On April 28, 2022 Gilead Sciences, Inc. (Nasdaq: GILD) reported its results of operations for the first quarter of 2022 (Press release, Gilead Sciences, APR 28, 2022, View Source [SID1234613140]).

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"Gilead’s performance in the first quarter reflects the strength and diversity of our business with both our HIV and oncology therapies contributing to year-over-year growth," said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. "Biktarvy delivered strong 18% year-over-year revenue growth, and oncology sales increased by 60% year-over-year, driven by increased demand for Trodelvy and our cell therapy products. As we continue to advance our broad oncology portfolio, we look forward to providing more new options for people living with cancer."

First Quarter 2022 Financial Results

First quarter 2022 revenue increased 3% to $6.6 billion compared to the same period in 2021, primarily due to increased demand for Biktarvy (bictegravir 50mg/emtricitabine 200mg ("FTC")/tenofovir alafenamide 25mg ("TAF")) and Veklury (remdesivir 100mg for injection), partially offset by the impact of the loss of exclusivity for Truvada (FTC/tenofovir disoproxil fumarate 300mg ("TDF")) in the United States and unfavorable pricing dynamics for hepatitis C virus ("HCV") products.
Diluted Earnings Per Share ("EPS") decreased to $0.02 for the first quarter of 2022 compared to $1.37 for the same period in 2021. The decrease was primarily the result of a $2.7 billion in-process research and development ("IPR&D") impairment related to assets acquired by Gilead from Immunomedics in 2020.
Non-GAAP diluted EPS increased 4% to $2.12 for the first quarter of 2022 compared to $2.04(1) for the same period in 2021, primarily reflecting higher product sales.
As of March 31, 2022, Gilead had $6.8 billion of cash, cash equivalents and marketable debt securities compared to $7.8 billion as of December 31, 2021.
During the first quarter of 2022, Gilead generated $1.8 billion in operating cash flow, which includes the cash outflow related to the $1.25 billion legal settlement.
During the first quarter of 2022, Gilead made a $725 million collaboration opt-in payment to Arcus Biosciences, Inc., repaid $500 million of debt, paid dividends of $945 million and repurchased $352 million of common stock.
________________________________

(1)

Non-GAAP diluted EPS has been recast due to an update to our non-GAAP policy in the first quarter 2022, resulting in a $0.04 reduction of previously-reported non-GAAP diluted EPS for the first quarter of 2021. Refer to Non-GAAP Financial Information section below for further information.

Product Sales Performance

First quarter 2022 product sales increased 3% to $6.5 billion compared to the same period in 2021. Total product sales, excluding Veklury, increased 2% to $5.0 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy, our cell therapy products and Trodelvy (sacituzumab govitecan-hziy), partially offset by unfavorable pricing dynamics in HCV.

HIV product sales increased 2% to $3.7 billion in the first quarter of 2022 compared to the same period in 2021, primarily reflecting higher demand for Biktarvy and favorable pricing dynamics partially offset, as expected, by the loss of exclusivity of Truvada in the United States.

Biktarvy sales increased 18% year-over-year in the first quarter of 2022, primarily due to higher demand.
Descovy (FTC 200mg/TAF 25mg) sales increased 4% year-over-year in the first quarter of 2022, primarily driven by increased demand and favorable pricing, partially offset by unfavorable channel inventory dynamics.
Truvada sales decreased 72% year-over-year in the first quarter 2022, as expected, primarily due to the loss of exclusivity in the United States in October 2020.
HCV product sales decreased 22% to $399 million in the first quarter of 2022 compared to the same period in 2021, primarily driven by lower net price and fewer patient starts.

Hepatitis B virus ("HBV") and hepatitis delta virus ("HDV") product sales increased 7% to $235 million in the first quarter of 2022 compared to the same period in 2021. Vemlidy (TAF 25mg) sales increased 10% in the first quarter of 2022 compared to the same period in 2021, primarily driven by higher demand in geographies outside the United States. Hepcludex (bulevirtide) contributed $11 million in the first quarter of 2022, as launch activities continued across Europe.

Cell therapy product sales increased 43% to $274 million in the first quarter of 2022 compared to the same period in 2021.

Yescarta(axicabtagene ciloleucel) sales increased to $211 million in the first quarter of 2022, primarily driven by demand for relapsed or refractory large B-cell lymphoma ("LBCL") in the United States and Europe and follicular lymphoma in the United States.
Tecartus(brexucabtagene autoleucel) sales were $63 million in the first quarter of 2022, primarily driven by growing adoption in Europe for mantle cell lymphoma and for adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia in the United States.
Trodelvy sales increased 103% to $146 million in the first quarter of 2022 compared to the same period in 2021, primarily reflecting uptake in the second line setting for the treatment of metastatic triple-negative breast cancer in the United States and Europe as well as metastatic urothelial cancer in the United States.

Veklury sales increased by 5% to $1.5 billionfor the first quarter of 2022 compared to the same period in 2021. Veklury revenue generally reflects COVID-19 related rates of infections, hospitalizations and vaccinations, as well as the availability, uptake and effectiveness of alternative treatments for COVID-19.

First Quarter 2022 Product Gross Margin, Operating Expenses and Effective Tax Rate

Product gross margin was 78.2% for the first quarter of 2022 compared to 78.5% for the same period in 2021, primarily driven by a change in product mix and restructuring costs for the closing of a New Jersey manufacturing site in 2022, partially offset by lower inventory reserve adjustments. Non-GAAP product gross margin was 87.4% for the first quarter of 2022 compared to 86.5% in the same period in 2021, primarily driven by lower inventory reserve adjustments.
Research and development ("R&D") expenses for the first quarter of 2022 were $1.2 billion compared to $1.1 billion in the same period in 2021. Non-GAAP R&D expenses for the first quarter of 2022 were $1.2 billion compared to $1.0 billion in the same period in 2021. The increase in R&D and non-GAAP R&D expenses primarily reflect increased clinical activities for Trodelvy.
Selling, general and administrative ("SG&A") expenses were $1.1 billion for the first quarter of 2022 and for the same period in 2021. Non-GAAP SG&A expenses for the first quarter of 2022 were $1.1 billion compared to $1.0 billion in the same period in 2021.
The effective tax rate ("ETR") for the first quarter of 2022 was 107.9% compared to 23.9% for the same period in 2021, primarily driven by the $2.7 billion IPR&D impairment. Non-GAAP ETR for both the first quarter 2022 and the same period last year was 18.4%.
Guidance and Outlook

For the full-year, we have updated our EPS guidance to primarily reflect the $2.7 billion IPR&D impairment. We now expect EPS between $3.00 and $3.50, compared to $4.70 and $5.20 previously. There is no change to other guidance shared on February 1, 2022:

Total product sales between $23.8 billion and $24.3 billion.
Total product sales, excluding Veklury, between $21.8 billion and $22.3 billion.
Total Veklury sales of approximately $2.0 billion.
Non-GAAP earnings per share between $6.20 and $6.70.
This financial guidance excludes the impact of any expenses related to potential acquisitions or business development transactions that have not been executed, fair value adjustments of equity securities and discrete tax charges or benefits associated with changes in tax related laws and guidelines as Gilead is unable to project such amounts. A reconciliation between GAAP and non-GAAP financial information for the 2022 guidance is provided in the accompanying tables. Also see the Forward-Looking Statements described below. The financial guidance is subject to a number of risks and uncertainties, including uncertainty around the duration and magnitude of the COVID-19 pandemic. While the pandemic can be expected to continue to impact Gilead’s business and broader market dynamics, the rate and degree of these impacts as well as the corresponding recovery from the pandemic may vary across Gilead’s business.

Key Updates Since Our Last Quarterly Release

Viral Diseases

Received a Complete Response Letter from FDA related to vial compatibility issues for the New Drug Application of investigational lenacapavir for the treatment of HIV-1 infection in heavily treatment-experienced ("HTE") people with multi-drug resistant HIV-1 infection.
Presented one-year data from studies of investigational lenacapavir at the 29th Conference on Retroviruses and Opportunistic Infections ("CROI") with results from each of the Phase 2/3 CAPELLA trial in HTE people living with multi-drug resistant HIV and Phase 2 CALIBRATE trial in treatment-naive people living with HIV demonstrating high rates of virologic suppression at one-year.
Presented five-year results from two Phase 3 studies of Biktarvy at CROI which reinforced Biktarvy’s sustained efficacy and durable viral suppression with zero cases of treatment failure due to emergent resistance observed.
Announced data demonstrating in vitro activity of Veklury against ten SARS-CoV-2 variants, including Omicron. Additionally, interim results from the Phase 2/3 CARAVAN trial of Veklury in pediatric patients aged 28 days to less than 18 years hospitalized with COVID-19 were presented at CROI.
Oncology

Announced results from the Phase 3 TROPiCS-02 study of Trodelvy in patients with HR+/HER2- metastatic breast cancer who had been heavily pre-treated. The study met its primary endpoint, demonstrating a statistically significant improvement in progression-free survival compared to physician’s choice of chemotherapy. Additionally, at the first interim analysis, a trend in improvement for overall survival ("OS") was observed, a key secondary endpoint. No new safety concerns were noted. The company will discuss the study data with regulators and the study will continue to follow patients for OS and detailed results will be presented at an upcoming medical conference. Trodelvy has not been approved by any regulatory agency for the treatment of HR+/HER2- metastatic breast cancer, and its safety and efficacy have not been established for this indication.
Received FDA approval for Yescarta for the treatment of adult patients with LBCL that is refractory to first-line chemoimmunotherapy or that relapse within 12 months of first-line chemoimmunotherapy. Additionally, the National Comprehensive Cancer Network updated its Clinical Practice Guidelines for B-cell Lymphomas to include Yescarta as a Category 1 recommendation for "Relapsed disease <12 mo or Primary refractory disease" under diffuse large B-cell lymphoma.
Announced that FDA has lifted the partial clinical hold on studies evaluating investigational magrolimab in combination with azacitidine for the treatment of myelodyspastic syndrome and acute myeloid leukemia.
Corporate

Announced that the company’s Board of Directors declared a quarterly dividend of $0.73 per share of common stock for the second quarter of 2022. The dividend is payable on June 29, 2022, to stockholders of record at the close of business on June 15, 2022. Future dividends will be subject to Board approval.
Announced $24 million in grants to support 116 organizations in 41 countries as part of Gilead’s Zeroing In: Ending the HIV Epidemic program. Grantee organizations will focus on advancing comprehensive HIV innovation programs, digital health innovations, and/or community outreach and education.
Received FDA approval for commercial production at Kite’s new CAR T-cell therapy manufacturing facility in Frederick, Maryland.
Purchased approximately 27 acres of additional land in Oceanside, California to potentially support further manufacturing operations.
Certain amounts and percentages in this press release may not sum or recalculate due to rounding.

Non-GAAP Financial Information

The information presented in this document has been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), unless otherwise noted as non-GAAP. Management believes non-GAAP information is useful for investors, when considered in conjunction with Gilead’s GAAP financial information, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead’s operating results as reported under GAAP. Non-GAAP financial information generally excludes acquisition-related expenses including amortization of acquired intangible assets and inventory step-up charges, and other items that are considered unusual or not representative of underlying trends of Gilead’s business, fair value adjustments of equity securities and discrete and related tax charges or benefits associated with changes in tax related laws and guidelines. Although Gilead consistently excludes the amortization of acquired intangible assets from the non-GAAP financial information, management believes that it is important for investors to understand that such intangible assets were recorded as part of acquisitions and contribute to ongoing revenue generation.Non-GAAP measures may be defined and calculated differently by other companies in the same industry. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the accompanying tables.

Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission ("SEC"), Gilead no longer excludes acquired IPR&D expenses from its non-GAAP financial measures. Acquired IPR&D expenses reflect the initial costs of externally-developed IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and other payments related to various collaborations and the initial costs of rights to IPR&D projects. Prior period non-GAAP financial measures are revised to conform to the new presentation.

Conference Call

At 1:30 p.m. Pacific Time today, Gilead will host a conference call to discuss Gilead’s results. A live webcast will be available on View Source and will be archived on www.gilead.com for one year.

On April 28, 2022 Emergent BioSolutions Inc. (NYSE: EBS) reported financial results for the first quarter ended March 31, 2022 (Press release, Emergent BioSolutions, APR 28, 2022, View Source [SID1234613139]).

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"Emergent remains focused on our strategic plan to grow within public health threat markets where we can positively impact patients and customers," said Robert G. Kramer, president and CEO of Emergent BioSolutions. "Our diversified business model, disciplined operating approach, and financial strength enable us to continue pursuing our vision of protecting and enhancing one billion lives by 2030."

FINANCIAL HIGHLIGHTS (1)

SELECT Q1 2022 AND OTHER RECENT BUSINESS UPDATES

Completed the rolling submission to the U.S. Food and Drug Administration (FDA) of the Biologics License Application (BLA) for AV7909 (Anthrax Vaccine Adsorbed, Adjuvanted), the Company’s new anthrax vaccine candidate.
Announced updates to the Company’s corporate governance:
Appointed Zsolt Harsanyi, Ph.D., as Chairman of the Board of Directors; and
Appointed Keith Katkin to the Board of Directors.
Strengthened the Company’s senior leadership with three key hires:
Coleen Glessner joined as EVP, Global Quality and Ethics and Compliance, reporting to the CEO;
Bill Hartzel joined as SVP and Head of the CDMO Services business, reporting to the COO; and
Joseph Philipose joined as SVP and Chief Ethics and Compliance Officer, reporting to the EVP, Global Quality and Ethics and Compliance.
Initiated a Phase 1 study evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of stabilized isoamyl nitrite (SIAN), a treatment being developed for known or suspected acute cyanide poisoning, with funding from the Biomedical Advanced Research and Development Authority (BARDA) and in collaboration with Southwest Research Institute.
Continued to repurchase the Company’s common stock under an existing authorization by the Board of Directors to management to repurchase up to $250 million through November 11, 2022; during the quarter ended March 31, 2022, the Company purchased an additional 1.1 million shares for $52.2 million, resulting in an aggregate of approximately 3.8 million shares for $164.7 million since initiating repurchases in Q4 2021.
Q1 2022 FINANCIAL PERFORMANCE (1)

For Q1 2022, revenues from Anthrax vaccines increased $48.6 million as compared to Q1 2021. The increase is largely driven by timing of deliveries to the U.S. government (USG), specifically the Strategic National Stockpile (SNS). The Company received an AV7909 (Anthrax Vaccine Adsorbed, Adjuvanted) contract modification in September 2021 valued at approximately $399 million to deliver additional AV7909 doses through March 2023.

Nasal naloxone products
For Q1 2022, revenues from nasal naloxone products increased $18.9 million as compared to Q1 2021. The increase is driven by strong growth in sales of NARCAN (naloxone HCl) Nasal Spray to U.S. public interest and Canadian customers, as well as solid contributions from sales of the authorized generic product licensed to Sandoz which launched in December 2021. These increases are offset by a decrease in sales of NARCAN Nasal Spray to the U.S. commercial retail market.

ACAM2000
For Q1 2022, revenues from ACAM2000 (Smallpox (Vaccinia) Vaccine, Live) increased $14.4 million as compared to Q1 2021. The increase is driven by international sales.

Other (4)
For Q1 2022, revenues from other product sales increased $17.3 million as compared to Q1 2021. The increase is largely a result of sales of VIGIV [Vaccinia Immune Globulin Intravenous (Human)] driven by timing of deliveries to the USG and of sales of Anthrasil (Anthrax Immune Globulin Intravenous (Human)) driven by timing of deliveries to international customers.

Contract Development and Manufacturing (CDMO)
CDMO Services
For Q1 2022, revenue from contract development and manufacturing services decreased $15.8 million as compared to Q1 2021. This decrease is largely due to the impact of the Company’s decision to initiate maintenance and other modification-related work at the Bayview facility which reduced manufacturing activities during the quarter. The decline in revenues at Bayview was offset by an increase in manufacturing activities at the Company’s Camden and Winnipeg sites in support of drug substance and drug product manufacturing services related to products and product candidates of the Company’s commercial customers.

CDMO Leases
For Q1 2022, revenue from contract development and manufacturing leases decreased $107.2 million as compared to Q1 2021. The decrease was primarily due to the completion of the Company’s public-private partnership with BARDA in November 2021.

Contracts and Grants
For Q1 2022, revenues from contracts and grants decreased $11.7 million as compared to Q1 2021. The decrease is primarily due to lower revenue from BARDA as a result of the termination of the Center for Innovation and Advanced Development and Manufacturing (CIADM) agreement in November 2021 as well as decreases in development activities associated with various other externally funded R&D projects.

Operating Expenses

For Q1 2022, cost of product sales increased $27.7 million as compared to Q1 2021. The increase is primarily due to the higher volume of product sales.

Cost of CDMO
For Q1 2022, cost of CDMO increased $28.9 million as compared to Q1 2021. The increase is driven by professional services in support of quality functions at the Bayview site and at the Camden and Winnipeg sites due to an increase in manufacturing activities in Q1 2022 compared to Q1 2021.

Research and Development
For Q1 2022, research and development expenses decreased $6.1 million as compared to Q1 2021. The decrease is primarily due to a decline in costs associated with the development of the Company’s COVID-19 therapeutic product candidates offset by an increase in costs associated with the Phase 3 study of the Company’s chikungunya virus (CHIKV) virus-like particle (VLP) vaccine candidate.

Selling, General and Administrative
For Q1 2022, selling, general and administrative expenses increased $3.9 million due to an increase in professional services and marketing costs in support of the expansion of the Company’s business operations and defending and supporting the Company’s corporate reputation.

Additional Financial Information

Segment Information
During Q1 2022, the Company began assessing its operating performance by focusing on two reportable segments: 1) a products segment (Product) consisting of the Government/Medical Countermeasure (MCM) and Commercial products business lines; and 2) a services segment (Services) consisting of the CDMO services business line. The Company evaluates the performance of these reportable segments based on revenue and adjusted gross margin. Segment revenue includes external customer sales but does not include inter-segment services. The Company does not allocate Contracts and grants, R&D, SG&A, amortization of intangible assets, interest and other income (expense) or taxes to its evaluation of the performance of these segments.

** Gross margin is calculated as Revenue less cost of sales. Gross margin % is calculated as gross margin divided by Revenue.
*** Adjusted gross margin is calculated as Revenue less Adjusted cost of sales. Adjusted gross margin % is calculated as Adjusted gross margin divided by Revenue.
For Q1 2022, Product margin increased $71.5 million as compared to Q1 2021. Product adjusted gross margin increased $70.9 million as compared to Q1 2021. The increase in Product gross margin and Product adjusted gross margin is primarily due to increased volumes.

For Q1 2022, Services gross margin and adjusted gross margin decreased $151.9 million as compared to Q1 2021. The decrease in Services gross and adjusted gross margin is primarily due to the decline in revenue at the Bayview facility as a result of the completion of the Company’s arrangement with BARDA, the pause in manufacturing activities for improvement and modifications, as well as an increase in professional services costs.

For Q1 2022, the Company is temporarily suspending disclosing CDMO Backlog as of March 31, 2022, pending further clarity on Johnson & Johnson (J&J) COVID-19 vaccine requirements, influenced by the fact this metric includes value from the J&J contract. The Company will resume providing this metric at the appropriate time.

For Q1 2022, capital expenditures decreased largely due to less spending associated with the expansion project at the Company’s Rockville facility which is nearing completion.

2022 FINANCIAL FORECAST

The Company provides the following update to its full year 2022 forecast.

Reaffirmed Guidance

The following revenue guidance is reaffirmed for full year 2022 ($ in millions):

• Anthrax Vaccines $280-$300
• ACAM2000 $190-$210
• Nasal Naloxone Products $240-$310
• Other Products + Contracts and Grants $200-$260
Temporarily Suspended Guidance

Following the recent decision by Johnson & Johnson (J&J) to suspend projecting COVID-19 vaccine sales for 2022 due to global supply surplus and vaccine hesitancy in the developing world, the Company’s 2022 revenues related to its commercial supply arrangement with J&J are uncertain. Accordingly, the following metrics are temporarily suspended for full year 2022 pending further clarity on J&J COVID-19 vaccine requirements:

CDMO Revenues
Total Revenues
Adjusted Net Income
Adjusted EBITDA
Gross Margin
At the appropriate time, the Company will communicate additional information and update the overall forecast.

Assumptions

The Company’s 2022 financial forecast also takes into consideration the following assumptions.

2022 Product and Contract and Grant Revenues

Anthrax vaccines revenues are expected to continue at similar levels to 2021 under the terms of the Company’s existing contract with BARDA.
ACAM2000 vaccine deliveries are expected to continue under the terms of the Company’s existing contract with the U.S. Department of Health and Human Services (HHS) at unit volume levels consistent with 2021 deliveries.
Nasal naloxone products revenues reflect the formation of a generic market and comprise revenues from a combination of NARCAN Nasal Spray and the authorized generic of NARCAN Nasal Spray, a product licensed to Sandoz and launched in late 2021 and one in which the Company retains a financial interest.
Other Products + Contracts and Grants revenues: 1) other products revenues reflect continued procurement of other products not highlighted on a standalone basis from various government customers under existing multi- year contracts; 2) contracts and grants revenues reflect continued funding of select development programs from various government and other non-dilutive sources.
Other

Pipeline progress is expected across the R&D portfolio with the ongoing advancement of the CHIKV VLP Phase 3 clinical trial, the completion of the BLA filing for AV7909, and anticipated advancements of a number of early- stage programs.
Capital expenditures, net of reimbursement, are expected to be approximately 10% of total revenues at the midpoint, reflecting ongoing investments in capacity and capability expansions related to the CDMO business and the Company’s R&D programs, and aligned with the average over the previous five-year period.
FOOTNOTES

(1) All financial information incorporated within this release is unaudited.
(2) See "Reconciliation of Net Income to Adjusted Net Income," "Reconciliation of Net Income to Adjusted EBITDA," and "Adjusted Revenues" for a definition of terms and the reconciliation tables.
(3) Product sales, net are reported net of variable consideration including returns, rebates, wholesaler fees and prompt pay discounts in accordance with U.S. generally accepted accounting principles.
(4) Other can include a combination of sales of any of the following products: BAT, VIGIV, Anthrasil, raxibacumab, RSDL, Trobigard, Vivotif, and Vaxchora.
(5) CDMO Customer is defined as a client (commercial, government, NGO) for whom the Company has performed CDMO services where there is evidence of meeting all of the following criteria: i) completion of any billable project milestones in the preceding 24-month period, indicating ongoing work; ii) secured project work planned in the future, which has not yet been invoiced, capturing future work not yet indicated in the invoice record; and, iii) neither the Company nor the client having yet to formally terminate the last remaining project, thereby removing any client for whom work has fully concluded.
(6) CDMO New Business Secured is defined as initial value of contracts secured as well as incremental value of existing contracts modified within the indicated period.

CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST INFORMATION

Company management will host a conference call at 5:00 pm (Eastern Time) today, April 28, 2022, to discuss these financial results. The conference call and presentation supplement can be accessed from the Company’s website or through the following:

A replay of the call can be accessed from the Company website.

On April 28, 2022 CTI BioPharma Corp. (CTI BioPharma) (NASDAQ: CTIC) reported that management plans to report its first quarter 2022 financial results on Thursday, May 12, 2022, after the close of the U.S. financial markets (Press release, CTI BioPharma, APR 28, 2022, View Source [SID1234613138]). Following the announcement, members of the management team will host a conference call and webcast to discuss the results and provide a general corporate update at 4:30 p.m. ET (1:30 p.m. PT).

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To access the live call by phone please dial (877) 735-2860 (domestic) or (602) 563-8791 (international); the conference ID is 7291915. A live audio webcast of the event may also be accessed through the "Investors" section of CTI’s website at www.ctibiopharma.com. A replay of the webcast will be available for 30 days following the event.

On April 28, 2022 Seagen Inc. (Nasdaq:SGEN) reported financial results today for the first quarter ended March 31, 2022 (Press release, Seagen, APR 28, 2022, View Source [SID1234613137]). The Company also highlighted PADCEV (enfortumab vedotin-ejfv), TUKYSA (tucatinib), ADCETRIS (brentuximab vedotin) and TIVDAK (tisotumab vedotin-tftv) commercial and development accomplishments, as well as progress across its deep and diverse oncology pipeline .

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"Seagen delivered strong results for the first quarter of 2022 with net product sales increasing 27 percent over the first quarter of 2021, reflecting growth across our portfolio of four approved products," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seagen. "This month the European Commission approved PADCEV for previously treated metastatic urothelial cancer, further extending the reach of our innovative medicines for cancer patients with unmet medical needs. We look forward to presenting data from more than two dozen abstracts at the upcoming ASCO (Free ASCO Whitepaper) Annual Meeting, including two oral presentations demonstrating the survival advantage of ADCETRIS regimens in newly diagnosed patients with advanced Hodgkin lymphoma. Other upcoming milestones in 2022 include reporting results from the TUKYSA pivotal MOUNTAINEER clinical trial in metastatic HER2-positive colorectal cancer and Cohort K of the PADCEV EV-103 trial in newly diagnosed metastatic urothelial cancer. Seagen continues to be well-positioned with significant resources and an expanded geographic footprint to continue executing upon our strategy."

APPROVED PRODUCTS HIGHLIGHTS

PADCEV

Received European Commission (EC) Approval for PADCEV in Previously Treated Metastatic Urothelial Cancer: In April 2022, Seagen and Astellas announced the EC approval of PADCEV as monotherapy for the treatment of adult patients with locally advanced or metastatic urothelial cancer who have previously received a platinum-containing chemotherapy and a PD-1/L1 inhibitor. The approval is applicable in the European Union Member States, as well as Iceland, Norway and Liechtenstein. Additionally, in April 2022, PADCEV was approved in Great Britain for the same indication.
Reported Initial Results in Patients with Muscle-Invasive Bladder Cancer (MIBC) at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium (ASCO GU): In February 2022, initial results were presented from Cohort H of the EV-103 trial evaluating PADCEV as neoadjuvant monotherapy in patients with MIBC who are ineligible for cisplatin-based chemotherapy. The data showed an encouraging objective response rate and tolerability profile. PADCEV in combination with KEYTRUDA(pembrolizumab) is being studied in two phase 3 clinical trials for MIBC.
Presented Preclinical Data in Non-Muscle Invasive Bladder Cancer (NMIBC) at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting: In April 2022, the Company presented data showing that intravesical PADCEV administration demonstrated antitumor activity and limited systemic exposure in preclinical models of NMIBC. The data supports further investigation in an ongoing phase 1 trial.
Expect to Report Top-Line Results of EV-103 Cohort K for First-Line Metastatic Urothelial Cancer (mUC) in 2H22: Seagen and Astellas expect to report top-line results in the second half of 2022 from Cohort K of the EV-103 trial evaluating PADCEV in combination with KEYTRUDA and as a single agent for first-line treatment of patients with mUC who are unable to receive cisplatin-based chemotherapy. The results along with other data from the EV-103 trial could potentially support registration under the FDA’s accelerated approval pathway.
TUKYSA

Treated First Patient in the Phase 3 HER2CLIMB-05 Trial: In April 2022, the first patient was treated in a phase 3 trial evaluating TUKYSA or placebo in combination with frontline standard of care trastuzumab and pertuzumab as maintenance therapy for patients with metastatic HER2-positive breast cancer.
Initiated Phase 3 MOUNTAINEER-03 Trial in First-Line Metastatic HER2-Positive Colorectal Cancer: In February 2022, the Company initiated a randomized phase 3 trial, MOUNTAINEER-03, evaluating TUKYSA in combination with trastuzumab and standard chemotherapy compared to chemotherapy alone in first-line HER2-positive metastatic colorectal cancer.
Expect to Report Top-Line Results of MOUNTAINEER Trial for Metastatic HER2-Positive Colorectal Cancer in 2H22: The Company expects to report top-line results in the second half of 2022 from the phase 2 MOUNTAINEER trial of TUKYSA in combination with trastuzumab and as a single agent in patients with HER2-positive metastatic colorectal cancer following previous treatment with first- and second-line standard-of-care therapies. The results could potentially support registration under the FDA’s accelerated approval pathway.
ADCETRIS

Reported ADCETRIS Combination Significantly Improves Overall Survival (OS) in Newly Diagnosed Patients with Advanced Hodgkin Lymphoma: In February 2022, the Company announced that the phase 3 ECHELON-1 clinical trial demonstrated a statistically significant improvement in OS (p=0.009) in patients with Stage 3/4 Hodgkin lymphoma following treatment with ADCETRIS in combination with chemotherapy. Full data will be featured in an oral presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June. In addition, the data will be submitted to U.S. FDA in a supplemental Biologics License Application (sBLA) during 2022.
Data from the Children’s Oncology Group (COG) Phase 3 Pediatric Study to be Highlighted in Oral Presentation at the ASCO (Free ASCO Whitepaper) Annual Meeting: The COG, a National Cancer Institute (part of the National Institutes of Health)-supported clinical trial group, will present data from the AHOD1331 trial, which compared an ADCETRIS-containing chemotherapy regimen to a chemotherapy regimen that included bleomycin in children with newly diagnosed high-risk Hodgkin lymphoma.The study met its primary endpoint of superior 3-year event-free survival. Further details will be presented in an oral session at ASCO (Free ASCO Whitepaper). The Company plans to submit the data to the FDA in a sBLA during 2022.
TIVDAK

Reported Initial Results from Solid Tumor Basket Trial: In February 2022, initial data from the ongoing innovaTV 207 phase 2 trial of TIVDAK in solid tumors were presented at the Multidisciplinary Head and Neck Cancers Symposium. The results demonstrated a manageable safety profile and promising preliminary antitumor activity in patients with squamous cell carcinoma of the head and neck.
PIPELINE PROGRAMS

Initiated Pivotal Trial of Disitamab Vedotin: In April 2022, the Company began enrolling patients into the pivotal phase 2 trial of disitamab vedotin in patients with HER2-expressing metastatic urothelial cancer. The trial is designed to support potential registration under the FDA’s accelerated approval pathway.
Presented Preclinical Data from Two Novel Antibody-Drug Conjugates (ADCs) at the AACR (Free AACR Whitepaper) Annual Meeting: In April 2022, preclinical data were presented for SGN-ALPV and SGN-B7H4V, two novel ADCs that utilize Seagen’s proprietary vedotin drug linker technology, at the AACR (Free AACR Whitepaper) Annual Meeting. Data described SGN-ALPV antibody specificity, antitumor activity, and safety profile, which provided the basis for an ongoing phase 1 trial. SGN-B7H4V data demonstrated robust antitumor activity as monotherapy and in combination with an anti-PD-1 agent, which support the ongoing phase 1 monotherapy trial and potential future combinations with immunotherapies.
For additional information on Seagen’s pipeline, visit www.seagen.com/science/pipeline.

CORPORATE HIGHLIGHTS

Announced Jury Award in a Patent Infringement Case Against Daiichi Sankyo Co. Ltd. (Daiichi Sankyo): In April 2022, the Company announced that a jury found that Daiichi Sankyo willfully infringed Seagen’s U.S. Patent No. 10,808,039 by selling in the U.S. its Enhertu product (trastuzumab deruxtecan; DS-8201). Seagen was awarded damages of approximately $42 million for past infringement of the patent. In addition, Seagen will request additional royalty payments for future sales of Enhertu in the United States through the life of the patent. In a related matter, on April 7, 2022, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office granted a request on rehearing and instituted two post grant review (PGR) proceedings brought against certain claims of U.S. Patent No. 10,808,039. Seagen intends to vigorously defend the patent in the PGRs. Separately, Seagen is engaged in an ongoing arbitration it brought against Daiichi Sankyo over ownership of certain technology used by Daiichi Sankyo in Enhertu and several drug candidates. The Company expects a decision in the arbitration case in mid-2022.
Entered into Collaboration with Sanofi to Develop and Commercialize Multiple Novel ADCs: In March 2022, the Company announced an exclusive collaboration that will utilize Sanofi’s proprietary monoclonal antibody technology and Seagen’s proprietary ADC technology for up to three cancer targets.Under the terms of the collaboration, Seagen and Sanofi will co-fund global development activities and share equally in any future profits. In addition, Sanofi will make an undisclosed payment to Seagen for each of the three targets as they are selected. The first target under the collaboration has been designated and an undisclosed payment was received in the first quarter of 2022.
The Committee for Medicinal Products for Human Use (CHMP) Recommends EU approval of Roche’s Polivy (polatuzumab vedotin) Combination for Previously Untreated Diffuse Large B-cell Lymphoma (DLBCL): In March 2022, the CHMP recommended approval of Polivy in combination with chemotherapy for previously untreated DLBCL. Polivy is an ADC that uses Seagen technology, which was developed and is commercialized by Roche and Genentech, a member of the Roche Group. Seagen receives royalties on worldwide net sales of Polivy.
FIRST QUARTER 2022 FINANCIAL RESULTS

Revenues: Total revenues for the first quarter and three months ended March 31, 2022 were $426.5 million, compared to $332.0 million for the same period in 2021. Revenues in the 2022 period reflected higher net product sales across the Company’s commercial portfolio.

Revenues were composed of the following components:

Note: Sum of product sales may not equal total net product sales due to rounding.

Net Product Sales: The increase in net product sales for the first quarter of 2022 compared to the same period in 2021 was driven by growth from each of the Company’s marketed products. PADCEV growth was driven by continued penetration in its approved indications and, to a lesser extent, sales of drug product for use in clinical trials being conducted by another company. TUKYSA growth was driven primarily by increased sales in European markets following its approval in February 2021 and continued penetration in its current indication in the U.S. ADCETRIS growth was partially related to greater use in frontline advanced Hodgkin lymphoma. TIVDAK commercialization began in the U.S. following FDA approval in September 2021.
Royalty Revenues: Royalty revenues were primarily driven by sales of ADCETRIS outside the U.S. and Canada by Takeda and, to a lesser extent, royalties from sales of Polivy (polatuzumab vedotin) by Roche and Blenrep (belantamab mafodotin) by GlaxoSmithKline, which are ADCs that use Seagen technology.
Collaboration and License Agreement Revenues: The increase in collaboration and license agreement revenues in the first quarter of 2022 compared to the same period in 2021 was primarily the result of an upfront license payment relating to the Company’s recent ADC collaboration with Sanofi, profit share contribution from Astellas’ sales primarily in Japan, as well as higher amounts of drug product supplied to a collaborator.
Cost of Sales: Cost of sales for the first quarter of 2022 were $87.6 million, compared to $64.1 million for the same period in 2021. The increase was primarily related to the gross profit share owed to collaboration partners, which was $52.8 million in the first quarter of 2022, compared to $32.5 million for the same period in 2021. Cost of sales also reflects amortization of TUKYSA acquired in-process technology costs, third-party royalties owed for PADCEV and TUKYSA net product sales, and cost of products sold.

Research and Development (R&D) Expenses: R&D expenses for the first quarter of 2022 were $297.7 million, compared to $230.4 million for the same period in 2021. The increase in the period ended March 31, 2022 primarily reflected continued investment in clinical development of the Company’s approved drugs and to advance its novel programs and technologies.

Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the first quarter of 2022 were $174.2 million, compared to $159.8 million for the same period in 2021. The increase in 2022 primarily reflected investments to support ongoing European TUKYSA launches and the U.S. commercial launch of TIVDAK.

Non-cash, share-based compensation expense for the first quarter of 2022 was $43.9 million, compared to $38.2 million for the same period in 2021.

Net Loss: Net loss for the first quarter of 2022 was $136.5 million, or $0.74 per diluted share, compared to net loss in the first quarter of 2021 of $121.4 million, or $0.67 per diluted share.

Cash and Investments: As of March 31, 2022, Seagen had $2.0 billion in cash and investments.

2022 FINANCIAL OUTLOOK

Seagen anticipates 2022 revenues, operating expenses and other costs to be in the ranges shown in the table below, unchanged from the Company’s previous financial guidance provided on February 9, 2022.

1. TIVDAK sales guidance not provided and is excluded from product sales and total revenues guidance.

2. Non-cash costs include share-based compensation, depreciation and amortization of intangible assets.

Conference Call Details

Seagen management will host a conference call and webcast with supporting slides to discuss its first quarter 2022 financial results and provide an update on business activities. The event will be held today at 1:30 p.m. Pacific Time (PT); 4:30 p.m. Eastern Time (ET). The live event will be simultaneously webcast and available for replay from the Seagen website at investor.seagen.com. Investors may also participate in the conference call by calling 844-763-8274 (domestic) or 412-717-9224 (international). The conference ID is 10165175. Supporting slides are available on the Seagen website at investor.seagen.com under the Investors section. A webcast replay will be archived on the Company’s website investor.seagen.com, under the Investors section.

On April 28, 2022 Nkarta, Inc. (Nasdaq: NKTX), a biopharmaceutical company developing engineered natural killer cell therapies to treat cancer, reported the closing of its previously announced underwritten public offering of 13,333,334 shares of its common stock at a price to the public of $15.00 per share, and the exercise in full by the underwriters of their option to purchase an additional 2,000,000 shares of common stock (Press release, Nkarta, APR 28, 2022, View Source [SID1234613136]). The exercise of the underwriters’ option brought the total number of shares of common stock sold by Nkarta to 15,333,334 shares and increased the gross proceeds raised in the offering, before deducting underwriting discounts and commissions and offering expenses, to $230 million.

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Nkarta intends to use the net proceeds from the offering to fund the continued clinical development of NKX101 and NKX019, preclinical studies for research stage programs and the continued buildout of internal manufacturing capabilities, and for working capital and for general corporate purposes.

Cowen, SVB Securities, Evercore ISI and Stifel acted as joint book-running managers for the offering.

The offering was conducted pursuant to a shelf registration statement (File No. 333-258766), which was filed with the Securities and Exchange Commission ("SEC") on August 12, 2021 and declared effective by the SEC on September 2, 2021. The offering was made only by means of a prospectus supplement and accompanying prospectus describing the terms of the offering. Copies of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained by contacting the following: Cowen and Company, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, by telephone at (833) 297-2926, or by email at [email protected]; SVB Securities LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, by telephone at (800) 808-7525, ext. 6105, or by email at [email protected]; Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, NY 10055, by telephone at (888) 474-0200, or by email at [email protected]; and Stifel, Nicolaus & Company, Incorporated, Attention: Prospectus Department, One Montgomery Street, Suite 3700, San Francisco, CA 94104 or by telephone at (415) 364-2720 or by email at [email protected]. These documents may also be obtained for free on the SEC’s website located at View Source

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any offer, solicitation or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.