On August 3, 2023 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the second quarter ended June 30, 2023 (Press release, NanoString Technologies, AUG 3, 2023, View Source [SID1234633759]).

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"Strong growth in our spatial biology business and continued durability in our nCounter business helped us generate record revenue during the second quarter," said Brad Gray, President and CEO of NanoString. "We expect to continue to benefit from substantial CosMx instrument order backlog through the back half of the year and into 2024, providing visibility into revenue growth and anticipated reductions in our working capital requirements, cash burn and operating loss."

Second Quarter Financial Highlights

•Total revenue of $44.2 million
•Spatial biology revenue of $23.3 million
•nCounter revenue, inclusive of all service and other revenue, of $20.9 million
•Cash, cash equivalents and short-term investments balance of $117.6 million as of June 30, 2023
Spatial Biology
•Accelerated CosMx shipments during Q2, resulting in Q2 spatial biology instrument revenue growth of 188% year-over-year
•Successfully defended substantial CosMx instrument order book, fulfilling or retaining approximately 97% of cumulative orders as of June 30, 2023
•Captured new orders for spatial biology instruments at a rate exceeding the Q1 pace, and retained more than $35 million in CosMx instrument order backlog as of June 30, 2023
•Recorded spatial biology consumables revenue growth of 44% year-over-year, and approximately $85,000 of annualized pull-through, driven by a steady GeoMx consumables pull-through over a larger installed base supplemented by growing shipments of CosMx consumables
•Partnered with Owkin and world-leading cancer research institutions and announced the launch of Multi Omic Spatial Atlas in Cancer (MOSAIC) at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)’s annual meeting. MOSAIC is a project designed to revolutionize cancer research and unlock potential new breakthrough treatments through the use of spatial omics, which can leverage AI to help reveal the location and molecular activity of tumor and immune cells by providing a spatial atlas of cancer cells
•Partnered with Acrobat Genomics and the Illumina Accelerator to collaborate with Stanford Medicine to discover new drug targets for gene editing-based therapeutics using GeoMx Digital Spatial Profiler (DSP) technology
•Grew total spatial biology system installed base to approximately 445 systems, an increase of approximately 41% year-over-year
•Total peer-reviewed publications featuring our spatial biology platforms were approximately 280 as of June 30, 2023, representing an increase of approximately 150 publications in the last 12 months
nCounter
•Recorded nCounter consumables revenue growth of approximately 8% year-over-year and approximately $46,000 of annualized pull-through
•Total installed base of our nCounter platforms of approximately 1,135, an increase of approximately 5% year-over-year
•Total peer-reviewed publications featuring nCounter were approximately 7,075 as of June 30, 2023, representing an increase of approximately 1,275 publications in the last 12 months
Guidance
Management reiterated its full year guidance, which remains as follows:
•Total revenue of $175 to $185 million
◦Spatial biology revenue of $100 to $105 million
◦nCounter revenue, inclusive of all service and other revenue, of $75 to $80 million
•Adjusted EBITDA loss of $65 to $75 million

Financial Results

We have elected to present selected non-GAAP, or adjusted, financial measures, including Adjusted EBITDA. These adjusted financial measures are calculated excluding certain items that may make it more challenging to compare our GAAP operating results across periods. Such items may include stock-based compensation, depreciation and amortization, or one-time charges such as transaction related fees and expenses or restructuring charges and severance costs. A reconciliation of adjusted financial measures to the nearest comparable GAAP financial measure can be found in the tables at the end of this press release.
(dollars in thousands) Three Months Ended June 30,
GAAP Non-GAAP
2023 2022 2023 2022
Revenue $ 44,157 $ 32,219 $ 44,157 $ 32,219
Cost of revenue 29,757 15,852 27,168 14,756
Gross margin 33 % 51 % 38 % 54 %
Research and development 18,214 17,346 14,428 14,474
Selling, general and administrative 39,076 36,112 29,260 30,224
Adjusted EBITDA N / A N / A $ (26,699) $ (27,235)
Non-operating expense, net (778) (2,148) (778) (2,148)
Net loss $ (43,668) $ (39,239) $ (27,477) $ (29,383)

Six Months Ended June 30,
GAAP Non-GAAP
2023 2022 2023 2022
Revenue $ 79,962 $ 63,299 $ 79,962 $ 63,299
Cost of revenue 52,628 30,630 47,720 28,545
Gross margin 34 % 52 % 40 % 55 %
Research and development 34,332 34,763 27,083 29,430
Selling, general and administrative 76,442 72,467 59,022 59,621
Adjusted EBITDA N / A N / A $ (53,863) $ (54,297)
Non-operating expense, net (1,466) (4,178) (1,466) (4,178)
Net loss $ (84,906) $ (78,739) $ (55,329) $ (58,475)

Supplemental Information
As a supplement to the table above, we have posted to the investor relations section of our website, at View Source, supplemental financial data that include our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the second quarter of 2023 and the six months ended June 30, 2023, and for each quarter of and the full year of 2022.

Conference Call

Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss these results and answer questions. Investors and other interested parties can register for the call in advance by visiting View Source Following registration, an email confirmation will be sent including dial-in details and unique conference call codes for entry. Registration is open throughout the call, but to ensure connection for the full call, registration in advance is recommended. The link to the webcast and audio replay will be made available at the Investor Relations website: www.nanostring.com. A replay of the call will be available beginning August 3, 2023 at 7:30pm ET through midnight ET on August 17, 2023. To access the replay, dial (800) 770-2030 or (647) 362-9199 and reference Conference ID: 72369. The webcast will also be available on our website for one year following the completion of the call.

On August 3, 2023 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its second quarter ended June 30, 2023 (Press release, Myriad Genetics, AUG 3, 2023, View Source [SID1234633757]). The Company also provided an update on its business performance and 2023 financial guidance.

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"Strong double-digit test volume growth in the second quarter of 2023 continues to reflect greater adoption by providers as we continue to emerge from the pandemic restrictions on access and Myriad’s improved commercial execution across our businesses. We’re pleased with ongoing share gains in our hereditary cancer testing franchise, particularly the 21% year-over-year volume growth in Women’s Health," said Paul J. Diaz, president and CEO, Myriad Genetics. "Excluding changes in estimated revenue, Myriad generated 10% year-over-year revenue growth in the second quarter of 2023, even as the company, and the diagnostics lab industry, continue to work through challenging payor dynamics that negatively impacted our second quarter revenue by approximately $4 million. We believe these dynamics are largely transitory and we remain focused on working collaboratively with payers to support reimbursement for the services we provide to healthcare providers and their patients." Mr. Diaz concluded, "In the second quarter of 2023, we generated strong gross margins, managed operating expenses and improved our financial flexibility by executing on a new credit facility. We remain confident in our ability to achieve our goal of adjusted profitability by the fourth quarter and sustainable 10%+ annual revenue growth."
Financial and Operational Highlights:
•Test volumes of 358,325 in the second quarter of 2023 increased 38% year-over-year, or 17% excluding contributions from the SneakPeek Early Gender DNA Test.
•The following table summarizes sequential and year-over-year quarterly testing volume changes in the company’s core product categories:
Three months ended
June 30, 2023 Three months ended
March 31, 2023 Three months ended
June 30, 2023

Year-over-Year Year-over-Year Sequential
Product volumes:
Hereditary cancer
20 % 24 % 8 %
Tumor profiling 8 % 5 % (2) %
Prenatal 71 % 77 % (2) %
Pharmacogenomics
23 % 31 % 7 %
Total 38 % 45 % 3 %

2

•Excluding contributions from the SneakPeek Early Gender DNA Test:
◦Prenatal testing volumes in the second quarter 2023 increased 12% year-over-year and 1% sequentially. In the first quarter 2023 prenatal testing volumes increased 12% year-over-year and 16% sequentially.
•The following table summarizes year-over-year quarterly revenue changes in the company’s core businesses by product category:
Three months ended Six months ended
(in millions)
June 30, 2023 June 30, 2022
% Change
June 30, 2023
June 30, 2022
% Change
Product revenues:
Hereditary cancer
$
76.7
$
79.4 (3) %
$
152.4
$
150.3 1 %
Tumor profiling
36.0 33.5 7 % 73.3 66.0 11 %
Prenatal 35.6 33.3 7 % 71.8 65.2 10 %
Pharmacogenomics
35.2 33.1 6 % 67.2 62.4 8 %
Total $ 183.5 $ 179.3 2 % $ 364.7 $ 343.9 6 %

•Year-over-year revenue growth in the second quarter of 2023 reflects an $11.7 million addition to revenue in the second quarter of 2022 from change of estimates1 compared to an immaterial change in estimated revenue in the second quarter of 2023.
•GAAP gross margins of 68.5% in the second quarter of 2023; adjusted gross margins for the second quarter of 2023 was 69.0%, an increase of 130 basis points from the first quarter of 2023, reflecting disciplined execution from the laboratory operations team.
•GAAP total operating expenses in the second quarter of 2023 were $239.4 million. Adjusted operating expenses in the quarter were $133.4 million. On a sequential basis, adjusted operating expenses in the second quarter decreased $11.1 million, reflecting seasonality and general cost management activities.
•GAAP operating loss in the second quarter of 2023 was $113.7 million, which factors in settlement costs for the securities class action lawsuit, which is subject to court approval, of $77.5 million; adjusted operating loss in the quarter was $6.8 million.
•Ended the second quarter of 2023 with $127.8 million in cash, cash equivalents and marketable investment securities, which includes $40.0 million of borrowings under the new asset-based credit facility.

1 Change of estimates may include both positive and negative adjustments primarily driven by changes in the estimated transaction price due to contractual adjustments, actual cash collections, and obtaining updated information from payors and patients that was unknown at the time revenue was recognized.

Business Performance and Highlights:

Oncology
The Myriad Genetics Oncology business provides hereditary cancer testing, including the MyRisk hereditary cancer test for patients who have cancer. It also provides tumor profiling products such as the myChoice CDx companion diagnostic test, the Prolaris prostate cancer test, Precise Tumor molecular profile test and the EndoPredict breast cancer prognostic test. The Oncology business delivered revenue of $80.7 million in the second quarter of 2023.
•Second quarter hereditary cancer testing volumes in Oncology grew 18% year-over-year. In addition, Prolaris continued to see strong demand as second quarter testing volumes grew 13% year-over-year.
•Named leading medical oncologist and University of Pittsburgh School of Medicine professor of medicine, Adam Brufsky, MD, PhD, FACP, as Scientific Advisor to the Oncology business unit. Dr. Brufsky is responsible for guiding clinical development and medical affairs to further elevate the Precise Oncology Solutions portfolio.
•In June 2023, we entered into a research collaboration with the University of Texas MD Anderson Cancer Center to use our minimal residual disease testing platform, a tumor-informed high-definition assay that detects circulating tumor DNA (ctDNA), to support research focused on metastatic renal cell carcinoma treatment selection and response.
•Added the Folate Receptor Alpha test as an enhancement to the Precise Oncology Solutions portfolio to help guide treatment decisions for women living with ovarian cancer.

Women’s Health
The Myriad Genetics Women’s Health business serves women of all ancestries by assessing their risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family. The Women’s Health business delivered revenue of $67.6 million in the second quarter of 2023.
•Second quarter hereditary cancer testing volumes in Women’s Health grew 21% year-over-year, driven by competitive account wins and increased adoption by providers of MyRisk for patients whose family history puts them at a higher risk for cancer.
•Excluding the contributions from the SneakPeek Early Gender DNA Test, prenatal testing volumes in the second quarter of 2023 grew 12% versus the second quarter of 2022.
•In collaboration with SimonMed Imaging, one of the largest independent outpatient medical imaging providers and physician radiology practices in the U.S., we launched a new Breast Cancer Risk Assessment Program in the second quarter of 2023. This program combines diagnostic imaging and genetic risk assessment utilizing MyRisk with RiskScore and patient education. The program is expected to enable affordable access to genetic testing and deliver personalized insights to better inform clinical decisions for millions of potential patients.
•During the second quarter of 2023, Myriad surpassed one million Prequel tests provided to-date.

Mental Health
The Myriad Genetics Mental Health business consists of the GeneSight test that covers 64 medications commonly prescribed for depression, anxiety, attention deficit hyperactivity disorder, and other psychiatric conditions. GeneSight helps physicians understand how genetic alterations impact patient response to antidepressants and other drugs. In the pharmacogenomics category, the GeneSight test recorded revenue of $35.2 million in the second quarter of 2023.
•In the second quarter, Myriad Genetics added approximately 4,000 clinicians who ordered GeneSight for the first time.
•Second quarter GeneSight revenue began to factor in reimbursement from a number of Medicaid programs and managed Medicaid plans now pricing and paying for GeneSight under the PLA code (O345U).
•Myriad continues to work on building GeneSight’s clinical data, including collaborating with Optum Genomics to create a multi-phase study designed to better understand GeneSight’s ability to improve clinical outcomes and reduce healthcare costs.
•Building on a 2020 meta-analysis of the clinical utility of the GeneSight test, which included four prospective, controlled trials and 1,556 unique patients, Myriad is incorporating additional published studies to further measure the utility of combinatorial pharmacogenomics testing for the treatment of Major Depressive Disorder (MDD).

Securities Class Action Settlement
Myriad Genetics reached an agreement to settle the securities class action lawsuit, In re Myriad Genetics, Inc. Securities Litigation, 2:19-cv-00707-JNP-DBP (D. Utah). The settlement, if approved by the United States District Court for the District of Utah, will resolve all claims brought by the plaintiff Los Angeles Fire and Police Pensions Fund, without Myriad Genetics making an admission or the finding of fault, liability, or wrongdoing by Myriad Genetics or any current and former Myriad Genetics employees. Pursuant to the terms of the settlement, Myriad Genetics has agreed to pay a settlement amount of $77.5 million, consisting of at least $20 million in cash to be paid in the third quarter of 2023, and, at Myriad Genetics’ sole election, the remaining $57.5 million in either shares of Myriad Genetics common stock or cash, or a combination thereof, upon the final court approval of the settlement, which is expected to occur in the first quarter of 2024. The company intends to pay the majority of the settlement amount in cash from its cash on hand, operating cash flow and asset based credit facility. Additional details can be found on the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 3, 2023.

Liquidity and Cash Flow
In the second quarter, Myriad established a new $90 million asset-based credit facility (the "ABL Facility") with JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A. and Bank of America, N.A. The ABL Facility includes an option to increase the maximum principal amount by up to $25 million for a total of $115 million. The ABL Facility replaces the Company’s previous credit facility and matures on June 30, 2026.

(in millions)
Total cash and cash equivalents at end of second quarter of 2023 $ 127.8
Amount available to draw currently under the asset-based credit facility* 23.5
Expected initial cash payment in the securities class action settlement (third quarter of 2023)** (20.0)
Estimated capex and cash flow from operations in second half of 2023 (30.0)
Estimated total available cash and cash equivalents and availability under credit facility at year end 2023 $ 101.3
* The Company plans to increase the size of the ABL facility by $25 million to $115 million by the end of 2023.
** The remaining $57.5 million is to be paid upon the final court approval of the settlement, which is expected to occur in the first quarter of 2024. The company intends to pay the majority of the settlement amount in cash from its cash on hand, operating cash flow and asset based credit facility.

2023 Investor Event
Myriad Genetics will host its 2023 Investor Event at the Dr. Walter Gilbert Innovation Center in South San Francisco on September 19, 2023. The event will commence with a facility tour beginning at 12:00 p.m. EDT followed by a management presentation and Q&A from 1:00 p.m. to 3:00 p.m. EDT. For those unable to attend in person, a webcast will be available at the investor site on www.myriad.com.

Background on Walter Gilbert, Ph.D.
Walter Gilbert, Ph.D, a molecular biology pioneer and co-founder of Myriad Genetics served on the Board of Directors for 28 years and was the company’s first Chairman of the Board. An early proponent of sequencing the human genome, Dr. Gilbert joined Myriad as a founding scientist in 1992 and served in numerous leadership roles which positively impacted the strategic direction and growth of the company. Leading up to his work at Myriad Genetics, Dr. Gilbert won the Nobel Prize in Chemistry in 1980 for his contributions to the development of DNA sequencing technology. He also was a founder of Biogen, Inc. and its Chairman of the Board and Chief Executive Officer from 1981 to 1985, as well as the Carl M. Loeb University Professor at Harvard University.

Financial Guidance
Myriad Genetics reaffirms its 2023 revenue and non-GAAP financial guidance and updates its other GAAP financial guidance to account for the pending settlement of the securities class action lawsuit, as stated in the table below.*
(in millions, except per share amounts) FY 2023 FY 2023 Comments
Revenue $730 – $750 2023 annual growth between 8% – 11% over 2022
Gross margin % 68% – 70% GM expected to fluctuate in any quarter given seasonality
GAAP OPEX $722 – $742 Increase in the GAAP operating expense range to include expected costs of approximately $80 million associated with the settlement of the securities class action lawsuit
Adjusted OPEX $535 – $555
GAAP EPS $(2.75) – $(2.60) Increase in the GAAP EPS range to include expected costs of approximately $80 million associated with the settlement of the securities class action lawsuit
Adjusted EPS $(0.36) – $(0.24) Adjusted EPS is expected to improve through 2023, reaching positive adjusted profitability and adjusted operating cash flow in Q4 ’23
*Assumes currency rates as of August 3, 2023

Myriad Genetics’ fiscal year 2023 non-GAAP guidance begins with the comparable GAAP financial measure and excludes the estimated impact of stock-based compensation expense of approximately $40.0 million, non-cash amortization associated with acquisitions of approximately $43.0 million and special items such as costs related to transformation initiatives of approximately $24.0 million, legal settlement costs of approximately $80 million, and tax adjustments of approximately $8.0 million.

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release.

Conference Call and Webcast
A conference call will be held today, Thursday, August 3, 2023, at 4:30 p.m. EDT to discuss Myriad Genetics’ financial results and business developments for the second quarter 2023. The dial-in number for domestic callers is 1-800-954-0653. International callers may dial 1-212-231-2921. All callers will be asked to reference reservation number 22027563. An archived replay of the call will be available for seven days by dialing 1-800-633-8284 and entering the reservation number above. The conference call and slide presentation will be available through a live webcast at www.myriad.com.

On August 3, 2023 Morphic Therapeutic (Nasdaq: MORF), a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, reported corporate highlights and financial results for the second quarter of 2023 (Press release, Morphic Therapeutic, AUG 3, 2023, View Source [SID1234633756]).

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"Morphic rides a wave of momentum into the 2nd half of 2023, bolstered by the compelling and consistent dataset derived from the EMERALD-1 Phase 2a study of MORF-057 in ulcerative colitis. These data paved the way to a fortress balance sheet, catalyzing the broader advancement of our pipeline," commented Praveen Tipirneni, MD, Chief Executive Officer of Morphic Therapeutic. "The MORF-057 development program moves ahead with on-track enrollment of ulcerative colitis patients in the EMERALD-2 Phase 2b study and with the preparation for a Phase 2 trial in Crohn’s Disease, planned to begin in the first half of 2024. Our robust financial position opens the gates to additional investment in therapeutic areas beyond IBD, enabled by the MInT Platform.

In particular, our αvβ8 inhibitor program continues to stir enthusiasm, buoyed by compelling pre-clinical data and the potentially central role of TGF-β in the pathogenesis of myelofibrosis. On the strength of these advancements, we have formally nominated MORF-088, a selective small molecule inhibitor of αvβ8, as our development candidate for myelofibrosis and expect this program to enter the clinic in the first half of 2024."

Second Quarter 2023 and Recent Corporate Highlights

In the EMERALD-1 Phase 2a trial of MORF-057 in UC, topline data indicate that MORF-057:

•Was generally well tolerated with no safety signal observed
•Achieved the study’s primary endpoint and demonstrated consistent, clinically meaningful improvements across secondary and exploratory measures
•Demonstrated a statistically significant reduction of 6.4 points (p=0.002) from baseline at Week 12 in the Robarts Histopathology Index (RHI) Score
•Achieved 26% clinical remission as measured by Modified Mayo Clinic Score (mMCS)
•Demonstrated positive biomarker results, including the saturation of the α4β7 receptor and α4β7 lymphocyte subset changes consistent with Phase 1 MORF-057 data

Ongoing MORF-057 EMERALD Phase 2 Development Program Updates

•Continued the 40-week maintenance phase of the EMERALD-1 study as projected with top-line data anticipated in the first half of 2024
◦Patients who completed the 12-week induction phase of the EMERALD-1 Phase 2a study were eligible to continue participating in a 40-week maintenance phase of the EMERALD-1 open-label single-arm study
•Announced completion of enrollment in the exploratory cohort of the EMERALD-1 study comprised of UC patients who have previously failed treatment with vedolizumab
•Announced that the EMERALD-2 global Phase 2b randomized, double-blind, placebo-controlled trial of MORF-057 in patients with moderate-to-severe UC continued to ramp-up and enroll as projected
◦The primary endpoint of EMERALD-2 is the clinical remission rate as measured by mMCS at 12 weeks and is expected to report in the first half of 2025
•Announced that the Phase 2b study of MORF-057 in Crohn’s Disease is anticipated to begin in the first half of 2024
•Announced the acceptance of a moderated poster presentation of the EMERALD-1 study results at the UEG Week 2023 in October in Copenhagen

MORF-057 Preclinical Studies

•Presented new biomarker data at Digestive Disease Week 2023, demonstrating increases in circulating fibroblasts, consistent with previous findings and adding new support to mechanistic understanding of MORF-057’s activity in a non-human primate model of UC. These data further support the ongoing EMERALD Phase 2 clinical trials of MORF-057 in IBD

Equity Financing

•Morphic strengthened its balance sheet with a total of approximately $345 million in new capital during the second quarter through:
◦$276 million in gross proceeds from a public offering of 6,133,334 shares of its common stock at $45 per share, including full exercise of the underwriters’ overallotment option following the release of the positive and consistent EMERALD-1 Phase 2a topline data in ulcerative colitis
◦~$69 million in gross proceeds through the use of its ATM facility at a volume-weighted average price of $56.20 per share

Financial Results for the Second Quarter 2023

•Net loss for the quarter ended June 30, 2023, was $39.0 million or $0.92 per share compared to net income of $26.8 million or $0.68 per share for the same quarter last year
•Revenue was $0 million for the quarter ended June 30, 2023, compared to $60.2 million for the same quarter last year due to the conclusion of the Company’s research and development collaboration with AbbVie
•Research and development expenses were $35.7 million for the quarter ended June 30, 2023, as compared to $25.7 million for the same quarter last year. The increase was primarily attributable to higher manufacturing and development costs along with higher pre-clinical and phase 2 clinical trial costs to support our lead product candidate, MORF-057
•General and administrative expenses were $9.6 million for the quarter ended June 30, 2023, compared to $8.2 million for the same quarter last year. The increase was due to increased non-cash stock-based compensation expenses and higher payroll costs

As of June 30, 2023, Morphic had cash, cash equivalents and marketable securities of $731.4 million, compared to $421.3 million as of March 31, 2023. Based on its current operating plan, Morphic believes its existing cash, cash equivalents and marketable securities as of June 30, 2023, will be sufficient to fund operating expenses and capital expenditure requirements into the second half of 2027.

Upcoming Morphic Investor and Medical Meeting Presentations
•Canaccord Genuity 43rd Annual Growth Conference, Boston
◦Corporate presentation, August 9, 2023
•Wells Fargo Healthcare Conference, Boston
◦Fireside Chat, September 6, 2023
•UEG Week 2023, Copenhagen
◦EMERALD-1 moderated poster presentation, October 15, 2023

About MORF-057

Morphic is developing MORF-057 as a selective, oral small molecule inhibitor of the α4β7 integrin for patients with inflammatory bowel disease (IBD). α4β7 has been clinically validated as a target for the treatment of IBD by the success of the approved injectable antibody therapeutic vedolizumab. MORF-057, like vedolizumab, is designed to block the interactions between α4β7 on the surface of lymphocytes and the mucosal endothelial cell ligand MAdCAM-1, substantially reducing lymphocyte migration from the bloodstream into intestinal mucosal tissues and avoiding inflammation that is associated with IBD.

About the EMERALD-1 Study

EMERALD-1 (MORF-057-201) is an open-label multi-center phase 2a trial designed to evaluate the efficacy, safety, and tolerability of MORF-057 in adults with moderate to severe ulcerative colitis. The 35 patients enrolled in the main cohort of the EMERALD-1 study have been treated with 100 mg BID (twice daily) at sites in the United States and Poland. The primary endpoint of the trial was the change in Robarts Histopathology Index (RHI), a validated instrument that measures histological disease activity in ulcerative colitis at 12 weeks compared to baseline. Patients will continue for an additional 40 weeks of maintenance therapy followed by a 52-week assessment. Secondary and additional pre-specified measures in the EMERALD-1 study include change in the modified Mayo clinic score, safety, pharmacokinetic parameters and key pharmacodynamic measures including α4β7 receptor occupancy and lymphocyte subset trafficking.

About the EMERALD-2 Study

EMERALD-2 (MORF-057-202) is a global phase 2b randomized, double-blind, placebo-controlled trial of MORF-057 that is currently enrolling patients with moderate-to-severe ulcerative colitis. The primary endpoint of EMERALD-2 is clinical remission rate as measured by the Modified Mayo Clinic Score (mMCS) at 12 weeks. EMERALD-2 will also measure several secondary and exploratory endpoints based on the mMCS as well as histologic, pharmacokinetic and pharmacodynamic measures, and safety parameters. Patients in the EMERALD-2 study will be randomized to receive either 200 mg BID MORF-057, 100 mg BID MORF-057, a QD (once daily) dose of MORF-057, or a placebo dose. Following the 12-week induction phase, all patients will receive MORF-057 for 40 weeks of maintenance dosing. For more information about the EMERALD clinical trials of MORF-057, please click here.

On August 3, 2023 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) [("Merrimack" or the "Company")] reported its second quarter 2023 financial results for the period ended June 30, 2023 (Press release, Merrimack, AUG 3, 2023, View Source [SID1234633754]).

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"We were excited to see the announcement from Ipsen that the U.S. Food and Drug Administration (FDA) had accepted its supplemental new drug application (sNDA) Onivyde (irinotecan liposome injection) plus 5 fluorouracil/leucovorin and oxaliplatin (NALIRIFOX regimen) as a potential first-line treatment for metastatic pancreatic ductal adenocarcinoma (mPDAC) and that the FDA had provided a Prescription Drug User Fee Act goal date of 13 February 2024 for review of the application" said Gary Crocker, Chairman of Merrimack’s Board of Directors. "We will continue to monitor the progress of this program which, if approved, would entitle Merrimack to a $225 million milestone payment from Ipsen."

Second Quarter 2023 Financial Results

Merrimack reported a net loss of $391 thousand for the second quarter ended June 30, 2023, or $0.03 per basic and diluted share on a fully diluted basis, compared to a net loss of $478 thousand, or $0.04 per basic and diluted share on a fully diluted basis, for the same period in 2022.

Interest income in the second quarter ended June 30, 2023, was $178 thousand compared to $8 thousand for the same period in 2022.

General and administrative expenses for the second quarter ended June 30, 2023, were $569 thousand, compared to $486 thousand for the same period in 2022.

As of June 30, 2023, Merrimack had cash, cash equivalents and short term investments of $19.0 million, compared to $19.4 million as of December 31, 2022.

As of June 30, 2023, Merrimack had 14.3 million shares of common stock outstanding.

Updates on Programs Underlying Potential Milestone Payments

Ipsen

Metastatic Pancreatic Ductal Adenocarcinoma

•
In November 2022, Ipsen announced the Phase III NAPOLI 3 trial of Onivyde (irinotecan liposome injection) plus 5-fluorouracil/leucovorin and oxaliplatin (the "NALIRIFOX regimen") met its primary endpoint demonstrating clinically meaningful and statistically significant improvement in overall survival compared to nab-paclitaxel plus gemcitabine in 770 previously untreated patients with mPDAC and key secondary efficacy outcome of progression-free survival (PFS) also showed significant improvement over the comparator arm. Ipsen also announced that the safety profile of Onivyde in the NAPOLI 3 trial was consistent with those observed in the previous phase I/II mPDAC study.

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In January 2023, Ipsen presented clinical trial results at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium.

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In June 2023, Ipsen announced that the U.S. Food and Drug Administration (FDA) had accepted its supplemental new drug application (sNDA) Onivyde (irinotecan liposome injection) plus 5 fluorouracil/leucovorin and oxaliplatin (NALIRIFOX regimen) as a potential first-line treatment for metastatic pancreatic ductal adenocarcinoma (mPDAC) and that the FDA had provided a Prescription Drug User Fee Act goal date of 13 February 2024 for review of the application.

Small Cell Lung Cancer

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In August 2022, Ipsen announced that the Phase III RESILIENT trial did not meet its primary endpoint of overall survival compared to topotecan. The trial is evaluating Onivyde versus topotecan in patients with small cell lung cancer, who have progressed on or after platinum-based first-line therapy treatment. In the announcement, Ipsen indicated that detailed results from the RESILIENT trial would be presented at an upcoming medical conference. The analysis concluded that the primary endpoint overall survival was not met in patients treated with Onivyde versus topotecan. However, a doubling of the secondary endpoint of objective response rate in favor of Onivyde was observed. In the August 2022 announcement, Ipsen reported that the clinical study results would be communicated with the regulatory agency. Ipsen indicated that while the results from the analysis of the RESILIENT trial have not demonstrated an overall survival benefit with Onivyde in patients in second-line small cell lung cancer, Ipsen intends to analyze the data further before decisions regarding next steps are made.

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To date, there have been no further announcements by Ipsen regarding these matters and it remains unclear as to whether Ipsen will continue to seek approval for the use of Onivyde in the small cell lung cancer application. If Ipsen elects not to proceed with seeking regulatory approval, or if regulatory approval is not obtained, Merrimack would not be entitled to the $150 million milestone payment tied to FDA approval of Onivyde for treatment of small cell lung cancer.

Elevation Oncology

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In January 2023, Elevation announced it is pausing further investment in the clinical development of seribantumab and intends to pursue further development only in collaboration with a partner. If Elevation elects not to proceed with seeking regulatory approval, or if regulatory approval is not obtained, Merrimack would not be entitled to the $54.5 million in additional potential development, regulatory approval and commercial-based milestone payments.

On August 3, 2023 Pharma major Lupin Limited [BSE: 500257 | NSE: LUPIN] reported its financial performance for the quarter ending June 30, 2023 (Press release, Lupin, AUG 3, 2023, View Source [SID1234633753]). These unaudited results were taken on record by the Board of Directors at a meeting held today.

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Financial Highlights – Consolidated IND-AS

Amt in INR mn

Particulars Quarter
Q1 FY2024 Q4 FY2023 QoQ Growth % Q1 FY2023 YoY Growth %
Sales 47,421 43,303 ↑9.5% 36,040 ↑31.6%
EBITDA 8,791 6,150 ↑ 42.9% 2,379 ↑ 269.6%
EBITDA Margin (%) 18.5% 14.2% ↑ 430 bps 6.6% ↑ 1190 bps
PBT 5,588 2,585 ↑116.2% 23 ↑24516.3%
Income Statement highlights – Q1 FY2024

Gross Profit was INR 31,013 mn compared to INR 25,803 mn in Q4 FY2023, with gross margin of 65.4%
Personnel cost was 17.8% of sales at INR 8,444 mn compared to INR 7,730 mn in Q4 FY2023
Manufacturing and other expenses were 31.0% of sales at INR 14,724 mn compared to INR 13,030 mn in Q4 FY2023
Investment in R&D for the quarter was INR 3,679 mn (7.8% of sales)
Balance Sheet highlights

Operating working capital was INR 51,946 mn as on June 30, 2023
Capital Expenditure for the quarter was INR 1,171 mn
Net Debt as on June 30, 2023 stands at INR 13,099 mn
Net Debt-Equity as on June 30, 2023 stands at 0.10
Commenting on the results, Mr. Nilesh Gupta, Managing Director, Lupin Limited said, "Building on the momentum of the last few quarters, we had a strong quarter with good growth across all key markets as we continue to improve our operating margins driven by higher sales, better mix and cost optimization initiatives. Our India branded business has bounced back to double-digit growth despite NLEM price reductions. With the clearance of Pithampur Unit-2 we expect to add to the product approvals for the US region. Getting approvals for important complex generics like Tiotropium DPI, and getting back into the launch tempo with first to market products like Darunavir and additional new product launches will help sustain the growth momentum both in topline and bottom line as we move ahead"

Consolidated Financial Results Q1 FY2024

Amt in INR mn

Particulars Q1 FY2024 % of sales Q4 FY2023 % of sales QoQ Gr% Q1 FY2023 % of sales YoY Gr%
Sales 47,421 100.0% 43,303 100.0% 9.5% 36,040 100.0% 31.6%
Other operating income 720 1.5% 998 2.3% -27.9% 1,398 3.9% -48.5%
Total Revenue from operations 48,141 101.5% 44,301 102.3% 8.7% 37,438 103.9% 28.6%
Material cost 16,408 34.6% 17,501 40.4% -6.2% 16,098 44.7% 1.9%
Gross Profit (Excl. Other op. income) 31,013 65.4% 25,802 59.6% 20.2% 19,942 55.3% 55.5%
Employee cost 8,444 17.8% 7,730 17.9% 9.2% 7,785 21.6% 8.5%
Manufacturing & Other expenses 14,724 31.0% 13,030 30.1% 13.0% 11,916 33.1% 23.6%
Other Income 228 0.5% 373 0.9% -38.9% 56 0.2% 307.1%
Forex Loss / (Gain) 2 0.0% 263 0.6% -99.3% (684) -1.9% -100.3%
EBITDA 8,791 18.5% 6,150 14.2% 42.9% 2,379 6.6% 269.5%
Depreciation, Amortization & Impairment Expense 2,346 4.9% 2,640 6.1% -11.1% 1,928 5.3% 21.7%
EBIT 6,445 13.6% 3,510 8.1% 83.6% 451 1.3% 1329.0%
Finance cost 857 1.8% 925 2.1% -7.4% 428 1.2% 100.2%
Profit Before Tax (PBT) 5,588 11.8% 2,585 6.0% 116.2% 23 0.1% 24516.3%
Tax 1,055 2.2% 161 0.4% 891 2.5%
Profit After Tax (PAT) 4,533 9.6% 2,424 5.6% (868) -2.4%
(+) Share of Profit from JV – – – – – –
(-) Non-Controlling Interest 10 0.0% 64 0.1% 23 0.1%
Profit/(Loss) for the period 4,523 9.5% 2,360 5.4% (891) -2.5%

Sales Mix

Amt in INR mn

Particulars Q1 FY2024 Q4 FY2023 Growth QoQ Q1 FY2023 Growth YoY
North America 15,905 15,503 2.6% 10,104 57.4%
India 16,384 14,786 10.8% 14,920 9.8%
Growth Markets 4,066 4,385 -7.3% 4,237 -4.0%
EMEA 3,987 4,535 -12.1% 3,335 19.6%
ROW 1,655 868 90.6% 893 85.3%
Total Formulations 41,997 40,077 4.8% 33,489 25.4%
API 3,371 3,226 4.5% 2,551 32.1%
Total Product Sales 45,368 43,303 4.8% 36,040 25.9%
NCE Income 2,053 – NA – NA
Consolidated Sales 47,421 43,303 9.5% 36,040 31.6%

Operational Highlights

North America

North America sales for Q1 FY2024 were INR 15,905 mn, up 2.6% compared to INR 15,503 mn in Q4 FY2023; up 57.4% as compared to INR 10,104 mn in Q1 FY2023; and accounted for 34% of Lupin’s global sales.

Q1 FY2024 sales were USD 181 mn compared to USD 175 mn in Q4 FY2023 and USD 121 mn in Q1 FY2023.

The Company received 4 ANDA approvals from the U.S. FDA, and launched 3 products in the quarter in the U.S. The Company now has 158 generic products in the U.S.

Lupin continues to be the 3rd largest pharmaceutical player in both U.S. generic market and U.S. total market by prescriptions (IQVIA MAT June 2023). Lupin is the leader in 41 of its marketed generics in the U.S. and amongst the Top 3 in 109 of its marketed products (IQVIA March 2023).

India

India formulation sales for Q1 FY2024 were INR 16,384 mn, up 10.8% as compared to INR 14,786 mn in Q4 FY2023; up 9.8% as compared to INR 14,920 mn in Q1 FY2023; and accounted for 35% of Lupin’s global sales.

India Region Formulations sales grew by 11.6% in the quarter as compared to Q4 FY2023, up 10.6% as compared to Q1 FY2023. The company launched 4 brands across therapies during the quarter.

Lupin is the 6th largest company in the Indian Pharmaceutical Market (IQVIA MAT June 2023).

Growth Markets (LATAM and APAC)

Growth Markets registered sales of INR 4,066 mn for Q1 FY2024, down 7.3% compared to INR 4,385 mn in Q4 FY2023; down 4.0% as compared to INR 4,237 mn in Q1 FY2023; and accounted for 9% of Lupin’s global sales.

Brazil sales were BRL 75 mn for Q1 FY2024, compared to BRL 75 mn for Q4 FY2023 and BRL 57 mn for Q1 FY2023.

Mexico sales were MXN 86 mn for Q1 FY2024, compared to MXN 152 mn for Q4 FY2023 and MXN 213 mn for Q1 FY2023.

Philippines sales were PHP 463 mn for Q1 FY2024, compared to PHP 542 mn for Q4 FY2023 and PHP 434 mn for Q1 FY2023.

Australia sales were AUD 26 mn for Q1 FY2024, compared to AUD 24 mn for Q4 FY2023 and AUD 25 mn for Q1 FY2023.

Europe, Middle-East and Africa (EMEA)

EMEA sales for Q1 FY2024 were INR 3,987 mn, down 12.1% compared to INR 4,535 mn in Q4 FY2023; up 19.6% compared to INR 3,335 mn in Q1 FY2023; and accounted for 8% of Lupin’s global sales.

South Africa sales were ZAR 295 mn for Q1 FY2024, compared to ZAR 417 mn for Q4 FY2023 and ZAR 282 mn for Q1 FY2023. Lupin is the 8th largest player in South Africa in the total generics market (IQVIA May 2023).

Germany sales were EUR 10 mn for Q1 FY2024, compared to EUR 10 mn for Q4 FY2023 and EUR 9 mn for Q1 FY2023.

Global API

Global API Sales for Q1 FY2024 were INR 3,371 mn, up 4.5% as compared to INR 3,226 mn in Q4 FY2023; up 32.1% as compared to INR 2,551 mn in Q1 FY2023; and accounted for 7% of Lupin’s global sales.

Research and Development

Investment in R&D was INR 3,679 mn (7.8% of sales) for Q1 FY2024 as compared to INR 3,050 mn (7.0% of sales) for Q4 FY2023.

Lupin received approval for 4 ANDAs from the U.S. FDA in the quarter. Cumulative ANDA filings with the U.S. FDA stand at 443 as of June 30, 2023, with the company having received 294 approvals to date.

The Company now has 54 First-to-File (FTF) filings including 21 exclusive FTF opportunities. Cumulative U.S. DMF filings stand at 169 as of June 30, 2023.