On July 27, 2023 MaaT Pharma (EURONEXT: MAAT – the "Company"), a clinical-stage biotechnology company and a leader in the development of Microbiome Ecosystem TherapiesTM (MET) dedicated to improving survival outcomes for patients with cancer, reported a business update and provided its cash position as of June 30, 2023 and its revenues for the second quarter of 2023 (Press release, MaaT Pharma, JUL 27, 2023, View Source [SID1234633460]).

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"As a leading microbiome company in oncology, we are proud of the progress made in the second quarter of 2023. We are particularly pleased with positive interactions with international regulatory agencies, such as the FDA’s clearance of the IND application, which paves the way for bringing MaaT013 to patients. We remain aligned with our strategy to pursue the development of MaaT013 towards its registration in the treatment of aGvHD. Additionally, we are on the brink of launching the largest, to our knowledge, randomized study in hemato-oncology with a microbiome therapy, as we finalize preparation for the Phase 2 trial of MaaT033," commented Hervé Affagard, CEO and co-founder of MaaT Pharma. "In the upcoming months, we will continue to deliver on the plans presented during our IPO to investors, patients, and the global community."

Pipeline highlights

MaaT013

In onco-hematology:
In April 2023, MaaT013 clinical results in its early access program for 81 patients, previously announced at American Society of Hematology (ASH) (Free ASH Whitepaper), were presented during the 49th Annual Meeting of the European Society for Blood and Marrow Transplantation (EBMT 2023). Clinical results showed a GI-Overall Response Rate (GI-ORR) of 56% with a 12-month overall survival (OS) of 59% in patients responding to MaaT013 treatment. A 65% ORR was observed in 31 patients being a similar population to those treated in MaaT Pharma’s ongoing pivotal Phase 3 ARES clinical trial (3rd-line therapy after failure to 2nd-line ruxolitinib treatment); 12-month OS in this group responding to MaaT013 treatment was 74%. As a reminder, overall survival in ruxolitinib-resistant patients at 2 months is 22% (REACH1 study).
In April 2023, the U.S. Food and Drug Administration (FDA) lifted the clinical hold and cleared the Investigational New Drug (IND) application for MaaT013 in patients with aGvHD. MaaT Pharma intends to consult with the FDA on the next steps of the regulatory process to bring MaaT013 to US patients in the most expeditious way possible while the Company continues the late-stage clinical development of MaaT013 in Europe with the ongoing international multicenter, open-label, single arm, pivotal Phase 3 trial (ARES).
The Company announces that the independent data safety and monitoring board (DSMB) meeting, after enrollment of half of the patients in the ARES study evaluating MaaT013 in aGvHD, is expected in H2 2023, as opposed to H1 2023, while the ORR is expected mid-2024.
In parallel to the ARES trial, the European Early Access Program (EAP) continues to gather significant interest from healthcare professionals with the number of patients treated in H1.2023, significantly higher than that of H1.2022.
As a post-period event, in July 2023, the Company announced that clinical data on MaaT013 as a treatment for aGvHD was published in eClinicalMedicine, one of the Lancet Discovery Science suite’s journals. The data includes results from 24 patients in a Phase 2 clinical trial and 52 patients enrolled in the EAP in France. The article can be accessed here.
In immuno-oncology:
The PICASSO study, sponsored by APHP, is on track for data readout expected in H2 2024. This is the only double-blind randomized clinical trial in the field evaluating a microbiome approach (MaaT013) to enhance the efficacy of immune checkpoints inhibitors (ICI) treatments in patients with metastatic melanoma.
With more than half of the patients now having completed their week 9 visit, the Company is in a position to receive biological biomarker data from its partner.
MaaT033

In onco-hematology:
In April 2023, MaaT033 data of Phase 1b study CIMON, previously presented at ASH (Free ASH Whitepaper) 2022 annual meeting, were also shared at the EBMT 2023. The Company’s second drug candidate was shown to be safe and tolerable in 21 patients. This is an important milestone prior to embarking on subsequent clinical development of MaaT033 and for establishing the dose determination for the Phase 2b PHOEBUS.
During the period, and following the positive feedback received from the FDA in April 2023 clearing the IND for MaaT013, the Company incorporated learnings related to its proprietary pooling technology into its clinical development plan envisaged for its second clinical-stage product MaaT033. In parallel, the clinical protocol of the Phase 2b randomized placebo-controlled PHOEBUS trial was reviewed in a Scientific Advice with EMA, with a positive outcome and no consequences on the authorizations already received in France and Germany in March 2023. Consequently, the start of the PHOEBUS trial, initially planned to start in Q2 2023 is now expected in H2 2023. This trial will assess MaaT033’s impact on overall survival in allo-HSCT patients.
In neurodegenerative diseases:
The IASO Phase 1b pilot study (NCT05889572) in ALS (also known as Lou Gehrig’s disease in the US and Charcot’s disease in French-speaking country) is active and ready for the first patient to be dosed.
Corporate update

On June 19, 2023, all resolutions presented during the AGM were adopted in line with Board recommendations. For further information, please visit: View Source
In June 2023, MaaT Pharma announced new appointments to the Board of Directors and Executive team, to align with the Company’s long-term vision and goals:
Karim Dabbagh as Chairman and Nadia Kamal as Director, both independent.
Gervais Tougas, acting Chief Medical Officer and Philippe Moyen, Chief Operating Officer.
In June 2023, MaaT Pharma announced the appointment of Guilhaume Debroas as Head of Investor Relations.
As a post period event, in July 2023, MaaT Pharma announced having joined the Microbiome Therapeutics Innovation Group (MTIG). MTIG is a coalition of companies leading the research and development of FDA-approved microbiome therapeutic drugs and microbiome-based products to address unmet medical needs, improve clinical outcomes, and reduce health care costs.
Cash position1

As of June 30, 2023, total cash and cash equivalents were EUR 35.1 million, as compared to EUR 40.7 million as of March 31, 2023, and EUR 35.2 million as of December 31, 2022. The net decrease in cash of EUR 5.6 million during the second quarter 2023 reflecting the continued investment in R&D activities across the pipeline and includes partial reimbursement of the 2022 R&D tax credit for EUR 2.3 million. The Company believes it has sufficient cash to cover needs of the development programs into the second quarter of 2024.
Revenues in Q2 20231

MaaT Pharma reported revenues[2] from its compassionate access program of EUR 0.7 million for the quarter ended June 30, 2023, comparable with EUR 0.7 million for the first quarter of 2023. Total revenues for the first half of 2023 amount to EUR 1.4 million compared with EUR 0.9 million for the first half of 2022. This trend is a direct reflection of the continued demand from the medical community for drug candidate MaaT013.
Upcoming financial communication and investor conference participation

September 26, 2023 – Half-year Results 2023*
September 27, 2023 – 6th edition – Forum LPB Valeurs Régionales
October 4, 2023 – KBC Securities Life Sciences Conference
October 4-5, 2023 – Portzamparc Seminar Biotech & Health
October 9-10, 2023 – Investor Access Event

On July 27, 2023 Labcorp (NYSE: LH), a global leader of innovative and comprehensive laboratory services, reported results for the second quarter ended June 30, 2023, and provided full-year guidance (Press release, LabCorp, JUL 27, 2023, View Source [SID1234633459]).

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"We delivered strong results in the quarter, and I’m optimistic about our opportunities for continued growth as Labcorp enters the second half of the year with significant momentum," said Adam Schechter, chairman and CEO of Labcorp. "Looking forward, we are focused on advancing our strategy as a global laboratory services leader. Labcorp continues to harness science, technology, and innovation to deliver better patient outcomes that improve health and improve lives, while enhancing shareholder value."

On June 30, 2023, Labcorp completed the spin-off of Fortrea, its Clinical Development business, which began trading on the NASDAQ Stock Market under the symbol "FTRE" at the market open on July 3, 2023. Upon closing, Fortrea made a cash distribution to Labcorp of approximately $1.6 billion as partial consideration for the assets that Labcorp contributed to Fortrea in connection with the spin-off. Labcorp intends to use approximately $1.0 billion of the proceeds toward an accelerated share repurchase program and $300 million to pay down debt maturing this year.

In the second quarter, Labcorp continued to expand its relationship with hospitals, regional healthcare systems and local labs. In May, the company announced a laboratory agreement with Jefferson Health, to deliver comprehensive laboratory services to the greater Philadelphia area and Southern New Jersey. The transaction was finalized after quarter end in July. Additionally, the company announced the next step in its strategic relationship with Providence Health and Services. Through the agreement, Labcorp will acquire Providence Oregon’s outreach laboratory business and select assets in Oregon.

Subsequent to quarter end, the company announced a comprehensive lab relationship with Legacy Health under which Labcorp will acquire select laboratory business assets and manage Legacy’s inpatient hospital laboratories.

On July 13, 2023, the company announced a quarterly cash dividend of $0.72 per share of common stock, payable on September 8, 2023, to stockholders of record at the close of business on August 8, 2023.

Consolidated Results

Second Quarter Results

Revenue for the quarter was $3.03 billion, an increase of 3.8% from $2.92 billion in the second quarter of 2022. The increase was due to organic revenue of 2.0%, acquisitions, net of divestitures, of 1.6%, and foreign currency translation of 0.2%. The 2.0% increase in organic revenue was driven by a 9.8% increase in the company’s organic Base Business, partially offset by a (7.8%) decrease in COVID-19 PCR and antibody testing (COVID-19 Testing). Base Business includes Labcorp’s operations except for COVID-19 Testing.

Operating income for the quarter was $266.3 million, or 8.8% of revenue, compared to $428.8 million, or 14.7%, in the second quarter of 2022. The company recorded amortization, restructuring charges, and special items, which together totaled $182.0 million in the quarter, compared to $119.0 million during the same period in 2022. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $448.3 million, or 14.8% of revenue, compared to $547.8 million, or 18.7%, in the second quarter of 2022. The decrease in operating income and margin was primarily due to a reduction in COVID-19 Testing. The margin decline was also negatively affected by the mix impact from the Ascension lab management agreement and NHP-related constraints.

Net earnings from continuing operations for the quarter were $155.2 million compared to $268.0 million in the second quarter of 2022. Diluted EPS were $1.74 in the quarter compared to $2.89 during the same period in 2022. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $3.42 in the quarter compared to $4.04 in the second quarter of 2022.

Operating cash flow from continuing operations for the quarter was $280.0 million compared to $548.4 million in the second quarter of 2022. The decrease in operating cash flow was due to lower COVID-19 Testing earnings, spin-related items and higher working capital, partially offset by increased Base Business earnings. Capital expenditures totaled $102.6 million compared to $140.2 million a year ago. As a result, free cash flow (operating cash flow less capital expenditures) from continuing operations was $177.4 million compared to $408.2 million in the second quarter of 2022.

At the end of the quarter, the company’s cash balance was $1.9 billion and total debt was $5.3 billion, respectively. The cash balance includes the $1.6 billion dividend from the spin-off. During the quarter, the company invested $137.1 million on acquisitions and paid out $64.6 million in dividends.

Year-To-Date Results

Revenue was $6.07 billion, an increase of 0.1% from $6.07 billion, in the first six months of 2023. The increase was due to acquisitions, net of divestitures, of 1.6%, partially offset by lower organic revenue of (1.3%) and unfavorable foreign currency translation of (0.2%). The (1.3%) decrease in organic revenue was driven by an (11.2)% decrease in COVID-19 Testing, partially offset by a 9.9% increase in the company’s organic Base Business.

Operating income was $596.1 million, or 9.8% of revenue, compared to $1,034.0 million, or 17.0%, in the first six months of 2023. The company recorded amortization, restructuring charges, special items, and impairments, which together totaled $300.0 million in the first six months of 2023 compared to $235.3 million during the same period in 2022. Adjusted operating income (excluding amortization, restructuring charges, special items, and impairments) was $896.1 million, or 14.8% of revenue, compared to $1,269.3 million, or 20.9%, in the first six months of 2022. The decrease in operating income and margin was primarily due to lower COVID-19 Testing and higher personnel costs, partially offset by a recovery in the Base Business.

Net earnings from continuing operations were $363.6 million compared to $689.1 million in the first six months of 2022. Diluted EPS were $4.08 in the first six months of 2023 compared to $7.38 during the same period in 2022. Adjusted EPS (excluding amortization, restructuring charges, special items, and impairments) were $6.88 in the first six months of 2023 compared to $9.54 during the same period in 2022.

Operating cash flow from continuing operations was $410.2 million compared to $904.6 million in the first six months of 2022. The decrease in operating cash flow was due to lower COVID-19 Testing earnings, spin-related items and higher working capital, partially offset by increased Base Business earnings. Capital expenditures totaled $181.5 million compared to $247.4 million during the same period in 2022. As a result, free cash flow (operating cash flow less capital expenditures) from continuing operations was $228.7 million compared to $657.2 million in the first six months of 2022.

Second Quarter Segment Results

The company’s two segments include Diagnostics Laboratories and Biopharma Laboratory Services (comprised of its Central Laboratories and Early Development Research Laboratories). The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Diagnostics Laboratories

Revenue for the quarter was $2.34 billion, an increase of 3.8% from $2.26 billion in the second quarter of 2022. The increase was due to organic growth of 1.8% and acquisitions of 2.2%, partially offset by foreign currency translation of (0.2%). The 1.8% increase in organic revenue was due to an 11.9% increase in the Base Business, partially offset by a (10.1%) decrease in COVID-19 Testing. Total Base Business growth compared to the Base Business in the prior year was 15.7%. The increase was due to the Ascension lab management agreement of approximately 7% as well as continued volume recovery compared to last year, which was negatively impacted by Omicron.

Total volume (measured by requisitions) increased by 1.4% as acquisition volume contributed 2.5%, while organic volume decreased by (1.1%). Organic volume was impacted by a (6.1%) decrease in COVID-19 Testing, partially offset by a 5.1% increase in the Base Business. Price/mix increased by 2.4% due to organic Base Business growth of 6.8%, partially offset by COVID-19 Testing of (3.9%), acquisitions of (0.3%), and currency of (0.2%). Base Business volume increased 8.1% compared to the Base Business last year. Price/mix was up 7.5% in the Base Business compared to the Base Business last year, which includes the benefit of the Ascension lab management agreement.

Adjusted operating income for the quarter was $409.7 million, or 17.5% of revenue, compared to $515.6 million, or 22.9%, in the second quarter of 2022. The decrease in adjusted operating income and margin was primarily due to a reduction in COVID-19 Testing. Excluding the mix impact from Ascension, Base Business margin was up due to the benefit of organic growth and LaunchPad savings, which was partially offset by higher personnel expense.

Biopharma Laboratory Services

Revenue for the quarter was $699.0 million, an increase of 3.1% from $677.9 million in the second quarter of 2022. The increase was primarily due to organic growth of 2.1% and foreign currency translation of 1.5%, partially offset by divestitures of (0.4%). The increase in organic revenue was negatively impacted by approximately (5.0%) due to NHP-related constraints in its Early Development business.

Adjusted operating income for the quarter was $104.6 million, or 15.0% of revenue, compared to $93.0 million, or 13.7%, in the second quarter of 2022. Adjusted operating income and margin increased due to demand growth and LaunchPad savings, partially offset by higher personnel expense. The improvement in operating income and margin was impacted by the NHP-related constraints.

Net orders and net book-to-bill during the trailing twelve months were $3.30 billion and 1.23, respectively. Backlog at the end of the quarter was $7.96 billion, an increase of 11.2% compared to last year. The company expects approximately $2.46 billion of its backlog to convert into revenue in the next twelve months.

Outlook for 2023

Labcorp is providing 2023 full year guidance to reflect its second quarter performance and full year outlook. The following guidance assumes foreign exchange rates effective as of June 30, 2023, for the remainder of the year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions, share repurchases and dividends.

On July 27, 2023 Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-care biopharmaceutical company, reported its financial results for the first half of 2023 (Press release, Ipsen, JUL 27, 2023, View Source [SID1234633457]).

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H1 2023 total sales up by 7.4% at CER1 (7.2% as reported), with growth-platforms’2 sales increasing by 17.7%1 and a strong contribution from newly acquired medicines, Bylvay (odevixibat) and Tazverik (tazemetostat). Somatuline (lanreotide) sales, now comprising around a third of the total, fell by 12.0%1
H1 2023 core operating margin of 34.0%, a decline of 5.6% points, driven by investment in the pipeline, mainly from Bylvay and Tazverik. IFRS operating margin of 19.2%, down by 15.7% points, including the integration costs and amortization of intangible assets from Albireo and Epizyme
Acquisition of Albireo accompanied by several favorable developments in the pipeline, including Onivyde (irinotecan), Bylvay, palovarotene and elafibranor
Upgraded 2023 financial guidance: total-sales growth greater than 6.0% at CER1 (prior guidance: greater than 4.0% at CER1); core operating margin greater than 30.0% of total sales (prior guidance: around 30%)
Extract of consolidated results for H1 2023 and H1 20223:

H1 2023 H1 2022 % change
€m €m Actual CER1
Total Sales 1,536.6 1,433.7 7.2% 7.4%
Core Operating Income 523.2 568.0 -7.9%
Core operating margin 34.0% 39.6% -5.6% pts
Core Consolidated Net Profit 393.0 420.5 -6.5%
Core earnings per share (fully diluted) €4.73 €5.06 -6.6%
IFRS Operating Income 295.6 501.3 -41.0%
IFRS operating margin 19.2% 35.0% -15.7%
IFRS Consolidated Net Profit 195.1 394.3 -50.5%
IFRS earnings per share (fully diluted) €2.35 €4.74 -50.5%
Free Cash Flow 371.5 339.0 9.6%
Closing net cash/(debt)4 (272.2) 168.2 n/a

David Loew, Chief Executive Officer, commented:

"The successful delivery on our strategic roadmap is yielding more top-line growth, advancements in the pipeline and further positive developments from external innovation. Improving execution supported another strong performance from our growth platforms in Oncology and Neuroscience in the first half of the year, while I was particularly pleased with the Rare Disease progress of the pipeline, including another regulatory approval for Bylvay in the U.S., positive clinical-trial results for elafibranor and a favorable regulatory step for palovarotene in the U.S. These developments have the potential to significantly benefit patients across a range of indications.

The performance in the first half of the year is reflected in today’s upgrade to our full-year guidance. We look forward to more milestones and further expansion of the pipeline over time through additional external-innovation transactions. I am confident, as we continue to deliver more medicines to patients, in ensuring the sustainable growth of Ipsen."

Full-year 2023 guidance
Ipsen has upgraded its financial guidance for FY 2023:

Total-sales growth greater than 6.0%, at constant currency (prior guidance: greater than 4.0% at constant currency). Based on the average level of exchange rates in June 2023, an adverse impact on total sales of around 3% from currencies is expected
Core operating margin greater than 30.0% of total sales, excluding any potential impact of incremental investments from future external-innovation transactions (prior guidance: around 30%)
Pipeline update
Several announcements regarding Ipsen’s pipeline were published in June 2023:

The U.S. Food and Drug Administration (FDA) accepted its supplemental New Drug Application for Onivyde plus 5 fluorouracil/leucovorin and oxaliplatin (the NALIRIFOX regimen) as a potential first-line treatment for metastatic pancreatic ductal adenocarcinoma. The Prescription Drug User Fee Act (PDUFA) goal date is
13 February 2024
The U.S. FDA approved Bylvay for the treatment of cholestatic pruritus in patients from 12 months of age with Alagille syndrome (ALGS). In July 2023, the European Medicine Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending the approval of Bylvay for the treatment of cholestatic pruritus in patients with ALGS aged six months or older. The Committee for Orphan Medicinal Products (COMP), a scientific committee of the EMA, concurrently issued a negative opinion for the maintenance of Bylvay’s orphan drug designation in ALGS. This latter opinion prevents the retention of orphan-drug status in Bylvay’s marketing authorization in ALGS and might delay a final European Commission decision. Ipsen plans to submit an appeal in respect of the COMP opinion
The U.S. FDA Endocrinologic and Metabolic Drugs Advisory Committee voted in favor of investigational palovarotene as an effective treatment, with a positive risk-benefit profile, for people living with the ultra-rare bone disease, fibrodysplasia ossificans progressiva (FOP). The PDUFA goal date is 16 August 2023. In May 2023, the CHMP confirmed the negative opinion on palovarotene as a potential treatment for FOP, and it was therefore not subsequently approved by the European Commission
Positive top-line data from the pivotal ELATIVE Phase III trial were published. In the trial, the efficacy and safety of elafibranor was assessed for the treatment of patients with the rare cholestatic liver disease, primary biliary cholangitis, who have an inadequate response or intolerance to the current standard of care therapy, ursodeoxycholic acid. The trial met its primary endpoint, and full trial data will be presented at a future scientific congress
Update on Galderma partnership

In July 2023, Ipsen notified Galderma of the termination of the July 2014 R&D collaboration related to the parties’ respective neurotoxin programs.

Ipsen will retain all rights and obligations related to its early-stage R&D neurotoxin pipeline, including the development of IPN10200 (longer-acting neurotoxin). This decision does not impact the two ICC arbitrations initiated by Galderma. Ipsen intends to fully defend and vindicate its rights against Galderma’s allegations.

Consolidated financial statements

The Board of Directors approved the condensed consolidated financial statements on 26 July 2023. The Company’s auditors performed a limited review of the H1 2023 condensed consolidated financial statements. The interim financial report, with regards to the regulated information, will be available on ipsen.com in due course, under the Reports and Accounts tab in the Investor Relations section.

Conference call

A conference call and webcast for investors and analysts will begin today at 2pm, Paris time. Participants can access the call and its details by registering here; webcast details can be found here.

Calendar
Ipsen intends to publish its year-to-date and third-quarter sales update on 26 October 2023. The Company also anticipates hosting a capital-markets event on 7 December 2023 in London. It will be webcast live and details will be available in due course.

Notes

All financial figures are in € millions (€m). The performance shown in this announcement covers the six-month period to 30 June 2023 (H1 2023) and the three-month period to 30 June 2023 (Q2 2023), compared to six-month period to 30 June 2022 (H1 2022) and the three-month period to 30 June 2022 (Q2 2022), respectively, unless stated otherwise. Commentary is based on the performance in H1 2023, unless stated otherwise. The performance of the Consumer HealthCare (CHC) business, divested in July 2022, has been excluded from all commentary and comparisons to prior performance.

On July 27, 2023 ImmunoGen, Inc. (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reported that the Company will participate in a fireside chat at the upcoming Canaccord Genuity 43rd Annual Growth Conference in Boston, MA (Press release, ImmunoGen, JUL 27, 2023, View Source [SID1234633455]). The presentation is scheduled for August 10, 2023 at 10:00 am ET.

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A webcast of the presentation will be accessible through the "Investors and Media" section of the Company’s website, www.immunogen.com. Following the live webcast, a replay will be available at the same location.

On July 27, 2023 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported its financial results for the first half of fiscal year 2023 (Press release, Chugai, JUL 27, 2023, View Source [SID1234633453]).

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"In the second quarter of this year, we saw a continuation of the increase in both revenue and profits on a Core-basis from the first quarter. Domestic and overseas sales as well as other revenue increased. Domestic sales were driven by new products Polivy, Vabysmo, and Evrysdi, mainstay products Hemlibra, Enspryng and Tecentriq, and the supply of Ronapreve to the government in the first quarter. Overseas sales increased from the growth of mainstay products Alecensa and Hemlibra. In R&D, Chugai’s crovalimab was filed for approval in Japan, the U.S., and Europe. In addition, our in-house project ROSE12 entered the discovery pipeline, and we announced the decision to establish a corporate venture capital to further accelerate our discovery engine. Although contributions of COVID-19-related drugs have run their course, our core business remains solid, and we will continue to strive to create innovation," said Dr. Osamu Okuda, Chugai’s President and CEO.

< Half Year Financial Results (Core results, January to June 2023)>

Chugai reported increased revenue and operating profit for the first half year (Core-basis) consistent with first-quarter results, compared to the same period of the previous fiscal year.

Revenue increased in 15% overall, with growth in both domestic and overseas sales and other revenue. Domestic sales increased by approximately 15%. In the oncology field, the growth was approximately 3% year-on-year due to the contribution of steady market penetration of new product Polivy, and the mainstay product Tecentriq despite the impact of biosimilars and NHI drug price revisions on mature products such as Avastin and Herceptin. In the specialty field, sales increased by 24%, driven by the penetration of new products Vabysmo and Evrysdi, as well as the contribution of mainstay products Hemlibra and Enspryng, and the supply of Ronapreve to the government in the first quarter. Overseas sales increased by 17%. Sales of Alecensa doubled year-on-year, and sales of Hemlibra were also solid. Other revenue increased by approximately 11%, mainly due to the increase in milestone revenues. Revenue on IFRS basis, including Non-Core items, decreased due to the one-time impact of the lump-sum income from the settlement agreement with Alexion Pharmaceuticals, Inc in the previous year.

Cost to sales ratio rose by 3.5% points year-on-year to 46.3%, mainly due to the impact of foreign exchange. Research and development expenses increased mainly due to investments into drug discovery and early development, including the start of operation of Chugai Life Science Park Yokohama, and increases associated with the progress of development projects. Selling, general and administration expenses were comparable to the same period of last year. Other operating income (expense) was an income of ¥16.2 billion, mainly due to the recognition of income from disposal of product rights and gain on sale of property, plant and equipment. As a result, Core operating profit totaled ¥232.0 billion (+15.2%).

The company also made good progress in research and development. Among our in-house projects, anti-complement C5 recycling antibody crovalimab was filed in Japan, the U.S., and Europe in addition to filing in China, for paroxysmal nocturnal hemoglobinuria (PNH). Anti-IL-31 receptor A antibody nemolizumab was also filed for approval in Japan for additional indication of prurigo nodularis, and pruritus associated with atopic dermatitis (pediatric), by Maruho, the licensee of the drug in Japan. Furthermore, ROSE12 entered the clinical development phase for solid tumors, as the second Switch Antibody TM project applying Chugai’s proprietary antibody engineering technology. Overall, in-house projects which will contribute to the company’s mid to long term growth, is progressing steadily. As for projects in-licensed from Roche, anti-IL -6 antibody RG6179 newly entered the company’s pipeline, as an ophthalmology project for noninfectious uveitic macular edema.

In June, Chugai announced its decision to establish a corporate venture capital (CVC) "Chugai Venture Fund, LLC," which will make investments in drug discovery targets, drug discovery technologies and digital technologies that will lead to the creation of innovative new drugs. Primarily targeting drug discovery start-ups, it will invest an overall US $200 million, as well as providing technical advisory support and promoting partnership with Chugai. Through co-creation with investment partners, this CVC aims to combine Chugai’s strengths with external technologies, and to further accelerate our drug discovery engine.

[2023 half year results]

Billion JPY 2023
Jan – Jun 2022
Jan – Jun % change
Core results
　Revenue 579.7 504.0 +15.0%
　　Sales 523.0 452.8 +15.5%
　　Other revenue 56.6 51.2 +10.5%
　Operating profit 232.0 201.4 +15.2%
　Net income 171.4 144.7 +18.5%
IFRS results*
　Revenue 579.7 595.9 -2.7%
　Operating profit 210.9 286.9 -26.5%
　Net income 156.7 204.2 -23.3%
*IFRS results in 2022 include non-Core items, such as the income and other related items, which totaled ¥90.7 billion associated with the settlement agreement between Chugai and Alexion Pharmaceuticals, Inc., which are excluded from the Core results Chugai adopts to manage recurring business activities.

[Sales breakdown]

Billion JPY 2023
Jan – Jun 2022
Jan – Jun % change
Sales 523.0 452.8 +15.5%
　Domestic sales 313.6 273.8 +14.5%
　　Oncology 126.5 123.0 +2.8%
　　Specialty 187.1 150.9 +24.0%
　Overseas sales 209.4 179.0 +17.0%
[Progress in R&D activities for Apr 28th, 2023 – Jul 27th, 2023]

2023 Q2 R&D Progress
About Core results

Chugai discloses its results on a Core basis from 2013 in conjunction with its decision to apply IFRS. Core results are the results after adjusting non-Core items to IFRS results. Chugai’s recognition of non-recurring items may differ from that of Roche due to the difference in the scale of operations, the scope of business and other factors. Core results are used by Chugai as an internal performance indicator, for explaining the underlying business performance both internally and externally, and as the basis for payment-by-results such as a return to shareholders.

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