines for Impella – to expand access to patient populations.
Accelerates near- and long-term sales and earnings growth: The proposed transaction will accelerate pro forma MedTech and Johnson & Johnson enterprise revenue growth. Johnson & Johnson expects the transaction to be slightly dilutive to neutral to adjusted earnings per share in the first year, considering the impact of financing, and then accretive by approximately $0.05 in 2024, and increasingly accretive thereafter.
Transaction Financing and Path to Completion
Under the terms of the agreement, a wholly owned subsidiary of Johnson & Johnson (Merger Sub) will commence a tender offer for all outstanding shares of Abiomed, whereby Abiomed stockholders will be offered an upfront payment of $380.00 per share in cash, along with one non-tradeable CVR that entitles them to up to an additional $35.00 per share in cash if certain clinical and commercial milestones are achieved.

The milestones consist of:

$17.50 per share, payable if net sales for Abiomed products exceeds $3.7 billion during Johnson & Johnson’s fiscal second quarter of 2027 through fiscal first quarter of 2028, or if this threshold is not met during this period and is subsequently met during any rolling four quarter period up to the end of Johnson & Johnson’s fiscal first quarter of 2029, $8.75 per share;
$7.50 per share payable upon FDA premarket application approval of the use of Impella products in STEMI patients without cardiogenic shock by January 1, 2028; and
$10.00 per share payable upon the first publication of a Class I recommendation for the use of Impella products in high risk PCI or STEMI with or without cardiogenic shock within four years from their respective clinical endpoint publication dates, but in all cases no later than December 31, 2029.
Johnson & Johnson expects to fund the transaction through a combination of cash on hand and short-term financing. Johnson & Johnson expects to maintain a strong balance sheet and to continue to support its stated capital allocation priorities of R&D investment, competitive dividends, value-creating acquisitions and strategic share repurchases.

Following the completion of the transaction, Abiomed will operate as a standalone business within Johnson & Johnson MedTech, becoming one of 12 JJMT priority platforms as defined by annual sales of at least $1 billion each. Michael R. Minogue, Abiomed’s Chairman, President and Chief Executive Officer has an established succession plan to sustain a strong future and will assist in the transition. Andrew Greenfield, who has 17 years with Abiomed, most recently serving as Chief Commercial Officer has been appointed President of Abiomed. Michael Bodner will lead the integration under Ashley McEvoy’s leadership. Michael is a seasoned Interventional Cardiovascular executive with 15+ years in the industry with Johnson & Johnson and Abbott Vascular, most recently serving as Worldwide President of Johnson & Johnson’s global leading Biosense Webster Electrophysiology business.

The transaction is expected to be completed prior to the end of the first quarter of 2023 and is conditioned on the tender of a majority of the outstanding shares of Abiomed’s common stock, as well as the receipt of applicable regulatory approvals and other customary closing conditions. Assuming the closing of the tender offer, Johnson & Johnson will acquire any shares of Abiomed not tendered into the tender offer through a merger of Merger Sub with and into Abiomed for the same per share consideration as will be payable in the tender offer. The merger will be effected as soon as practicable after the closing of the tender offer.

Advisors
J.P. Morgan Securities LLC is serving as financial advisor to Johnson & Johnson and Cravath, Swaine & Moore LLP is serving as legal advisor.

Goldman Sachs & Co. LLC is serving as financial advisor to Abiomed and Sullivan & Cromwell LLP is serving as legal advisor.

A simultaneous webcast of the call for investors and other interested parties may be accessed by utilizing the link provided above. A replay will be available approximately two hours after the live webcast by visiting www.investor.jnj.com or www.investors.Abiomed.com.

In light of the joint conference call today, Abiomed has cancelled its conference call to discuss its financial results for the second quarter of fiscal year 2023, previously scheduled for 8:00 a.m. ET today.

On November 1, 2022 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its third quarter ended September 30, 2022 and provided an update on business performance (Press release, Myriad Genetics, NOV 1, 2022, View Source [SID1234622682]).

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"Excluding typical seasonality and other temporary headwinds, we believe the overall strength of our business model and improving growth trajectory is clear. Our Mental Health business continues to generate exciting growth, and we believe this momentum is sustainable due to recent peer-reviewed, published clinical data, healthy reimbursement levels, and potential expanding payer coverage," said Paul J. Diaz, president and CEO, Myriad Genetics. "I am also pleased with the progress we have made in our market-leading hereditary cancer testing business. Test volume growth continues to improve and recent pricing updates serve only to support our positive outlook on pricing stability for this important product."

Paul Diaz concluded, "As the pace of Myriad Genetics’ transformation advances, we believe now is an opportune moment to prudently use capital to bolster our offering and accelerate our momentum. We believe the acquisition of Gateway Genomics, with its proprietary portfolio of consumer genetic tests and strong brand reputation, is an excellent strategic fit and will complement our robust Women’s Health portfolio. We look forward to bringing valuable insight from their offering to our patients. And from a financial perspective, is expected to be accretive to Myriad’s growth rate, earnings and operating cash flows in 2024. We are excited to welcome our new Gateway Genomics teammates."

Financial and Operational Highlights:

Diagnostic test volumes of 255,674 in the third quarter of 2022 increased 2% year-over-year, or 12% excluding divested businesses. Despite typical third quarter seasonality, hereditary cancer and pharmacogenomics volumes improved sequentially 1% and 2%, respectively, when compared to the second quarter of 2022. On a year-over-year basis, hereditary cancer volumes grew 4% in the third quarter of 2022. Prenatal volume growth in the third quarter was negatively impacted by service disruptions related to the State of California’s recent roll out of its prenatal screening program.
The following table summarizes sequential and year-over-year quarterly volume changes in the company’s core product categories:

Excluding divestitures, revenue for the nine months ended September 30, 2022, increased 5% to $500.3 million compared to revenue for the nine months ended September 30, 2021. The impact of currency translation ($7.1 million) and the non-recurring milestone payment ($4 million) represented headwinds to year-to-date revenue growth of approximately 2%.
The following table summarizes year-over-year quarterly revenue changes in the company’s core businesses by product category:

Third quarter revenue of $156.4 million compared to the same period in 2021, excluding divested businesses, was impacted by currency translations, change of estimates, and non-recurring milestone payments.
GAAP gross margins of 67.8% in the third quarter of 2022 decreased 370 basis points year-over-year, reflecting product/volume mix and items such as the impact of currency translation, change of estimates, inflationary pressures, and a non-recurring milestone payment. GAAP gross margins year-to-date were 70% and in-line with the company’s forecasted range.
GAAP total operating expenses in the third quarter of 2022 were $151.0 million, decreasing $48.4 million year-over-year; adjusted operating expenses in the quarter increased $5.5 million year-over-year to $127.0 million, or approximately 5% growth.
GAAP operating loss in the third quarter of 2022 was $45.0 million, improving $34.9 million year-over-year; adjusted operating loss was $20.6 million, increasing $19.2 million year-over-year from a loss of $1.4 million.
Ended the third quarter of 2022 with $259.2 million in cash, cash equivalents and investments as compared to $283.6 million at the beginning of the quarter. The decrease was driven primarily by ongoing capital expenditures and investments in the company’s labs of the future initiative. Operating cash flow was a decrease of $2 million in the third quarter. The company ended the quarter with no debt outstanding.
Business Performance and Highlights:

Oncology
The Myriad Genetics Oncology business provides hereditary cancer testing, including the MyRisk hereditary cancer test for patients who have cancer. It also provides tumor profiling products such as the myChoice CDx companion diagnostic test, the Prolaris prostate cancer test, and the EndoPredict breast cancer prognostic test. The Oncology business delivered revenue of $69.2 million in the third quarter of 2022.

Prolaris continued to see strong demand, as third quarter testing volumes grew mid-teens year-over-year.
Precise Tumor quarterly testing volumes highest since launch with strong attachment rate to MyRisk and BRACAnalysis CDx.
Women’s Health
The Myriad Genetics Women’s Health business serves women of all ancestries by assessing their risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family. The Women’s Health business delivered revenue of $54.3 million in the third quarter of 2022.

Third quarter hereditary cancer testing volumes were higher than any prior quarter in 2022.
Prenatal testing volumes, in the third quarter, were stable year-over-year.
Mental Health
The Myriad Genetics Mental Health business consists of the GeneSight test that covers 64 medications commonly prescribed for depression, anxiety, attention deficit hyperactivity disorder, and other psychiatric conditions. GeneSight helps physicians understand how genetic alterations impact patient response to antidepressants and other drugs. In the pharmacogenomics category, the GeneSight test recorded revenue of $33.0 million in the third quarter of 2022, an increase of 37% year-over-year.

Surpassed 2 million total GeneSight tests processed to date.
The Centers for Medicare & Medicaid Services (CMS) preliminarily agreed to crosswalk GeneSight to Proprietary Laboratory Analyses (PLA) code 0175U, which is expected to be final by January 1, 2023.
Achieved highest quarterly GeneSight volumes in the third quarter of 2022.
Myriad Genetics Expands Consumer Access to Genetic Testing with Acquisition of Gateway Genomics and Its Leading SneakPeek Early Gender DNA Test
Myriad Genetics reported that it has acquired Gateway Genomics, LLC, a personal genomics company and developer of consumer genetic tests including the No. 1 selling SneakPeek Early Gender DNA Test. SneakPeek reveals a baby’s gender at six weeks into pregnancy — the only at-home test to do so with 99% accuracy and the earliest method available.

Approximately 3.6 million babies are born in the United States every year2, and SneakPeek attracts over 4 million annual visitors to its website, capturing a large percentage of pregnant families who could benefit from a range of prenatal care options. Through expanded online engagement, consumers who use SneakPeek also can learn the benefits of other forms of genetic testing offered by Myriad Genetics.

Over the last three years, SneakPeek has grown at a compound annual rate exceeding 20%. SneakPeek is offered directly to consumers at sneakpeektest.com, online channel partners, and more than 1,850 clinicians in the U.S. and select international markets. The test has strong brand loyalty and a 76-point Net Promoter Score. It is the best-selling prenatal DNA test on Amazon and the top searched gender test on Google with more than 9,000 reviews and a 4.5 star average rating.

Myriad Genetics acquired Gateway Genomics for an upfront cash purchase price of $67.5 million, subject to customary working capital adjustments and an escrow of $7.5 million. Gateway has the opportunity to earn up to an additional $32.5 million of cash payments in 2023 and 2024 if certain revenue, volume synergy and EBITDA targets are achieved. Projected revenues for Gateway in calendar year 2022 are approximately $20 million. The core Gateway business is expected to grow over 20% compounded over the next three to five years, excluding synergies, and is expected to be neutral to Myriad’s earnings and operating cash flows in 2023. Gateway is also expected to be accretive to Myriad’s growth rate, earnings and operating cash flows in 2024.

Myriad Genetics’ fiscal year 2022 non-GAAP guidance begins with the comparable GAAP financial measure and excludes the estimated impact of stock-based compensation expense of approximately $40.0 million, non-cash amortization associated with acquisitions of approximately $40.0 million and special items such as costs related to transformation initiatives of approximately $15.0 million. These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release.

The updated 2022 financial guidance reflects third quarter business updates as well as the impact of currency translation and change of estimates.

Conference Call and Webcast
A conference call will be held today, Tuesday, November 1, 2022, at 4:30 p.m. EDT to discuss Myriad Genetics’ financial results and business developments for the third quarter 2022. The dial-in number for domestic callers is 1-800-954-0689. International callers may dial 1-212-231-2937. All callers will be asked to reference reservation number 22021060. An archived replay of the call will be available for seven days by dialing 1-800-954-0689 and entering the reservation number above. The conference call and slide presentation will be available through a live webcast at www.myriad.com.