On July 31, 2019 Vanda Pharmaceuticals Inc. (Vanda) (Nasdaq: VNDA) reported financial and operational results for the second quarter ended June 30, 2019 (Press release, Vanda Pharmaceuticals, JUL 31, 2019, View Source [SID1234537965]).

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"The exceptional commercial performance of HETLIOZ and Fanapt positions Vanda to continue on its path of growth and long term value creation," said Mihael H. Polymeropoulos, M.D., Vanda’s President and CEO. "The recently announced positive results from the tradipitant motion sickness study further enhance the potentially broad therapeutic utility of tradipitant as a treatment option for the millions of patients with gastroparesis, motion sickness and atopic dermatitis."

Key Financial Highlights:

Total net product sales from HETLIOZ and Fanapt were $59.1 million in the second quarter of 2019, a 24% increase compared to $47.7 million in the first quarter of 2019 and a 25% increase compared to $47.4 million in the second quarter of 2018.
HETLIOZ net product sales were $37.8 million in the second quarter of 2019, a 31% increase compared to $29.0 million in the first quarter of 2019 and a 35% increase compared to $28.0 million in the second quarter of 2018.
Fanapt net product sales were $21.2 million in the second quarter of 2019, a 13% increase compared to $18.8 million in the first quarter of 2019 and a 10% increase compared to $19.3 million in the second quarter of 2018.
Cash, cash equivalents and marketable securities (Cash) were $292.7 million as of June 30, 2019, representing an increase to Cash of $24.8 million as compared to March 31, 2019.
Key Research and Development Highlights:

Tradipitant

In July 2019, Vanda announced positive results from a Phase II clinical study (Motion Sifnos) of tradipitant in motion sickness. Patients with a prior history of motion sickness were treated with tradipitant or placebo prior to a chartered trip on the Pacific Ocean. In this setting, significantly fewer patients on tradipitant vomited than those on placebo. Vanda intends to initiate a Phase III program in motion sickness in 2019 with a plan to file for marketing authorization in 2020.
After meeting with the U.S. Food and Drug Administration (FDA) in May 2019 to discuss the Phase III program, Vanda initiated a Phase III clinical study of tradipitant in gastroparesis in the second quarter of 2019 and plans to begin randomizing patients in the third quarter of 2019.
Enrollment in the Phase III clinical study (EPIONE) of tradipitant in atopic dermatitis is ongoing. Results are expected in the first half of 2020. A second Phase III clinical study is expected to begin in the first quarter of 2020.
HETLIOZ (tasimelteon)

The FDA’s review of the supplemental New Drug Application (sNDA) of HETLIOZ for the treatment of jet lag disorder is ongoing with a Prescription Drug User Fee Act (PDUFA) target date of August 16, 2019. On July 19, 2019, Vanda received a "Deficiencies Preclude Discussion" letter from the FDA. The letter does not specify any deficiencies in the file at this time. Vanda will await the PDUFA action and work expeditiously to resolve any potential deficiencies.
Vanda expects to file a sNDA for HETLIOZ for the treatment of Smith-Magenis Syndrome in the third quarter of 2019.
Vanda plans in the third quarter of 2019 to initiate a Phase II clinical study of HETLIOZ in delayed sleep phase disorder (DSPD) in patients who have a mutation in the CRY1 gene, which is believed to be causative in a subset of patients with DSPD.
Fanapt (iloperidone)

Enrollment is ongoing in a pharmacokinetic study for the once-a-month long acting injectable (LAI) formulation of Fanapt.
A randomized study of Fanapt in bipolar disorder is planned to begin in 2019.
VTR-297 (histone deactetylase (HDAC) inhibitor)

Enrollment is ongoing in a Phase I clinical study (1101) of VTR-297 in hematologic malignancies.
Non-GAAP Financial Results

Non-GAAP net income was $15.0 million for the second quarter of 2019, or $0.28 per share, compared to a Non-GAAP net income of $7.7 million, or $0.15 per share, for the second quarter of 2018.

Vanda provides Non-GAAP financial information, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the sections of this press release entitled "Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP Financial Information" for more detailed information regarding Non-GAAP financial information.

2019 Financial Guidance

Vanda reiterates its prior 2019 net product sales guidance and provides an update to Year-end 2019 Cash and expects to achieve the following financial objectives in 2019:

Conference Call

Vanda has scheduled a conference call for today, Wednesday, July 31, 2019, at 4:30 PM ET. During the call, Vanda’s management will discuss the second quarter 2019 financial results and other corporate activities. Investors can call 1-866-688-9426 (domestic) or 1-409-216-0816 (international) and use passcode 2589983. A replay of the call will be available on Wednesday, July 31, 2019, beginning at 7:30 PM ET and will be accessible until Wednesday, August 7, 2019, at 7:30 PM ET. The replay call-in number is 1-855-859-2056 for domestic callers and 1-404-537-3406 for international callers. The passcode number is 2589983.

The conference call will be broadcast simultaneously on Vanda’s website, www.vandapharma.com. Investors should click on the Investor Relations tab and are advised to go to the website at least 15 minutes early to register, download, and install any necessary software or presentations. The call will also be archived on Vanda’s website for a period of 30 days.

Non-GAAP Financial Information

Vanda believes that the Non-GAAP financial information provided in this press release can assist investors in understanding and assessing the ongoing economics of Vanda’s business and reflect how it manages the business internally and sets operational goals. Vanda’s "Non-GAAP Selling, general and administrative expenses" and "Non-GAAP Research and development expenses" exclude stock-based compensation. Vanda’s "Non-GAAP Net income," "Non-GAAP Net income per share" and "Non-GAAP Operating expenses excluding Cost of goods sold" exclude stock-based compensation and intangible asset amortization.

Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business, as well as Vanda’s use of financial resources and its long-term performance.

These Non-GAAP financial measures, as presented, may not be comparable to similarly titled measures reported by other companies since not all companies may calculate these measures in an identical manner and, therefore, they are not necessarily an accurate measure of comparison between companies.

The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for guidance prepared in accordance with GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Vanda’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these Non-GAAP financial measures. In order to compensate for these limitations, Vanda presents its Non-GAAP financial guidance in connection with its GAAP guidance. Investors are encouraged to review the reconciliation of our Non-GAAP financial measures to their most directly comparable GAAP financial measure.

On July 31, 2019 US Medical Innovations, LLC (USMI), a Biomedical and Life Science subsidiary of US Patent Innovations, LLC and the Jerome Canady Research Institute for Advanced Biological and Technological Sciences (JCRI-ABTS), LLC reported that the U.S. Food and Drug Administration (FDA) has approved the first clinical trial in the U.S. to evaluate Cold Atmospheric Plasma (CAP) Technology for the treatment of cancer (Press release, US Medical Innovations, JUL 31, 2019, View Source [SID1234537963]).

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USMI is the first company in the world to integrate a high frequency electrosurgical generator and plasma gas to deliver a Cold Atmospheric Plasma (Plasma Helium Beam) for the selective treatment of cancer US Patent #9,999,462 June 19, 2019 (Integrated Cold Plasma and High Frequency Plasma Electrosurgical System and Method). This novel non-thermal process has been developed for treating solid cancerous tumors. JCRI-ABTS and several plasma laboratories around the world have reported that CAP can trigger chemical and molecular changes in the cancerous cells that cause significant stress and drastically decrease the cancer cell’s viability and death. Canady Helios Cold Plasma System (CHCPS) has a selective action only on tumor cells and not healthy normal cells. CHCPS technology demonstrates a temperature equal or less than 30°C (85°F) and cause no thermal injury to normal tissue.

The Canady Helios Cold Plasma System and Canady Plasma Cold Plasma Ablator were developed by Jerome Canady, M.D. CEO, Chief Science Officer and the scientists at the Jerome Canady Research Institute for Advanced Biological and Technological Sciences (JCRI/ABTS), USMI’s engineering team led by Taisen Zhuang, PhD VP Research & Development; Michael Keidar PhD, Professor School of Engineering and Applied Sciences, Director of Micropropulsion and Nanotechnology lab at The George Washington University (GWU); and Alex Shashurin, PhD, Assistant Professor School of Aeronautics and Astronautics at Purdue University.

Dr. Canady explained, "After the surgeon removes the cancerous tumor during surgery, CAP is subsequently sprayed at the surgical margins to target any remaining cancerous tissue or cells for 2 to 7 minutes, thus reducing the chances of cancer recurrence. We see our CAP treatment as an important adjunct to the current treatment protocols for solid cancerous tumors. The FDA has given approval for 20 patients and we plan to start the program in August 2019."

The JCRI-ABTS Translational Molecular Center has developed a robust research program targeting Breast, Ovarian, Lung, Renal Cell, Sarcoma, Prostrate, Melanoma and Gastrointestinal solid tumors.

On July 31, 2019 Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported that will report its second quarter 2019 financial results on Wednesday, August 7, 2019 after the U.S. financial markets close (Press release, Five Prime Therapeutics, JUL 31, 2019, View Source [SID1234537962]). Five Prime will also host a conference call and live audio webcast on August 7th at 4:30 p.m. (ET) / 1:30 p.m. (PT) to discuss the company’s financial results and provide a general business update.

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The live audio webcast may be accessed through the "Events & Presentations" page in the "Investors" section of the company’s website at www.fiveprime.com. Alternatively, participants may dial (877) 878-2269 (domestic) or (253) 237-1188 (international) and refer to conference ID: 3575436.

The archived conference call will be available on Five Prime’s website beginning approximately two hours after the event and will be archived and available for replay for at least 30 days after the event.

On July 31, 2019 Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics reported that Aron Knickerbocker, Chief Executive Officer, is scheduled to present at the following investor conference (Press release, Five Prime Therapeutics, JUL 31, 2019, View Source [SID1234537961]):

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The 2019 Wedbush PacGrow Healthcare Conference Wednesday, August 14, 2019 at 8:35am ET / 5:35am PT
The presentations will be webcast and may be accessed at the "Events & Presentations" section of the Company’s website at:

View Source Five Prime will maintain an archived replay of the webcast on its website for 30 days after the conference.

On July 31, 2019 McKesson Corporation (NYSE:MCK) reported that revenues for the first quarter ended June 30, 2019, were $55.7 billion compared to $52.6 billion a year ago, an increase of 6% on a reported basis and an increase of 7% on an FX-adjusted basis (Press release, McKesson, JUL 31, 2019, View Source [SID1234537960]).

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On the basis of U.S. generally accepted accounting principles ("GAAP"), first-quarter earnings per diluted share from continuing operations was $2.27, compared to a loss per diluted share of $(0.69) a year ago.

First-quarter Adjusted Earnings per diluted share was $3.31, an increase of 14% compared to $2.90 a year ago, primarily driven by growth in the U.S. Pharmaceutical and Specialty Solutions segment and a lower share count, partially offset by a higher tax rate.

"McKesson is off to a strong start in fiscal 2020, and our first-quarter earnings performance exceeded our expectations," said Brian Tyler, chief executive officer. "Based on the momentum from our first-quarter results and our confidence in the full year outlook, we are raising our previous guidance range for fiscal 2020 and now expect Adjusted Earnings per diluted share of $14.00 to $14.60."

For the first quarter, McKesson used cash from operations of $51 million, and invested $111 million internally, resulting in negative free cash flow of $162 million. During the quarter, McKesson paid $46 million for acquisitions, and returned $759 million of cash to shareholders via $684 million of common stock repurchases and $75 million of dividend payments. The Board of Directors also approved a 5% increase in the quarterly dividend to $0.41 per share. The company ended the quarter with cash and cash equivalents of $1.9 billion.

U.S. Pharmaceutical and Specialty Solutions Segment

First-quarter revenues were $44.2 billion, up 8%, driven primarily by market growth, partially offset by branded to generic conversions. GAAP operating profit was $579 million and GAAP operating margin was 1.31%. Adjusted operating profit was $600 million, up 11%, and adjusted operating margin was 1.36%.
European Pharmaceutical Solutions Segment

First-quarter revenues were $6.7 billion, down 3% on a reported basis and up 3% on an FX-adjusted basis, driven primarily by market growth in the pharmaceutical distribution business. GAAP operating profit was $5 million and GAAP operating margin was 0.07%. Adjusted operating profit was $35 million, down 53%, and adjusted operating margin was 0.52%. On an FX-adjusted basis, adjusted operating profit was $37 million, down 50%, and adjusted operating margin was 0.52%, driven by the weak retail pharmacy environment in the U.K.
Medical-Surgical Solutions Segment

First-quarter revenues were $1.9 billion, up 12%, driven by an acquisition and growth in the Primary Care and Extended Care businesses. The aforementioned acquisition closed in the prior fiscal year on June 1, 2018, and has now been fully lapped. GAAP operating profit was $125 million and GAAP operating margin was 6.57%. Adjusted operating profit was $159 million, up 27%, and adjusted operating margin was 8.36%.
Other remaining businesses (primarily including McKesson Canada, McKesson Prescription Technology Solutions (MRxTS) and the equity method investment in the Change Healthcare Joint Venture (Change Healthcare))

First-quarter revenues were $3.0 billion, down 1% on a reported basis and up 2% on an FX-adjusted basis, driven primarily by growth in our MRxTS business. GAAP operating profit was $141 million and adjusted operating profit was $276 million, up 30%. On an FX-adjusted basis, adjusted operating profit was $279 million, up 31%.
Company Updates

Change Healthcare, Inc., a leading independent healthcare technology company, began trading on the Nasdaq Global Select Market under the trading symbol "CHNG" on June 27, 2019.
For the fourth year in a row, McKesson was named a ‘Best Place to Work’ for Disability Inclusion. McKesson earned a top-ranking score of 100 on the 2019 Disability Equality Index (DEI), a joint initiative of the American Association of People with Disabilities (AAPD) and Disability:IN.
Dr. Ken Washington joined McKesson’s Board of Directors as a new independent director effective July 1, 2019.
Fiscal 2020 Outlook and Change Healthcare Update

McKesson raised fiscal 2020 Adjusted Earnings per diluted share guidance to $14.00 – $14.60 from a range of $13.85 – $14.45.

Following the completion of the Change Healthcare, Inc. IPO, McKesson owns approximately 58.5% of Change Healthcare, reduced from 70%. McKesson will continue to report the equity income from its interest in Change Healthcare based on its revised equity ownership percentage and with a one-month lag.

McKesson reaffirmed the guidance range for adjusted equity earnings from Change Healthcare of approximately $250 million to $270 million in fiscal 2020. This range reflects McKesson’s revised equity ownership, and includes the expected benefit of lower interest expense for Change Healthcare driven by its repayment of long-term debt.

Dividend Declaration

The company’s Board of Directors yesterday declared a 5% increase in the regular quarterly dividend to 41 cents per share of common stock. The dividend will be payable on October 1, 2019, to stockholders of record on September 3, 2019.

Conference Call Details

The company has scheduled a conference call for today, Wednesday, July 31st, at 5:00 PM ET to discuss the company’s financial performance. A live audio webcast of the conference call will be available on McKesson’s Investor Relations website at View Source The conference call can also be accessed by dialing 323-994-2093. The password is ‘McKesson’. A telephonic replay of this conference call will be available for five calendar days. For individuals wishing to listen to the replay, the dial-in number is 719-457-0820 and the pass code is 5579684. An archive of the conference call will also be available on the company’s Investor Relations website at View Source

Upcoming Investor Events

McKesson management will be participating in the following investor conference:

Morgan Stanley 17th Annual Global Healthcare Conference, September 9-11, 2019, in New York, New York.
Audio webcasts will be available live and archived on the company’s Investor Relations website at View Source A complete listing of upcoming events for the investment community is available on the company’s Investor Relations website.

Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, transaction-related expenses and adjustments, LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments. A reconciliation of McKesson’s GAAP financial results to Adjusted Earnings is provided in Schedules 2 and 3 of the financial statement tables included with this release.

The company does not provide forward-looking guidance on a GAAP basis prospectively as McKesson is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

FX-Adjusted

McKesson also presents its financial results on an FX-adjusted basis. The company conducts business worldwide in local currencies, including the Euro, British pound and Canadian dollar. As a result, the comparability of the financial results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. FX-adjusted information is presented to provide a framework for assessing how the company’s business performed excluding the effect of foreign currency exchange rate fluctuations. The supplemental FX-adjusted information of the company’s GAAP financial results and Adjusted Earnings (Non-GAAP) is provided in Schedule 3 of the financial statement tables included with this release.

Free Cash Flow

McKesson also provides free cash flow, a non-GAAP measure. Free cash flow is defined as net cash provided by operating activities less payments for property, plant and equipment and capitalized software expenditures, as outlined in the company’s condensed consolidated statements of cash flows.