On January 28, 2020 Accuray Incorporated (NASDAQ: ARAY) reported its financial results for the second quarter of fiscal 2020 ended December 31, 2019 (Press release, Accuray, JAN 28, 2020, View Source [SID1234553632]).

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Recent Company Highlights

Gross orders of $98.6 million, including 11 orders from China
Net orders of $89.9 million, an increase of 30% year over year
Total backlog increased 12 percent year over year to $539.4 million
Net revenue of $98.8 million, net income of $10.7 million, Adjusted EBITDA of $7.1 million
"Financial and operational results for our second fiscal quarter and for the first half of fiscal year 2020 were solid," commented Joshua H. Levine, president and chief executive officer of Accuray. "Gross orders for the second quarter exceeded our internal expectations heading into the quarter, including a solid order contribution from China. We expect revenue growth to improve in the second half of fiscal 2020 as we believe revenue recognition of China Type A systems will start in our fourth fiscal quarter. In addition, we have confirmed that the tariff exemption for medical linear accelerators is applicable to all of our systems. We believe that this exemption will support our commercial momentum and expand access to our innovative radiation therapy solutions for hospitals and patients in China. In light of recent events with the coronavirus outbreak in China, we do not believe that the outbreak affects the longer-term demand outlook for radiotherapy equipment in China. China remains the world’s fastest growing market for radiation oncology systems where we have a highly differentiated strategy to drive significant revenue growth in the coming years."

Fiscal Second Quarter Results

Gross orders totaled $98.6 million compared to $100.2 million for the prior year period. Backlog as of December 31, 2019 was $539.4 million, an increase of 12 percent compared to $482.2 million for the prior year period.

Total net revenue was $98.8 million compared to $102.3 million for the prior year period. Product revenue totaled $43.8 million compared to $48.1 million in the same prior fiscal year period, while service revenue totaled $55.1 million compared to $54.3 million in the same prior fiscal year period.

Total gross profit for the fiscal 2020 second quarter was $37.9 million, or 38.4 percent of net revenue, comprised of product gross margin of 44.0 percent of product revenue and service gross margin of 33.9 percent of service revenue. This compares to total gross profit of $38.4 million, or 37.5 percent of net revenue, comprised of product gross margin of 39.5 percent of product revenue and service gross margin of 35.7 percent of service revenue for the prior fiscal year second quarter.

Operating expenses were $34.3 million, a decrease of 13 percent compared to $39.2 million in the prior fiscal year second quarter.

Net income was $10.7 million, or $0.12 per share, compared to a net loss of $4.6 million, or ($0.05) per share, for the prior fiscal year period. Net income included a non-cash, special gain of $13.0 million related to the value of the Company’s capital contribution to the China joint venture in exchange for the Company’s 49% equity interest in the joint venture. This gain was recorded as non-operating, other income in the second quarter.

Adjusted EBITDA, which excludes the non-cash, special gain related to the Company’s capital contribution to the China joint venture, for the second quarter of fiscal 2020 was $7.1 million, compared to $4.1 million in the prior fiscal period.

Cash, cash equivalents and short-term restricted cash were $99.1 million as of December 31, 2019 compared with $86.7 million as of September 30, 2019.

Fiscal Six Months Results

For the six months ended December 31, 2019, gross product orders totaled $177.0 million compared to $161.6 million for the same prior fiscal year period. Ending product backlog was $539.4 million, approximately 12 percent higher than backlog at the end of the prior fiscal year second quarter.

Total net revenue for the six months ended December 31, 2019 was $188.4 million compared to $198.1 million in the same prior fiscal year period. Product revenue for the six months ended December 31, 2019 totaled $81.4 million compared to $89.6 million, while service revenue totaled $107.0 million compared to $108.6 million in the same prior fiscal year period.

Total gross profit for the six months ended December 31, 2019 was $70.8 million, or 37.6 percent of net revenue, comprised of product gross margin of 43.4 percent of product revenue and service gross margin of 33.2 percent of service revenue. This compares to total gross profit of $76.3 million, or 38.5 percent of net revenue, comprised of product gross margin of 40.2 percent of product revenue and service gross margin of 37.1 percent of service revenue for the same prior fiscal year period.

Operating expenses for the six months ended December 31, 2019 were $71.5 million, a decrease of 13 percent compared with $81.8 million in the same prior fiscal year period.

Net income was $1.4 million, or $0.02 per share, for the six months ended December 31, 2019, compared to a net loss of $13.8 million, or ($0.16) per share, for the same prior fiscal year period. Net income included a non-cash, special gain of $13.0 million related to the value of the Company’s capital contribution to the China joint venture in exchange for the Company’s 49% equity interest in the joint venture. This gain was recorded as non-operating, other income in the second quarter.

Adjusted EBITDA for the six months ended December 31, 2019 was $6.1 million, compared to $8.1 million in the prior fiscal year period.

2020 Financial Guidance

The Company is reaffirming revenue guidance provided on August 15, 2019 and updating adjusted EBITDA guidance for fiscal year 2020. Total revenue for fiscal year 2020 is expected to range between $410.0 and $420.0 million. The Company expects to generate revenue growth during the second half of fiscal year 2020 compared to the second half of the prior fiscal year. Adjusted EBITDA for fiscal year 2020 is expected to range between $21.0 to $26.0 million, which includes approximately $1.0 million of the Company’s share of expected loss from the joint venture operations in China. This is adjusted from the previous range of $19.0 million to $24.0 million.

Conference Call Information

Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss results for the second fiscal quarter as well as recent corporate developments. Conference call dial-in information is as follows:

U.S. callers: (855) 867-4103
International callers: (262) 912-4764
Conference ID Number (U.S. and international): 8598970
Individuals interested in listening to the live conference call via the Internet may do so by logging on to Accuray’s website, www.accuray.com. In addition, a taped replay of the conference call will be available beginning approximately two hours after the call’s conclusion and available for seven days. The replay telephone number is (855) 859-2056 (USA) or (404) 537-3406 (International), Conference ID: 8598970. An archived webcast will also be available at Accuray’s website until Accuray announces its results for the third quarter of fiscal 2020.

On January 28, 2020 Aflac Incorporated (NYSE: AFL) reported that it will release fourth quarter financial results after the market closes on February 4, 2020 (Press release, Aflac, JAN 28, 2020, View Source [SID1234553631]).

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In conjunction with the earnings release, Aflac Incorporated will webcast a conference call scheduled for 9:00 a.m. (ET) on February 5, 2020. During the teleconference, the company will discuss fourth quarter results and its outlook. The following executives will be available to answer questions: Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos; President and Chief Operating Officer of Aflac Incorporated Frederick J. Crawford; Executive Vice President and Chief Financial Officer of Aflac Incorporated Max K. Brodén; President of Aflac International and Chairman and Representative Director of Aflac Life Insurance Japan Charles D. Lake II; President and Representative Director of Aflac Life Insurance Japan Masatoshi Koide; Director, Executive Vice President and Director of Sales and Marketing of Aflac Life Insurance Japan Koji Ariyoshi; President of Aflac U.S. Teresa L. White; Executive Vice President and Global Chief Investment Officer of Aflac Incorporated and President of Aflac Global Investments Eric M. Kirsch; Director, Executive Vice President and Chief Financial Officer of Aflac Life Insurance Japan J. Todd Daniels; Executive Vice President and Chief Distribution Officer Richard L. Williams Jr.; and Senior Vice President; Global Chief Risk Officer and Chief Actuary Albert A. Riggieri.

On January 28, 2020 Kite, a Gilead Company (Nasdaq: GILD), reported that the company’s Marketing Authorization Application (MAA) for KTE-X19, an investigational chimeric antigen receptor (CAR) T cell therapy for the treatment of adult patients with relapsed or refractory mantle cell lymphoma (MCL), has been fully validated and is now under evaluation by the European Medicines Agency (EMA) (Press release, Kite Pharma, JAN 28, 2020, View Source [SID1234553630]).

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The MAA is supported by data from the single arm, open-label, Phase 2 ZUMA-2 trial, which demonstrated an overall response rate of 93 percent, including 67 percent with complete response, as assessed by an Independent Radiologic Review Committee (IRRC) following a single infusion of KTE-X19 (median follow-up of 12.3 months). In the safety analysis, Grade 3 or higher cytokine release syndrome (CRS) and neurologic events were seen in 15 percent and 31 percent of patients, respectively. No Grade 5 CRS or neurologic events occurred. Detailed findings from this trial were recently presented during an oral session at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting & Exposition in Orlando.

"Relapse rates in mantle cell lymphoma remain overwhelmingly high and there is a significant need for new therapies that may improve patients’ prognosis," said Ken Takeshita, MD, Kite’s Global Head of Clinical Development. "The EMA validation of our marketing application brings us closer to delivering on the promise of our industry-leading cell therapy development program, with the hope that we can bring KTE-X19 to appropriate patients in Europe as quickly as possible."

Kite submitted a Biologics License Application (BLA) for KTE-X19 to the U.S. Food and Drug Administration (FDA) on December 11, 2019 for the treatment of adult patients with relapsed or refractory MCL. KTE-X19 has been granted Breakthrough Therapy Designation (BTD) by the FDA and Priority Medicines (PRIME) by the EMA.

KTE-X19 is investigational and not approved anywhere globally. Its efficacy and safety have not been established. More information about clinical trials with KTE-X19 is available at www.clinicaltrials.gov.

About MCL

MCL is a rare form of non-Hodgkin lymphoma (NHL) that arises from cells originating in the "mantle zone" of the lymph node and typically affects men over the age of 60.

About ZUMA-2

ZUMA-2 is a single-arm, multicenter, open-label Phase 2 study involving 74 enrolled/leukapheresed adult patients (≥18 years old) with MCL whose disease is refractory to or has relapsed following up to five prior lines of therapy, including anthracycline or bendamustine-containing chemotherapy, anti-CD20 monoclonal antibody therapy and the BTK inhibitors ibrutinib or acalabrutinib. The objectives of the study are to evaluate the efficacy (60 patients) and safety (68 patients) after a single infusion of KTE-X19 in this patient population. The primary endpoint for the study is objective response rate (ORR). ORR in this trial is defined as the combined rate of complete responses and partial responses as assessed by an IRRC.

Secondary endpoints include duration of response, progression-free survival, overall survival, incidence of adverse events, incidence of anti-CD19 CAR antibodies, levels of anti-CD19 CAR T cells in blood, levels of cytokines in serum, and changes over time in the EQ-5D scale score and visual analogue scale score. The study is ongoing.

About KTE-X19

KTE-X19 is an investigational, autologous, anti-CD19 CAR T cell therapy. KTE-X19 uses the XLP manufacturing process that includes T-cell selection and lymphocyte enrichment. Lymphocyte enrichment is a necessary step in certain B-cell malignancies in which circulating lymphoblasts are a common feature. KTE-X19 is currently in Phase 1/2 trials in acute lymphoblastic leukemia (ALL), mantle cell lymphoma (MCL) and chronic lymphocytic leukemia (CLL).

On January 28, 2020 Sengenics, a leading precision medicine focused company, reported that Dr Arif Anwar, CEO of Sengenics, will present a company overview at the 2020 BIO CEO and Investor Conference (Press release, Sengenics, JAN 28, 2020, View Source [SID1234553629]). The presentation will take place at 3:15 PM EST on Monday, February 10, 2020 in the Wilder room at the New York Marriott Marquis.

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Dr Arif Anwar will present an overview of the commercialisation strategy of the company and applications of its patented KREXTM technology for autoimmune and cancer immunotherapy drug response and ADR prediction.

Sengenics is currently co-developing complementary and companion diagnostic tests for several autoimmune and cancer immunotherapy drugs through partnerships with top pharmaceutical companies. The company has commenced the process for obtaining FDA 510(k) approval for several of these tests and plans to launch them in 2020 and 2021.

Sengenics’ management team will also hold meetings with institutional investors and analysts from February 10 – 14 in New York. Accredited investors are invited to request a meeting during the conference through BIO’s One-on-One PartneringTM System.

On January 28, 2020 Guided Therapeutics, Inc. (Pink Sheets: GTHP), the maker of a rapid and painless cervical cancer detection test based on its patented biophotonic technology, reported the Company’s plans for 2020 (Press release, Guided Therapeutics, JAN 28, 2020, View Source [SID1234553628]).

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The Company’s main goals for this year are:

Restart discussions with the FDA and begin work on a small confirmatory study to support the claims of the previously completed pivotal study – The Company has already contacted FDA and informed them to expect the updated protocol for review. The outline for the protocol was previously agreed to during previous meeting between FDA and the Company. FDA also agreed to reduce the criteria for sensitivity of the test, a benchmark that was reached in the completed pivotal study of 2,000 women. Based on these developments, the company intends to discuss with FDA completing the smaller confirmatory study under one of three possible approval scenarios: 1) as part of the normal premarket approval process 2) via the de novo 510(k) route for new technologies or 3) as part of post-marketing studies. The latter two strategies would likely reduce the time to US market launch and would need to be agreed to by FDA.
Start clinical studies for Chinese FDA approval and achieve approval by Q4 2020 – Company intends to fill near term purchase order of 5 devices in Q1 2020 and, once our Chinese distribution partner Shandong Medical Instrumentation Co, Ltd. files with Chinese FDA as a Class 2 device, start to receive payments on larger $2.5 million Purchase Order.
Start taking new orders for Europe and Russia based on final assembly of LuViva at new manufacturing site in Hungary – Contract manufacturer is now ISO 13485 approved to assemble LuViva. New CE Mark with expanded claims has been applied for and expected to be granted in Q1 or Q2 of this year.
Jumpstart sales growth in Middle East and Indonesia – New agreements and subsequent sales with current distributors and addition of new distributor covering a total of 19 countries are expected to generate significant new orders in 2020.
Financial Filings – The Company anticipates releasing Q2 2019 (10Q) financial results later this month and 2019 Q3 (10Q) financial results early in February to catch up with its SEC filings.