On May 10, 2016 CEL-SCI Corporation (NYSE MKT: CVM) reported financial results for the quarter ended March 31, 2016 (Press release, Cel-Sci, MAY 10, 2016, View Source [SID:1234512270]).

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Key corporate and clinical developments during second quarter fiscal year 2016 include:

Enrolled an additional 186 patients in the global pivotal Phase 3 head and neck cancer trial during the first six months of FY 2016, a 32% increase in enrollment compared to the first six months of FY 2015.
Enrolled a monthly record of 41 patients in April 2016, following the end of Q2.
A total of 797 patients have been enrolled in the study as of April 30, 2016.
The Company’s CEO and CSO provided informative updates in multiple interviews, including Fox Business News.
Continued patient enrollment in the Phase 1 trial of Multikine* in HIV/HPV co-infected men and women with peri-anal warts at San Diego Naval Medical Center and University of California, San Francisco (UCSF).
Received significant litigation funding for arbitration lawsuit against former CRO that led to a narrowing of G&A expense and operating loss in Q2 FY 2016.
CEL-SCI reported an operating loss of ($6,273,603) for the quarter ended March 31, 2016 versus an operating loss of ($7,759,343) for the quarter ended March 31, 2015. The operating loss for the six months ended March 31, 2016 was ($12,056,735) versus ($17,755,084) during the six months ended March 31, 2015. The decrease in operating loss in the first half of fiscal 2016 was mostly attributable to a decrease in general and administrative expenses of approximately $5,803,000, as compared to the first half of fiscal 2015. A major component of the decrease is the approximate $3,254,000 gain on the derecognition of legal fees recognized pursuant to an agreement with Lake Whillans for funding litigation expenses in the Company’s arbitration against its former CRO. Additionally, during the first half of fiscal 2015, there was approximately $2,726,000 in employee compensation costs related to the issuance of shareholder approved shares of restricted stock released upon meeting predetermined milestones. Research and development expenses remained relatively consistent and decreased by $176,000 during the six months ended March 31, 2016.

CEL-SCI’s net loss available to common shareholders for the quarter ended March 31, 2016 was ($8,844,855) or ($0.07) per basic and diluted share, versus ($12,556,236) or ($0.17) per basic and diluted share during the quarter ended March 31, 2015. The net loss available to common shareholders for the six months ended March 31, 2016 was ($6,503,042) or ($0.06) per basic and diluted share, versus ($20,401,554) or ($0.27) per basic and diluted share during the same six months ended March 31, 2015. The decrease in net loss for the three and six month periods of 2016 as compared to the same periods in 2015 was primarily attributable to the decrease in operating loss and reduced loss and unrealized gain, respectively, on the fair value of warrants as a result of the change in the stock price between reporting periods.

About Multikine (Leukocyte Interleukin, Injection)

Multikine is an investigational immunotherapeutic agent that is being tested in an open-label, randomized, controlled, global pivotal Phase 3 clinical trial as a potential first-line treatment for advanced primary (not yet treated) squamous cell carcinoma of the head and neck. Multikine is designed to be a different type of therapy in the fight against cancer: one that appears to have the potential to work with the body’s natural immune system in the fight against tumors.

On May 10, 2016 Intrexon Corporation (NYSE: XON), a leader in synthetic biology, reported its first quarter results for 2016 (Press release, Intrexon, MAY 10, 2016, View Source [SID:1234512269]).

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Intrexon Corporation logo.
Business Highlights and Recent Developments:

National Health Surveillance Agency of Brazil (Anvisa) announced that Oxitec, a wholly-owned subsidiary of Intrexon, would receive a special temporary registration to deploy its genetically engineered mosquito, OX513A, known as ‘Friendly Aedes aegypti’, throughout the country;
The World Health Organization’s Vector Control Advisory Group issued a positive recommendation for planned pilot deployment of Oxitec’s self-limiting mosquito (OX513A) under operational conditions. Additionally the Pan American Health Organization has offered to provide technical support for pilot studies of OX513A as part of its response to the Zika epidemic;
The U.S. Food and Drug Administration (FDA) Center for Veterinary Medicine published a preliminary finding of no significant impact (FONSI) on Oxitec’s self-limiting OX513A Ae. aegypti mosquito for an investigational trial in the Florida Keys;
Announced the Cayman Islands Mosquito Research and Control Unit (MRCU) plans to utilize Oxitec’s solution for suppression of wild populations of Ae. aegypti to help reclaim the island from this disease-carrying pest. The program follows a successful trial of Oxitec’s mosquito in the Cayman Islands that reduced Ae. aegypti by 96%;
Acquired the business of EnviroFlight LLC and formed a joint venture with Darling Ingredients Inc. (NYSE: DAR), the world’s largest publicly traded developer and producer of sustainable natural ingredients from bio-nutrients. Through collaboration between Intrexon and Darling, EnviroFlight’s scalable approach utilizing black soldier fly larvae will be used in the generation of high-nutrition, low environmental impact animal and fish feed as well as fertilizer products;
Announced the pilot plant for Intrexon’s proprietary gas-to-liquids bioconversion platform is operational. The plant is dedicated to the production of isobutanol, a drop-in fuel with numerous advantages over other clean burning gasoline blendstocks;
With collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) announced allowance from the U.S. FDA to initiate a Phase I/II clinical trial for FCX-007 in adults. FCX-007 is Fibrocell’s lead gene-therapy product candidate developed in collaboration with Intrexon for the treatment of the orphan indication of recessive dystrophic epidermolysis bullosa. Additionally Fibrocell received orphan drug designation from the FDA for FCX-013, its second gene-therapy product candidate developed in conjunction with Intrexon, for the treatment of localized scleroderma;
Collaborator ZIOPHARM Oncology (NASD: ZIOP) announced the first patient was treated in the dose escalation portion of the Phase I study of Ad-RTS-hIL-12 for advanced glioma, and additionally the first patient was enrolled in the Phase I study of second generation non-viral CD-19-specific CAR T-cell therapy for advanced lymphoid malignancies;
Announced the formation of Intrexon T1D Partners, LLC, a joint venture to develop ActoBiotics based antigen-specific immunotherapy to treat type 1 diabetes (T1D) in humans. The objective of the program is to create an easy-to-take pill for people afflicted with T1D to halt autoimmune-induced damage, both for early stage patients before they become insulin dependent and also for certain advanced stage patients to potentially prevent the requirement for insulin to be administered externally;
Entered into ECCs with two startups backed by the Harvest Intrexon Enterprise Fund, sponsored by Harvest Capital Strategies, LLC. Through the proprietary technologies of Intrexon, these companies will pursue new approaches for unmet needs in human health: Relieve Genetics, Inc. will focus on a breakthrough, non-opioid gene therapy approach for neuropathic pain and Exotech Bio, Inc. will utilize a novel exosome-based platform for delivering therapeutic RNA to treat select cancer indications; and
Announced the formation of Intrexon Crop Protection (ICP), a wholly-owned subsidiary dedicated to the biological control of agricultural pests and diseases. Through the utilization of Oxitec’s diverse self-limiting gene platform for insect control as well as the ActoBiotics system for the expression of targeted biologicals, ICP will precisely target single pest species thereby avoiding off-target effects of conventional pesticide applications on the broader ecosystem.
First Quarter Financial Highlights:

Total revenues of $43.4 million, an increase of 28% over the first quarter of 2015;
Net loss of $64.4 million attributable to Intrexon, or $(0.55) per basic share, including non-cash charges of $50.6 million;
Adjusted EBITDA of $1.9 million, or $0.02 per basic share;
Cash consideration received for reimbursement of research and development services covered 56% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries);
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 92% of consolidated cash operating expenses; and
Cash, cash equivalents, and short-term and long-term investments totaled $336.0 million, and the value of equity securities totaled $61.3 million at March 31, 2016.
In addition, Intrexon’s Board of Directors has authorized management to prepare a plan to distribute to the shareholders of Intrexon certain shares of the Intrexon Crop Protection subsidiary. Any dividend will be subject to various conditions including the registration of the subsidiary pursuant to the Securities Exchange Act of 1934.

"Your company is capably executing its plan to accomplish all of its goals for 2016 – financially, programmatically and through its partnering – and I am very proud of the fine work being done by our team," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. "Our principal internal business objective, as always, is the maximization of the value of our growing, diversified portfolio of commercial and financial interests across many products and industries. We seek to obtain this through minimal net expenditure of our company’s cash and this is for two reasons – to maximize our ultimate cash-on-cash return and to allow the cash flows resulting from the products that we have enabled to flow to our bottom line on a relatively unburdened basis. We made significant progress in this category during the first quarter and believe that we shall continue to extend our performance trajectory throughout the year and beyond.

"Programmatic progress – and this is where the vast majority of our 750 employees are engaged every day – is largely tracking to our expectations, and we look forward to detailing some of this during our upcoming conference call and to the announcement of further developments throughout the balance of the year. Our progress in partnering, especially around some of our mature assets, keeps much of our executive team very busy, and we shall update you on this as well, but we would be remiss if we did not here especially acknowledge a new partner, the Cayman Islands and its exemplary government under the leadership of Premier Hon. Alden McLaughlin, MBE, JP, MLA, which is the first government in the world to develop a comprehensive program across a territory to fight the Aedes aegypti mosquito, the principal disease vector for Zika, dengue and chikungunya."

Mr. Kirk concluded, "Finally, under the heading of stewardship, our board of directors and management recognize a fundamental desire to seek, identify and implement means of rewarding our shareholders that go beyond ‘merely’ building a great business. As was the case with last year’s $172M dividend of equity securities in ZIOPHARM Oncology, we recognize an opportunity for our shareholders to participate directly in the ownership of Intrexon Crop Protection ("ICP") which we believe will confer significant and direct value to our shareholders beyond that which could be realized in the event that ICP had remained a wholly owned subsidiary of Intrexon. You should expect further information on this development in the near future."

First Quarter 2016 Financial Results Compared to Prior Year Period

Total revenues were $43.4 million for the quarter ended March 31, 2016 compared to $33.8 million for the quarter ended March 31, 2015, an increase of $9.6 million, or 28%. Collaboration and licensing revenues increased $9.3 million over the quarter ended March 31, 2015 due to (i) the recognition of deferred revenue for upfront payments received from the Company’s license and collaboration agreements with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon between April 1, 2015 and March 31, 2016; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. Product revenues were $8.6 million for the quarter ended March 31, 2016 compared to $8.9 million for the quarter ended March 31, 2015, a decrease of $0.3 million, or 4%. The decrease primarily relates to a decrease in the quantities of livestock previously used in production and live calves sold due to lower customer demand for these products. Gross margin on product revenues declined for the same period primarily due to a decline in the average sales prices of livestock previously used in production. Service revenues were $10.7 million for the quarter ended March 31, 2016 compared to $10.0 million for the quarter ended March 31, 2015, an increase of $0.7 million, or 7%. The increase relates to an increase in the number of in vitro fertilization cycles performed due to higher customer demand.

Total operating expenses were $84.0 million for the quarter ended March 31, 2016 compared to $121.0 million for the quarter ended March 31, 2015, a decrease of $37.0 million, or 31%. Research and development expenses declined $53.4 million, or 67%, due primarily to the inclusion in 2015 of a $59.6 million payment in common stock for an exclusive license to certain technologies owned by the University of Texas MD Anderson Cancer Center (MD Anderson). This decrease was partially offset by increases in (i) salaries, benefits and other personnel costs for research and development employees (ii) lab supplies and consultant expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $2.3 million due to (i) an increase in research and development headcount to support new and expanded collaborations and (ii) a full quarter of costs for research and development employees assumed in the Company’s various 2015 acquisitions. Lab supplies and consultant expenses increased $2.8 million as a result of (i) the progression into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) a full quarter of costs incurred as a result of the Company’s various 2015 acquisitions. Depreciation and amortization increased $1.9 million primarily as a result of (i) incurring a full quarter of depreciation and amortization on property and equipment and intangible assets acquired in the Company’s 2015 acquisitions, and (ii) amortization related to AquaBounty’s intangible assets upon regulatory approval in November 2015. Selling, general and administrative (SG&A) expenses increased $15.3 million, or 55%, over the first quarter of 2015. Salaries, benefits and other personnel costs for SG&A employees increased $6.0 million due to (i) increased headcount to support Intrexon’s corporate operations and increased stock compensation expense due to higher grant date fair values for stock options granted; (ii) a full quarter of stock compensation expense for a company-wide option grant to employees in March 2015 and (iii) a full quarter of salaries, benefits and other personnel costs for employees assumed in the Company’s 2015 acquisitions. Legal and professional expenses increased $3.7 million primarily due to (i) noncash expenses due pursuant to Intrexon’s services agreement with Third Security, LLC which the Company entered into in November 2015; (ii) legal fees for trial and post-trial activities for the Company’s litigation with XY, LLC; (iii) expenses incurred to support domestic and international government affairs for regulatory approvals necessary to commercialize the Company’s products and services; (iv) incremental costs incurred to support the ongoing operations of the Company’s 2015 acquisitions; and (v) other business development activities. For the quarter ended March 31, 2016, the Company also recorded $4.2 million in litigation settlement expenses arising from the final court order in the Company’s trial with XY, LLC.

Total other income (expense), net, was $(21.4) million for the quarter ended March 31, 2016 compared to $115.7 million for the quarter ended March 31, 2015, a decrease of $137.1 million, or 119%. This decrease was attributable to market changes in Intrexon’s current equity securities portfolio; in 2016, this portfolio no longer included shares of ZIOPHARM Oncology, Inc. since the Company distributed such shares, including all realized gains thereon, to the Company’s shareholders as a dividend in June 2015.

On May 10, 2016 Immune Design (Nasdaq:IMDZ), a clinical-stage immunotherapy company focused on oncology, reported financial results and a corporate review for the first quarter ended March 31, 2016 (Press release, Immune Design, MAY 10, 2016, View Source [SID:1234512268]).

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"During the first quarter, we progressed both clinical product development and discovery research activities," said Carlos Paya, M.D., Ph.D., president and chief executive officer of Immune Design. "We continued to enroll patients in randomized Phase 2 studies evaluating both of our lead immuno-oncology product candidates, CMB305 and G100, and we are initiating activities in the emerging field of neoantigen-based personalized therapies."

Recent Highlights

Product Development Progress

Specific Antigen Approach: Targeting NY-ESO-1 positive Soft Tissue Sarcomas

LV305 Phase 1 single agent trial

Enrollment is complete with sufficient follow-up of a large cohort of patients indicating a favorable safety profile and a positive signal in clinical endpoints such as progression-free survival (PFS) and survival.

The complete data will be presented at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.

CMB305 Phase 1 single agent trial

Enrollment in the expansion arm is in progress.

Thus far the safety profile is favorable, and a positive signal in PFS- related endpoints was observed.

The Company plans to provide data at the Immune Design Company Update event in New York City on Wednesday, June 8.

Immune Design recently received Orphan Designation from the FDA for this product.

CMB305 randomized Phase 2 trial

Enrollment is ongoing in the 80-patient trial evaluating CMB305 with atezolizumab, Genentech’s anti-PD-L1 checkpoint inhibitor, versus atezolizumab alone.

A first analysis is planned for the fourth quarter of this year.
Intratumoral Immune Activation Approach: Evaluation in Merkel cell carcinoma (MCC), Sarcoma and follicular non-Hodgkin Lymphoma (fNHL)

G100 single agent and in combination with radiation Phase 1 trial in MCC patients

Enrollment has completed, with a consistent safety and clinical benefit profile.

A thorough analysis of the tumor micro-environment before and after G100 injection demonstrates increased tumor inflammation ("hot" tumor).

Full data set will be presented at the upcoming ASCO (Free ASCO Whitepaper) meeting.

G100 single agent and in combination with radiation Phase 1 trial in sarcoma patients

Investigator-sponsored trial at the Fred Hutchinson Cancer Research Center is ongoing in sarcoma patients with accessible lesions.

Evaluating dose response of G100 for safety, clinical signal and tumor micro-environment changes of a traditionally "cold" tumor.

Initial data will be presented at the upcoming ASCO (Free ASCO Whitepaper) meeting.

G100 and low dose radiation in combination or not with Keytruda Phase 1/2 trial in fNHL

Enrollment is ongoing in part 1: G100 dose-escalation.

We expect enrollment for part 1 and part 2 (randomized with Keytruda) to be completed by year-end.
New Clinical Collaboration targeting Neoantigens with Gritstone Oncology

A collaboration announced on May 9, 2016 will involve the application of Immune Design’s ZVexTM discovery platform with Gritstone’s proprietary genomics and proteomics platform for identification of patient-specific tumor antigens to develop neoantigen-based immunotherapies.
Research Activities Progress

Immune Design is evaluating the ZVex IL-12 vector as a potential addition to its intratumoral activation approach.

Preclinical results were presented at the recent American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting.
Financial Results

First Quarter

Immune Design ended the first quarter of 2016 with $100.8 million in cash and investments, compared to $112.9 million as of December 31, 2015. Net cash used in operations for the three months ended March 31, 2016 was $12.1 million.

Net loss and net loss per share for the first quarter of 2016 were $12.3 million and $0.61, respectively, compared to $9.4 million and $0.56, respectively, for the first quarter of 2015.

Revenue for the first quarter of 2016 was $1.9 million and was attributable primarily to the Sanofi G103 (HSV2 therapeutic vaccine) collaboration established in the fourth quarter of 2014. Revenue for the first quarter of 2015 was similar, $1.9 million, and was attributable primarily to $1.8 million in collaboration revenue associated with Sanofi G103 collaboration and $0.1 million in product sales.

Research and development expenses for the first quarter of 2016 were $10.6 million, compared to $7.5 million for the first quarter of 2015. The $3.1 million increase was primarily attributable to continuing advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials.

General and administrative expenses did not materially differ over the comparative periods. For the first quarter of 2016 general and administrative expenses were $3.9 million, compared to $3.8 million for the first quarter of 2015.

On May 10, 2016 Varian Medical Systems (NYSE: VAR) reported the cyclotron for the new multi-room HollandPTC in Delft, which will be equipped with the Varian ProBeam proton therapy system (Press release, Varian Medical Systems, MAY 10, 2016, View Source [SID:1234512267]). The cyclotron, a particle accelerator which accelerates protons to two thirds of the speed of light for clinical use, is a core piece of equipment of the ProBeam system. The delivery marks the start of equipment installation, a key milestone for each new proton therapy center.

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HollandPTC is part of Medical Delta, the medical-technological collaboration of the universities and university medical centers of Leiden, Delft and Rotterdam. Due for completion in 2017, the center will feature two proton therapy treatment rooms with full rotational gantries, one for fixed-beam eye treatments, as well as a dedicated research room.

Proton therapy makes it possible to treat certain types of cancer more precisely and with potentially fewer side effects than is possible with conventional radiation therapy. With proton therapy, the risk of damage to healthy tissues and potential side effects is reduced because the beam is designed to stop and deposit dose within the tumor site rather than passing all the way through the patient. Proton therapy can be used for many of the most common types of cancer.

"Delivery of the cyclotron is the next major milestone in bringing this advanced cancer-fighting technology to patients in the Netherlands," said Dr. Moataz Karmalawy, general manager of Varian’s Particle Therapy division. "As well as offering pencil-beam scanning, the most advanced form of proton therapy, HollandPTC will be a key research site feeding into a national program to study and improve the efficacy of protons."

HollandPTC business director Rob Florijn adds: "The arrival of the cyclotron is an important milestone in the realization of HollandPTC. Varian has been a great partner in achieving this, as well as joining us in our research efforts towards a new generation of proton therapy."

Varian’s ProBeam technology is being used to treat patients at the Scripps Proton Therapy Center in San Diego, the Maryland Proton Therapy Center in Baltimore, the Rinecker Proton Therapy Center in Munich, and at the Paul Scherrer Institute in Switzerland. Varian also has contracts for system installations at ten other sites around the world. Varian’s ProBeam system with Dynamic Peak Scanning is uniquely capable of high-speed intensity modulated proton therapy (IMPT) which is the most precise form of proton therapy available.

On May 10, 2016 Allergan plc (NYSE: AGN) reported strong performance with net revenue from continuing operations increasing 48 percent to $3.8 billion for the quarter ended March 31, 2016, compared to $2.6 billion in the first quarter 2015 (Press release, Allergan, MAY 10, 2016, View Source;p=irol-newsArticle&ID=2166833 [SID:1234512266]). On a non-GAAP basis, diluted earnings per share from continuing operations increased 15 percent to $3.04 for the first quarter 2016, compared to $2.65 in the first quarter 2015. GAAP loss from continuing operations per diluted share for the first quarter 2016 was $0.38, compared to GAAP loss from continuing operations per diluted share of $2.80 in the prior year period. GAAP results were impacted by amortization, acquisition-related expenses, research and development (R&D) expenses resulting from the acquisition of R&D assets from Anterios, Pfizer-related expenses, acquisition accounting valuation related expenses and severance associated with acquired businesses, mainly the acquisition of Allergan on March 17, 2015. These results include Allergan results as of the date of the close of the acquisition, March 17, 2015.

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"Allergan once again delivered strong performance in the first quarter of 2016, powered by double-digit pro forma branded revenue growth2 and our top global products within the U.S. Brands, U.S. Medical and International Brands segments. We also grew our Non-GAAP EPS by 15 percent, marking the seventh consecutive quarter of double-digit, year-over-year EPS growth since I became the CEO in July 2014," said Brent Saunders, CEO and President of Allergan. "Thanks to the effort of our 30,000 colleagues around the world, Allergan remains the most dynamic and exciting company in our industry. That dynamism is evident in our results, in the way we operate our business, in the way we build category leadership through our Open Science model and in our highly responsive, service oriented approach to customers."

"Our branded business continues to grow at a fast pace and is very well positioned in each of our seven therapeutic areas. As we look ahead, we see durable global brands with strong fundamentals, broad-based geographic expansion, and many opportunities to continue growing our innovative business," added Saunders.

For the first quarter 2016, adjusted EBITDA from continuing operations increased 65 percent to $1.8 billion, compared to $1.1 billion for the first quarter 2015. Non-GAAP operating income from continuing operations in the first quarter 2016 was $1.75 billion. GAAP operating loss from continuing operations in the first quarter 2016 was $154 million. Cash flow from operations for the first quarter of 2016 was $1.2 billion and cash and marketable securities were $2.3 billion as of March 31, 2016. Cash from operations in the quarter was impacted by the acquired R&D assets from Anterios and integration expenses.

_____________________________________
1 Excludes Fx impact, Namenda IR and divestitures
2 Excludes Fx impact, Namenda IR and divestitures

Operating Expenses
Total non-GAAP SG&A was $1.0 billion for the first quarter 2016 compared to $609 million in the prior year period. Non-GAAP R&D investment for the first quarter 2016 was $277 million. As of March 31, 2016, the Company had outstanding indebtedness of $42.6 billion primarily as a result of legacy Allergan, Forest and other recent acquisitions.

Amortization and Tax
Amortization expense for the first quarter 2016 was $1.6 billion, compared to $788 million in the first quarter of 2015. The increase was primarily due to the Allergan acquisition.

The Company’s non-GAAP continuing operations tax rate was 9.7 percent in the first quarter 2016. The Company experienced a benefit to its tax rate as a result of the impact of its entire interest expense being included within continuing operations earnings.

Top Global Branded Product Highlights
The following table represents revenue from Allergan’s top promoted products.

ALLERGAN PLC
NET REVENUES TOP GLOBAL PRODUCTS
(Unaudited; in millions)

Three Months Ended March 31,

Global

U.S.

International

2016

2015

$ Change
% Change

2016

2015

$ Change
% Change

2016

2015

$ Change
% Change

Botox

$ 637.5

$ 84.0

$ 553.5
n.m.

$ 455.5

$ 60.7

$ 394.8
n.m.

$ 182.0

$ 23.3

$ 158.7
n.m.
Restasis

313.7

29.9

283.8
n.m.

298.7

28.7

270.0
n.m.

15.0

1.2

13.8
n.m.
Fillers

214.7

24.6

190.1
n.m.

114.1

12.8

101.3
n.m.

100.6

11.8

88.8
n.m.
Namenda XR

173.1

150.6

22.5
14.9%

173.1

150.6

22.5
14.9%

–

–

–
n.a.
Lumigan/Ganfort

169.6

21.2

148.4
n.m.

81.5

8.1

73.4
n.m.

88.1

13.1

75.0
n.m.
Bystolic

164.0

164.1

(0.1)
(0.1)%

163.6

163.7

(0.1)
(0.1)%

0.4

0.4

–
0.0%
Linzess/Constella

140.9

96.2

44.7
46.5%

137.1

95.5

41.6
43.6%

3.8

0.7

3.1
n.m.
Alphagan/Combigan

126.7

16.0

110.7
n.m.

84.9

10.1

74.8
n.m.

41.8

5.9

35.9
n.m.
Asacol/Delzicol

121.2

149.2

(28.0)
(18.8)%

105.9

132.0

(26.1)
(19.8)%

15.3

17.2

(1.9)
(11.0)%
Lo Loestrin

89.3

83.3

6.0
7.2%

89.3

82.7

6.6
8.0%

–

0.6

(0.6)
(100.0)%
Viibryd/Fetzima

83.3

79.6

3.7
4.6%

83.3

79.6

3.7
4.6%

–

–

–
n.a.
Estrace Cream

80.7

71.9

8.8
12.2%

80.7

71.9

8.8
12.2%

–

–

–
n.a.
Minastrin 24

80.4

65.4

15.0
22.9%

79.6

64.8

14.8
22.8%

0.8

0.6

0.2
33.3%
Silicone Implants

67.4

9.4

58.0
n.m.

33.9

2.4

31.5
n.m.

33.5

7.0

26.5
n.m.
Carafate / Sulcrate

61.5

53.6

7.9
14.7%

61.0

53.6

7.4
13.8%

0.5

–

0.5
n.a.
Ozurdex

60.5

7.0

53.5
n.m.

19.4

2.7

16.7
n.m.

41.1

4.3

36.8
n.m.
Aczone

33.0

6.0

27.0
n.m.

33.0

6.0

27.0
n.m.

–

–

–
n.a.
Namenda IR

5.8

245.4

(239.6)
(97.6)%

5.8

245.4

(239.6)
(97.6)%

–

–

–
n.a.
Other Products Revenues

807.9

650.9

157.0
24.1%

657.5

618.3

39.2
6.3%

150.4

32.6

117.8
n.m.
Total Products Revenues

3,431.2

2,008.3

1,422.9
70.9%

2,757.9

1,889.6

868.3
46.0%

673.3

118.7

554.6
467.2%
ANDA Revenues

364.7

554.3

(189.6)
(34.2)%

364.7

554.3

(189.6)
(34.2)%

–

–

–
n.a.
Total Net Revenues

$ 3,795.9

$ 2,562.6

$ 1,233.3
48.1%

$ 3,122.6

$ 2,443.9

$ 678.7
27.8%

$ 673.3

$ 118.7

$ 554.6
467.2%
For the first quarter 2016, total global branded product revenues were $3.4 billion versus $2.0 billion in the prior year quarter. Top key branded product highlights in the quarter included:

Botox revenues in the first quarter of 2016 were $638 million, driven by continued strong performance in both aesthetic and therapeutic indications.
Restasis revenues in the first quarter of 2016 were $314 million, driven by continuing strong promotional efforts.
Fillers’ revenues in the first quarter of 2016 were $215 million, reflecting continued strong performance.
Namenda XR revenues in the first quarter of 2016 were $173 million, as prescriptions and formulary coverage remained stable following the loss of exclusivity of Namenda IR.
Lumigan/Ganfort revenues in the first quarter of 2016 were $170 million reflecting stable performance across Allergan’s glaucoma product franchise.
Bystolic revenues in the first quarter of 2016 remained stable at $164 million.
Linzess/Constella revenues in the first quarter of 2016 were $141 million, driven by continued strong OTC conversion momentum and increasing sales in the long-term care market.
Asacol/Delzicol revenues in the first quarter of 2016 were $121 million, impacted by lower prescriptions and trade buying patterns.
Viibryd/Fetzima revenues in the first quarter of 2016 were $83 million, driven by double digit prescription growth in Fetzima.
Lo Loestrin revenues in the first quarter of 2016 were $89 million, driven by continuing strong demand and promotional efforts.
Minastrin and Estrace Cream revenues in the first quarter of 2016 were $80 million and $81 million, respectively.
Silicone breast implant revenues in the first quarter of 2016 were $67 million, as a result of increased market share.
First Quarter 2016 Business Segment Results

U.S. Brands

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Central Nervous System (CNS)
$ 554.3

$ 548.4

$ 5.9
1.1%
Eye care
533.0

94.7

438.3
n.m.
Gastroenterology (GI)
403.6

366.6

37.0
10.1%
Women’s Health
263.7

229.3

34.4
15.0%
Urology
74.1

37.3

36.8
98.7%
Infectious Disease
51.5

41.9

9.6
22.9%
Other
422.5

491.0

(68.5)
(14.0)%
Net revenues
$ 2,302.7

$ 1,809.2

$ 493.5
27.3%
Operating expenses:

Cost of sales(1)

259.4

218.2

41.2
18.9%
Selling and marketing

431.9

372.3

59.6
16.0%
General and administrative

68.1

58.5

9.6
16.4%
Segment contribution

$ 1,543.3

$ 1,160.2

$ 383.1
33.0%
Segment margin

67.0%

64.1%

2.9%
Segment gross margin

88.7%

87.9%

0.8%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
U.S. Brands net revenue of $2.3 billion for the first quarter 2016 represents a 27 percent increase over $1.8 billion in the first quarter of 2015. Growth was mainly attributed to the acquisition of legacy Allergan products, including Botox, Restasis, Lumigan/Ganfort, and Combigan, and strong growth from Linzess/Constella, Carafate/Sulcrate, Zenpep, Namenda XR, Lo Loestrin, Estrace Cream and Minastrin 24 and new product launches Avycaz, Dalvance and Liletta.

U.S. Brands gross margin for the first quarter of 2016 was 88.7 percent. Selling & marketing (S&M) expenses increased 16 percent in the first quarter 2016 due mainly to the acquisition of legacy Allergan and the launches of Viberzi and Vraylar offset, in part, by the impact of synergies from Forest Laboratories and Allergan acquisitions. G&A expenses increased versus first quarter 2015 reflecting the addition of legacy Allergan, which was offset by related synergies from the acquisitions of Forest Laboratories and Allergan. Overall, net segment contribution for the first quarter 2016 increased 33 percent over the prior year period to $1.5 billion primarily as a result of the Allergan acquisition.

U.S. Medical Aesthetics

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Facial Aesthetics
$ 279.4

$ 35.2

$ 244.2
n.m.
Medical Dermatology and Other
122.2

30.5

91.7
n.m.
Plastic Surgery
48.1

14.1

34.0
n.m.
Net revenues
$ 449.7

$ 79.8

$ 369.9
n.m.
Operating expenses:

Cost of sales(1)

30.9

4.5

26.4
n.m.
Selling and marketing

110.0

13.8

96.2
n.m.
General and administrative

13.3

2.7

10.6
n.m.
Segment contribution

$ 295.5

$ 58.8

$ 236.7
n.m.
Segment margin

65.7%

73.7%

(8.0)%
Segment gross margin

93.1%

94.4%

(1.3)%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
First quarter 2016 U.S. Medical Aesthetics net revenue was $450 million reflecting continued strong performance in BOTOX and Fillers including Juvederm.

U.S. Medical Aesthetics selling and marketing (S&M) expenses for the first quarter of 2016 were $110 million, and general & administrative expenses (G&A) for the first quarter of 2016 were $13 million.

U.S. Medical Aesthetics segment gross margin for the first quarter of 2016 was 93.1 percent compared to 94.4 percent in the prior year quarter.

International Brands

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Eye care
$ 291.5

$ 40.5

$ 251.0
n.m.
Facial Aesthetics
205.5

24.8

180.7
n.m.
Other Therapeutics
139.5

45.6

93.9
n.m.
Plastic Surgery
36.8

7.8

29.0
n.m.
Net revenues
$ 673.3

$ 118.7

$ 554.6
n.m.
Operating expenses:

Cost of sales(1)

99.2

23.7

75.5
n.m.
Selling and marketing

187.3

42.3

145.0
n.m.
General and administrative

27.6

7.4

20.2
n.m.
Segment contribution

$ 359.2

$ 45.3

$ 313.9
n.m.
Segment margin

53.3%

38.2%

15.1%
Segment gross margin

85.3%

80.0%

5.3%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
International Brands net revenues for the first quarter of 2016 was $673 million compared to $119 million in the first quarter of 2015. Growth was mainly attributed to revenues associated with acquired legacy Allergan products, including Botox, Juvederm and Ozurdex.

International Brands selling and marketing (S&M) expenses for the first quarter of 2016 were $187 million, and general & administrative expense (G&A) were $28 million. International Brands segment gross margin for the first quarter of 2016 was 85.3 percent compared to 80.0 percent in the prior year quarter.

Anda Distribution

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Net revenues
$ 364.7

$ 554.3

$ (189.6)
(34.2)%
Operating expenses:

Cost of sales(1)

302.9

473.5

(170.6)
(36.0)%
Selling and marketing

28.8

37.6

(8.8)
(23.4)%
General and administrative

10.2

10.8

(0.6)
(5.6)%
Segment contribution

$ 22.8

$ 32.4

$ (9.6)
(29.6)%
Segment margin

6.3%

5.8%

0.5%
Segment gross margin

16.9%

14.6%

2.3%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
Anda Distribution net revenues for the first quarter of 2016 were $365 million, reflecting a $189.6 million decline primarily due to the loss of Target Corporation business due to CVS Health acquiring Target’s in store pharmacies.

Anda Distribution gross margin for the first quarter of 2016 was 16.9 percent compared to 14.6 percent in the previous year period.

Discontinued Operations
As a result of the proposed divestiture of Allergan’s Global Generics business to Teva on July 27, 2015, the financial results of the Company’s Global Generics business are being reported as discontinued operations in the condensed consolidated statements of operations. These portions of the Company’s results will continue to be reported as discontinued operations until the close of that transaction. Continuing operations includes the U.S. Brands, U.S. Medical, International Brands and Anda Distribution segments. All prior year results have been recast to reflect continuing operations results.

Pipeline Update
R&D productivity continued during the quarter. Key development highlights included:

First Quarter U.S. and International Branded Product Approvals and Launches

ACZONE (dapsone) Gel, 7.5%, received U.S. Food and Drug Administration (FDA) approval for the topical treatment for acne in patients 12 years of age and older.
BOTOX (onabotulinumtoxinA) received FDA approval for the treatment of lower limb spasticity in adult patients to decrease the severity of increased muscle stiffness in ankle and toe muscles.
DALVANCE (dalbavancin) for injection received FDA approval for its supplemental New Drug Application (sNDA) and EU approval to expand the product’s label. The expanded label includes a single-dose administered as a 30-minute intravenous (IV) infusion of DALVANCE for the treatment of acute bacterial skin and skin structure infections (ABSSSI) caused by designated susceptible Gram-positive bacteria in adults, including infections caused by methicillin-resistant Staphylococcus aureus (MRSA).
Allergan launched VRAYLAR (cariprazine), a once-daily oral atypical antipsychotic in the U.S. VRAYLAR was approved by the FDA in September 2015 for the treatment of acute manic or mixed episodes of bipolar I disorder and schizophrenia in adults.
First Quarter 2016 Regulatory Milestones & Clinical Updates

Allergan announced that rapastinel (GLYX-13) received Breakthrough Therapy designation from the FDA for adjunctive treatment of Major Depressive Disorder (MDD). This follows the Fast Track Designation for rapastinel granted by the FDA in 2014.
Allergan announced that the FDA accepted for filing the company’s supplemental New Drug Application (sNDA) for TEFLARO (ceftaroline fosamil). If approved, this filing will expand the label of TEFLARO beyond adults to include the treatment of children two months of age and older with acute bacterial skin and skin structure infections (ABSSSI) including infections caused by methicillin-resistant Staphylococcus aureus (MRSA) and community-acquired bacterial pneumonia (CABP) caused by Staphylococcus pneumoniae and other designated susceptible bacteria.
Allergan announced that the FDA accepted for filing the company’s supplemental New Drug Application (sNDA) for AVYCAZ (ceftazidime and avibactam). This filing will add important new clinical data to the current label from two Phase 3 trials evaluating the safety and efficacy of AVYCAZ, in combination with metronidazole, for the treatment of complicated intra-abdominal infections (cIAI), including patients with infections due to ceftazidime-nonsusceptible (CAZ-NS) pathogens.
Allergan has submitted an NDA to the FDA for Oxymetazoline, a potential treatment for rosacea.
Allergan submitted an sNDA to the FDA for Linzess 72 mcg for the treatment of Chronic Idiopathic Constipation (CIC).
Allergan submitted an sNDA to the FDA for a single-inserter with optimized packaging for use with Liletta.
FDA accepted an NDA submission for SER 120, an investigational treatment for nocturia.
Top-line results from the first Phase 3 study of Ulipristal Acetate were reported in the first half of 2016. The study met all co-primary and secondary endpoints with both ulipristal treatment arms achieving statistically significant results over placebo (p<0.0001).
Allergan initiated a Phase 3 study for Cariprazine in Bipolar Depression in the first half of 2016.
Full Year 2016 Continuing Operations Guidance
Allergan’s full year 2016 continuing operations standalone estimates are based on management’s current belief about prescription trends, pricing levels, inventory levels and the anticipated timing of future product launches and events. Continuing operations includes the U.S. Brands, U.S. Medical, International Brands and Anda distribution segments.

Total Non-GAAP Net Revenues are expected to be ~$17 Billion
Non-GAAP Branded Net Revenues are expected to be ~$15 Billion (10% Growth1)
No material changes to gross margin from current levels in each segment
Non-GAAP R&D investment is expected to be ~$1.5 Billion
SG&A as a percent of non-GAAP Net Revenues is expected to be ~25% reflecting plans to restructure and simplify the business following the divestiture of the Global Generics business to Teva
Non-GAAP tax rate anticipated to return to normalized levels following the close of Teva of ~14%
1 Excluding Namenda IR, divestitures and Anda.

Share Repurchase Program
Allergan reported that the Company’s board of directors has authorized a new share repurchase program of up to $10 billion of the Company’s common stock. Allergan expects to execute $4 – $5 billion in open market repurchases over four to six months subject to favorable market conditions. If favorable market conditions persist, the Company will consider extending the program following completion of the initial portion of the share repurchase program.

The share repurchase program is pending the completion of and receipt of proceeds from the divestiture of Allergan’s Global Generics business to Teva, expected to close by the end of June 2016.

First-Quarter 2016 Conference Call and Webcast Details
Allergan will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss first quarter 2016 results. The dial-in number to access the call is U.S./Canada (877) 251-7980, International (706) 643-1573, and the conference ID is 94452083. To access the live webcast, go to Allergan’s Investor Relations Web site at View Source

A taped replay of the conference call will also be available beginning approximately two hours after the call’s conclusion and will remain available through 11:30 PM Eastern Time on May 24, 2016. The replay may be accessed by dialing (855) 859-2056 and entering conference ID 94452083. From international locations, the replay may be accessed by dialing (404) 537-3406 and entering the same conference ID. To access the webcast, go to Allergan’s Investor Relations Web site at View Source A replay of the webcast will also be available.