On August 3, 2023 BridgeBio Pharma, Inc. (Nasdaq: BBIO) (BridgeBio or the Company), a commercial-stage biopharmaceutical company focused on genetic diseases and cancers, reported its financial results for the second quarter ended June 30, 2023 and provided an update on the Company’s operations (Press release, BridgeBio, AUG 3, 2023, View Source [SID1234633740]).

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"We’ll remain ever grateful for the support of the physicians and patients in the ATTR-CM community, which helped bring the ATTRibute-CM study to its final readout," said Neil Kumar, Ph.D., founder and CEO of BridgeBio. "With these data in hand, coupled with a pipeline that could produce an additional three pivotal readouts in the next 24 months, we feel we have the ingredients to build a sustainable engine for the patients that we serve in large and small markets alike."

BridgeBio’s key programs:

Acoramidis (AG10) – Transthyretin (TTR) stabilizer for transthyretin amyloid cardiomyopathy (ATTR-CM):
In July 2023, the Company released topline results from ATTRibute-CM, its Phase 3 trial of acoramidis for patients with ATTR-CM. The primary endpoint analysis was highly statistically significant with a Win Ratio of 1.8 (p<0.0001).
A clinically meaningful and consistent treatment effect was observed across all measures of mortality, morbidity, function, and quality of life.
An on-treatment survival rate of 81% was observed, versus a placebo survival rate of 74% (absolute risk reduction of 6.43%; relative risk reduction of 25%).
A highly statistically significant relative risk reduction of 50% (p<0.0001) was observed on frequency of cardiovascular-related hospitalization.
In comparative exploratory post hoc analyses enabled by tafamidis drop-in, albeit at low patient numbers, acoramidis showed a 42% greater increase in serum TTR levels and a 92% improvement in median NT-proBNP relative to placebo + tafamidis.
Acoramidis was well-tolerated with no safety signals of potential clinical concern identified.
BridgeBio intends to file an NDA for acoramidis with the FDA by end of 2023 and marketing authorization applications with additional regulatory authorities globally in 2024.
The details of the topline results of the ATTRibute-CM trial will be presented at the annual meeting of the European Society of Cardiology, one of the premier global cardiology congresses, in Amsterdam at the end of August 2023.
Low-dose infigratinib – FGFR1-3 inhibitor for achondroplasia and hypochondroplasia:
In June 2023, the Company presented updated six-month results from Cohort 5 of PROPEL2, its Phase 2 trial of infigratinib for children with achondroplasia, at ENDO 2023; the data demonstrated a significant and robust increase in annualized height velocity (AHV) with a mean change from baseline of +3.38 cm/year for 12 children.
83% of children in Cohort 5 responded to infigratinib, as defined by an increase from baseline AHV of at least 25%. The mean change from baseline in AHV of responders was +4.08 cm/year.
Early but promising trends towards improvement in proportionality were observed, as measured by the upper and lower body segment ratio.
At six months, infigratinib was well-tolerated as a single daily oral therapy with no adverse events assessed as treatment-related in all patients in Cohort 5.
The Company has started to enroll children in the run-in for a registrational Phase 3 trial.
If approved, BridgeBio believes that infigratinib has the potential to capture a significant share of the market based on blinded market research.
BBP-418 – Glycosylation substrate for limb-girdle muscular dystrophy type 2I/R9 (LGMD2I/R9):
The Company met with the FDA to discuss the use of glycosylated αDG levels as a surrogate endpoint. Based on this meeting, the Company believes there is potential to pursue Accelerated Approval in the U.S. for BBP-418.
The Company has dosed the first participant in FORTIFY, its global Phase 3 study of BBP-418 in patients with LGMD2I/R9.
FORTIFY includes an interim analysis at 12 months focused on change in glycosylated αDG levels; topline data from this analysis is expected in late 2024/early 2025.
Deficiency of glycosylated αDG is the causal molecular driver of LGMD2I/R9. In the ongoing Phase 2 study, patients treated with BBP-418 had a rapid and sustained increase of glycosylated αDG levels, concurrent with sustained decreases in creatine kinase and improvements from baseline in ambulatory and clinical function measures.
BBP-418 has a potentially addressable population of 7,000 patients in the United States and European Union.
There are currently no disease-modifying treatments available for LGMD2I/R9.
Encaleret – Calcium-sensing receptor (CaSR) inhibitor for autosomal dominant hypocalcemia type 1 (ADH1):
The Company presented 18-month data from the long-term extension of its Phase 2 study of encaleret in patients with ADH1 at ENDO 2023, including observations of a rapid and sustained treatment effect. Additionally, the Company shared initial findings from its genetic testing program, highlighting that ADH1 may be the most common presentation of nonsurgical hypoparathyroidism.
Population genetics analyses estimate approximately 25,000 carriers of gain-of-function variants of the CaSR, the underlying cause of ADH1, in the United States and European Union.
The Company anticipates sharing topline data from CALIBRATE, a Phase 3 registrational trial of encaleret for ADH1, in the first half of 2024.
If approved, encaleret could be the first therapy specifically indicated for the treatment of ADH1.
BBP-631 – AAV5 gene therapy candidate for congenital adrenal hyperplasia (CAH):
The Phase 1/2 gene therapy trial of BBP-631 for CAH continued to progress, and the Company plans to provide an update by the end of 2023.
CAH is one of the most prevalent genetic diseases potentially addressable with adeno-associated virus (AAV) gene therapy, with more than 75,000 cases estimated in the United States and European Union.
RAS cancer portfolio:
BridgeBio is continuing to develop the three main programs of its RAS franchise:
BBO-8520, an investigational, next-generation small molecule direct KRASG12C(ON) inhibitor candidate that is designed to directly bind and inhibit KRASG12C in both its ON (GTP-bound) and OFF (GDP-bound) conformations, which remains on track to file an IND application and enter the clinic in 2023.
A PI3Kα:RAS breaker program, investigational small molecules that are designed to block RAS-driven PI3Kα activation with a novel and potentially broad mechanism of action to target not only PI3Kα mutant tumors and RAS mutant tumors, but potentially other tumors driven by RTK activation of RAS signaling. The Company has selected a development candidate and expects to file an IND application in 2024 as the second investigational RAS cancer therapy from the BridgeBio portfolio.
The Company’s pan-KRAS program, which targets multiple KRAS mutants including KRASG12D and KRASG12V, which are present in a large percentage of colorectal, pancreatic, and non-small cell lung cancer tumors. Development candidate selection for this program is planned for late 2023 or early 2024.
Recent Corporate Updates:

Partnership with Burjeel Holdings on project ‘NADER’ (Needs Assessment and Therapeutics Development for Rare Diseases – ‘nader’ meaning ‘rare’ in Arabic): Signed a preliminary, non-binding Collaboration Agreement establishing a mutual intention to revolutionize the field of early diagnosis and treatment of rare diseases in the United Arab Emirates and the region.
Updated encouraging clinical and biomarker data shared for the Company’s Canavan disease gene therapy program: Presented promising positive data from six participants dosed in CANaspire, the Company’s Phase 1/2 clinical trial of BBP-812, an investigational intravenous (IV) adeno-associated virus serotype 9 (AAV9) gene therapy for the treatment of Canavan disease. Following treatment, the N-acetylaspartate (NAA) levels of CANaspire participants were consistent with levels seen in individuals with milder Canavan disease based on findings from the Company’s natural history study and reports in the scientific literature. Sustained reductions in NAA were measured in the urine, cerebrospinal fluid (CSF), and brain of all participants and have been observed for over one year in the earliest dosed participants.
Second Quarter 2023 Financial Results:

Cash, Cash Equivalents, Marketable Securities and Short-Term Restricted Cash

Cash, cash equivalents, marketable securities and short-term restricted cash, totaled $353.2 million as of June 30, 2023, compared to $466.2 million as of December 31, 2022. The net decrease of $113.0 million in cash, cash equivalents, marketable securities and short-term restricted cash is primarily attributable to net cash used in operating activities of $257.7 million, offset by net proceeds received of $144.0 million from the Follow-on public offering during the six months ended June 30, 2023.

Revenue

Revenue for the three and six months ended June 30, 2023 was $1.6 million and $3.5 million, respectively, as compared to $73.7 million and $75.4 million for the same periods in the prior year. Revenue for the three and six months ended June 30, 2023 primarily consisted of $1.5 million and $3.2 million, respectively, of services revenue under the Navire-BMS License Agreement. Revenue for the three and six months ended June 30, 2022 primarily consisted of $70.2 million of license revenue and $3.2 million of services revenue under the Navire-BMS License Agreement.

Operating Costs and Expenses

Operating costs and expenses for the three and six months ended June 30, 2023 were $147.7 million and $275.7 million, respectively, compared to $153.9 million and $329.3 million for the same periods in the prior year. The overall decrease in operating costs and expenses for the three and six months ended June 30, 2023 compared to the comparative periods was due mainly to the decreases in research, development and other (R&D) expenses resulting from the Company’s reprioritization of its R&D programs; selling, general and administrative expenses resulting from its company-wide streamlining of costs; and restructuring, impairment and related charges since the majority of the restructuring initiatives commenced in the first quarter of 2022. The effects of the Company’s restructuring initiative which commenced in the first quarter of 2022, continue to be realized due to the Company’s reductions in operating costs and expenses. Restructuring, impairment and related charges for the three and six months ended June 30, 2023, amounted to $3.5 million and $6.9 million, respectively. These charges primarily consisted of winding down, exit costs, and severance and employee-related costs. Restructuring, impairment and related charges for the same periods in the prior year were $8.4 million and $31.1 million, respectively. These charges primarily consisted of impairments and write-offs of long-lived assets, severance and employee-related costs, and exit and other related costs. The Company remains committed to evaluating various restructuring alternatives aimed at driving operational changes in business processes. These alternatives includes enhancing commercialization efforts, improving efficiencies, and achieving cost savings.

Stock-based compensation expenses included in operating costs and expenses for the three months ended June 30, 2023 were $27.2 million, of which $13.2 million is included in research, development and other (R&D) expenses, $14.0 million is included in selling, general and administrative expenses. Stock-based compensation expenses included in operating costs and expenses for the three months ended June 30, 2022 were $28.3 million, of which $14.3 million is included in research, development and other (R&D) expenses, and $14.0 million is included in selling, general and administrative expenses.

Stock-based compensation expenses included in operating costs and expenses for the six months ended June 30, 2023 were $50.7 million, of which $25.0 million is included in research, development and other (R&D) expenses, $25.7 million is included in selling, general and administrative expenses. Stock-based compensation expenses included in operating costs and expenses for the six months ended June 30, 2022 were $52.6 million, of which $22.9 million is included in research, development and other (R&D) expenses, $28.5 million is included in selling, general and administrative expenses, and $1.2 million is included in restructuring, impairment and related charges.

"Following the recent announcement and strength of our Phase 3 ATTRibute-CM data, we will continue to explore multiple options to fully resource the acoramidis launch while optimizing cost of capital, including partnerships, royalty transactions, and equity financing," said Brian Stephenson, Ph.D., CFA, Chief Financial Officer of BridgeBio. "We anticipate $300-$350 million of investment will support acoramidis from here through the first 12 months of commercial launch. This coupled with our slate of pivotal readouts over the next 24 months offers the opportunity for meaningful value creation for both patients and investors."

On August 3, 2023 BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX) reported financial results for the second quarter ended June 30, 2023, and provided a corporate update (Press release, BioCryst Pharmaceuticals, AUG 3, 2023, View Source [SID1234633739]).

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"Our strong second quarter keeps us firmly on track to achieve no less than $320 million in ORLADEYO revenue this year, as our base of patients grows larger and larger every quarter. While ORLADEYO revenues continue to grow, we are also excited to host an R&D day in November to introduce new molecules and programs from our discovery platform that have the potential to replicate or exceed the success of ORLADEYO," said Jon Stonehouse, president and chief executive officer of BioCryst.

Program Updates

ORLADEYO (berotralstat): Oral, Once-daily Treatment for Prevention of Hereditary Angioedema (HAE) Attacks

"The significant step-up in revenue we expected and achieved in the second quarter reflects the continued strong growth in patients taking ORLADEYO, the normal seasonality in revenue that follows first quarter prescription reauthorizations, and our steady improvement in helping patients get to reimbursed therapy. We recently attended the HAEA summit, attended by 1,200 patients and family members. Their strong interest and enthusiasm gave us even more confidence in our expectations for sustained long-term demand for ORLADEYO in the U.S. and globally," said Charlie Gayer, chief commercial officer of BioCryst.

ORLADEYO net revenue in the second quarter of 2023 was $81.0 million (+24.2 percent year-over-year (y-o-y)).

Total growth in patients taking ORLADEYO continued on a strong, linear trajectory.

The percentage of U.S. ORLADEYO patients receiving paid drug improved in the second quarter as the company made progress converting commercially-insured patients who had been receiving long-term free product, and as patients who received temporary free product during the first quarter prescription re-authorization process returned to reimbursed product in the second quarter.

Sales from outside the U.S. contributed 10.1 percent of global ORLADEYO net revenues in the second quarter.

The ongoing APeX-P trial in pediatric HAE patients who are 2 to <12 years of age continues to enroll as expected.
BCX10013—Oral Factor D Inhibitor

"Our goal with BCX10013 is to bring a best-in-class molecule to physicians and patients. That means a safe, highly effective, once-daily oral therapy, and we are now focused on preparing for enrollment in our dose-ranging trial in patients," said Dr. Helen Thackray, chief research and development officer.

The company has begun opening clinical trial sites for a dose-ranging trial in patients with paroxysmal nocturnal hemoglobinuria (PNH) and expects to begin patient enrollment (in countries without other approved therapies) by the end of the year. The trial is designed to identify a safe, effective, once-daily dose that BioCryst can advance into a pivotal program in renal complement-mediated diseases.

The company also plans to complete an additional cohort of its multiple ascending dose trial (MAD) of BCX10013, at a higher dose (160 mg QD), in healthy volunteers to provide further information to the pharmacokinetic model.
Upcoming R&D Day—November 3, 2023

BioCryst will host a Research and Development (R&D) day at 1:00p ET on Friday, November 3 at its Research Center of Excellence in Birmingham, AL (the event also will be webcast live). At the R&D day, the company plans to introduce additional assets from its pipeline targeting rare diseases.

Second Quarter 2023 Financial Results

For the three months ended June 30, 2023, total revenues were $82.5 million, compared to $65.5 million in the second quarter of 2022 (+25.9 percent year-over-year (y-o-y)). The increase was primarily due to $81.0 million in ORLADEYO net revenue in the second quarter of 2023, compared to $65.2 million in ORLADEYO net revenue in the second quarter of 2022 (+24.2 percent y-o-y).

R&D expenses for the second quarter of 2023 decreased to $51.2 million from $62.0 million in the second quarter of 2022 (-17.3 percent y-o-y), primarily due to decreased investment in both the BCX9250 and complement programs, partially offset by increased investment in the early-stage pipeline.

Selling, general and administrative expenses for the second quarter of 2023 increased to $51.0 million, compared to $38.0 million in the second quarter of 2022 (+34.1 percent y-o-y). The increase was primarily due to increased investment to support the commercial launch of ORLADEYO and expanded international operations.

Interest expense was $28.9 million in the second quarter of 2023, compared to $24.0 million in the second quarter of 2022 (+20.4 percent y-o-y). The increase is primarily driven by additional interest to service the Pharmakon debt secured in April 2023.

Net loss for the second quarter of 2023 was $75.3 million, or $0.40 per share, compared to a net loss of $58.9 million, or $0.32 per share, for the second quarter of 2022. There was a $29.0 million one-time debt extinguishment fee related to the close-out of the Athyrium debt facility. Excluding this one-time event, non-GAAP net loss for the second quarter of 2023 was $0.24 per share.

Cash, cash equivalents, restricted cash and investments totaled $415.7 million at June 30, 2023, compared to $418.9 million at June 30, 2022. Operating cash use for the second quarter of 2023 was $13.5 million.

Non-GAAP Pro forma Financial Measures

The information furnished in this release includes non-GAAP pro forma financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America (GAAP), including financial measures labeled as "non-GAAP" or "adjusted."

We believe providing these non-GAAP measures, which show our pro forma results with these items adjusted, is valuable and useful since they allow the company and investors to better understand the company’s financial performance in the absence of these one-time events and allow investors to more accurately understand our second quarter 2023 results and more easily compare them to future results. These non-GAAP pro forma measures also correspond with the way we expected Wall Street analysts to compare our results. Our non-GAAP pro forma measures should be considered only as supplements to, and not as substitutes for or in isolation from, our other measures of financial information prepared in accordance with GAAP, such as GAAP revenue, operating income, net income, and earnings per share.

Our references to our second quarter 2023 and first six months 2023 "non-GAAP pro forma" financial measures of adjusted net loss and adjusted earnings per share constitute non-GAAP financial measures. They refer to our GAAP results, adjusted to show the results without the one-time loss on the extinguishment of the Athyrium term loans.

Financial Outlook for 2023

The company expects full year 2023 global net ORLADEYO revenue to be no less than $320 million. Operating expenses for full year 2023, not including non-cash stock compensation, are expected to be flat to 2022 at approximately $375 million. While flat year-over-year, we expect reductions in R&D spending in 2023 following the discontinuation of the BCX9930 and BCX9250 programs in 2022 and the delay in the BCX10013 clinical program, offset by increases in SG&A to support the U.S. launch and global expansion of ORLADEYO.

Conference Call and Webcast

BioCryst management will host a conference call and webcast at 8:30 a.m. ET today to discuss the financial results and provide a corporate update. The live call may be accessed by dialing 1-866-777-2509 for domestic callers and 1-412-317-5413 for international callers. A live webcast and replay of the call will be available online in the investors section of the company website at www.biocryst.com.

On August 3, 2023 Bicycle Therapeutics plc (NASDAQ: BCYC), a biotechnology company pioneering a new and differentiated class of therapeutics based on its proprietary bicyclic peptide (Bicycle) technology, reported financial results for the second quarter ended June 30, 2023 and provided recent corporate updates (Press release, Bicycle Therapeutics, AUG 3, 2023, View Source [SID1234633738]).

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"We have made significant progress in the first half of 2023 executing on our plan to become one of the world’s leading solid tumor medicines companies," said Kevin Lee, Ph.D., Chief Executive Officer of Bicycle Therapeutics. "Not only have we continued to advance our three clinical trial candidates – BT5528, BT8009 and BT7480 – but we have also entered into multiple research and development collaborations with pioneers in the radiopharmaceutical space to develop Bicycle radio-conjugates (BRCs). These collaborations enable us to advance a broad pipeline of partnered and wholly owned BRCs that represents the third pillar of our oncology strategy beyond our Bicycle toxin conjugate (BTC) and Bicycle tumor-targeted immune cell agonist (Bicycle TICA) programs. Our clinical programs remain on track for us to provide updates in the second half of 2023. Additionally, we are excited to welcome Alethia Young, our new Chief Financial Officer, who brings over 20 years of experience in the healthcare and biotech industry to Bicycle. The advancement of our programs and platform in oncology and beyond are supported by a strong balance sheet that has been further enhanced by the recent proceeds from a public equity offering completed in July."

Second Quarter 2023 and Recent Highlights

Raised Gross Proceeds of $230.0 Million in Public Offering. In July 2023, Bicycle announced the closing of an underwritten public offering resulting in gross proceeds of approximately $230.0 million, including the full exercise of the underwriters’ option to purchase additional shares. Net proceeds were approximately $215.5 million. In addition, the company also received gross proceeds from Bicycle’s at-the-market (ATM) offering program during the second quarter of 2023 totaling $12.5 million.

Continued Progress with Clinical and Regulatory Programs Including BT8009, BT5528, and BT7480. Enrollment in the company’s clinical trial of BT8009, as well as discussions with the U.S. Food and Drug Administration (FDA) remain ongoing. The company expects to provide clinical and regulatory updates on BT8009 in the second half of 2023.
Enhanced Leadership Team with Appointment of Alethia Young as Chief Financial Officer. In June 2023, Bicycle announced the appointment of Alethia Young as its new Chief Financial Officer, effective July 17. Ms. Young brings to Bicycle more than 20 years of experience in the healthcare and biotech industry, most recently serving as the Chief Financial Officer at Graphite Bio. Prior to Graphite Bio, she served as a senior biotech analyst and head of research at Cantor Fitzgerald, and previously held senior biotech analyst positions at Credit Suisse and Deutsche Bank.
Presented Potent Anti-Tumor Activity of a Lead-212 Labelled MT1-MMP Targeting Bicycle Radionuclide Conjugate at TIDES 2023. In May 2023, Bicycle presented preclinical results from a preclinical research collaboration with OranoMed. In these studies, Pb-BCY20603, a prototype BRC that binds with high affinity to the tumor antigen MT1-MMP and carries a chelate of lead-212, showed potent anti-tumor activity in rodent tumor xenograft studies and achieved complete tumor regressions after 3 dosing cycles of 10 µCi, given two weeks apart. Median survival was increased for each dosing group with 90% survival observed for the 3 cycles of 10 μCi, treatment at the end of the 100-day study.

Announced Multiple Strategic Collaborations for Developing BRCs for Potential Oncology Targets
Strategic Collaboration with Bayer. In May 2023, Bicycle announced that it has entered into a strategic collaboration agreement with Bayer to discover, develop, manufacture, and commercialize BRCs for multiple agreed upon oncology targets. Bicycle will use its proprietary phage platform to develop bicyclic peptides, while Bayer will be responsible for, and fully fund, all further preclinical and clinical development, manufacturing, and commercialization activities. Bicycle received a $45 million upfront payment in July 2023 and, with potential development and commercial-based milestone fees, payments under the collaboration to Bicycle could total up to $1.7 billion. Bicycle will also be eligible to receive tiered royalties on Bicycle-based medicines commercialized by Bayer.
Expanded Collaboration with the German Cancer Research Center. In May 2023, Bicycle announced the extension of a collaboration with the German Cancer Research Center (DKFZ) to develop and discover BRCs for potential oncology targets. This enhanced relationship will provide a more continuous and purpose-driven commitment towards advancing Bicycle’s wholly owned BRC candidates. Bicycle intends to commence initial testing of its wholly owned BRCs in patients during 2024.

Strategic Collaboration with Novartis. In March 2023, Bicycle announced a strategic collaboration with Novartis to collaborate on the discovery, development and commercialization of BRCs for multiple agreed upon oncology targets. Bicycle will utilize its proprietary phage platform to discover Bicycles to be developed into BRCs. Novartis will be responsible for and fund further development, manufacture and commercialization of the BRCs. Under the collaboration, Bicycle received a $50 million upfront payment in April 2023 and is eligible for development and commercial-based milestone payments totaling up to $1.7 billion. Bicycle will also be eligible to receive tiered royalties on Bicycle-based medicines commercialized by Novartis.
Financial Results

Cash and cash equivalents were $340.4 million as of June 30, 2023, compared to $339.2 million as of December 31, 2022. The increase in cash and cash equivalents is primarily due to $50.0 million received from our collaboration agreement with Novartis and $14.8 million of net proceeds from our ATM offering program, offset by cash used in operating activities. Our cash and cash equivalents at June 30, 2023 do not include the upfront payment from Bayer or proceeds from our public offering received in July 2023. Additionally in July, the company strengthened its balance sheet with gross proceeds of $230.0 million, or net proceeds of approximately $215.5 million, from the July 2023 public offering.

Research and development expenses were $39.7 million for the three months ended June 30, 2023, compared to $19.9 million for the three months ended June 30, 2022. The increase in expense of $19.9 million was primarily due to increased clinical program expenses for BT8009, BT7480 development expenses, and other discovery and platform related expenses, as well as increased personnel-related expenses, including incremental non-cash share-based compensation expense of $1.3 million, offset by incremental UK research and development incentives.
General and administrative expenses were $14.8 million for the three months ended June 30, 2023, compared to $11.8 million for the three months ended June 30, 2022. The increase of $3.0 million for the three months ended June 30, 2023 as compared to the same period in the prior year was primarily due to an increase in professional and consulting fees, as well as an increase in personnel-related expenses, including incremental non-cash share-based compensation expense of $1.2 million, offset by a favorable impact of foreign exchange rates.
Net loss was $42.6 million, or $(1.41) basic and diluted net loss per share, for the three months ended June 30, 2023, compared to net loss of $26.8 million, or $(0.90) basic and diluted net loss per share, for three months ended June 30, 2022.

On August 3, 2023 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company" or "we" or "our") reported its second-quarter 2023 financial results and various other key updates from the quarter (Press release, Bausch Health, AUG 3, 2023, View Source [SID1234633737]).

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"We are encouraged by our strong performance in the second quarter as we continue to see the results from our focus on commercial excellence and investments in key businesses with growth opportunities, such as Salix" said Thomas J. Appio, Chief Executive Officer, Bausch Health. "We are also encouraged by various other key positive developments for our business during the quarter, including the favorable motion ruling in respect of Xifaxan and the continued success our initiatives to proactively manage our balance sheet. We also continue to advance our R&D pipeline as we look forward to bringing new products to the patients who can benefit from them," concluded Appio.

Favorable Motion Ruling in Xifaxan Litigation Reinforces Continuing Salix Growth Strategy
In May 2023, the U.S. District Court of Delaware denied Norwich Pharmaceuticals Inc.’s motion for reconsideration in the matter of Salix Pharmaceuticals, LTD et al v. Norwich Pharmaceuticals, Inc., which therefore prevents the U.S. Food and Drug Administration ("FDA") from approving Norwich’s abbreviated new drug application ("ANDA") for Xifaxan (rifaximin) 550 mg before October 2029. Norwich has appealed the denial of its motion for reconsideration. In June 2023, the FDA granted tentative approval for the ANDA, but confirmed that it is enjoined from granting final approval until October 2029. This favorable ruling reinforces Salix’s continuing growth strategy.

1 This is a non-GAAP measure or a non-GAAP ratio. For further information on non-GAAP measures and non-GAAP ratios, please refer to the "Non-GAAP Information" section of this news release. Please also refer to tables at the end of this news release for a reconciliation of this and other non-GAAP measures to the most directly comparable GAAP measure.

On June 5, 2023, Norwich sued the FDA in the United States District Court for the District of Columbia challenging the FDA’s decision to follow the August 10, 2022 final judgment and withhold final approval for the Norwich ANDA until October 2029. The FDA opposed Norwich’s action and the Company intervened in the lawsuit. A decision in the District Court for the District of Columbia is expected by the end of 2023.

Norwich’s appeal of the U.S. District Court of Delaware’s denial of its motion for reconsideration and Bausch Health’s appeal of the IBS-D and polymorph patent rulings from the August 10, 2022 final judgment have been consolidated, and are pending at the Court of Appeals for the Federal Circuit. A decision is expected on the appeals as early as Q1 2024.

The Company remains confident in the strength of the Xifaxan patents and intends to vigorously defend its intellectual property.

Proactive Balance Sheet Initiatives, Including New Accounts Receivable Credit Facility, Further Enhance Liquidity of Bausch Health (excl. Bausch + Lomb) to Greater than $1 Billion
In June 2023, the Company entered into a non-recourse receivables financing facility for up to $600 million with KKR and its credit funds and accounts. Following the closing of the receivables facility Bausch Health (excl. Bausch + Lomb) has liquidity in excess of $1 billion, inclusive of cash and cash equivalents, availability under the Company’s existing revolving credit facility and availability under the receivables facility. The strength of our current liquidity profile, coupled with our continued generation of cash flow from operations, provides the Company with flexibility to assess strategic opportunities to further improve our balance sheet and pursue key growth opportunities.

Update on Potential Bausch + Lomb Distribution
The Company continues to believe that completing a separation of Bausch + Lomb Corporation ("Bausch + Lomb") makes strategic sense and is committed to creating two strong companies following any potential distribution.
As the Company continues to evaluate all relevant factors and circumstances related to any Bausch + Lomb distribution, it is exploring options for optimizing the structure of any Bausch + Lomb distribution, if and when such a distribution is completed. The Company’s initial intent was to effectuate any potential distribution by way of plan of arrangement. The Company has since determined that the optimal way to implement the distribution may instead be through a tax-free reduction of capital, which also provides additional flexibility to the Company and Bausch + Lomb with respect to strategic alternatives after any distribution has occurred. The Company continues to evaluate the structure of any distribution and its other related details. Any distribution of Bausch + Lomb continues to be subject to receipt of applicable shareholder and other required approvals.

Bausch Health (excl. B+L) R&D Update
•RED-C: global program for Reduction of Early Decompensation in Cirrhosis
◦Expect to complete enrollment of two global Phase 3 trials in Q1 2024
◦Received feedback on the program from the National Medical Products Administration in China and we are currently planning to meet with authorities in Japan later this year
•Amiselimod (S1P modulator): treatment of mild to moderate Ulcerative Colitis
◦Phase 2 study completed enrollment in July 2023 and the study is expected to be completed in Q4 2023
•IDP-126: first triple combination product for the treatment of acne vulgaris
◦PDUFA date set for October 2023

◦New Drug Submission was submitted to Health Canada on May 30, 2023
•Clear and Brilliant Touch: fractionated laser device for skin rejuvenation
◦Regulatory submissions on-track in Europe and Canada in 2024 and Asia Pacific in 2025
•Next Generation Fraxel: fractionated laser device for skin resurfacing
◦FDA submission is expected in Q4 2023

Second Quarter 2023 Revenue Performance
Total reported revenues were $2.17 billion for the second quarter of 2023, compared with $1.97 billion in the second quarter of 2022, an increase of $200 million, or 10%. Excluding the unfavorable impact of foreign exchange of $17 million and the favorable impact of acquisitions, divestitures, and discontinuations of $4 million, revenue increased by 11% organically1 compared with the second quarter of 2022.

Reported revenues by segment were as follows:

Three Months Ended June 30, Reported Change
Change at Constant Currency1
(Non-GAAP)
Change in Organic Revenue1
(Non-GAAP)
(in millions) 2023 2022 Amount Pct.
Total Bausch Health Revenues $2,167 $1,967 $200 10 % 11 % 11 %
Bausch Health (excl. B+L) $1,132 $1,026 $106 10 % 10 % 11 %
Salix segment $557 $501 $56 11 % 11 % 11 %
International segment $259 $233 $26 11 % 9 % 11 %
Solta Medical segment $88 $57 $31 54 % 60 % 60 %
Diversified segment $228 $235 ($7) (3 %) (3 %) (3 %)
Bausch + Lomb segment $1,035 $941 $94 10 % 12 % 12 %

Salix Segment
Salix segment reported and organic1 revenues were $557 million for the second quarter of 2023, compared with $501 million for the second quarter of 2022, an increase of $56 million, or 11%. Sales growth was driven by Xifaxan, Relistor, and Trulance.

International Segment
International segment reported revenues were $259 million for the second quarter of 2023, compared with $233 million for the second quarter of 2022, an increase of $26 million, or 11%. Excluding the favorable impact of foreign exchange of $4 million and the favorable impact of divestitures and discontinuations of $4 million, segment revenues increased organically by 11% compared with the second quarter of 2022, led by organic1 growth in Canada and EMEA.

Solta Medical Segment
Solta Medical segment reported revenues were $88 million for the second quarter of 2023, compared with $57 million in the second quarter of 2022, an increase of $31 million, or 54%, which was favorably impacted by COVID-related lockdowns in China in the prior year quarter. Excluding the unfavorable impact of foreign exchange of $3 million, segment revenues increased organically1 by 60% compared with the second quarter of 2022.

Diversified Segment
Diversified segment reported revenues were $228 million for the second quarter of 2023, compared with $235 million for the second quarter of 2022, a decrease of $7 million, or 3% on both a reported and organic basis, primarily attributable to decreases in sales across Neurology and Generics, partially offset by growth in sales in Dermatology and Dentistry.

Bausch + Lomb Segment
Bausch + Lomb segment reported revenues were $1,035 million for the second quarter of 2023, compared with $941 million for the second quarter of 2022, an increase of $94 million, or 10%. Excluding the unfavorable impact of foreign exchange of $18 million, the favorable impact of acquisitions of $2 million and the favorable impact of divestitures and discontinuations of $2 million, the Bausch + Lomb segment revenue increased organically1 by 12%, compared with the second quarter of 2022, driven by increases across all business units.

Consolidated Operating Income
Consolidated operating income was $412 million for the second quarter of 2023, compared with operating income of $161 million for the second quarter of 2022, an increase of $251 million. The change is primarily due to higher revenues and associated gross profit, the benefit of insurance recoveries relating to certain litigation matters, lower amortization of intangible assets, and lower restructuring, integration, separation and IPO costs, partially offset by higher selling, general and administrative expenses and investments in research and development.

Net Income (Loss) Attributable to Bausch Health
Net income attributable to Bausch Health for the second quarter of 2023 was $26 million, compared with a net loss of $145 million for the second quarter of 2022, a favorable change of $171 million. This was primarily due to the increase in income before income taxes of $208 million.

Adjusted net income attributable to Bausch Health (non-GAAP)1 for the second quarter of 2023 was $300 million, compared with $201 million for the second quarter of 2022, an increase of $99 million primarily due to growth in consolidated operating income.

Earnings (Loss) Per Share Attributable to Bausch Health
GAAP earnings per share attributable to Bausch Health for the second quarter of 2023 was $0.07, compared with a loss of $0.40 for the second quarter of 2022.

Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $727 million for the second quarter of 2023, as compared to $701 million for the second quarter of 2022, an increase of $26 million.

Cash Provided by (Used in) Operating Activities
The Company generated $206 million of cash from operating activities in the second quarter of 2023 compared with $123 million in the second quarter of 2022. The increase in cash flow from operations is primarily attributable to (i) a decrease in legal settlements compared to the prior year when payments were made related to the Glumetza Antitrust Litigation in second quarter 2022, (ii) proceeds from insurance recoveries regarding certain legacy litigation matters, (iii) changes in business performance and (iv) a portion of cash interest payments being classified as Cash Flows from Financing activities as a result of the accounting treatment required for the Company’s New Secured Notes issued in September 2022.

Balance Sheet Highlights as of June 30, 2023:
•Cash and cash equivalents of $588 million.
•Bausch Health (excl. B+L) had availability under its 2027 revolving credit facility of $707 million and Bausch + Lomb had availability of approximately $275 million under its revolving credit facility.
•Accounts Receivable Credit Facility provides for an up to $600 million facility for approximately five years. No amounts were drawn as of June 30, 2023.

On August 3, 2023 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the Company) reported its financial results for the three and six months ended June 30, 2023. Amounts are expressed in U.S. dollars (Press release, Aurinia Pharmaceuticals, AUG 3, 2023, View Source [SID1234633736]).

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Total net revenue was $41.5 million for the three months ended June 30, 2023, compared to $28.2 million in the prior year three months ended June 30, 2022, representing growth of approximately 47% year over year. Year to date net revenue increased to $75.9 million for the six months ended June 30, 2023 compared to $49.8 million for the same time period for 2022, representing growth of approximately 52% period over period.

"We are extremely pleased with our results in the second quarter of 2023. Building on three successful quarters in a row, this represents our most successful quarter to date from a net revenue perspective," said Peter Greenleaf, President, and Chief Executive Officer of Aurinia. "Strong commercial execution continues as we see further utilization of LUPKYNIS (voclosporin) across the lupus nephritis marketplace. Moreover, we are excited by the depth of usage in nephrology and the continued expansion into rheumatology. Our marketing and selling efforts continue to produce patient start forms (PSFs), patients on therapy (POT), wallets shipped, and net product revenue at or near all-time highs."

For the fiscal year 2023, the Company is increasing its net product revenue guidance to a range of $150 – $160 million for net product sales of LUPKYNIS. The guidance range is based on assumptions regarding PSF run rates, consistent conversion rates, time to convert, persistency, and pricing.

Second Quarter 2023 and Recent Highlights

Arthritis & Rheumatology published full results of AURORA 2, a Phase 3, double-blind, placebo-controlled extension study out to 3 years, demonstrating that kidney preservation, sustained renal response, and reductions in steroid use were achieved with LUPKYNIS with mycophenolate mofetil (MMF) and low-dose steroids, compared to MMF and low-dose steroids alone.
A post-hoc, pooled analysis of the Phase 2 AURA-LV and Phase 3 AURORA 1 studies presented at the annual meetings of the European League Against Rheumatism (EULAR) and the European Renal Association (ERA) found that LUPKYNIS with MMF and low-dose steroids resulted in significantly higher renal response rates and earlier and greater reductions in proteinuria in LN patients with high proteinuria, compared to MMF and low-dose steroids alone.
Refined method of use patent (‘991) was issued by the U.S. Patent and Trademark Office and Orange Book listed.
Received reimbursement recommendation from National Institute for Health and Care Excellence (NICE) in the United Kingdom, Swissmedic marketing authorization in Switzerland and most recently reimbursement approval in Italy.
Initiated strategic review of the company in association with J.P. Morgan Securities LLC as our financial advisor.
LUPKYNIS Product Performance Highlights

There were approximately 1,911 patients on LUPKYNIS therapy at June 30, 2023, compared with 1,274 at June 30, 2022, representing an increase of approximately 50% year over year.
Aurinia added 451 patient start forms (PSFs) during the three months ended June 30, 2023, compared to 409 during the three months ended June 30, 2022, representing an increase of approximately 10% over the previous period last year.
As of July 31, 2023, the Company recorded approximately 1,017 PSFs since January 1, 2023.
Conversion rates remain consistent with more than 89% of PSFs converted to patients on therapy.
Time to convert has improved to an all-time high with the large majority (65%) of patients on therapy by 20 days.
As of June 30, 2023, 12 month persistency improved to 54% from 51% at March 31, 2023.
Financial Results for the Three and Six Months Ended June 30, 2023

Total net revenue was $41.5 million and $28.2 million for the three months ended June 30, 2023 and June 30, 2022, respectively. Total net revenue was $75.9 million and $49.8 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The increase is primarily due to an increase in net product revenue from our two main customers for LUPKYNIS driven predominantly by further penetration in the LN market.

Total cost of sales and operating expenses for the three months ended June 30, 2023 and June 30, 2022 were $57.7 million and $64.2 million, respectively. Total cost of sales and operating expenses for the six months ended June 30, 2023 and June 30, 2022 were $121.7 million and $123.7 million, respectively. Further breakdown of operating expense drivers and fluctuations are highlighted in the following paragraphs.

Cost of sales were $1.6 million for the three months ended June 30, 2023 and June 30, 2022. Cost of sales were $2.0 million and $1.9 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Cost of sales for both periods ended June 30, 2023 and June 30, 2022 remained consistent due to an increase of revenues, offset by a write down of FDA process validation batches that occurred during the second quarter of 2022.

Gross margin for the three months ended June 30, 2023 and June 30, 2022 was approximately 96% and 94%, respectively. Gross margin for the six months ended June 30, 2023 and June 30, 2022 was approximately 97% and 96% respectively.

Selling, general and administrative (SG&A) expenses, inclusive of share-based compensation, were $47.1 million and $51.5 million for the three months ended June 30, 2023 and June 30, 2022, respectively. SG&A expenses, inclusive of share-based compensation, were $97.2 million and $96.7 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The primary drivers for the decrease in SG&A expense for the three months ended June 30, 2023 compared to the same period ended June 30, 2022 was a decrease in professional fees and services, including legal fees incurred during the respective quarters, with respect to litigation matters that were taking place in the three months ended June 30, 2022. For the six months ended June 30, 2023 compared to the same period ended June 30, 2022, the increase was due to an increase in share-based compensation expense and marketing expenses offset by a decrease in professional fees and services which includes legal fees.

Non-cash SG&A share-based compensation expense included within SG&A expenses was $9.8 million and $8.9 million for the three months ended June 30, 2023 and June 30, 2022, respectively. Non-cash SG&A share-based compensation expense included within SG&A expenses, was $17.4 million and $14.9 million for the six months ended June 30, 2023 and June 30, 2022, respectively.

Research and development (R&D) expenses, inclusive of share-based compensation, were $12.7 million and $11.5 million for the three months ended June 30, 2023 and June 30, 2022, respectively. R&D expenses, inclusive of share-based compensation expense, were $25.8 million and $24.1 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The primary drivers for the increase for the three and six months ended June 30, 2023 as compared to the same periods ended June 30, 2022, were an increase in salaries and related employee benefit costs, share-based compensation expense and clinical supply and distribution as the Company advances its AUR200 and AUR300 programs and fulfills the post approval FDA commitments related to LUPKYNIS. The increase was partially offset by a decrease in contract research organization costs related to the completion of the AURORA 2 continuation study and drug interaction study, which were substantially completed in 2022.

Non-cash R&D share-based compensation expense included with R&D expense was $2.1 million and $1.1 million for the three months ended June 30, 2023 and June 30, 2022, respectively. Non-cash R&D share-based compensation expense included with R&D expenses was $3.7 million and $2.0 million for the six months ended June 30, 2023 and June 30, 2022, respectively.

Other (income) expense, net was $(3.6) million and $(0.5) million for the three months ended June 30, 2023 and June 30, 2022, respectively. Other (income) expense, net was $(3.3) million and $1.0 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The increase in other income is primarily related to change in fair value assumptions driven predominantly by rising interest rates related to our deferred compensation liability coupled with the foreign exchange gain related to our monoplant finance liability.

Interest expense was $0.1 million for the three and six months ended June 30, 2023 due to the commencement of the monoplant finance lease during the second quarter of 2023. We did not incur interest expense during 2022.

Interest income was $4.1 million and $0.5 million for the three months ended June 30, 2023 and June 30, 2022, respectively. Interest income was $7.9 million and $0.7 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The increase between periods is due to higher yields on our investments as a result of increased interest rates.

For the three months ended June 30, 2023, Aurinia recorded a net loss of $11.5 million or $0.08 net loss per common share, as compared to a net loss of $35.5 million or $0.25 net loss per common share for the three months ended June 30, 2022. For the six months ended June 30, 2023, Aurinia recorded a net loss of $37.7 million or $0.26 net loss per common share, as compared to a net loss of $73.1 million or $0.52 net loss per common share for the six months ended June 30, 2022.

Financial Liquidity at June 30, 2023

As of June 30, 2023, Aurinia had cash, cash equivalents and restricted cash and short-term investments of $350.7 million compared to $389.4 million at December 31, 2022. The decrease is primarily related to the continued investment in commercialization activities and post approval commitments of our approved drug, LUPKYNIS, inventory purchases, advancement of our pipeline and the second capital expenditure payment for the monoplant, partially offset by an increase in cash receipts from sales of LUPKYNIS.

Aurinia believes that it has sufficient financial resources to fund its operations, which include funding commercial activities, such as FDA related post approval commitments, manufacturing and packaging of commercial drug supply, funding its supporting commercial infrastructure, advancing its R&D programs and funding its working capital obligations for at least the next few years.

This press release is intended to be read in conjunction with the Company’s unaudited condensed consolidated financial statements and Management’s Discussion and Analysis for the quarter ended June 30, 2023 in the Company’s Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, including risk factors disclosed therein, which will be accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedarplus.ca or on EDGAR at www.sec.gov/edgar.

Conference Call Details

Aurinia will host a conference call and webcast to discuss the quarter ended June 30, 2023 financial results today, Thursday, August 3, 2023 at 8:30 a.m. ET. The audio webcast can be accessed under "News/Events" through the "Investors" section of the Aurinia corporate website at www.auriniapharma.com. In order to participate in the conference call, please dial +1 (888) 645-4404 (Toll-free U.S. & Canada). An audio webcast can be accessed under "News/Events" through the Investors section of the Aurinia corporate website at www.auriniapharma.com. A replay of the webcast will be available on Aurinia’s website.

About Lupus Nephritis

Lupus Nephritis is a serious manifestation of systemic lupus erythematosus (SLE), a chronic and complex autoimmune disease. About 200,000-300,000 people live with SLE in the U.S. and about one-third of these people are diagnosed with lupus nephritis at the time of their SLE diagnosis. About 50 percent of all people with SLE may develop lupus nephritis. If poorly controlled, lupus nephritis can lead to permanent and irreversible tissue damage within the kidney. Black and Asian people with SLE are four times more likely to develop lupus nephritis and Hispanic people are approximately twice as likely to develop the disease compared to White people with SLE. Black and Hispanic people with SLE also tend to develop lupus nephritis earlier and have poorer outcomes, compared to White people with SLE.