Merck Announces Fourth-Quarter and Full-Year 2022 Financial Results

On February 1, 2023 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported financial results for the fourth quarter and full year of 2022 (Press release, Merck & Co, FEB 2, 2023, View Source [SID1234626726]).

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"2022 was an exceptional year for Merck, which is a testament to the profound impact our medicines and vaccines are having on patients globally," said Robert M. Davis, chairman and chief executive officer. "I am extremely proud of what our talented and dedicated colleagues have accomplished scientifically, commercially and operationally. Our science-led strategy is working as we continue to build a sustainable engine that will drive innovation and generate long-term value for patients and shareholders well into the next decade."

Financial Summary

Financial information presented in this release reflects Merck’s results on a continuing operations basis, which excludes Organon & Co. that was spun off in 2021.

$ in millions, except EPS amounts

Fourth Quarter

Year Ended

2022

2021

Change

Change

Ex-Exchange

Dec. 31,

2022

Dec. 31,

2021

Change

Change

Ex-Exchange

Sales

$13,830

$13,521

2%

8%

$59,283

$48,704

22%

26%

GAAP net income1

3,017

3,820

-21%

-17%

14,519

12,345

18%

21%

Non-GAAP net income that excludes certain items1,2*

4,129

4,592

-10%

-7%

19,005

13,623

40%

43%

GAAP EPS

1.18

1.51

-22%

-17%

5.71

4.86

17%

21%

Non-GAAP EPS that excludes certain items2*

1.62

1.81

-10%

-7%

7.48

5.37

39%

43%

*Refer to table on page 11.

Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.18 for the fourth quarter and $5.71 for the full year of 2022. Non-GAAP EPS was $1.62 for the fourth quarter and $7.48 for the full year of 2022. The declines in GAAP and non-GAAP EPS in the fourth quarter versus the prior year were primarily due to lower fourth quarter 2021 effective tax rates and the unfavorable impact of foreign exchange, partially offset by strong underlying business performance. The GAAP EPS decline in the fourth quarter also reflects the unfavorable impact of losses from investments in equity securities compared with gains in the prior year. Full-year 2022 and 2021 GAAP and non-GAAP EPS were negatively impacted by $0.22 and $0.65, respectively, related to an asset acquisition, and collaboration and licensing agreements.

Non-GAAP EPS excludes acquisition- and divestiture-related costs (including pretax intangible asset impairment research and development [R&D] charges of $780 million and $1.7 billion in the fourth quarter and full year of 2022, respectively, largely related to nemtabrutinib) and restructuring costs, as well as income and losses from investments in equity securities.

In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting. Results for 2021 have been recast to conform to the new presentation. For more information, refer to the Form 8-K filed by the company on April 21, 2022.

Oncology Program Highlights

Merck announced the following regulatory and clinical milestones for KEYTRUDA (pembrolizumab), Merck’s anti-PD-1 therapy:
KEYTRUDA approved by the U.S. Food and Drug Administration (FDA) as adjuvant treatment following resection and platinum-based chemotherapy for adult patients with stage IB (T2a ≥4 centimeters), II, or IIIA non-small cell lung cancer (NSCLC), based on the pivotal Phase 3 KEYNOTE-091 trial.
In collaboration with Moderna, Inc. (Moderna), positive topline results from the Phase 2b KEYNOTE-942/mRNA-4157-P201 trial, which showed that KEYTRUDA in combination with mRNA-4157/V940, an investigational personalized mRNA therapeutic cancer vaccine, demonstrated a statistically significant and clinically meaningful improvement in the primary endpoint of recurrence-free survival versus KEYTRUDA alone for the adjuvant treatment of patients with stage III/IV melanoma following complete resection.
In collaboration with Seagen Inc. and Astellas Pharma Inc., acceptance by the FDA for priority review of the supplemental Biologics License Application for KEYTRUDA in combination with Padcev3 (enfortumab vedotin-ejfv) for the treatment of patients with locally advanced or metastatic urothelial cancer who are not eligible to receive cisplatin-containing chemotherapy.
Positive topline results from the pivotal Phase 3 KEYNOTE-859 trial investigating KEYTRUDA in combination with chemotherapy for the first-line treatment of patients with human epidermal growth factor receptor 2 (HER2)-negative locally advanced unresectable or metastatic gastric or gastroesophageal junction adenocarcinoma.
Positive topline results from the Phase 3 KEYNOTE-966 trial investigating KEYTRUDA in combination with standard of care chemotherapy (gemcitabine and cisplatin) for the first-line treatment of patients with advanced or unresectable biliary tract cancer.
Merck announced that Lynparza (olaparib), an oral PARP inhibitor being co-developed and co-commercialized with AstraZeneca, was approved in the European Union (EU) in combination with abiraterone and prednisone or prednisolone for the treatment of adult patients with metastatic castration-resistant prostate cancer in whom chemotherapy is not clinically indicated, based on the Phase 3 PROpel trial.
Vaccine Program Highlights

Merck announced that an updated systematic literature review of 138 peer-reviewed studies observed that use of GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant] led to reductions in the rates of high-grade (precancerous) and low-grade cervical lesions, as well as reductions in certain non-cervical HPV-related diseases and HPV infection in women and men.
Cardiovascular Program Highlights

Merck will present results from the Phase 3 STELLAR study evaluating investigational sotatercept for the treatment of patients with pulmonary arterial hypertension, and from the Phase 2 study evaluating MK-0616, the company’s investigational oral macrocyclic peptide PCSK9 inhibitor for the treatment of patients with hypercholesterolemia, at the American College of Cardiology’s 72nd Annual Scientific Session together with the World Heart Federation’s World Congress of Cardiology (ACC.23/WCC). Merck will host an investor event at ACC.23/WCC on March 6, 2023, to discuss these results. Further details will be announced at a later date.
Business Development Highlights

Merck announced and successfully completed the acquisition of Imago BioSciences, Inc. (Imago), for an approximate total equity value of $1.35 billion, expanding Merck’s growing hematology portfolio.
Merck announced that it has expanded its relationship and entered into an exclusive license and collaboration agreement with Kelun-Biotech (a holding subsidiary of Sichuan Kelun Pharmaceutical Co., Ltd) to develop up to seven investigational preclinical antibody-drug conjugates (ADCs) for the treatment of cancer.
Environmental, Social and Governance (ESG) Updates

Merck was named one of America’s most JUST companies by JUST Capital and CNBC, ranking No. 1 in the pharmaceuticals and biotech industry for the third straight year and No. 26 overall of all companies named.
Merck published its Sustainability Bond Allocation Report, which highlighted how the company’s initial $1.0 billion sustainability bond is helping to drive progress across ESG focus areas.
Fourth-Quarter and Full-Year Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as sales of Animal Health products.

$ in millions

Fourth Quarter

Year Ended

2022

2021

Change

Change

Ex-Exchange

Dec. 31,

2022

Dec. 31,

2021

Change

Change

Ex-Exchange

Total Sales

$13,830

$13,521

2%

8%

$59,283

$48,704

22%

26%

Pharmaceutical

12,180

12,039

1%

9%

52,005

42,754

22%

28%

KEYTRUDA

5,450

4,577

19%

26%

20,937

17,186

22%

27%

GARDASIL / GARDASIL 9

1,470

1,528

-4%

6%

6,897

5,673

22%

27%

LAGEVRIO

825

952

-13%

2%

5,684

952

***

***

JANUVIA / JANUMET

913

1,393

-34%

-29%

4,513

5,288

-15%

-9%

PROQUAD, M-M-R II and VARIVAX

526

509

3%

6%

2,241

2,135

5%

7%

BRIDION

441

436

1%

7%

1,685

1,532

10%

16%

Lynparza*

292

268

9%

14%

1,116

989

13%

18%

Lenvima*

216

206

5%

9%

876

704

24%

28%

ROTATEQ

139

213

-35%

-31%

783

807

-3%

0%

SIMPONI

166

206

-19%

-8%

706

825

-14%

-4%

Animal Health

1,230

1,261

-2%

6%

5,550

5,568

0%

6%

Livestock

814

791

3%

12%

3,300

3,295

0%

7%

Companion Animals

416

470

-11%

-5%

2,250

2,273

-1%

4%

Other Revenues**

420

221

90%

-25%

1,728

382

***

87%

*Alliance revenue for this product represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.

***>100%

Pharmaceutical Revenue

Fourth-quarter pharmaceutical sales grew 1% to $12.2 billion. Excluding the unfavorable impact of foreign exchange, pharmaceutical sales grew 9%, primarily driven by oncology and hospital acute care, partially offset by diabetes.

Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 19% to $5.5 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from metastatic indications including certain types of NSCLC, renal cell carcinoma, head and neck squamous cell carcinoma, triple-negative breast cancer (TNBC) and microsatellite instability-high (MSI-H) cancers, and increased uptake across recent earlier-stage launches, including certain types of neoadjuvant/adjuvant TNBC in the U.S. Also contributing to growth in oncology was increased alliance revenue from Lynparza, which grew 9% to $292 million, driven primarily by higher demand in the U.S. In addition, sales of WELIREG (belzutifan), an oral hypoxia-inducible factor-2 alpha inhibitor, increased to $40 million due to continued uptake in the U.S. following the product’s launch in 2021.

Growth in hospital acute care reflects higher sales of ZERBAXA (ceftolozane and tazobactam), a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of patients with certain bacterial infections. ZERBAXA sales of $49 million in the fourth quarter of 2022 increased from $10 million in the fourth quarter of 2021, reflecting uptake from the completion of the phased resupply in 2022 that was initiated in the fourth quarter of 2021. Growth in hospital acute care also reflects higher sales of PREVYMIS (letermovir), a medicine for prophylaxis of CMV infection and disease in adult CMV-seropositive recipients of an allogenic hematopoietic stem cell transplant, which increased 17% to $118 million, reflecting higher demand globally.

Vaccines sales performance reflects lower combined sales of GARDASIL and GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), vaccines to prevent certain cancers and other diseases caused by HPV, which declined 4% to $1.5 billion. Excluding the unfavorable impact of foreign exchange, GARDASIL/GARDASIL 9 sales grew 6%, reflecting higher demand outside of the U.S., particularly in China. Vaccines sales performance also reflects lower sales of PNEUMOVAX 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, which declined 50% to $145 million, primarily reflecting lower U.S. demand as the market continues to shift toward newer adult pneumococcal conjugate vaccines. In addition, sales of ROTATEQ (Rotavirus Vaccine, Live Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children, declined 35% to $139 million, primarily due to lower sales in China, which benefited in the fourth quarter of 2021 from increased supply, and lower sales in the U.S. largely due to the timing of public-sector purchases. Vaccines sales performance benefited from the ongoing pediatric launch of VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine), a vaccine to help prevent invasive pneumococcal disease, which had sales of $138 million, largely due to inventory stocking in the U.S.

Pharmaceutical sales growth was partially offset by lower combined sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI), for the treatment of type 2 diabetes, which declined 34% to $913 million, primarily reflecting generic competition in certain international markets, particularly in Europe and the Asia Pacific region, and lower demand and net pricing in the U.S.

Sales of LAGEVRIO (molnupiravir), an investigational oral antiviral COVID-19 medicine, decreased 13% to $825 million. Excluding the unfavorable impact of foreign exchange, sales increased 2%, primarily driven by strong growth in Japan and the U.K. and the launch in Australia, offset by a decline in the U.S.

Full-year 2022 pharmaceutical sales grew 22% to $52.0 billion. Pharmaceutical sales growth was 16% excluding LAGEVRIO and the unfavorable impact of foreign exchange, primarily driven by higher sales in oncology, particularly KEYTRUDA, higher sales of vaccines, reflecting strong growth of GARDASIL/GARDASIL 9 and the ongoing pediatric launch of VAXNEUVANCE, as well as growth in hospital acute care products, including ZERBAXA and BRIDION (sugammadex) injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults and pediatric patients ages 2 years and older undergoing surgery. Pharmaceutical sales growth in 2022 was partially offset by lower sales of JANUVIA and JANUMET, primarily reflecting lower demand in Europe as a result of generic competition, and a decline in PNEUMOVAX 23 sales as the U.S. market continues to shift toward newer adult pneumococcal conjugate vaccines. COVID-19-related disruptions negatively affected sales in 2022, but to a lesser extent than in 2021, which benefited year-over-year sales growth.

Animal Health Revenue

Animal Health sales totaled $1.2 billion for the fourth quarter of 2022, a 2% decline compared with the fourth quarter of 2021. Excluding the unfavorable effect of foreign exchange, Animal Health sales increased 6%. Sales growth of livestock products reflects higher demand, notably in the ruminant and poultry product portfolio, which includes technology solutions products, as well as higher pricing. Sales of companion animal products were negatively impacted by a reduction in veterinary visits in the broader companion animal market following the more favorable trend during the pandemic, as well as supply constraints for certain vaccines, partially offset by higher pricing.

Full-year 2022 Animal Health sales were $5.5 billion, in line with the prior year. Excluding the unfavorable effect of foreign exchange, Animal Health sales grew 6%, primarily due to higher pricing. Full-year sales growth was also driven by higher demand of livestock products, led by ruminant, poultry and swine products. Sales of companion animal products also reflect higher demand for the BRAVECTO (fluralaner) parasiticide line of products, which had sales of $1.0 billion, partially offset by supply constraints for certain vaccines.

Fourth-Quarter and Full-Year Expense, EPS and Related Information

The tables below present selected expense information.

$ in millions

Fourth Quarter 2022

GAAP

Acquisition-

and

Divestiture-

Related Costs 4

Restructuring

Costs

(Income) Loss

From

Investments in

Equity

Securities

Certain

Other

Items

Non-

GAAP 2

Cost of sales

$3,881

$482

$38

$-

$-

$3,361

Selling, general and administrative

2,687

39

20

2,628

Research and development

3,775

740

3,035

Restructuring costs

49

49

Other (income) expense, net

(75)

(69)

80

(86)

Fourth Quarter 2021

Cost of sales

$3,873

$419

$47

$-

$(4)

$3,411

Selling, general and administrative

2,830

226

10

2,594

Research and development

3,068

397

7

2,664

Restructuring costs

174

174

Other (income) expense, net

(333)

(3)

(381)

51

$ in millions

Year Ended Dec. 31, 2022

GAAP

Acquisition-

and

Divestiture-

Related Costs 4

Restructuring

Costs

(Income) Loss

From

Investments in

Equity

Securities

Certain

Other

Items

Non-

GAAP 2

Cost of sales

$17,411

$2,059

$205

$-

$-

$15,147

Selling, general and administrative

10,042

176

94

9,772

Research and development

13,548

1,676

30

11,842

Restructuring costs

337

337

Other (income) expense, net

1,501

(207)

1,348

360

Year Ended Dec. 31, 2021

Cost of sales

$13,626

$1,607

$160

$-

$221

$11,638

Selling, general and administrative

9,634

322

19

9,293

Research and development

12,245

479

28

11,738

Restructuring costs

661

661

Other (income) expense, net

(1,341)

76

(1,884)

467

GAAP Expense, EPS and Related Information

Gross margin was 71.9% for the fourth quarter of 2022 compared with 71.4% for the fourth quarter of 2021. The increase primarily reflects favorable product mix and foreign exchange. Gross margin was 70.6% for the full year of 2022 compared to 72.0% for the full year of 2021. The decline primarily reflects the unfavorable impacts of higher amortization of intangible assets, as well as higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins. The full-year gross margin decline was partially offset by the favorable effects of product mix, foreign exchange and charges in the prior year related to the discontinuation of COVID-19 development programs.

Selling, general and administrative (SG&A) expenses were $2.7 billion in the fourth quarter of 2022, a decrease of 5% compared to the fourth quarter of 2021. The decrease primarily reflects lower acquisition- and divestiture-related costs and the favorable effect of foreign exchange, partially offset by higher promotional spending, as well as higher administrative costs. Full-year SG&A expenses were $10.0 billion, an increase of 4% compared to the full year of 2021. The increase primarily reflects higher administrative costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange and lower acquisition- and divestiture-related costs.

R&D expenses were $3.8 billion in the fourth quarter of 2022, an increase of 23% compared to the fourth quarter of 2021. The increase was primarily driven by higher intangible asset impairment charges related to nemtabrutinib, which were $780 million in the fourth quarter of 2022 compared with $275 million in the fourth quarter of 2021, lower reimbursement of LAGEVRIO R&D costs from Ridgeback Biotherapeutics (Ridgeback), higher compensation and benefit costs reflecting in part increased headcount to support expanded clinical development activity, and higher clinical development spending. R&D expenses were $13.5 billion for the full year of 2022, an increase of 11% compared with the full year of 2021. The increase was primarily driven by higher intangible asset impairment charges, which were $1.7 billion in 2022 compared with $275 million in 2021, largely related to nemtabrutinib, $690 million of charges in 2022 related to collaboration and licensing agreements with Moderna, Orna Therapeutics (Orna) and Orion Corporation (Orion), as well as higher compensation and benefit costs and clinical development spending. The increase was partially offset by a $1.7 billion charge in the prior year for the acquisition of Pandion Therapeutics, Inc. (Pandion).

Other (income) expense, net, was $75 million of income in the fourth quarter of 2022 compared to $333 million of income in the fourth quarter of 2021. Other (income) expense, net, was $1.5 billion of expense in the full year of 2022 compared to $1.3 billion of income in the full year of 2021. The change in both periods is primarily due to net losses from investments in equity securities in 2022 compared with net gains from investments in equity securities in 2021.

The effective tax rate for the fourth quarter of 2022 of 14.1% reflects the unfavorable impact of a higher than anticipated full-year rate of 11.7% due to a less favorable mix of income and expense than previously anticipated, while the effective tax rate for the fourth quarter of 2021 of 2.2% reflects the favorable impact of a lower than previously expected full-year 2021 rate of 11.0%.

GAAP EPS was $1.18 for the fourth quarter of 2022 compared to $1.51 for the fourth quarter of 2021. GAAP EPS was $5.71 for the full year of 2022 compared to $4.86 for the full year of 2021.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 75.7% for the fourth quarter of 2022 compared to 74.8% for the fourth quarter of 2021. The increase primarily reflects the favorable effects of product mix and foreign exchange. Non-GAAP gross margin was 74.4% for the full year of 2022 compared to 76.1% for the full year of 2021. The decrease primarily reflects the impact of higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins, partially offset by the favorable effects of product mix and foreign exchange.

Non-GAAP SG&A expenses were $2.6 billion in the fourth quarter of 2022, an increase of 1% compared to the fourth quarter of 2021. Non-GAAP SG&A expenses for the full year were $9.8 billion, an increase of 5% compared to the full year of 2021. The increase in both periods primarily reflects higher administrative costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange.

Non-GAAP R&D expenses were $3.0 billion in the fourth quarter of 2022, an increase of 14% compared with the fourth quarter of 2021. The increase was primarily driven by lower reimbursement of LAGEVRIO R&D costs from Ridgeback, higher compensation and benefit costs reflecting in part increased headcount to support expanded clinical development activity, and higher clinical development spending. Non-GAAP R&D expenses were $11.8 billion for the full year of 2022, an increase of 1% compared with the full year of 2021. The increase was primarily driven by $690 million of charges in 2022 related to collaboration and licensing agreements with Moderna, Orna and Orion, as well as higher compensation and benefit costs and clinical development spending. The increase was partially offset by a $1.7 billion charge in the prior year for the acquisition of Pandion.

Non-GAAP other (income) expense, net, was $86 million of income in the fourth quarter of 2022 compared to $51 million of expense in the fourth quarter of 2021. Non-GAAP other (income) expense, net, was $360 million of expense in the full year of 2022 compared to $467 million of expense in the full year of 2021.

The non-GAAP effective tax rate for the fourth quarter of 2022 of 15.6% reflects the unfavorable impact of a higher than anticipated full-year rate of 14.2% due to a less favorable mix of income and expense than previously anticipated, while the non-GAAP effective tax rate for the fourth quarter of 2021 of 4.3% reflects the favorable impact of a lower than previously expected full-year 2021 rate of 12.4%.

Non-GAAP EPS was $1.62 for the fourth quarter of 2022 compared to $1.81 for the fourth quarter of 2021. Non-GAAP EPS was $7.48 for the full year of 2022 compared to $5.37 for the full year of 2021.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

$ in millions, except EPS amounts

Fourth Quarter

Year Ended

2022

2021

Dec. 31, 2022

Dec. 31, 2021

EPS

GAAP EPS

$1.18

$1.51

$5.71

$4.86

Difference

0.44

0.30

1.77

0.51

Non-GAAP EPS that excludes items listed below2

$1.62

$1.81

$7.48

$5.37

Net Income

GAAP net income1

$3,017

$3,820

$14,519

$12,345

Difference

1,112

772

4,486

1,278

Non-GAAP net income that excludes items listed below1,2

$4,129

$4,592

$19,005

$13,623

Decrease (Increase) in Net Income Due to Excluded Items:

Acquisition- and divestiture-related costs4

$1,192

$1,039

$3,704

$2,484

Restructuring costs

107

238

666

868

Loss (income) from investments in equity securities

80

(381)

1,348

(1,884)

Charges for the discontinuation of COVID-19 development programs

221

Other

(4)

Net decrease (increase) in income before taxes

1,379

892

5,718

1,689

Income tax (benefit) expense5

(267)

(120)

(1,232)

(411)

Decrease (increase) in net income

$1,112

$772

$4,486

$1,278

Financial Outlook

The following table summarizes the company’s full-year 2023 financial guidance.

GAAP

Non-GAAP 2

Revenue*

$57.2 to $58.7 billion

$57.2 to $58.7 billion

Gross margin

Approximately 73%

Approximately 77%

Operating expenses**

$23.3 to $24.3 billion

$23.1 to $24.1 billion

Effective tax rate

17% to 18%

17% to 18%

EPS***

$5.86 to $6.01

$6.80 to $6.95

*Includes approximately $1.0 billion of LAGEVRIO sales. The company does not have any non-GAAP adjustments to revenue.

**Includes an aggregate $1.4 billion of R&D expenses related to the Imago acquisition and upfront payment for a license and collaboration agreement with Kelun-Biotech.

***Includes $0.53 of charges related to the Imago acquisition and upfront payment to Kelun-Biotech. EPS guidance for 2023 assumes a share count (assuming dilution) of approximately 2.55 billion shares.

Merck anticipates full-year 2023 revenue to be between $57.2 billion and $58.7 billion, including a negative impact of foreign exchange of approximately 2% at mid-January 2023 exchange rates. The company expects a significant decline in sales of LAGEVRIO, which are expected to be approximately $1.0 billion.

Merck expects full-year 2023 GAAP EPS to be between $5.86 and $6.01.

Merck expects full-year 2023 non-GAAP EPS to be between $6.80 and $6.95, including a negative impact of foreign exchange of approximately 4%. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, as well as income and losses from investment in equity securities.

In the fourth quarter of 2022, Merck announced the acquisition of Imago for an approximate total value of $1.35 billion and a license and collaboration agreement with Kelun-Biotech, which includes an upfront payment of $175 million. The Imago acquisition closed in January 2023 and the collaboration with Kelun-Biotech is expected to close in the first quarter of 2023, resulting in the inclusion of an aggregate $1.4 billion of R&D expenses in Merck’s GAAP and non-GAAP results for the first quarter and full year of 2023. The Imago acquisition is also anticipated to result in an approximate 1 percentage point unfavorable impact to Merck’s expected full-year 2023 GAAP and non-GAAP tax rates. The impact of these two transactions on expected full-year 2023 GAAP and non-GAAP EPS is approximately $0.53. GAAP and non-GAAP EPS in 2022 were negatively impacted by $0.22 of charges related to the collaboration and licensing agreements with Moderna, Orna and Orion.

Operating expenses include incremental R&D spending to advance the development of the Imago and Kelun-Biotech programs, as well as other promising programs related to the collaboration and licensing agreements with Moderna, Orna and Orion.

The financial outlook does not assume additional significant potential business development transactions.

A reconciliation of anticipated 2023 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

$ in millions, except EPS amounts

Full Year 2023

GAAP EPS

$5.86 to $6.01

Difference

$0.94

Non-GAAP EPS that excludes items listed below2

$6.80 to $6.95

Acquisition- and divestiture-related costs

$2,500

Restructuring costs

400

(Income) loss from investments in equity securities

(20)

Net decrease (increase) in income before taxes

$2,880

Estimated income tax (benefit) expense

(480)

Decrease (increase) in net income

$2,400

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Thursday, Feb. 2, at 8:00 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures, and slides highlighting the results, will be available at www.merck.com.

West to Host Fourth-Quarter and Full-Year 2022 Conference Call and Announces Participation in Upcoming Investor Conferences

On February 2, 2023 West Pharmaceutical Services, Inc. (NYSE: WST), a global leader in innovative solutions for injectable drug administration, reported that it will release fourth-quarter and full-year 2022 financial results before the market opens on Thursday, February 16, 2023, and will follow with a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time (Press release, West Pharmaceutical Services, FEB 2, 2023, View Source;utm_medium=Email&utm_campaign=Investors_Email&campaignid=null&utm_content=2_February_2023&utm_term=0_4b4b77d239-c7eeb04aed-584006100&creative=null&device=null&matchtype=null#2023-feb-02-west-to-host-fourth-quarter-and-full-year-2022-conference-call-and-announces-participation-in-upcoming-investor-conferences [SID1234626727]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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The live audio-only webcast will be made available via the Company’s Investor Relations website here or by clicking here.

To participate in the conference call by asking questions to Management, please register in advance by clicking here. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that will be used to access the call.

Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website. A replay of the conference call and webcast will be available on the Company’s website for 30 days.

West will also participate in the Barclays Global Healthcare Conference in Miami, Florida, on March 14, 2023 and the KeyBanc Life Sciences & MedTech Investor Forum taking place virtually on March 22, 2023.

A live audio webcast will be available in the "Investors" section of the Company’s website at www.westpharma.com. Replay of the webcasts will be available for approximately 90 days after the events.

Purple Biotech Expands Pipeline of First-in-Class Therapeutics with Acquisition of Immunorizon and Its Portfolio of Tri-Specific Antibodies for the Treatment of Cancer

On February 2, 2023 Purple Biotech Ltd. (NASDAQ/TASE: PPBT), a clinical-stage company developing first-in-class, effective and durable therapies that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance, reported that it has entered into an agreement for the acquisition of Immunorizon Ltd., a private company developing potential multi-specific T and NK cell engager oncology therapies that selectively activate the immune response within the tumor microenvironment (Press release, Purple Biotech, FEB 2, 2023, View Source;id=253551&p=2256767&I=1206939-c7Z3G6f3m8 [SID1234626728]). The acquisition will provide Purple Biotech with an expanded portfolio of investigational tri-specific antibody compounds that target multiple antigens and offer the potential to further expand to additional targets.

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Immunorizon’s lead asset is a conditionally-activated tri-specific antibody that engages both T cells and NK cells to mount a strong, localized immune response within the tumor microenvironment. The third arm of the lead compound specifically targets the Tumor Associated Antigen (TAA) 5T4, that is expressed in a variety of solid tumors and is correlated with advanced disease, increased invasiveness and poor clinical outcomes. 5T4 is a well-known target that has been validated by multiple pre-clinical and clinical programs. The drug candidates Purple Biotech is acquiring are differentiated from other multi-specific cell therapies targeting 5T4+ tumors by its cleavable capping technology, which confines the compound’s therapeutic activity to the local tumor microenvironment, and thereby potentially increases the anticipated therapeutic window in patients. The acquisition will also provide Purple Biotech with additional preclinical assets targeting other TAAs through this technology platform.

"We are delighted to add Immunorizon’s portfolio of tri-specific antibodies to our drug development pipeline," said Gil Efron, CEO of Purple Biotech. "The acquisition of these assets highly fits our strategy of expanding our pipeline, and we believe that the acquired technology platform has the potential to expand to multiple additional development programs. This new technology is differentiated not only by the combination of the NK and T cell engagement, but also by the conditional activation at the tumor microenvironment, which we believe provides an opportunity for better therapeutic outcomes for cancer patients. Bi-specifics as a class have undergone multiple iterations of technological improvements that have culminated in a basket of approved and/or clinically de-risked assets with several recent industry partnerships that have formed around such platforms. Novel multi-specifics have seen increasing industry attention and we are excited with our first step into this field. We believe that we will be able to leverage the knowledge and expertise we have gained over the years through both preclinical and clinical development. We expect to advance the first of the newly acquired assets to an IND submission in approximately two years in parallel to our ongoing promising clinical programs from which we expect to report clinical data during this year."

Purple Biotech is acquiring 100% of the shares of Immunorizon Ltd., a privately held, VC-backed biopharmaceutical company, in exchange for an aggregate upfront payment of $3.5 million in cash and an aggregate $3.5 million in American Depository Shares (ADSs), at a price per ADS equal to the NASDAQ volume-weighted average price of the Company’s ADSs for the 60-day period preceding the execution date of the agreement. Additional long-term development, regulatory and sales milestones are set at an aggregate amount of $94 million, with royalties of low single digit out of net sales. The accumulated transaction payments, excluding the upfront payment, will not exceed $100 million.

The ADSs will be issued to certain of the Immunorizon selling shareholders and will be subject to a three – month lock-up period, and the Company has agreed to file a resale registration statement with the U.S. Securities and Exchange Commission to register the ADSs for resale following the lock-up period. The selling shareholders of Immunorizon that shall receive ADSs as partial consideration in the transaction will be entitled to an ADS price adjustment during the 12-month period following the closing of the transaction, for the remaining ADSs held by them at such time (if any), in the event of an issuance by us of additional ADSs or other securities in certain types of financing transactions, at a price per ADS lower than the price per ADS under the agreement; provided that such price adjustment shall only be provided once.

The closing of the transaction is subject to satisfaction of customary closing conditions, expected within 10 business days.

This communication does not constitute an offer to sell or the solicitation of an offer to buy the ADSs or any securities, nor shall there be any sale of the ADSs or any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The ADSs of Purple Biotech will be issued to the certain selling shareholders of Immunorizon on a private placement basis pursuant to applicable exemptions from the prospectus requirements under applicable Israeli securities laws and from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities offered have not been registered under the U.S. Securities Act or any U.S. state or Israeli securities laws, and may not be offered or sold in the United States or in Israel, or to, or for the account or benefit of, United States persons or persons in Israel absent registration or any applicable exemption from the registration and/or prospectus requirements of the U.S. Securities Act and applicable U.S. state and/or Israeli securities law.

BIO-TECHNE RELEASES SECOND QUARTER FISCAL 2023 RESULTS

On February 2, 2023 Bio-Techne Corporation (NASDAQ: TECH) today reported its financial results for the second quarter ended December 31, 2022 (Press release, Bio-Techne, FEB 2, 2023, View Source [SID1234626729]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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Second Quarter FY2023 Highlights

Second quarter organic revenue increased by 4% (1% reported) to $271.6 million and 5% (3% reported) in the first half of fiscal 2023 to $541.2 million.
GAAP earnings per share1) (EPS) was $0.31 versus $0.49 one year ago. Delivered adjusted EPS1) of $0.47, consistent with the prior year, with foreign currency exchange negatively impacting EPS by $0.02 per share when compared to the prior year.
Growth in the ExoDx Prostate test continued with its fourth consecutive record quarter, as tests performed grew over 70% and revenue more than doubled year-over-year.
Successful execution and expansion of our cell and gene therapy platform with a record quarter in GMP protein sales and the launch of RNAscope Plus.
Enhancement of our ProteinSimple branded product offering with the launch of the MauriceFlex instrument and the opening of a state-of-the-art immunoassay product innovation and manufacturing facility.
1)On November 29, 2022, the company executed a four-for-one split of Bio-Techne’s common stock in the form of a stock dividend to all shareholders of record on November 14, 2022. All references made to share or per share amounts in this press release have been retroactively adjusted to reflect the effects of the stock split.

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted diluted EPS, adjusted earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, organic growth, and adjusted operating margin are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of non-GAAP Adjusted Financial Measures." A reconciliation of GAAP to non-GAAP financial measures is included in this press release.

"As we lap high revenue growth rates from last year, we continued to grow in Q2 despite a slow-down in Biotech funding and the Covid illness that is sweeping China," said Chuck Kummeth, President and CEO of Bio-Techne. "Within the quarter, we delivered much improved results in Europe. Also, our run-rate consumable business in the US and our Cell Therapy portfolio grew double-digits, indicating continued underlying strength in our end markets."

Kummeth continued, "Meanwhile, our ExoDx Prostate test continued its rapid adoption, with revenues more than doubling in the quarter compared to the prior year. Our portfolio of innovative tools, bioactive reagents, and technologies are aimed at some of the highest growth life science tools and diagnostic markets. This diverse portfolio combined with the investments we have made in our people, our facilities, and our new product pipeline, position the Company to execute on our strategic growth plan and deliver our long-term targets."

Second Quarter Fiscal 2023

Revenue

Net sales for the second quarter increased 1% to $271.6 million. Organic growth was 4% compared to the prior year with acquisitions contributing 1% and foreign currency exchange having an unfavorable impact of 4%.

GAAP Earnings Results

GAAP EPS was $0.31 per diluted share, versus $0.49 in the same quarter last year. Prior year GAAP EPS was favorably impacted by a non-recurring gain of approximately $28.4 million on our ChemoCentryx investment. GAAP operating income for the second quarter of fiscal 2023 increased 9% to $67.9 million, compared to $62.3 million in the second quarter of fiscal 2022. GAAP operating margin was 25.0%, compared to 23.2% in the second quarter of fiscal 2022. GAAP operating margin compared to prior year was positively impacted by a non-recurring impairment in the prior year related to our Eminence investment.

Non-GAAP Earnings Results

Adjusted EPS was $0.47 per diluted share in both the second quarter of fiscal 2023 and in the comparative period. Adjusted EPS remained flat year-over-year with unfavorable foreign currency exchange being offset by reduced net interest expense. Adjusted operating income for the second quarter of fiscal 2023 decreased 6% compared to the second quarter of fiscal 2022. Adjusted operating margin was 35.5%, compared to 38.3% in the second quarter of fiscal 2022. Adjusted operating margin decreased compared to the prior year due to unfavorable foreign currency exchange, higher inflation, and strategic growth investments including the Namocell acquisition.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the Company’s business segments, as highlighted below.

Protein Sciences Segment

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s second quarter fiscal 2023 net sales were $203.9 million, a decrease of 1% from $205.0 million for the second quarter of fiscal 2022. Organic growth for the segment was 2%, with foreign currency exchange having an unfavorable impact of 4% and acquisitions contributing 1%. Protein Sciences segment’s operating margin was 43.8% in the second quarter of fiscal 2023 compared to 45.5% in the second quarter of fiscal 2022. The segment’s operating margin compared to the prior year was negatively impacted by unfavorable foreign currency exchange, higher inflation, and the Namocell acquisition.

Diagnostics and Genomics Segment

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides in situ hybridization products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s second quarter fiscal 2023 net sales were $68.0 million, an increase of 5% from $64.5 million for the second quarter of fiscal 2022. Organic growth for the segment was 7%, with foreign exchange having an unfavorable impact of 2%. The Diagnostics and Genomics segment’s operating margin was 12.2% in the second quarter of fiscal 2023 compared to 16.9% in the second quarter of fiscal 2022. The segment’s operating margin was negatively impacted by foreign exchange, higher inflation, and the timing of strategic growth investments.

Conference Call

Bio-Techne will host an earnings conference call today, February 2, 2023 at 8:00 a.m. CST. To listen, please dial 1-877-407-9208 or 1-201-493-6784 for international callers, and reference conference ID 13735661. The earnings call can also be accessed via webcast through the following link View Source

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512- 2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 13735661. The replay will be available from 11:00 a.m. CST on Thursday, February 2, 2023, until 11:00 p.m. CST on Thursday, March 2, 2023.

Use of non-GAAP Adjusted Financial Measures:

This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:

Organic growth
Adjusted diluted earnings per share
Adjusted net earnings
Adjusted tax rate
Adjusted gross margin
Adjusted operating income
Adjusted operating margin
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
Adjusted EBITDA
We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, as well as the impact of partially-owned consolidated subsidiaries. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period. Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. There was no revenue from partially-owned consolidated subsidiaries for the quarter ended December 31, 2022 due to the sale of Changzhou Eminence Biotechnology Co., Ltd. (Eminence) in the first quarter of fiscal 2023. Revenue from partially-owned consolidated subsidiaries was $2.0 million for the six months ended December 31, 2022.

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, adjusted EBITDA, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including non-recurring costs, goodwill and long-lived asset impairments, and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements, goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity. The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries in the calculation of our non-GAAP financial measures as the revenues and expenses are not fully attributable to the Company.

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes stock-based compensation expense, which is inclusive of the employer portion of payroll taxes on those stock awards, restructuring, impairments of equity method investments, gain and losses from investments, and certain adjustments to income tax expense.

Impairments of equity investments are excluded as they are not part of our day-to-day operating decisions. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded.

Costs related to restructuring activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release.

Verastem Oncology Outlines Key 2023 Strategic Priorities and Upcoming Catalysts for Advancing Avutometinib as a Backbone of Therapy for RAS Pathway-Driven Cancers

On February 2, 2023 Verastem Oncology (Nasdaq:VSTM), a biopharmaceutical company committed to advancing new medicines for patients battling cancer, reported key strategic priorities and upcoming catalysts to support its lead compound RAF/MEK clamp avutometinib in RAS pathway-driven cancers (Press release, Verastem, FEB 2, 2023, View Source [SID1234626730]).

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"Building on the Breakthrough Therapy designation for the combination of avutometinib with defactinib in recurrent LGSOC and the positive results from the interim analysis of Part A of the RAMP 201 trial, we are working rapidly to bring forward the first U.S. Food and Drug Administration (FDA)-approved therapy for these patients who deserve better options," said Brian Stuglik, CEO of Verastem Oncology. "Further, we plan to efficiently advance our development program and provide early data read-outs with avutometinib combinations across other RAS pathway-driven cancers with high unmet need, including combinations in KRAS G12C mutant NSCLC and frontline metastatic pancreatic cancer. With the recently announced financing, we have strengthened our balance sheet and cash runway to deliver on these key initiatives."

2022 and Recent Accomplishments

Completed target enrollment in the RAMP 201 trial evaluating avutometinib + defactinib in recurrent LGSOC and reported positive interim data from Part A that included blinded independently confirmed response rates in both KRAS Mutant and KRAS wild-type tumors with a favorable safety and tolerability profile.
The combination of avutometinib and defactinib was selected as the go-forward treatment regimen for the recurrent LGSOC program.
In the KRAS G12C Mutant NSCLC program, the RAMP 203 trial, evaluating the combination of avutometinib with Amgen’s LUMAKRASTM (sotorasib), advanced to final dose level of 4 mg avutometinib with 960 mg of LUMAKRASTM and enrollment was initiated in the RAMP 204 trial of avutometinib with Mirati’s KRAZATI (adagrasib).
Initiated the RAMP 205 trial evaluating avutometinib and defactinib with standard of care chemotherapy in frontline metastatic pancreatic cancer.
Secured up to $150 Million in non-dilutive financing from Oxford Finance LLC and entered into a definitive agreement to sell up to approximately 2.1 million shares of its Series B Convertible Preferred Stock to affiliates of BVF Partners L.P. in a private placement to raise aggregate gross proceeds of up to approximately $60 million in two tranches. On January 27, 2023 Verastem Oncology closed on the initial tranche of 1.2 million shares of its Series B Convertible Preferred Stock (the "Preferred Stock") with gross proceeds of $30 million.
2023 Strategic Priorities

Initiate confirmatory study of avutometinib + defactinib in recurrent LGSOC upon agreement with the FDA on study design in support of filing for accelerated approval.
Advance KRAS G12C mutant NSCLC program with initial read-outs of the RAMP 203 and RAMP 204 trials evaluating avutometinib in combination with LUMAKRASTM (sotorasib) or KRAZATITM (adagrasib).
Determine recommended Phase 2 dose and complete enrollment of the initial Phase 2 expansion cohort of the RAMP 205 trial evaluating avutometinib and defactinib plus standard of care chemotherapy in frontline metastatic pancreatic cancer.
Progress signal-finding, investigator-initiated trial program of combinations with avutometinib in additional RAS pathway-driven cancers with high unmet need.
Anticipated 2023 Milestones and Catalysts

Q1-2023

Determine recommended Phase 2 dose for RAMP 203 trial (KRAS G12C NSCLC avutometinib + LUMAKRASTM (sotorasib)) combination trial.
Launch education campaign in LGSOC to differentiate LGSOC from high-grade ovarian cancer, highlight signs and symptoms and younger age at diagnosis.
Q2-2023

Present updated results of Part A of RAMP 201 trial (LGSOC avutometinib + defactinib) at a scientific medical conference.
Finalize confirmatory trial study design for recurrent LGSOC program.
Present updated results of investigator-sponsored trial of avutometinib and everolimus in KRAS-mutant NSCLC.
2H-2023

Initiate confirmatory study of avutometinib and defactinib in recurrent LGSOC.
Report initial read-out of safety and preliminary efficacy of the RAMP 203 trial (KRAS G12C NSCLC avutometinib + LUMAKRASTM (sotorasib)) combination trial.
Provide initial safety read-out and recommended dose of RAMP 204 (KRAS G12C NSCLC avutometinib + KRAZATITM (adagrasib)) combination trial.
Determine recommended Phase 2 dose and complete enrollment of the initial Phase 2 expansion cohort of RAMP 205 (frontline metastatic pancreatic cancer avutometinib and defactinib plus standard of care).
Financial Update

As of December 31, 2022, Verastem Oncology had preliminary unaudited cash and short-term investments of $87.9 million.

On January 24, 2023, Verastem Oncology announced that it had entered into a definitive agreement to sell up to approximately 2.1 million shares of Preferred Stock to affiliates of BVF Partners L.P. in a private placement to raise aggregate gross proceeds of up to approximately $60 million in two tranches, before deducting fees to the placement agent and other estimated offering expenses payable by Verastem Oncology. Verastem Oncology closed on the initial tranche of 1.2 million shares of Preferred Stock for a purchase price of $30 million on January 27, 2023.

Upon closing of the initial tranche of the private placement, Verastem Oncology achieved the Term B Milestone under the Oxford Loan and Security Agreement which will allow Verastem Oncology to draw an additional $15M in term loans ("Term B Loan").

About Avutometinib (VS-6766)

Avutometinib is a RAF/MEK clamp that induces inactive complexes of MEK with ARAF, BRAF and CRAF potentially creating a more complete and durable anti-tumor response through maximal RAS pathway inhibition. Avutometinib is currently in late-stage development.

In contrast to other MEK inhibitors, avutometinib blocks both MEK kinase activity and the ability of RAF to phosphorylate MEK. This unique mechanism allows avutometinib to block MEK signaling without the compensatory activation of MEK that appears to limit the efficacy of other inhibitors. The U.S. Food and Drug Administration granted Breakthrough Therapy designation for the combination of Verastem Oncology’s investigational RAF/MEK clamp avutometinib, with defactinib, its FAK inhibitor, for the treatment of all patients with recurrent low-grade serous ovarian cancer (LGSOC) regardless of KRAS status after one or more prior lines of therapy, including platinum-based chemotherapy.

Verastem Oncology is currently conducting clinical trials with its RAF/MEK clamp avutometinib in RAS-driven tumors as part of its (Raf And Mek Program). RAMP 201 is a registration-directed trial of avutometinib in combination with defactinib in patients with recurrent LGSOC. Verastem Oncology has established clinical collaborations with Amgen and Mirati to evaluate LUMAKRAS (sotorasib) and KRAZATI (adagrasib) in combination with avutometinib in KRAS G12C mutant NSCLC as part of the RAMP 203 and RAMP 204 trials, respectively. As part of the "Therapeutic Accelerator Award" Verastem Oncology received from PanCAN, Verastem Oncology is conducting RAMP 205, a Phase 1b/2 clinical trial evaluating avutometinib and defactinib with gemcitabine/nab-paclitaxel in patients with front-line metastatic pancreatic cancer.