On October 29, 2020 Pacira BioSciences, Inc. (Nasdaq: PCRX), the leading provider of innovative non-opioid pain management options, reported financial results for the third quarter of 2020 (Press release, Pacira Pharmaceuticals, OCT 29, 2020, View Source;991.htm [SID1234569466]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Throughout the third quarter, we continued to make meaningful progress in growing EXPAREL sales despite lingering challenges in the elective surgery market due to the COVID-19 pandemic. The ongoing transition from procedures in the inpatient setting to the 23-hour ambulatory surgical center setting has accelerated because of the pandemic and we expect this trend to continue. The recent opening of our state-of-the art Pacira Innovation and Training Facility in Tampa is expected to further drive the adoption of EXPAREL and iovera° by providing digital and educational tools that meet the needs of our physician customers, as they seek to improve patient care in a variety of surgical settings. Looking ahead, Pacira remains well-positioned as the leading provider of innovative non-opioid pain management solutions," said Dave Stack, chairman and chief executive officer of Pacira BioSciences.

Third Quarter 2020 Financial Results
•Total revenues were $117.5 million in the third quarter of 2020, a 12% increase versus the $104.7 million reported for the third quarter of 2019.
•EXPAREL net product sales were $113.7 million in the third quarter of 2020, a 12% increase versus the $101.5 million reported for the third quarter of 2019.
•Third quarter 2020 iovera° net product sales were $2.7 million, a 3% increase versus the $2.6 million reported for the third quarter of 2019.
•Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were $0.4 million in the third quarter of 2020, compared to $0.3 million in the third quarter of 2019.
•Third quarter 2020 royalty revenues were $0.6 million, compared to $0.3 million in the third quarter of 2019.
•Total operating expenses were $99.9 million in the third quarter of 2020, compared to $102.3 million in the third quarter of 2019.
•Research and development (R&D) expenses were $14.7 million in the third quarter of 2020, compared to $20.3 million in the third quarter of 2019. R&D expenses include $5.6 million and $7.8 million of product development and manufacturing capacity expansion costs in the third quarters of 2020 and 2019, respectively.
•Selling, general and administrative (SG&A) expenses were $52.6 million in the third quarter of 2020, compared to $50.1 million in the third quarter of 2019.
•GAAP net income was $130.1 million, or $3.03 per share (basic) and $2.94 (diluted), in the third quarter of 2020, compared to a GAAP net loss of $6.1 million, or $(0.15) per share (basic and diluted), in the third quarter of 2019. Included in GAAP net income in the third quarter of 2020 was a $124.6 million income tax benefit related to the release of a valuation allowance on deferred tax assets.
•Non-GAAP net income was $29.9 million, or $0.70 per share (basic) and $0.68 (diluted), in the third quarter of 2020, compared to non-GAAP net income of $20.2 million, or $0.48 per share (basic and diluted), in the third quarter of 2019.
•Adjusted EBITDA was $34.2 million in the third quarter of 2020, versus adjusted EBITDA of $24.8 million in the third quarter of 2019.
•Pacira ended the third quarter of 2020 with cash, cash equivalents, short-term and long-term investments ("cash") of $576.2 million. Cash provided by operations was $39.8 million in the third quarter of 2020, compared to cash provided by operations of $18.4 million in the third quarter of 2019.
•Pacira had 42.9 million basic weighted average shares of common stock outstanding in the third quarter of 2020.
•Pacira had 44.3 million diluted weighted average shares of common stock outstanding in the third quarter of 2020.

See "Non-GAAP Financial Information" below.

Recent Highlights

•Launch of state-of-the-art training center dedicated to advancing best practice regional approaches to manage acute pain. In October 2020, Pacira announced the grand opening of the Pacira Innovation and Training Center of Tampa (the PITT). Designed to advance clinician understanding of the latest local, regional and field block approaches for managing pain, the PITT will provide an unparalleled training environment for healthcare providers working to reduce or eliminate patient exposure to opioids. The PITT is a fully adaptable environment constructed with guidance and input from leaders in the field of regional anesthesia, and is equipped with state-of-the-art technology and audio/visual capabilities to support a full range of educational events from didactic presentations to hands-on workshops.

•Preliminary net product sales for September 2020. In October 2020, Pacira reported preliminary unaudited net product sales of EXPAREL and iovera° of $39.5 million and $1.1 million, respectively, for the month of September 2020. In order to provide greater
transparency, the company will continue to report monthly intra-quarter unaudited net product sales until it has gained enough visibility around the impacts of COVID-19.

•Positive CHMP opinion for EXPAREL for the treatment of postsurgical pain. In September 2020, Pacira announced the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending marketing authorization for EXPAREL for postsurgical analgesia. The CHMP is a scientific committee of the EMA that reviews medical product applications on their scientific and clinical merit. The CHMP positive opinion was based on the results of four pivotal Phase 3 studies that demonstrated improvements in pain reduction and opioid use.

•Collaboration with IPG to reduce postsurgical opioid prescribing and surgical procedure costs. In September 2020, IPG, the industry-leading provider of surgical cost management solutions, and Pacira announced a collaboration to reduce postsurgical opioid prescribing and surgical procedure costs across the IPG national health plan and provider network. Through this partnership, IPG will offer reimbursement for EXPAREL to its health plan provider clients across the country to further support its mission to bring high quality, cost-effective surgical solutions to the U.S. healthcare market. Pacira will work alongside IPG to provide education and training to ensure consistent, positive outcomes are achieved across procedures, clinicians, and provider facilities.

Today’s Conference Call and Webcast Reminder
The Pacira management team will host a conference call to discuss the company’s financial results and recent developments today, Thursday, October 29, 2020, at 8:30 a.m. ET. To participate in the conference call, dial 1-877-845-0779 and provide the passcode 5997369. International callers may dial 1-720-545-0035 and use the same passcode. In addition, a live audio of the conference call will be available as a webcast. Interested parties can access the event through the "Events" page on the Pacira website at investor.pacira.com.

For those unable to participate in the live call, a replay will be available at 1-855-859-2056 (domestic) or 1-404-537-3406 (international) using the passcode 5997369. The replay of the call will be available for one week from the date of the live call. The webcast will be available on the Pacira website for approximately two weeks following the call.

On October 29, 2020 Genecast (Beijing) Technology reorted that it completed a $149 million Series E financing to develop its second-generation sequencing technology and bioinformatics (Press release, Genecast Biotechnology, OCT 29, 2020, View Source [SID1234569465]). Founded in 2014, Genecast has developed a circulating tumor DNA detection technology to provide individualized cancer diagnoses. The E Round was led by China Structural Reform Fund, and joined by Taikang Asset Management, CCB Private Equity Investment Management, Hillhouse Capital’s VC unit GL Ventures and China Renaissance.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

On October 29, 2020 BioInvent Interim Reported that January 1 – September 30, 202 (Press release, BioInvent, OCT 29, 2020, View Source;september-30-2020-301162589.html [SID1234569462])

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

China licensing agreement further validates technology and strategy

"The exclusive licensing agreement with CASI Pharmaceuticals for BI-1206 in China is an important validation of BioInvent’s technology, expertise and business model. It provides further impetus to our lead drug candidate and reinforces our financial position with $12 million upfront in cash and equity investment, plus potential future milestones and royalties."

Martin Welschof, CEO BioInvent

Financial information
Third quarter 2020

Net sales SEK 16.3 (18.1) million.
Loss after tax SEK -32.9 (-37.1) million.
Loss after tax per share before and after dilution SEK -0.04 (-0.07).
Cash flow from operating activities and investment activities SEK -33.1 (-25.0) million.
January – September 2020

Net sales SEK 48.6 (68.4) million.
Loss after tax SEK -104.9 (-97.7) million.
Loss after tax per share before and after dilution SEK -0.16 (-0.22).
Cash flow from operating activities and investment activities SEK -96.9 (-100.8) million. Liquid funds as of September 30, 2020: SEK 642.1 (183.9) million.
Events in the third quarter

BioInvent’s agreement with Pfizer Inc. was further extended until the end of 2020 to permit the companies to further identify and characterize new targets and antibodies binding to these targets.
The Extraordinary General Meeting on July 3 resolved to increase the Board of Directors with one member through new election of Dr. Thomas Hecht as a Board member. (R)
BioInvent’s Board of Directors resolved on a repair rights issue of a maximum of approximately SEK 139 million. It was completed in August and was heavily oversubscribed. The repair rights issue followed the successfully completed directed share issues of approximately SEK 487 million before transaction costs. (R)
Events after the reporting period

In October 2020, BioInvent licensed the anti-FcγRllB antibody BI-1206 to CASI Pharmaceuticals, Inc (NASDAQ: CASI) for the Greater China region. The collaboration accelerates and expands BioInvent’s global development plans for BI-1206. BioInvent is to receive $12 million upfront in combination of cash and equity investment and eligible to receive up to $83 million in milestone payments, plus tiered royalties. The equity investment is subject to the approval of an Extraordinary Shareholders’ Meeting (EGM) to be held on 27 November 2020. (R)
The Board of Directors has also proposed that the EGM approves the proposal on a reverse share split 1:25, a reduction of the share capital to adjust the share capital to the Company’s operations, and an updated authorization for the Board to decide on a new issue of shares comprising 109,378,025 new shares (corresponding to 4,375,121 shares after the reverse share split). (R)
BioInvent announced, in October 2020, regulatory authority approval of a clinical trial application (CTA) in Denmark for a Phase I/IIa, first-in-human study of BI-1808, as monotherapy and in combination with the anti-PD-1 therapy Keytruda (pembrolizumab) for the treatment of solid tumors and CTCL.
In October 2020, BioInvent announced that it will receive a €2 million milestone payment under its collaboration with Daiichi Sankyo related to the initiation of a global Phase I clinical trial with a GARP directed antibody. (R)

(R)= Regulatory event

Comments from the CEO
BioInvent took a significant step forward with the signing of an exclusive licensing agreement with CASI Pharmaceuticals for the development and commercialization of our novel anti-FcγRIIB antibody, BI-1206, in mainland China, Taiwan, Hong Kong and Macau. It is an important validation of BioInvent’s technology, expertise and business model and provides further impetus to our lead drug candidate.

This agreement will further accelerate the development and commercialization preparations for BI-1206, based on CASI’s clinical and regulatory expertise and strong presence across this major market. Their established commercial infrastructure and medical marketing team, together with their wide access to a strong network of investigators across Greater China, make them an ideal partner to expand our global development footprint in this important region.

The agreement also further reinforces our financial position, as BioInvent receives $12 million upfront as a combination of cash and equity investment. We are eligible for up to $83 million in development and commercial milestone payments plus tiered royalties in the high-single to mid-double-digit range on net sales of BI-1206.

In short this collaboration adds significant value to our overall BI-1206 program, through the leveraging of CASI’s capabilities in this major market and the financial terms.

The clinical development of BI-1206 in both hematological cancers and solid tumors is progressing well. A Phase I/IIa trial of BI-1206 in combination with the anti-PD-1 therapy Keytruda (pembrolizumab) in solid tumors is continuing as planned, as is the Phase I/IIa trial of BI-1206 in combination with rituximab for the treatment of non-Hodgkin lymphoma (NHL). With this exciting agreement with CASI now in place, we anticipate there could be further interest in similar partnerships for BI-1206 in other regional markets, or a license of the rest of the world.

Beyond BI-1206, BioInvent’s pipeline is expanding further based on the productivity of our proprietary n-CoDeR/F.I.R.S.TTM platforms and ability to generate antibodies to novel targets with potent anti-tumoral activity to address major unmet medical needs.

We have received regulatory authority approval of our clinical trial application in Denmark for a Phase I/IIa, first-in-human study of BI-1808, as monotherapy and in combination with the anti-PD-1 therapy Keytruda (pembrolizumab) for the treatment of solid tumors and CTCL. BI-1808 will be the first anti-TNFR2 antibody to enter clinical development, and we believe this is a very promising approach for cancer therapy. We expect to enroll the first patient before the end of the year and to submit an investigational new drug (IND) application in the U.S. in the coming weeks. Together with our partner Transgene, we also continue to expect to initiate a Phase I clinical trial with the multifunctional oncolytic virus BT-001 before the end of 2020.

We continue our value-creating collaborations with various partners and most recently announced receipt of a €2 million milestone payment under our collaboration with Daiichi Sankyo, related to the initiation of a global Phase I clinical trial with a GARP directed antibody.

This all adds up to further substantial progress for BioInvent, across the pipeline, and I look forward to continuing to keep you up to date with further developments through the rest of 2020 and beyond.

As previously informed, BioInvent has taken necessary precautions with regards to the corona virus. Although we see an increase of cases, which is of course terrible for all those affected and their families, we still remain on track with our clinical trials and results. As the situation is still evolving, timelines are still subject to potential changes and we will provide updates as necessary.

With financing in place, a new partnering collaboration and the strong support of our investors, BioInvent is well positioned to continue to deliver on the promise of our pipeline.

On October 29, 2020 WuXi AppTec Co., Ltd. (stock code: 603259.SH / 2359.HK), a company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients, reported its financial results for the third quarter and nine months ended September 30, 2020 ("Reporting Period") (Press release, WuXi AppTec, OCT 29, 2020, View Source [SID1234569460]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

This document serves purely as a summary and is not intended to provide a complete representation of the relevant matters. For further information, please refer to the 2020 third quarterly report and relevant announcements published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Stock Exchange of Hong Kong (www.hkexnews.hk), and the designated media for dissemination of the relevant information. Investors are advised to exercise caution and be aware of the investment risks in dealing in the shares of the Company.

All financials disclosed in this press release are prepared based on International Financial Reporting Standards (or "IFRSs").

The 2020 Third-Quarter Report of the Company has not been audited.

Third-Quarter 2020 Financial Highlights

Accelerated revenue growth of 35.4% year-over-year to RMB4,583 million.
– China-based laboratory services realized revenue of RMB2,338 million, representing a YoY growth of 38.9%. Both of our drug discovery services and laboratory testing services achieved strong growth. Our chemistry fee for services revenue grew about 53% and our drug safety assessment services revenue grew about 77%.
– CDMO services realized revenue of RMB1,548 million, representing a YoY growth of 54.9%. Our "Follow the Molecule" business model continued to perform very well.
– U.S.-based laboratory services realized revenue of RMB372 million, representing a YoY decline of 13.5%, mainly due to the impact of COVID-19 and customers’ projects delay.
– Clinical research and other CRO services realized revenue of RMB315 million, representing a YoY growth of 16.8%. The revenue growth rate continued to improve quarter-over-quarter.
Gross profit grew 28.2% year-over-year to RMB1,765 million. Gross profit margin was 38.5%, slightly lower than the 40.7% achieved in the third quarter 2019[1], mainly because of: (1) the impact of COVID-19 on our U.S.-based laboratory services and clinical research services business, (2) an increase in share-based compensation expenses.
Non-IFRS gross profit grew 26.9% YoY to RMB1,826 million. Non-IFRS gross profit margin was 40.1% compared to 42.1% for the same period in 2019. (1) The non-IFRS gross profit margin of our China-based laboratory services and CDMO services were largely in line with that of third quarter 2019. (2) Due to the impact of COVID-19, the non-IFRS gross profit margin of our U.S.-based laboratory services and clinical research and other CRO services declined.
Reported EBITDA down 10.4% Year-Over-Year to RMB1,035 million due to decrease of reported net profit.
Adjusted EBITDA grew 24.9% Year-Over-Year to RMB1,383 million.
Reported net profit attributable to owners of the Company declined 8.1% year-over-year to RMB651 million, mainly because: (1) In the third quarter of 2020, CNY appreciated sharply against the USD. We reported a RMB154 million net loss, due to realized and unrealized exchange loss of the proceeds of new H-Share placement and other USD assets held by the Company, partially offset by the gains from our foreign currency forward contracts. In the same period last year, we reported a RMB 4 million net gain. (2) Non-cash loss of RMB190 million from the derivative component of our convertible bonds due to the increase of our H share price.
Adjusted non-IFRS net profit attributable to owners of the Company increased strongly 44.3% year-over-year to RMB958 million.
Diluted EPS down 6.7% versus the same period last year while adjusted diluted non-IFRS EPS increased strongly by 37.9%.[2]
[1] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 28.4% year-over-year to RMB1,772 million. Gross profit margin was 38.7%, slightly lower than the 40.8% achieved in the third quarter 2019.

[2] Gain in the fair value change of the investment portfolio of the company is RMB183 million in the current period, increased by RMB173 million compared with the gains in fair value of RMB10 million in the same period last year. Three months ended September 30, 2019 and three months ended September 30, 2020, we had a fully-diluted weighted average share count of 2,287,273,082 and 2,351,038,288 ordinary shares, respectively.

Year-to-Date 2020 Financial Highlights

Strong revenue growth of 27.3% year-over-year to RMB11,815 million.
– China-based laboratory services realized revenue of RMB6,118 million, representing a YoY growth of 30.9%.
– CDMO services realized revenue of RMB3,710 million, representing a YoY growth of 36.5%.
– U.S.-based laboratory services realized revenue of RMB1,154 million, representing a YoY growth of 1.2%.
– Clinical research and other CRO services realized revenue of RMB815 million, representing a YoY growth of 9.9%.
Gross profit grew 20.8% year-over-year to RMB4,423 million. Gross profit margin was 37.4%.[3]
Non-IFRS gross profit grew 23.7% YoY to RMB4,743 million. Non-IFRS gross profit margin was 40.1%.
Reported EBITDA grew 24.8% Year-Over-Year to RMB3,635 million.
Adjusted EBITDA grew 27.5% Year-Over-Year to RMB3,833 million.
Net profit attributable to owners of the Company grew 34.2% year-over-year to RMB2,368 million.
Adjusted non-IFRS net profit attributable to owners of the Company grew 34.4% year-over-year to RMB2,477 million.
Diluted EPS increased by 34.2% versus the same period last year while adjusted diluted non-IFRS EPS increased by 32.5%.[4]
[3] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 21.1% year-over-year to RMB 4,440 million. Gross profit margin was 37.6%.

[4] The gains in the fair value of the investment portfolio of the company is RMB1,123 million in the first nine months, increased by RMB1,168 million compared with the losses in fair value of RMB 45 million in the same period last year. Nine months ended September 30, 2019 and nine months ended September 30, 2020, we had a fully-diluted weighted average share count of 2,287,319,809 and 2,318,953,908 ordinary shares, respectively.

Business Highlights

For nine months ended September 30 2020, we added over 900 new customers, increasing our active customer count to more than 4,100. Our "long-tail" strategy and "Follow the Customer/Follow the Project/Follow the Molecule" business model continued to perform very well.
– Our global platform continued to enable innovation worldwide. During the reporting period, our overseas customers contributed RMB9,023 million revenue, representing a YoY growth of 25.3%. Our China customers contributed RMB2,792 million revenue, representing a YoY growth of 34.4%.
– We continued to expand our customer base and retain existing customers. During the reporting period, our existing customers contributed RMB11,109 million revenue, representing a YoY growth of 29.1%. Our newly added customers contributed RMB706 million revenue.
– We continued to execute our "long-tail" strategy and increased our support to large global pharmaceutical companies. During the reporting period, our global "long-tail" customers and China-based customers contributed RMB7,938 million revenue, representing a YoY growth of 28.4%. The top 20 global pharmaceutical companies contributed RMB3,877 million revenue, representing a YoY growth of 25.1%.
– We continued to increase customer conversion and enhance synergies across our platform. During the reporting period, customers using services from more than one of our business units contributed RMB10,164 million revenue, representing a YoY growth of 27.1%.
We acquired Milestone Pharma to consolidate and expand the capacity of our analytical testing services.
Target-to-Hit platform enabled 359 customers globally and realized about RMB140 million revenue, representing a YoY growth of about 92%, which will also create incremental business opportunities for our downstream business units.
During the first nine months of 2020, our success-based drug discovery service unit submitted IND filings for 18 new chemical entities for our customers and obtained 20 CTAs. As of September 30, 2020, we have cumulatively submitted 103 NCE IND filings with the National Medical Products Administration (NMPA) for our customers and obtained 77 CTAs. As of September 30, 2020, there is 1 project in Phase III clinical trial, 9 projects in Phase II clinical trials, and 56 projects in Phase I clinical trials.
During the first nine months of 2020, we signed 78 integrated WIND packages with our customers, helping many of our customers submit their IND packages for global filings and obtain CTAs under eCTD format.
We added over 440 new molecules into our small molecule CDMO services pipeline. In addition to executing our ‘follow-the-molecule’ strategy, we also won 25 phase II/III projects externally transferred from our clients and their current CMOs. As of September 30, 2020, our small molecule CDMO pipeline has grown to more than 1,100 active projects, including 42 projects in Phase III clinical trials and 26 in commercial manufacturing.
4 WuXi STA sites passed China NMPA new drug pre-approval inspections (PAI) at the same time. This PAI success marked a milestone for STA with 4 records:
– It is WuXi STA’s first drug product pre-approval inspection.
– It is the first regulatory inspection for WuXi STA’s spray drying commercial manufacturing facility and process.
– This PAI is the first comprehensive inspection for WuXi STA’s integrated and end-to-end CMC platform including both drug substance and drug product.
– It is the first PAI involving four WuXi STA sites at the same time.
As of September 30, 2020, our U.S. cell and gene therapies CDMO business provided services for 33 clinical stage projects, including 22 projects in Phase I and 11 projects in Phase II/III. As of end of third quarter, 2020, the backlog of our cell and gene therapies CDMO business increased about 35% compared with the previous quarter. We expect about 2 to 3 products, including autologous cell therapy and allogeneic cell therapy products, will file for BLA with the FDA in 2021, which may become a significant growth driver for our U.S.-based laboratory services.
Our clinical research services continued to enable customers in China and the U.S. During the reporting period:
– SMO maintained its No.1 leadership position in China, with 3,100+ CRCs stationed in 145 cities. CDS team was comprised of 810+ employees distributed in China and the U.S.
– The backlog of our clinical research services increased significantly compared with the same period last year. As of September 30, 2020, the backlog of our CDS services increased about 100% and the backlog of our SMO services increased about 45%.
– SMO team assisted in the market approval of 14 products for our customers, including the approval of China’s first biosimilar product in the European Union. CDS team conducted 10 multi-regional clinical trials for our customers in the U.S. and China.
Management Comment

Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We once again achieved accelerated revenue growth in the third quarter of 2020. The strong performance of our China-based laboratory services and CDMO services, as well as the gradual recovery of our clinical research and other CRO services, mitigated the challenges faced by our U.S.-based laboratory services due to the COVID-19 pandemic. We are delighted to see that our platform and business performed very well and we continued to meet customer demand and project delivery schedules during the pandemic. Through the end of September 2020, we added over 900 new customers and our total number of active customers now exceeds 4,100."

"Our global enabling platform and ‘Follow the Customer/Follow the Project/Follow the Molecule’ strategy continued to perform very well. In the third quarter, our China-based laboratory services as well as CDMO services revenue growth accelerated compared with the second quarter and we continued to gain market share across different business units. Our clinical research and other CRO services realized revenue growth and our backlog increased significantly. In spite of the impact of COVID-19, the backlog of our U.S.-based laboratory services grew strongly quarter-over-quarter. In the future, we expect commercial manufacturing projects under our CDMO services segment to become a significant revenue driver. The Company’s financial position is very strong. In September 2020, after raising HK$7.29 billion through the placement of new H shares, we completed the non-public issuance of 62.7 million A shares, receiving approximately RMB6.46 billion in net proceeds and providing the Company with a strong balance sheet for capacity expansion, especially for our CDMO segment."

Dr. Ge Li concluded, "We are grateful for the dedication of our employees and the partnership with our global customers, and remain committed to working with them to enable scientific and pharmaceutical innovation worldwide during this pandemic and beyond. Looking ahead, we will continue to invest in new capabilities and capacities that help our global partners bring groundbreaking medicines and treatments to patients in need, realizing our vision that ‘every drug can be made and every disease can be treated’."

On October 29, 2020 DuPont (NYSE: DD) reported financial results for the third quarter 2020 (Press release, DuPont, OCT 29, 2020, View Source [SID1234569458]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our team remains committed to emphasizing the safety and well-being of our employees, prioritizing the needs of our customers, and executing on a playbook that enables us to quickly respond to the changing environment" said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. "This commitment is evident in the results we announced today. We delivered strong performance demonstrating the value our market-leading innovation and technology provides in key end-markets such as semiconductors, smartphones, water filtration, probiotics, and personal protective equipment. The actions we have taken to right-size our cost structure and generate significant cash flow are delivering results today and we intend to maintain this momentum as we move forward."

"In September, we completed the sale of our trichlorosilane business and our stake in the Hemlock Semiconductor joint venture and earlier this month we signed an agreement to sell the Biomaterials business," Breen continued. "Execution of these Non-Core divestitures and the continued progress towards the anticipated closing of the Nutrition & Biosciences transaction(1) in the first quarter 2021 exemplify our commitment to create both market-leading businesses and value for our shareholders."

Third Quarter 2020 Results

Net sales totaled $5.1 billion, down 6 percent versus the year-ago period on both an as reported and organic basis. Growth in Electronics & Imaging was more than offset by sales declines in the other segments primarily due to the impact of the global pandemic.

On a regional basis, organic sales increased 3 percent in Asia Pacific versus the year-ago period while the U.S. and Canada declined 10 percent, EMEA declined 15 percent, and Latin America declined 3 percent. China sales in our core segments improved 14 percent versus the third quarter 2019 and 10 percent sequentially from second quarter 2020.

GAAP EPS from continuing operations totaled $(0.11) on a GAAP loss from continuing operations of $(72) million, versus GAAP EPS from continuing operations of $0.49 on GAAP income from continuing operations of $372 million in the year-ago period. This decline is mostly attributable to non-cash impairment charges associated with Non-Core businesses, higher merger-related amortization expense and lower segment results, partially offset by gains associated with divestitures of Non-Core businesses.

Operating EBITDA(2) was $1.3 billion, down 7 percent versus operating EBITDA(2) in the prior year. The impact of lower demand, cost associated with idled facilities, and portfolio changes more than offset manufacturing productivity gains, approximately $150 million of non-manufacturing cost savings and strong demand in semiconductors, smartphones, water, Tyvek protective garments, and health & wellness. Adjusted EPS(2) decreased 8 percent to $0.88, compared with adjusted EPS(2) in the year-ago period of $0.96, primarily driven by lower segment results and a higher base tax rate partially offset by declines in interest expense, foreign exchange losses, and share count. A continued focus on cost control enabled operating EBITDA declines in-line with the decline in net sales on a percentage basis.

Operating cash flow of $1.3 billion included improvements in working capital of more than $300 million in the quarter which was driven by lower inventories. Capital expenditures of approximately $200 million resulted in free cash flow(2) of $1.1 billion. The sale of the trichlorosilane business and the Hemlock Semiconductor joint venture provided $550 million of additional pre-tax cash proceeds in the quarter. Proceeds from these sales as well as organic cashflow generation enabled a reduction in commercial paper balances to less than $400 million as of September 30, 2020; a reduction of $1.2 billion in the quarter.

(1)

Closing of transaction with IFF is subject to regulatory approval and customary closing conditions.

(2)

Adjusted EPS, operating EBITDA and free cash flow are non-GAAP measures. See page 7 for further discussion. Reconciliation to the most directly comparable GAAP measure, including details of significant items begins on page 13 of this communication.

Third Quarter 2020 Segment Highlights

Electronics & Imaging
Electronics & Imaging reported a record quarter with net sales of $1.0 billion, up 7 percent from the year-ago period. Organic sales were up 8 percent driven by a 9 percent growth in volume offset by a 1 percent decline in price. Currency was neutral and portfolio was a 1 percent headwind.

Sales gains were led by Semiconductor Technologies as new technology ramps across logic and foundry delivered high-single digit organic growth versus the year-ago period. Interconnect Solutions organic sales also increased high-single digits, despite an overall decline in the global smartphone market, driven by higher material content in premium, next-generation smartphones. Within Image Solutions, mid single-digit organic growth was led by strength in OLEDs for displays and ink for the consumer segment, partially offset by weakness in flexographic plates and textile inks.

Operating EBITDA for the segment was $357 million, an increase of 12 percent from operating EBITDA of $320 million in the year-ago period, driven primarily by strong volume growth and continued productivity actions.

Nutrition & Biosciences
Nutrition & Biosciences reported net sales of $1.5 billion, down 4 percent from the year-ago period on both an as reported and organic basis driven by lower volumes. Price, currency and portfolio impacts were each neutral versus third quarter 2019.

Within Health & Biosciences, double-digit growth in both probiotics and home and personal care markets was more than offset by continued weakness in biorefinery and microbial control. Pricing gains in Food & Beverage were more than offset by weaker demand primarily in emulsifiers, sweeteners, and cellulosics driven by declines in food service and lower consumer demand for mints and chewing gums in travel and convenience stores. Pharma Solutions sales were flat with the prior year.

Operating EBITDA for the segment was $379 million, an increase of 7 percent from operating EBITDA of $354 million in the year-ago period. Continued productivity actions and favorable product mix more than offset the impact of lower volumes leading to a 260 basis point improvement in operating EBITDA margins versus the year-ago period.

Transportation & Industrial
Transportation & Industrial reported net sales of $1.0 billion, down 14 percent from the year-ago period. Organic sales were down 14 percent with volume down 9 percent and price lower by 5 percent. Currency and portfolio impacts were both neutral versus third quarter 2019.

Volume declined 9 percent due to lower auto builds. Although a significant improvement versus second quarter performance the global auto market continues its recovery from steep declines in the first half of the year. The impact of COVID-19 on other key industrial markets, in addition to automotive, contributed to volume declines across Mobility Solutions, Industrial & Consumer, and Healthcare & Specialty. Strong demand for differentiated, high performance seals in semiconductor manufacturing lifted Kalrez revenues high-teens percent.

Operating EBITDA for the segment was $242 million, a decrease of 21 percent from operating EBITDA of $306 million in the year-ago period, as savings from productivity actions were more than offset by volume declines, lower price, and the impact of temporarily idled facilities.

Safety & Construction
Safety & Construction reported net sales of $1.2 billion, down 6 percent from the year-ago period. Organic sales were down 9 percent with a 1 percent price improvement offset by a 10 percent decline in volume. Acquisitions in the Water Solutions business increased reported sales by 3 percent. Currency was neutral.

Continued broad-based demand across Water Solutions was more than offset by declines in both Safety Solutions and Shelter Solutions. Within Safety Solutions, demand for Tyvek protective garments remained strong but was more than offset by soft demand for aramid fibers across aerospace, oil & gas and select industrial markets as a result of COVID-19. Similarly, within Shelter Solutions, growth in residential construction and retail channels for do-it-yourself applications was more than offset by weak commercial construction.

Operating EBITDA for the segment totaled $324 million, a decrease of 8 percent from operating EBITDA of $352 million in the year-ago period. Continued productivity actions as well as favorable product mix was more than offset by lower volumes and the impact of temporarily idled facilities.

Non-Core
Non-Core reported net sales of $331 million, down 23 percent from the year-ago period. Organic sales were down 13 percent driven by 18 percent volume declines and offset by 5 percent pricing gains. The September 2019 divestiture of the DuPont Sustainable Solutions business and the September 2020 divestiture of the trichlorosilane business reduced sales by 10 percent. Currency was neutral.

Operating EBITDA for the segment was $14 million, a decrease of 85 percent from operating EBITDA of $94 million in the year-ago period. The absence of a prior year gain on the sale of DuPont Sustainable Solutions, lower volumes and the impact of the trichlorosilane and Hemlock Semiconductor divestitures in September 2020 more than offset cost productivity.

Outlook

"With a continued focus on execution, we anticipate a fourth quarter underscored by additional cash generation and operating leverage across our core segments driven by additional cost savings," said Lori Koch, Chief Financial Officer of DuPont. "We expect to deliver full-year 2020 adjusted EPS(2) in the range of $3.17 to $3.21 on net sales of $20.1 billion to $20.2 billion."

Conference Call
The Company will host a live webcast of its third quarter earnings conference call with investors to discuss its results and business outlook today at 8:00 a.m. ET. The slide presentation that accompanies the conference call will be posted on the DuPont’s Investor Relations Events and Presentations page. A replay of the webcast also will be available on the DuPont’s Investor Relations Events and Presentations page following the live event.