On May 4, 2023 Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based computational platform is transforming the way therapeutics and materials are discovered, reported financial results for the first quarter ended March 31, 2023 (Press release, Schrodinger, MAY 4, 2023, View Source [SID1234631052]).

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"We are very pleased with our achievements during the first quarter, which included strong contributions from our software business and our drug discovery collaborations," stated Ramy Farid, Ph.D., chief executive officer of Schrödinger. "We are making excellent progress across our pipeline of proprietary and collaborative programs. We advanced the first program in our collaboration with BMS to development candidate status, and today reported that we have begun enrollment and dosing in both our ongoing Phase 1 study of SGR-1505 in patients with advanced B cell malignancies and our newly-initiated Phase 1 study in healthy volunteers. The transition to being a clinical-stage company represents a significant milestone for Schrödinger and an important step toward delivering our medicines to patients."

"We delivered a very strong quarter, with software and drug discovery making equal contributions to our revenue result, reflecting our balanced business model. We also made substantial progress in both collaborative and proprietary programs and added capital to our balance sheet, and our partners achieved significant corporate and development milestones further validating our platform," stated Geoff Porges, MBBS, chief financial officer of Schrödinger. "With our highly differentiated technology, our growing pipeline and our strong cash position, we are well positioned to achieve our goals for 2023 and beyond."

First Quarter 2023 GAAP Financial Results
•Total revenue for the first quarter increased 33% to $64.8 million, compared to $48.7 million in the first quarter of 2022.
•Software revenue for the first quarter was $32.2 million, compared to $33.1 million in the first quarter of 2022. Software revenue in the first quarter of 2023 included a small number of multi-year agreements that did not fully offset revenue from multi-year agreements in the first quarter of 2022.
•Drug discovery revenue was $32.6 million for the first quarter and included a $25 million milestone from BMS, compared to $15.6 million in the first quarter of 2022.
•Software gross margin increased to 78% for the first quarter, compared to 77% in the first quarter of 2022.
•Operating expenses were $76.2 million for the first quarter, compared to $56.6 million for the first quarter of 2022. The increase was driven by additional headcount to support the company’s progressing internal pipeline and its software business, CRO expenses, and royalties.
•Other income for the first quarter was $186.0 million, primarily associated with changes in fair value of equity investments, interest income, and a $147.3 million gain relating to the cash distributions from Nimbus in connection with the sale of Nimbus’s TYK2 inhibitor to Takeda. Other expense for the first quarter of 2022 was $5.8 million driven primarily by changes in the fair value of the company’s equity investments.
•Net income for the first quarter was $129.1 million, compared to net loss of $34.4 million in the first quarter of 2022.
•During the first quarter, Schrödinger reported a non-cash tax expense of $26.4 million associated with the cash distribution from Nimbus.
•At March 31, 2023, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $532 million, compared to approximately $456 million at December 31, 2022.

Three Months Ended
March 31,
2023 2022 % Change
(in millions)
Total revenue $ 64.8 $ 48.7 33%
Software revenue $ 32.2 $ 33.1 -3%
Drug discovery revenue $ 32.6 $ 15.6 109%
Software gross margin 78 % 77 %
Operating expenses $ 76.2 $ 56.6 35%
Other income (expense) $ 186.0 $ (5.8) N/M
Net income (loss) $ 129.1 $ (34.4) N/M

For the three months ended March 31, 2023, Schrödinger reported a non-GAAP net loss of $27.5 million compared to a non-GAAP net loss of $28.3 million for the three months ended March 31, 2022. See "Non-GAAP Information" below and the table at the end of this press release for a reconciliation of non-GAAP net income (loss) to GAAP net income (loss).

2023 Financial Outlook
As of May 4, 2023, Schrödinger maintained its financial guidance for the fiscal year ending December 31, 2023:
•Software revenue growth is expected to be in the range of 13 to 17 percent
•Drug discovery revenue is expected to range from $70 million to $90 million
•Software gross margin is expected to be similar to software gross margin for the full year 2022
•Operating expense growth in 2023 is expected to be significantly lower than operating expense growth in 2022 and to be similar to revenue growth in 2023
•Cash used for operating activities in 2023 is expected to be below cash used for operating activities in 2022

For the second quarter of 2023, software revenue is expected to range from $27 million to $31 million.
Recent Highlights
Corporate
•In April, Schrödinger received a $36.0 million distribution, which is the second cash distribution from Nimbus Therapeutics in connection with Takeda’s acquisition of Nimbus Lakshmi, Inc., a wholly-owned subsidiary of Nimbus, and its tyrosine kinase 2 (TYK2) inhibitor NDI-034858. Schrödinger received the first distribution of $111.3 million in February 2023 for a total distribution of approximately $147.3 million, all of which was recognized as other income in the company’s first quarter 2023 financial results. NDI-034858 is being evaluated for the treatment of multiple autoimmune diseases following positive Phase 2b results in psoriasis.

•In April, Schrödinger published its inaugural corporate sustainability report. The report highlights the company’s vision and approach to corporate sustainability, summarizes the company’s 2022 achievements and discloses key data about its corporate sustainability efforts in alignment with GRI and SASB reporting standards.

Pipeline
•Schrödinger continues to advance its MALT1 inhibitor, SGR-1505, in Phase 1 clinical development. A dose-escalation study designed to evaluate the safety, pharmacokinetics, pharmacodynamics, and early signals of clinical activity of SGR-1505 as a monotherapy is ongoing in patients with relapsed or refractory B-cell malignancies. Today Schrödinger announced that it has also initiated a Phase 1 study in healthy subjects to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of SGR-1505.

•Schrödinger is continuing to progress its CDC7 inhibitor, SGR-2921, through IND-enabling studies to support a planned IND submission in the first half of 2023. SGR-2921 has exhibited strong anti-tumor activity as a monotherapy and in combination with standard of care agents in multiple preclinical tumor models.

•Schrödinger continues to advance its Wee1 inhibitor, SGR-3515, through IND-enabling studies to support a potential IND submission in 2024.

•Schrödinger continues to advance its multi-target collaboration with BMS and reported that it received a $25 million milestone payment associated with the advancement of the SOS1/KRAS program to development candidate status. This payment was recognized in drug discovery revenue in the first quarter of 2023.

•Schrödinger’s collaborator, Morphic Therapeutic, made significant progress advancing MORF-057, an oral α4β7 integrin inhibitor, reporting positive topline results of the EMERALD-1 Phase 2a study in adults with moderate to severe ulcerative colitis (UC). MORF-057 achieved the primary endpoint and demonstrated consistent clinical improvement across other key measures with a favorable tolerability profile.

•The company continues to progress a pipeline of early-stage wholly-owned programs with potential across a broad range of therapeutic areas. Schrödinger is planning to review its drug discovery programs during its Pipeline Day, a virtual and in-person event that will take place on September 28, 2023.

Platform
•Schrödinger scientists published research showing how the company’s computational methods can be used to refine AlphaFold2 structures for hit discovery. While the publication of the open source AlphaFold protein structure database covers the complete human proteome and represents a significant scientific advance, computational methods are required to adequately refine the AlphaFold structures to improve their utility for drug discovery.

•Schrödinger scientists published a study describing how FEP+ can be used with homology models for protein thermostability predictions, which can extend Schrödinger’s platform and the use of FEP+ thermostability prediction to targets for which an experimental structure is unavailable. Protein engineering for thermostability has a range of applications, including in the design of antibodies and in chemical industries where protein stability requires optimization to enable enzymes to withstand specific chemical conditions or to extend the shelf-life of protein products.

Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its first quarter 2023 financial results on Thursday, May 4, 2023, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source To access the call by phone, please dial 1-888-396-8049 (domestic) or 1-416-764-8646 (international) and refer to conference ID 21402709. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.

Non-GAAP Information
Included in this press release is certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The company presents non-GAAP net income (loss) and non-GAAP net income (loss) per share, which exclude gains and losses on equity investments, changes in fair value, and non-cash income tax benefits and expenses relating to the company’s gains and losses on equity investments. Adjusting net income to exclude the impact of these items results in a financial presentation for the company without the impact of our equity investments. Management believes non-GAAP net income (loss) and non-GAAP net income (loss) per share are useful measures for investors, taken in conjunction with the company’s GAAP financial statements because they provide greater period-over-period comparability with respect to the company’s operating performance, by excluding non-cash mark-to-market and other valuation adjustments for our equity investments, non-recurring cash distributions from our equity investments and the tax impact of these distributions that are not reflective of the ongoing operating performance of the business. However, the non-GAAP measures should be considered only in addition to, not

as a substitute for or as superior to, net income (loss) and net income (loss) per share or other financial measures prepared in accordance with GAAP.

Other companies in our industry may calculate non-GAAP net income (loss) and non-GAAP net income (loss) per share, differently than we do, limiting their usefulness as comparative measures. For a reconciliation of non-GAAP net income (loss) and non-GAAP net income (loss) per share to GAAP net income (loss) and GAAP net income (loss) per share, respectively, please refer to the tables at the end of this press release.

On May 4, 2023 Relay Therapeutics, Inc. (Nasdaq: RLAY), a clinical-stage precision medicine company transforming the drug discovery process by combining leading-edge computational and experimental technologies, reported first quarter 2023 financial results and corporate highlights (Press release, Relay Therapeutics, MAY 4, 2023, View Source [SID1234631051]).

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"We have made important progress so far in 2023 by continuing to advance our clinical and pre-clinical programs," said Sanjiv Patel, M.D., president and chief executive officer of Relay Therapeutics. "At the AACR (Free AACR Whitepaper) Annual Meeting, we announced initial clinical data for RLY-2608, which showed that selectively inhibiting mutant PI3Kα avoided key common off-target toxicities. Of the eight patients with measurable breast cancer who received a dose at target exposure, one experienced a confirmed partial response after data cut-off and the other seven experienced a best overall response of stable disease; seven of these patients continue on treatment. Given the early but promising nature of these data, we are moving quickly to initiate dose expansion cohorts in the second half of the year."

Recent Corporate Highlights

RLY-4008 (FGFR2 inhibitor)

•
Presented data at AACR (Free AACR Whitepaper) Annual Meeting 2023, which showed that food and esomeprazole did not have a clinically relevant effect on the pharmacokinetics (PK) of RLY-4008
•
Full dose escalation data from the ReFocus trial accepted for presentation at 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, June 2-6, 2023

Breast Cancer Portfolio

•
RLY-2608 (pan-mutant and isoform-selective PI3Kα inhibitor)
o
Presented initial clinical data from the first-in-human ReDiscover trial at the AACR (Free AACR Whitepaper) Annual Meeting, which support initial clinical proof of mechanism, demonstrating that RLY-2608 achieved selective target engagement at multiple predicted efficacious doses with a favorable initial safety and tolerability profile. The cut-off date for these data was March 9, 2023. Key highlights include:
▪
Multiple doses achieved sustained target exposure of approximately 80 percent or greater mutant PI3Kα inhibition
▪
No Grade 3 hyperglycemia, rash or diarrhea observed at target exposures

▪
Favorable initial safety profile at target exposures with mostly low-grade adverse events that were manageable and reversible
▪
Partial response in breast cancer patient with 12 prior lines of therapy, which was confirmed subsequent to the data cut-off date
▪
Initial anti-tumor activity in breast cancer patients observed across a range of doses
▪
Median treatment duration among the 27 patients with breast cancer was approximately 4 months, with 70 percent (19/27) still on treatment as of the cut-off date
o
Dose exploration is ongoing to determine the recommended dose(s) for the dose expansion cohorts, which Relay Therapeutics anticipates initiating in the second half of 2023
•
RLY-5836 (pan-mutant and isoform-selective PI3Kα inhibitor)
o
In April 2023, initiated a first-in-human trial in patients with advanced solid tumors with a PIK3CA (PI3Kα) mutation
•
RLY-2139 (CDK2 inhibitor)
o
Selected development candidate; anticipate early 2024 clinical start, pending regulatory authorization

Anticipated Upcoming Milestones

RLY-4008
o
Full dose escalation data to be presented at ASCO (Free ASCO Whitepaper) Annual Meeting
o
Complete enrollment of pivotal cohort in the second half of 2023
o
Data from non-CCA expansion cohorts in the second half of 2023
•
Breast Cancer
o
RLY-2608: initiation of expansion cohorts in the second half of 2023
o
ERα degrader: development candidate nomination in 2023
o
RLY-2139 (selective CDK2 inhibitor): clinical start in early 2024, pending regulatory authorization

First Quarter 2023 Financial Results

Cash, Cash Equivalents and Investments: As of March 31, 2023, cash, cash equivalents and investments totaled $937.8 million compared to approximately $1 billion as of December 31, 2022. Relay Therapeutics expects its current cash, cash equivalents and investments will be sufficient to fund its current operating plan into 2025.

R&D Expenses: Research and development expenses were $82.8 million for the first quarter of 2023, as compared to $51.7 million for the first quarter of 2022. The increase was primarily due to $16.3 million of additional clinical trial expenses, $9.4 million of additional employee-related costs, which include $4.5 million of additional stock-based compensation expense, and $3.3 million of additional costs for preclinical programs and platform technologies.

G&A Expenses: General and administrative expenses were $19.6 million for the first quarter of 2023, as compared to $16.1 million for the first quarter of 2022. The increase was primarily due to additional employee-related costs, which include $3.6 million of additional stock-based compensation expense.

Net Loss: Net loss was $94.2 million for the first quarter of 2023, or a net loss per share of $0.78, as compared to a net loss of $62.0 million for the first quarter of 2022, or a net loss per share of $0.57.

On May 4, 2023 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the first quarter of 2023 and provided a business update (Press release, Regeneron, MAY 4, 2023, View Source [SID1234631050]).

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"In the first quarter of 2023, we achieved six FDA and EC approvals across five products, allowing our homegrown medicines to reach even more patients around the world, while we also continued to grow revenue," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "We remain focused on advancing our robust pipeline at all stages, and we were pleased to announce positive data from a late-stage study of Dupixent in COPD and make continued progress with our costimulatory and bispecific antibody candidates in oncology."

Financial Highlights

($ in millions, except per share data) Q1 2023 Q1 2022 % Change
Total revenues $ 3,162 $ 2,965 7 %
GAAP net income $ 818 $ 974 (16 %)
GAAP net income per share – diluted $ 7.17 $ 8.61 (17 %)
Non-GAAP net income(a) $ 1,168 $ 1,318 (11 %)
Non-GAAP net income per share – diluted(a) $ 10.09 $ 11.49 (12 %)
"Our business is off to a strong start in 2023, marked by our solid first quarter financial results and the pipeline progress we have achieved," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. "We continue to make investing in innovation, both internal and external, our top priority for capital allocation."

Business Highlights

Key Pipeline Progress
Regeneron has approximately 35 product candidates in clinical development, including a number of marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:

Aflibercept 8 mg

The U.S. Food and Drug Administration (FDA) accepted for priority review the Biologics License Application (BLA) for the treatment of wet AMD, DME, and diabetic retinopathy, with a target action date of June 27, 2023. A regulatory application has also been submitted for the treatment of wet AMD and DME in the European Union (EU) and Japan.
EYLEA (aflibercept) Injection

In February 2023, the FDA approved EYLEA for the treatment of retinopathy of prematurity (ROP) in preterm infants.
Dupixent (dupilumab)

In January 2023, the European Commission (EC) approved Dupixent for the treatment of adults and adolescents with eosinophilic esophagitis (EoE).
In March 2023, the EC also approved Dupixent as the first and only targeted medicine indicated to treat children aged 6 months to 5 years with severe atopic dermatitis in Europe.
The Company and Sanofi announced the primary and all key secondary endpoints were met in a Phase 3 trial in adults currently on maximal standard-of-care inhaled therapy (triple therapy) with uncontrolled COPD and evidence of type 2 inflammation. Dupixent is the first and only biologic to demonstrate a clinically meaningful and highly significant reduction (30%) in moderate or severe acute exacerbations of COPD (rapid and acute worsening of respiratory symptoms) over 52 weeks, while also demonstrating significant improvements in lung function, quality of life, and COPD respiratory symptoms. The safety results were generally consistent with the known safety profile of Dupixent in its approved indications.
The FDA accepted for review the supplemental BLA (sBLA) for the treatment of adults and adolescents aged 12 years and older with chronic spontaneous urticaria (CSU), with a target action date of October 22, 2023. A regulatory application has also been submitted in Japan.
The Phase 3 study in chronic cold induced urticaria did not meet its required efficacy endpoints and further development has been discontinued.
A Phase 2/3 study in eosinophilic gastroenteritis and a Phase 2 study in ulcerative colitis were initiated.
Oncology Programs

In March 2023, the EC approved Libtayo (cemiplimab) in combination with platinum-based chemotherapy for the first-line treatment of adult patients with advanced NSCLC with ≥1% PD-L1 expression.
A Phase 2/3 pivotal study was initiated for fianlimab, an antibody to LAG-3, in combination with Libtayo for first-line advanced NSCLC.
A Phase 1 study was initiated for Libtayo in combination with BioNTech’s BNT116 in patients with first-line NSCLC.
A Phase 1 study was initiated for REGN5837, a bispecific antibody targeting CD22 and CD28, in B-cell non-Hodgkin lymphoma (B-NHL).
The FDA granted Fast Track designation to linvoseltamab, a bispecific antibody targeting BCMA and CD3, for multiple myeloma.
Other Programs

The FDA approved Kevzara (sarilumab) as the first and only biologic for the treatment of polymyalgia rheumatica (PMR).
The FDA approved Evkeeza (evinacumab) as an adjunct to other lipid-lowering therapies to treat children with homozygous familial hypercholesterolemia (HoFH), which extended the approved indication to children as young as 5 years of age.
The FDA accepted for priority review the BLA for pozelimab, an antibody to C5, for the treatment of ultra-rare CD55-deficient protein-losing enteropathy (CHAPLE) in adults and children as young as 1 year of age, with a target action date of August 20, 2023.
The Company and Alnylam Pharmaceuticals, Inc. reported positive interim results from the ongoing single dose part of the Phase 1 study of ALN-APP, an investigational RNAi therapeutic targeting amyloid precursor protein (APP), in patients with early-onset Alzheimer’s disease. Patients treated with ALN-APP experienced dose-dependent, rapid, and sustained reduction in cerebrospinal fluid of both soluble APPα (sAPPα) and APPβ (sAPPβ), biomarkers of target engagement, with maximum reduction of 84% and 90%, respectively. These interim results demonstrated encouraging safety and tolerability to date.
A Phase 2 study was initiated for ALN-HSD, an RNAi therapeutic targeting HSD17B13, in nonalcoholic steatohepatitis (NASH).
Corporate and Business Development Updates

The Company announced that P. Roy Vagelos, M.D., will retire from his role as Chair of the Company’s Board of Directors and will not stand for reelection at the Company’s 2023 Annual Meeting of Shareholders on June 9, 2023. Dr. Vagelos will complete his current term through the conclusion of the Annual Meeting, at which time the Board plans to appoint Leonard S. Schleifer, M.D., Ph.D., and George D. Yancopoulos, M.D., Ph.D., as Co-Chairs of the Board, in addition to their roles as President and Chief Executive Officer and President and Chief Scientific Officer, respectively. The Board also plans to appoint current director Christine A. Poon as the Lead Independent Director of the Board.
In March 2023, the Company and Sonoma Biotherapeutics, Inc. entered into a license and collaboration agreement to bring together the Company’s VelociSuite technologies with Sonoma’s technology platform for the discovery, development, and commercialization of novel regulatory T cell (Treg) therapies for autoimmune diseases. In connection with the agreement, the Company made a $45 million up-front payment and, in April 2023, the Company purchased an aggregate of $30 million of Sonoma preferred stock. Sonoma is also eligible to receive a $45 million development milestone payment. The Company and Sonoma will co-fund research and development activities and share equally any future commercial expenses and profits. The Company will have the option to lead late-stage development and commercialization on all products globally, with Sonoma retaining rights to co-promote all such products in the United States.
First Quarter 2023 Financial Results

Revenues

($ in millions) Q1 2023 Q1 2022 % Change
Net product sales:
EYLEA – U.S. $ 1,434 $ 1,518 (6 %)
Libtayo – U.S. 110 79 39 %
Libtayo – ROW** 67 — *
Praluent – U.S. 40 34 18 %
Evkeeza – U.S. 15 8 88 %
Inmazeb – U.S. 2 — *
Total net product sales 1,668 1,639 2 %

Collaboration revenue:
Sanofi 798 631 26 %
Bayer 357 385 (7 %)
Roche 222 216 3 %
Other 1 — *
Other revenue 116 94 23 %
Total revenues $ 3,162 $ 2,965 7 %

Total revenues excluding Ronapreve(a)(b) $ 2,940 $ 2,749 7 %

* Percentage not meaningful.
** Rest of world (ROW). Effective July 1, 2022, the Company began recording net product sales of Libtayo outside the United States. Excluded from this line item is approximately $6 million of net product sales recorded by Sanofi in the first quarter of 2023 in connection with sales in certain markets (Sanofi records net product sales in such markets during a transition period until inventory on hand as of July 1, 2022 is sold through to the end customers).
Net product sales of EYLEA in the U.S. decreased in the first quarter of 2023, compared to the first quarter in 2022, primarily due to an increase in sales-related deductions, partly offset by higher sales volume.

Sanofi collaboration revenue increased in the first quarter of 2023, compared to the first quarter of 2022, primarily due to the Company’s share of profits from commercialization of antibodies, which were $637 million in the first quarter of 2023, compared to $415 million in the first quarter of 2022. The change in the Company’s share of profits from commercialization of antibodies was driven by profits associated with higher Dupixent sales. Additionally, in the first quarter of 2022, the Company earned a $50 million sales-based milestone from Sanofi, which did not recur in the first quarter of 2023.

The Company recorded Roche collaboration revenue during the first quarter of 2023 and 2022 in connection with payments from Roche attributable to global gross profits from sales of Ronapreve.

Refer to Table 4 for a summary of collaboration revenue.

Operating Expenses

GAAP % Change

Non-GAAP(a) % Change

($ in millions) Q1 2023 Q1 2022 Q1 2023 Q1 2022
Research and development (R&D) $ 1,101 $ 844 30 % $ 960 $ 751 28 %
Acquired in-process research and development (IPR&D) $ 56 $ 28 100 % * * n/a
Selling, general, and administrative (SG&A) $ 601 $ 450 34 % $ 515 $ 389 32 %
Cost of goods sold (COGS) $ 208 $ 207 — % $ 168 $ 136 24 %
Cost of collaboration and contract manufacturing (COCM) $ 249 $ 198 26 % * * n/a
Other operating (income) expense, net $ (1 ) $ (20 ) (95 %) * * n/a

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded.
GAAP and non-GAAP R&D expenses increased in the first quarter of 2023, compared to the first quarter of 2022, driven by additional costs incurred in connection with higher headcount and headcount-related costs, the advancement of the Company’s late-stage pipeline, and the impact of the 2022 amendments to the Sanofi collaboration agreements.
Acquired IPR&D for first quarter of 2023 included a $45 million up-front payment in connection with the Company’s collaboration agreement with Sonoma. Acquired IPR&D for the first quarter of 2022 included a $20 million opt-in payment in connection with a product candidate under the Company’s collaboration agreement with Adicet Bio, Inc.
GAAP and non-GAAP SG&A expenses increased in the first quarter of 2023, compared to the first quarter of 2022, primarily due to an increase in commercialization-related expenses for Libtayo outside the U.S. (as effective July 1, 2022, the Company became solely responsible for the commercialization of Libtayo worldwide), higher headcount and headcount-related costs, and higher contributions to an independent not-for-profit patient assistance organization. These increases were partly offset by a decrease in commercialization-related expenses for EYLEA.
COCM expenses increased in the first quarter of 2023, compared to the first quarter of 2022, primarily due to the recognition of costs in connection with manufacturing commercial supplies for Sanofi related to Praluent outside the U.S. and Dupixent globally.
Other Financial Information

GAAP other income (expense) included the recognition of net unrealized losses on equity securities of $165 million in the first quarter of 2023, compared to $211 million of net unrealized losses in the first quarter of 2022. GAAP and Non-GAAP other income (expense) also included interest income of $95 million in the first quarter of 2023, compared to $19 million in the first quarter of 2022.

In the first quarter of 2023, the Company’s GAAP effective tax rate (ETR) was 4.7%, compared to 8.3% in the first quarter of 2022. The decrease in the GAAP ETR was primarily due to a higher benefit of stock-based compensation. In the first quarter 2023, the non-GAAP ETR was 9.7%, compared to 11.6% in the first quarter of 2022.

GAAP net income per diluted share was $7.17 in the first quarter of 2023, compared to $8.61 in the first quarter of 2022. Non-GAAP net income per diluted share was $10.09 in the first quarter of 2023, compared to $11.49 in the first quarter of 2022. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

In January 2023, the Company’s Board of Directors authorized a new share repurchase program to repurchase up to an additional $3.0 billion of the Company’s common stock. During the first quarter of 2023, the Company repurchased shares of its common stock and recorded the cost of the shares, or $694 million, as Treasury Stock. As of March 31, 2023, an aggregate of $3.051 billion remained available for share repurchases under the Company’s share repurchase programs.

2023 Financial Guidance(c)

The Company’s full year 2023 financial guidance consists of the following components:

2023 Guidance
Prior Updated
GAAP R&D $4.200–$4.435 billion $4.225–$4.465 billion
Non-GAAP R&D(a) $3.725–$3.925 billion Unchanged
GAAP SG&A $2.460–$2.650 billion $2.490–$2.680 billion
Non-GAAP SG&A(a) $2.130–$2.280 billion Unchanged
GAAP gross margin on net product sales(d) 88%–90% 87%–89%
Non-GAAP gross margin on net product sales(a)(d) 90%–92% 89%–91%
COCM(e)* $720–$800 million $820–$880 million
Capital expenditures* $825–$950 million $800–$900 million
GAAP effective tax rate 10%–12% 8%–10%
Non-GAAP effective tax rate(a) 11%–13% 10%–12%

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded.
A reconciliation of full year 2023 GAAP to non-GAAP financial guidance is included below:

Projected Range
($ in millions) Low High
GAAP R&D $ 4,225 $ 4,465
Stock-based compensation expense 490 520
Acquisition-related integration costs 10 20
Non-GAAP R&D $ 3,725 $ 3,925

GAAP SG&A $ 2,490 $ 2,680
Stock-based compensation expense 310 330
Acquisition-related integration costs 50 70
Non-GAAP SG&A $ 2,130 $ 2,280

GAAP gross margin on net product sales 87 % 89 %
Stock-based compensation expense 1 % 1 %
Intangible asset amortization expense 1 % 1 %
Non-GAAP gross margin on net product sales 89 % 91 %

GAAP ETR 8 % 10 %
Income tax effect of GAAP to non-GAAP reconciling items 2 % 2 %
Non-GAAP ETR 10 % 12 %

(a) This press release uses non-GAAP R&D, non-GAAP SG&A, non-GAAP COGS, non-GAAP gross margin on net product sales, non-GAAP other income (expense), net, non-GAAP ETR, non-GAAP net income, non-GAAP net income per share, total revenues excluding Ronapreve, and free cash flow, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are computed by excluding certain non-cash and/or other items from the related GAAP financial measure. The Company also includes a non-GAAP adjustment for the estimated income tax effect of reconciling items. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s investments in equity securities) or items that are not associated with normal, recurring operations (such as integration-related expenses). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. With respect to free cash flows, the Company believes that this non-GAAP measure provides a further measure of the Company’s operations’ ability to generate cash flows. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP.

(b) The casirivimab and imdevimab antibody cocktail for COVID-19 is known as REGEN-COV in the United States and Ronapreve in other countries. The Company records net product sales of REGEN-COV in the United States and Roche records net product sales of Ronapreve outside the United States.

(c) The Company’s 2023 financial guidance does not assume the completion of any business development transactions not completed as of the date of this press release.

(d) Gross margin on net product sales represents gross profit expressed as a percentage of total net product sales recorded by the Company. Gross profit is calculated as net product sales less cost of goods sold.

(e) Corresponding reimbursements from collaborators and others for manufacturing of commercial supplies is recorded within revenues.
Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its first quarter 2023 financial and operating results on Thursday, May 4, 2023, at 8:30 AM Eastern Time. Participants may access the conference call live via webcast, or register in advance and participate via telephone, on the "Investors and Media" page of Regeneron’s website at www.regeneron.com. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the conference call and webcast will be archived on the Company’s website for at least 30 days.

On May 4, 2023 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the first quarter ended March 31, 2023 (Press release, Puma Biotechnology, MAY 4, 2023, View Source [SID1234631049]). Unless otherwise stated, all comparisons are for the first quarter of 2023 compared to the first quarter of 2022.

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Product revenue, net consists entirely of revenue from sales of NERLYNX, Puma’s first commercial product. Product revenue, net in the first quarter of 2023 was $46.8 million, compared to product revenue, net of $40.7 million in the first quarter of 2022.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported net income of $1.4 million, or $0.03 per basic and diluted share, for the first quarter of 2023, compared to net loss of $3.4 million, or $0.08 per share, for the first quarter of 2022.

Non-GAAP adjusted net income was $4.2 million, or $0.09 per basic and diluted share, for the first quarter of 2023, compared to non-GAAP adjusted net loss of $0.3 million, or $0.01 per share, for the first quarter of 2022. Non-GAAP adjusted net income excludes stock-based compensation expense. For a reconciliation of GAAP net income (loss) to non-GAAP adjusted net income (loss) and GAAP net income (loss) per share to non-GAAP adjusted net income (loss) per share, please see the financial tables at the end of this news release.

Net cash provided by operating activities for the first quarter of 2023 was $2.6 million, compared to net cash used in operating activities of $26.9 million in the first quarter of 2022. At March 31, 2023, Puma had cash, cash equivalents and marketable securities of $71.2 million, compared to cash, cash equivalents and marketable securities of $81.1 million at December 31, 2022.

"We are pleased to deliver positive net income for the first quarter of 2023. We are additionally pleased to see the recently published results from the TBCRC-041 trial evaluating alisertib in patients with ER-positive HER2-negative metastatic breast cancer that were published in JAMA Oncology in March," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "We look forward to meeting with the U.S. Food and Drug Administration and discussing the next steps for the development of alisertib in both small cell lung cancer and ER-positive HER2-negative metastatic breast cancer during 2023. Additionally, we will continue to focus our efforts toward achieving our goal of increasing awareness of and access to NERLYNX as an option for patients battling HER2-positive breast cancer."

Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) reporting biomarker data from the randomized trial of alisertib plus paclitaxel versus paclitaxel alone in hormone receptor positive, HER2-negative breast cancer (Q2 2023); (ii) reporting data from an ongoing investigator sponsored Phase I/II trial of alisertib plus pembrolizumab for the treatment of patients with Rb-deficient head and neck squamous cell cancer (2023); (iii) conducting a meeting with the FDA to discuss the registration pathway for alisertib in small cell lung cancer (Q2 2023); and (iv) conducting a meeting with the FDA to discuss the registration pathway for alisertib in hormone receptor positive, HER2-negative breast cancer (Q4 2023)."

Revenue

Total revenue consists of product revenue, net from sales of NERLYNX, Puma’s first commercial product, license revenue from Puma’s sub-licensees and royalty revenue. For the first quarter ended March 31, 2023, total revenue was $52.8 million, of which $46.8 million was net product revenue and $6.0 million was royalty revenue. This compares to total revenue of $45.7 million in the first quarter of 2022, of which $40.7 million was net product revenue and $5.0 million was royalty revenue.

Operating Costs and Expenses

Total operating costs and expenses were $48.4 million for the first quarter of 2023, compared to $46.4 million for the first quarter of 2022.

Cost of Sales

Cost of sales was $13.2 million for the first quarter of 2023, compared to $10.8 million for the first quarter of 2022. The $2.4 million increase resulted primarily from higher royalty expense related to increased net product sales, as well as increased intangible amortization related to the $12.5 million paid to Pfizer for meeting a commercial sales milestone as of December 31, 2022.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $22.5 million for the first quarter of 2023, compared to $20.4 million for the first quarter of 2022. The $2.1 million increase resulted primarily from an increase in payroll and related costs of approximately $1.6 million, primarily due to salary increases beginning in 2023 as well as higher headcount, and higher travel and meeting expenses.

Research and Development Expenses

Research and development expenses were $12.7 million for the first quarter of 2023, compared to $15.2 million for the first quarter of 2022. The $2.5 million decrease resulted primarily from a decrease in clinical trial expense of approximately $3.2 million, primarily due to the reduction and closing of SUMMIT clinical trial sites, and was partially offset by an increase in internal R&D of approximately $0.8 million, primarily due to an increase in payroll-related expenses in 2023.

Total Other Income (Expenses)

Total other expenses were $2.8 million for the first quarter of 2023, compared to total other expenses of $2.7 million for the first quarter of 2022. The increase resulted primarily from higher interest rates.

Second Quarter and Full Year 2023 Financial Outlook

Second Quarter 2023

Full Year 2023

Net Product Revenue

$47 – $50 million

$205 – $210 million

Royalty Revenue

$2 – $3 million

$25 – $30 million

Net Income/(Loss)

$0 – $1.5 million

$20 – $24 million

Gross to Net Adjustment

20% – 21%

19% – 20%

Conference Call

Puma Biotechnology will host a conference call to report its first quarter 2023 financial results and provide an update on the Company’s business and outlook at 1:30 p.m. PDT/4:30 p.m. EDT on Thursday, May 4, 2023. The call may be accessed by dialing 1-877-709-8150 (domestic) or 1-201-689-8354 (international). Please dial in at least 10 minutes in advance and inform the operator that you would like to join the "Puma Biotechnology Conference Call." A live webcast of the conference call and presentation slides may be accessed on the Investors section of the Puma Biotechnology website at View Source A replay of the call will be available approximately one hour after completion of the call and will be archived on Puma’s website for 90 days.

On May 4, 2023 Prothena Corporation plc (NASDAQ:PRTA), a late-stage clinical biotechnology company with a robust pipeline of investigational therapeutics built on protein dysregulation expertise, reported financial results for the first quarter of 2023 and provided business highlights (Press release, Prothena, MAY 4, 2023, View Source [SID1234631048]).

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"Recent positive clinical study results and FDA approvals have now established that reduction of amyloid beta plaque is directly related to clinical benefit. These results are positive for the Alzheimer’s disease community, especially for the patients, families and caregivers who fight everyday against this devastating disease. Prothena is committed to furthering these efforts by developing patient-centric, next-generation Alzheimer’s disease treatments," said Gene Kinney, Ph.D., President and Chief Executive Officer, Prothena. "We showcased our potential best-in-class Alzheimer’s disease portfolio in the first quarter of 2023 with new preclinical data presented at AD/PD which adds to the scientific foundation for our PRX012 program. These data demonstrated higher affinity binding to amyloid beta soluble protofibrils and greater clearance of pyroglutamate-modified amyloid beta plaques compared to other approved and investigational molecules. In addition, we released topline data from the Phase 1 SAD study of PRX005 which demonstrated that single doses of PRX005 across three dose cohorts were generally safe and well tolerated."

"We look forward to making meaningful advances in our Alzheimer’s disease portfolio this year. We also continue to focus on enrolling our confirmatory Phase 3 AFFIRM-AL study of birtamimab, the first potential therapy to observe a significant survival benefit in patients with Mayo Stage IV AL amyloidosis," added Kinney.

First Quarter, Recent Business Highlights and Upcoming Milestones

Neurodegenerative Diseases Portfolio

Alzheimer’s Disease (AD)

PRX012, a wholly-owned potential best-in-class, next-generation subcutaneous antibody for the treatment of AD, targets a key epitope at the N-terminus of amyloid beta (Aβ) with high binding potency. The U.S. Food and Drug Administration (FDA) has granted Fast Track Designation for PRX012 for the treatment of AD.

•Multiple presentations at International Conference on Alzheimer’s and Parkinson’s Diseases 2023 (AD/PD) highlighted by an oral presentation of preclinical data showing superior binding characteristics of PRX012, demonstrated 20-fold higher affinity to Aβ soluble protofibrils when compared to lecanemab; PRX012 also cleared pyroglutamate-modified Aβ at lower concentrations when compared to donanemab
•Partnered with Walgreens to accelerate patient identification and recruitment for ongoing ASCENT-2 multiple ascending dose (MAD) clinical trial evaluating safety and tolerability
•Ongoing Phase 1 single ascending dose (SAD) and MAD studies; topline data expected year end 2023

PRX005, a potential best-in-class antibody for the treatment of AD, specifically targets a key epitope within the microtubule binding region (MTBR) of tau, a protein implicated in diseases including AD, frontotemporal dementia (FTD), progressive supranuclear palsy (PSP), chronic traumatic encephalopathy (CTE), and other tauopathies. PRX005 is part of a global neuroscience research and development collaboration with Bristol Myers Squibb

•Topline data from Phase 1 SAD study announced January 2023 showing single doses of PRX005 across three dose cohorts were generally safe and well tolerated, meeting the primary study objective; results expected from the Phase 1 SAD study at an upcoming medical conference
•Ongoing Phase 1 MAD study; topline data expected by year end 2023

PRX123, a wholly-owned potential first-in-class dual Aβ/tau vaccine for the treatment and prevention of AD, is a dual-target vaccine targeting key epitopes within the N-terminus of Aβ and MTBR-tau designed to promote amyloid clearance and block the transmission of pathogenic tau

•Investigational new drug (IND) application filing expected by year end 2023

Parkinson’s Disease (PD)

Prasinezumab, a potential first-in-class antibody for the treatment of PD, is designed to target a key epitope within the C-terminus of alpha-synuclein and is the focus of a worldwide collaboration with Roche

•Poster and oral presentations at AD/PD highlighted aspects of the Phase 2 PASADENA study of prasinezumab for the treatment of PD
•In Q1 2023, Roche completed enrollment for the Phase 2b PADOVA trial in patients with early PD (NCT04777331); topline data expected in 2024

Rare Peripheral Amyloid Diseases Portfolio

AL Amyloidosis

Birtamimab, a wholly-owned potential best-in-class amyloid depleter antibody for the treatment of AL amyloidosis, is designed to directly neutralize soluble toxic aggregates and promote clearance of amyloid that causes organ dysfunction and failure. Among patients with AL amyloidosis, a rare, progressive, and fatal disease, newly diagnosed individuals with advanced disease (i.e. Mayo Stage IV) are at the highest risk for early death. Birtamimab has been granted Fast Track Designation by the FDA for the treatment of patients with Mayo Stage IV AL amyloidosis to reduce the risk of mortality and has been granted Orphan Drug Designation by both the FDA and European Medicines Agency.
•Confirmatory Phase 3 AFFIRM-AL trial in patients with Mayo Stage IV AL amyloidosis, which is under a Special Protocol Assessment (SPA) with the FDA with a primary endpoint of all-cause mortality at p≤0.10, is ongoing (NCT04973137); topline data expected in 2024

ATTR Amyloidosis

NNC6019 (formerly PRX004), a potential first-in-class amyloid depleter antibody for the treatment of ATTR cardiomyopathy, is designed to deplete the pathogenic, non-native forms of the transthyretin (TTR) protein and is being developed by Novo Nordisk as part of their up to $1.2 billion acquisition of Prothena’s ATTR amyloidosis business and pipeline

•Ongoing Phase 2 study in patients with ATTR cardiomyopathy is being conducted by Novo Nordisk (NCT05442047); topline data expected in 2024

First Quarter of 2023 Financial Results
For the first quarter of 2023, Prothena reported net loss of $46.9 million, as compared to a net loss of $36.3 million for the first quarter of 2022. Net loss per share was $0.89 for the first quarter of 2023, as compared to net loss per share of $0.78 for the first quarter of 2022.
Prothena reported total revenue of $2.2 million for the first quarter of 2023, as compared to total revenue of $1.2 million for the first quarter of 2022, primarily from collaboration revenue from Bristol Myers Squibb.
Research and development (R&D) expenses totaled $44.8 million for the first quarter of 2023, as compared to $27.3 million for the first quarter of 2022. The increase in R&D expense for the first quarter of 2023 compared to the same period in the prior year was primarily due to higher clinical trial expenses, higher personnel related expenses, higher consulting and other R&D expenses. R&D expenses included non-cash share-based compensation expense of $4.4 million for the first quarter of 2023, as compared to $3.3 million for the first quarter of 2022.
General and administrative (G&A) expenses totaled $13.7 million for the first quarter of 2023, as compared to $11.8 million for the first quarter of 2022. The increase in G&A expenses for the first quarter of 2023 compared to the same period in the prior year was primarily related to higher personnel related and legal expenses. G&A expenses included non-cash share-based compensation expense of $4.4 million for the first quarter of 2023, as compared to $4.3 million for the first quarter of 2022.
Total non-cash share-based compensation expense was $8.8 million for the first quarter of 2023, as compared to $7.7 million for the first quarter of 2022.

As of March 31, 2023, Prothena had $688.4 million in cash, cash equivalents and restricted cash, and no debt.
As of April 28, 2023, Prothena had approximately 52.8 million ordinary shares outstanding.

2023 Financial Guidance

The Company continues to expect the full year 2023 net cash used in operating and investing activities to be $213 to $229 million and expects to end the year with approximately $512 million in cash, cash equivalents and restricted cash (midpoint). The estimated full year 2023 net cash used in operating and investing activities is primarily driven by an estimated net loss of $250 to $275 million, which includes an estimated $46 million of non-cash share-based compensation expense.