On October 30, 2019 PRA Health Sciences, Inc. ("PRA," "we," "us" or the "Company") (NASDAQ: PRAH) reported financial results for the quarter ended September 30, 2019 (Press release, PRA Health Sciences, OCT 30, 2019, View Source [SID1234550044]).

"Our third quarter financial results produced solid revenue growth and double digit earnings growth," said Colin Shannon, PRA’s Chief Executive Officer. "During the quarter we finalized a $500.0 million stock repurchase plan and repurchased and retired $300.0 million of common stock in connection with KKR’s clean-up trade. We are excited for our next chapter and I would like to thank KKR for their partnership. Our focus will remain on delivering shareholder returns and also delivering broad and flexible services to our clients. We look forward to continuing to position PRA for success in the future."

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Net new business for our Clinical Research segment for the three months ended September 30, 2019 was $669.4 million, representing a net book-to-bill ratio of 1.22 for the period. This net new business contributed to an ending backlog of $4.6 billion at September 30, 2019.

For the three months ended September 30, 2019, revenue was $780.7 million, which represents growth of 8.8%, or $63.1 million, compared to the three months ended September 30, 2018 at actual foreign exchange rates. On a constant currency basis, revenue grew $69.3 million, an increase of 9.7% compared to the third quarter of 2018. By segment, the Clinical Research segment generated revenues of $719.0 million, while the Data Solutions segment generated revenues of $61.7 million.

Direct costs, exclusive of depreciation and amortization, were $389.3 million during the three months ended September 30, 2019 compared to $371.4 million for the three months ended September 30, 2018 at actual foreign exchange rates. On a constant currency basis, direct costs increased $24.6 million compared to the third quarter of 2018. The increase in direct costs continues to be driven by increased labor costs in our Clinical Research segment and increased data costs in our Data Solutions segment. Direct costs were 49.9% of revenue during the third quarter of 2019 compared to 51.8% of revenue during the third quarter of 2018.

Selling, general and administrative expenses were $95.5 million during the three months ended September 30, 2019 compared to $92.6 million for the three months ended September 30, 2018. Selling,

general and administrative costs were 12.2% of revenue during the third quarter of 2019 compared to 12.9% of revenue during the third quarter of 2018.

GAAP net income was $83.0 million for the three months ended September 30, 2019, or $1.25 per share on a diluted basis, compared to GAAP net income of $1.5 million for the three months ended September 30, 2018, or $0.02 per share on a diluted basis.

Adjusted net income was $87.2 million for the three months ended September 30, 2019, representing growth of 16.6% compared to the three months ended September 30, 2018. Adjusted net income per diluted share was $1.32 for the three months ended September 30, 2019, representing growth of 16.8% compared to the three months ended September 30, 2018.

EBITDA was $128.6 million for the three months ended September 30, 2019, representing an increase of 99.6% compared to the three months ended September 30, 2018. Adjusted EBITDA was $137.8 million for the three months ended September 30, 2019, representing growth of 14.0% compared to the three months ended September 30, 2018.

A reconciliation of our non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted net income, adjusted net income per diluted share and our 2019 guidance, to the corresponding GAAP measures is included in this press release.

Nine Months Ended September 30, 2019 Financial Highlights

For the nine months ended September 30, 2019, revenue was $2,266.0 million, which represents growth of 5.8%, or $123.7 million, compared to the nine months ended September 30, 2018 at actual foreign exchange rates. On a constant currency basis, revenue grew $150.7 million, representing growth of 7.0% compared to the nine months ended September 30, 2018.

Reported GAAP income from operations was $262.5 million, reported GAAP net income was $168.2 million and reported GAAP net income per diluted share was $2.53 for the nine months ended September 30, 2019.

Adjusted Net Income was $242.3 million for the nine months ended September 30, 2019, an improvement of 22.9% compared to the same period in 2018. Adjusted Net Income per diluted share was $3.64 for the nine months ended September 30, 2019, up 22.1% compared to the same period in 2018.

Guidance

The Company is maintaining its 2019 revenue guidance between $3.02 billion and $3.10 billion, representing as reported growth of 5% to 8% and constant currency growth of 6% to 8%. We are updating our GAAP net income per diluted share to between $3.58 and $3.64 and Adjusted Net Income per diluted share to between $5.07 and $5.12, representing growth of 18% to 20%.

We continue to estimate our annual effective income tax rate at approximately 24%. Our effective tax rate may differ from this estimate, due to, among other things, changes to estimates of the geographic allocation of our pre-tax income as well as changes in guidance from regulatory agencies related to interpretation, analysis and guidance of the U.S. Tax Cuts and Jobs Act.

Our guidance assumes a EURO rate of 1.15 and a GBP rate of 1.30. All other foreign currency exchange rates are as of September 30, 2019.

Conference Call Details

PRA will host a conference call at 9:00 a.m. ET on October 31, 2019, to discuss the contents of this release and other relevant topics. To participate, please dial (877) 930-8062 within the United States or (253) 336-7647 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 6427745. The conference call will also be accessible, live via audio broadcast, on the Investor Relations section of the PRA website at investor.prahs.com. A replay of the conference call will be available online at investor.prahs.com. In addition, an audio replay of the call will be available for one week following the call and can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside the United States. The replay ID is 6427745.

Additional Information

A financial supplement with third quarter 2019 results, which should be read in conjunction with this press release, may be found in the Investor Relations section of our website at investor.prahs.com in a document titled "Q3 2019 Earnings Presentation."

On October 30, 2019 NewLink Genetics Corporation (NASDAQ:NLNK) reported it will host its third quarter 2019 conference call and webcast at 8:30 AM ET on Wednesday, November 6, 2019, to discuss its third quarter financial results and provide an update on corporate activities (Press release, NewLink Genetics, OCT 30, 2019, View Source [SID1234550043]). There will also be a question and answer session following the prepared remarks.

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Investors and the general public are invited to listen to a live audio webcast of the conference call, which can be accessed five minutes prior to the start of the call by dialing (855) 469-0612 (U.S.) or (484) 756-4268 (international). The conference call will be webcast live and a link can be accessed through the NewLink Genetics website at View Source A replay of the call will be available for two weeks from the date of the call and can be accessed by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and using the passcode: 3794399.

On October 30, 2019 MannKind Corporation (NASDAQ:MNKD) reported that it will release its 2019 third quarter and year-to-date financial results and its management will host a conference call to discuss the financial results and corporate updates at 9:00 AM (Eastern Time) on Wednesday, November 6, 2019 (Press release, Mannkind, OCT 30, 2019, View Source [SID1234550042]).

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Presenting from the Company will be its Chief Executive Officer, Michael Castagna and Chief Financial Officer, Steven Binder.

To participate in the live call by telephone, please dial (866) 548-4713 or (323) 794-2093 and use the participant passcode: 8987532. Those interested in listening to the conference call live via the Internet may do so by visiting the Company’s website at View Source under News & Events.

A telephone replay of the call will be accessible for approximately 14 days following completion of the call by dialing (844) 512-2921 or (412) 317-6671 and use the participant passcode: 8987532. A replay will also be available on MannKind’s website for 14 days.

On October 30, 2019 Apollo Endosurgery, Inc. ("Apollo") (Nasdaq: APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, reported financial results for the third quarter ended September 30, 2019 (Press release, Lpath, OCT 30, 2019, View Source [SID1234550041]).

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Third Quarter 2019 Highlights
•ESS sales increased 28% (30% in constant currency) to $6.7 million, representing 64% of our Endoscopy sales for the third quarter
•Endoscopy sales increased 12% (14% in constant currency) to $10.4 million
•Received 510(k) clearance from the FDA for the OverStitch Polypropylene Suture-Anchor Assembly
Todd Newton, CEO of Apollo, commented, "Strong market momentum for OverStitch continued in the third quarter with 28% increase in sales. This marks our fourth consecutive quarter of double-digit year-over-year growth in OverStitch sales. We remain enthusiastic about the opportunities ahead to continue this growth, driven by expansion of our user base and ongoing clinical investments that will continue to demonstrate the notable clinical benefits of our Endoscopy products."
Third Quarter 2019 Results
Consolidated Endoscopy product sales increased 12% as reported and 14% in constant currency. For the third quarter, 64% of Endoscopy product sales related to ESS. In the U.S., Endoscopy sales increased 30% to $4.8 million.
Worldwide, ESS product sales increased 28% as reported and 30% in constant currency. U.S. ESS product sales increased 48% to $3.7 million in the third quarter of 2019. Outside the US ("OUS") ESS product sales increased 9% as reported and 12% in constant currency to $2.9 million.
Worldwide IGB sales decreased 9% as reported and 7% on a constant currency basis. U.S. IGB sales decreased $0.1 million, or 7%, to $1.1 million in the third quarter of 2019 while OUS IGB product sales decreased 9% as reported and 7% on a constant currency basis to $2.6 million.
The divestiture of our Surgical products in December of 2018 reduced total revenues in the third quarter of 2019 by $3.9 million compared to the third quarter of 2018. We divested the Surgical products in order to strengthen the organization’s focus on our Endoscopy products, which we believe have high growth potential.
Gross margin for the third quarter 2019 was 48%, compared to 55% for the third quarter 2018 as a result of a greater proportion of our overall product sales coming from our ESS products, which realize a lower gross margin than our other products.
Total operating expenses decreased $3.6 million to $12.3 million in the third quarter 2019, compared to the third quarter 2018. Research and development expense declined $1.5 million compared with the third quarter of 2018 as we neared completion in certain of our clinical studies. In addition, amortization expense is $1.3 million lower as a result of the reduction in our intangible assets after the recent divestiture of our Surgical products.
Net loss for the third quarter 2019 was $8.7 million compared to $9.8 million for the third quarter 2018.
Cash, cash equivalents and restricted cash were $36.0 million as of September 30, 2019. The Company raised proceeds of $20.0 million from the issuance of convertible debt in August 2019.
Conference Call
Apollo will host a conference call on October 30, 2019 at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time to discuss operating results for the third quarter ended September 30, 2019.
To participate in the conference call dial (877) 823-8673 for domestic callers and (647) 689-4156 for international callers. The conference ID number is 6392218. A live webcast of the conference call will be made available on the "Events and Presentations" section of our Investor Relations website: www.ir.apolloendo.com.
A replay of the webcast will be made available on Apollo’s website, www.apolloendo.com following the event.

Non-GAAP Financial Measures
To supplement our financial results we are providing a non-GAAP financial measure, percentage revenue change in constant currency, which removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of revenues. Percentage revenue change in constant currency is calculated by translating current foreign currency sales at last year’s exchange rate. This supplemental measure of our performance is not required by, and is not determined in accordance with GAAP.
We believe the non-GAAP financial measure included herein is helpful in understanding our current financial performance. We use this supplemental non-GAAP financial measure internally to understand, manage and evaluate our business, and make operating decisions. We believe that making non-GAAP financial information available to investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the company’s performance over time with the performance of other companies in the medical device industry, which may use similar financial measures to supplement their GAAP financial information. However, our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the comparable GAAP metric.

On October 30, 2019 Kaleido Biosciences, Inc. (Nasdaq: KLDO), a clinical-stage healthcare company with a chemistry-driven approach to leveraging the microbiome organ to treat disease and improve human health, reported financial results for the third quarter ended September 30, 2019, and provided a corporate update (Press release, Kaleido Biosciences, OCT 30, 2019, View Source [SID1234550040]).

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"Over the last two years we have invested in building our platform, including expanding our library of more than 1,500 MMTs and manufacturing capabilities. We have made important progress across the business, and today we have four ongoing clinical studies with three MMTs in three different patient populations, and presented encouraging data from a fifth study at the SSIEM meeting last month. We are also leveraging collaborations to advance our understanding of the potential of our MMTs in promising areas of health and disease where the microbiome is implicated, such as immuno-oncology," said Alison Lawton, President and Chief Executive Officer of Kaleido. "We are focusing our resources on our current pipeline, executing against key clinical milestones while optimizing our operational efficiencies to extend our cash runway. We anticipate results from our studies of KB174, including in patients with cirrhosis, during Q4 2019, and next year from our KB109 multi-drug resistant pathogens program and Phase 2 trial of KB195 in patients with urea cycle disorders."

Corporate Update and Anticipated Milestones

Dosing is underway in the Phase 2 trial (UNLOCKED) designed to evaluate KB195 in 18-24 patients with urea cycle disorders (UCD). Kaleido, in consultation with study investigators who are leaders in the clinical management of UCD patients, has elected to adjust the primary endpoint for this study in a rare orphan disease population to a within-patient responder analysis of the proportion of patients with ≥15 percent decrease in fasting plasma ammonia. The original primary endpoint, 24-hour area under the curve plasma ammonia, will be measured as a secondary endpoint. The Phase 2 trial was initiated approximately 24 months after conducting the first ex vivo screening, and data are expected in mid-2020.

Results from two clinical studies for Kaleido’s hepatic encephalopathy program evaluating KB174 in patients with well-compensated cirrhosis and in healthy volunteers are expected during Q4 2019.

Enrollment continues in the clinical study (VITORA) assessing KB109 in patients colonized with multi-drug resistant pathogens, and data are anticipated in mid-2020.

Kaleido is undertaking measures to focus resources on its pipeline programs, enhance operational efficiencies and extend its cash by approximately a quarter with runway into Q4 2020. This includes decreasing manufacturing and other external costs as well as reducing headcount by approximately 25 percent.
Recent Highlights

Entered into a research collaboration with Jeffrey Gordon, M.D., Director of the Edison Family Center for Genome Sciences and Systems Biology at Washington University School of Medicine, to explore the influence of MMTs on microbial and host physiology and metabolism.

Announced a collaboration with Gustave Roussy, the largest cancer treatment center in Europe, to identify and characterize MMT candidates with the potential to improve cancer immunotherapy efficacy; the research program is aimed at increasing the number of patients who respond to inhibitors of immune checkpoints by changing their microbiome composition and metabolic output.

Presented data at the annual Society for the Study of Inborn Errors of Metabolism Symposium (SSIEM) from a clinical study of KB195 in patients with UCD which demonstrated safety and tolerability and potential for effect on nitrogen metabolism, a biomarker of ammonia production.

Presented at IDWeek 2019 ex vivo data showing that KB109 reduced the relative abundance of multi-drug resistant pathogens in microbiome samples from two different populations at high risk for infection, patients in the intensive care unit who had received broad-spectrum antibiotics and patients with end-stage liver disease.

Presented ex vivo and in vivo data demonstrating the ability of MMTs to reduce toxic side effects of chemotherapy through multiple mechanisms at the Keystone Symposia on the Microbiome: Therapeutic Implications.
Third Quarter 2019 Financial Results

For the third quarter ended September 30, 2019, Kaleido reported a net loss of $22.0 million, or $0.74 per common share, compared to $17.4 million, or $3.38 per common share for the third quarter ended September 30, 2018.

In the third quarter of 2019, Kaleido invested $16.2 million in research and development (R&D) related to advancing its product pipeline, as compared to $10.2 million in the third quarter of 2018. This year-over-year increase was driven primarily by incremental R&D spending for KB195, including the Company’s Phase 2 clinical trial and external manufacturing. Additional incremental spend year-over-year related to ongoing clinical studies, including two clinical studies for Kaleido’s hepatic encephalopathy program evaluating KB174, and the VITORA clinical study of KB109 in multi-drug resistant pathogens.

General and administrative (G&A) expenses were $5.9 million during the third quarter of 2019, as compared to $7.1 million for the third quarter of 2018. This year-over-year decrease was driven primarily by lower stock-based compensation costs related to G&A.

Included in net loss was non-cash stock-based compensation expenses of $2.9 million for the third quarter of 2019, as compared to $3.8 million in the third quarter of 2018.

As of September 30, 2019, the Company reported cash and cash equivalents of $81.3 million.

About Microbiome Metabolic Therapies (MMT)

Kaleido’s Microbiome Metabolic Therapies, or MMTs, are designed to drive the function and distribution of the microbiome organ’s existing microbes in order to decrease or increase the production of metabolites, or to advantage or disadvantage certain bacteria in the microbiome community. The Company’s initial MMT candidates are targeted glycans that are orally administered, have limited systemic exposure, and are selectively metabolized by enzymes in the microbiome. Kaleido utilizes its human-centric discovery and development platform to study MMTs in microbiome samples in an ex vivo setting, followed by advancing MMT candidates rapidly into clinical studies in healthy subjects and patients. These human clinical studies are conducted under regulations supporting research with food, evaluating safety, tolerability and potential markers of effect. For MMT candidates that are further developed as therapeutics, the Company conducts clinical trials under an Investigational New Drug (IND) or regulatory equivalent outside the U.S., and in Phase 2 or later development.