On February 4, 2020 Aflac Incorporated (NYSE: AFL) reported its fourth quarter results (Press release, Aflac, FEB 4, 2020, View Source [SID1234553849]).

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Total revenues were $5.6 billion during the fourth quarter of 2019, compared with $5.1 billion in the fourth quarter of 2018. Net earnings were $782 million, or $1.06 per diluted share, compared with $525 million, or $0.69 per diluted share a year ago.

Net earnings in the fourth quarter of 2019 included pretax net realized investment gains of $34 million, or $0.05 per diluted share, compared with pretax net losses of $322 million, or $0.42 per diluted share a year ago. Included in those net gains were $9 million of losses related to impairments and loan loss reserve changes. Pretax net realized gains also included $36 million in gains from changes in the fair value of equity securities and $10 million of losses from certain derivatives and foreign currency activities, as well as a $17 million gain from sales and redemptions.

The average yen/dollar exchange rate* in the fourth quarter of 2019 was 108.79, or 3.8% stronger than the average rate of 112.87 in the fourth quarter of 2018. For the full year, the average exchange rate was 109.07, or 1.2% stronger than the rate of 110.39 a year ago.

Adjusted earnings* in the fourth quarter were $756 million, compared with $779 million in the fourth quarter of 2018, reflecting a decrease of 3.0%. Adjusted earnings per diluted share* increased 1.0% to $1.03 in the quarter and included $3 million of pretax variable investment income on alternative investments, in line with the company’s expectations. The stronger yen/dollar exchange rate impacted adjusted earnings per diluted share by $0.02. Adjusted earnings per diluted share excluding the impact of foreign currency* decreased 1.0% to $1.01.

For the full year of 2019, total revenues were up 2.5% to $22.3 billion, compared with $21.8 billion for the full year of 2018. Net earnings were $3.3 billion, or $4.43 per diluted share, compared with $2.9 billion, or $3.77 per diluted share, for the full year of 2018. Adjusted earnings for the full year of 2019 were $3.3 billion, or $4.44 per diluted share, compared with $3.2 billion, or $4.16 per diluted share, in 2018. Adjusted earnings also included $32 million of pretax variable investment income on alternative investments, of which $21 million was above the company’s expectations. The stronger yen/dollar exchange rate impacted adjusted earnings per diluted share by $0.02.

Total investments and cash at the end of December 2019 were $138.1 billion, compared with $126.2 billion at December 31, 2018. In the fourth quarter, Aflac Incorporated repurchased $470 million, or 8.9 million of its common shares. For the full year, Aflac repurchased $1.6 billion, or 32.0 million of its common shares. At the end of December, the company had 37.1 million remaining shares authorized for repurchase.

Shareholders’ equity was $29.0 billion, or $39.84 per share, at December 31, 2019, compared with $23.5 billion, or $31.06 per share, at December 31, 2018. Shareholders’ equity at the end of the fourth quarter included a net unrealized gain on investment securities and derivatives of $8.5 billion, compared with a net unrealized gain of $4.2 billion at December 31, 2018. Shareholders’ equity at the end of the fourth quarter also included an unrealized foreign currency translation loss of $1.6 billion, compared with an unrealized foreign currency translation loss of $1.8 billion at December 31, 2018. The annualized return on average shareholders’ equity in the fourth quarter was 10.7% and 12.6% for the full year.

Shareholders’ equity excluding AOCI* was $22.3 billion, or $30.74 per share at December 31, 2019, compared with $21.3 billion, or $28.22 per share, at December 31, 2018. The annualized adjusted return on equity excluding foreign currency impact* in the fourth quarter was 13.4% and 15.1% for the full year.

AFLAC JAPAN

In yen terms, Aflac Japan’s net premium income was ¥345.8 billion for the quarter, or 1.6% lower than a year ago, mainly due to limited-pay products reaching paid-up status. Net investment income, net of amortized hedge costs*, decreased 1.4% to ¥67.1 billion. Total revenues in yen declined 1.6% to ¥413.9 billion. Pretax adjusted earnings in yen for the quarter declined 8.8% on a reported basis and 7.2% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment was 19.8%, compared with 21.4% a year ago. This reflects a favorable benefit ratio in 2018 and elevated expenses driven by reinvestment in the business in 2019.

For the full year, net premium income in yen was ¥1.4 trillion, or 1.1% lower than a year ago. Net investment income, net of amortized hedge costs, increased 2.2% to ¥271.3 billion. Total revenues in yen were down 0.6% to ¥1.7 trillion. Pretax adjusted earnings were ¥354.8 billion, or 0.2% higher than a year ago.

In dollar terms, net premium income increased 2.1% to $3.2 billion in the fourth quarter. Net investment income, net of amortized hedge costs, increased 2.7% to $618 million. Total revenues increased by 2.2% to $3.8 billion. Pretax adjusted earnings declined 5.1% to $757 million.

For the full year, net premium income in dollars was $12.8 billion, or 0.1% higher than a year ago. Net investment income, net of amortized hedge costs, increased 3.9% to $2.5 billion. Total revenues were up 0.7% to $15.3 billion. Pretax adjusted earnings were $3.3 billion, or 1.7% higher than a year ago.

For the quarter, new annualized premium sales (sales) for protection-type first sector and third sector products decreased 23.6% to ¥18.1 billion, and total sales decreased 23.4% to ¥18.5 billion, or $170 million.

For the full year, sales for protection-type first sector and third sector products decreased 16.8% to ¥78.2 billion, and total sales decreased 16.9% to ¥79.7 billion, or $731 million.

AFLAC U.S.

Aflac U.S. net premium income rose 1.1% to $1.4 billion in the fourth quarter. Net investment income decreased 1.6% to $180 million. Total revenues were up 1.6% to $1.6 billion. Pretax adjusted earnings were $275 million, 0.4% higher than a year ago, despite higher anticipated expenses in the quarter. The pretax adjusted profit margin for the U.S. segment was 16.8%, compared with 17.0% a year ago.

For the full year, net premium income rose 1.8% to $5.8 billion. Net investment income decreased slightly by 1.0% to $720 million. Total revenues were up 1.7% to $6.6 billion. Pretax adjusted earnings were $1.3 billion, 1.0% lower than a year ago.

Aflac U.S. sales decreased 0.7% in the quarter to $534 million. For the full year, total new sales decreased 1.3% to $1.6 billion.

CORPORATE AND OTHER

For the quarter, total revenue increased 14.0% to $106 million, reflecting net investment income of $50 million and lower corporate expenses. Net investment income, which increased $12 million, benefited from a $27 million pretax contribution from the company’s enterprise corporate hedging program. Pretax adjusted earnings were a loss of $9 million, compared with a loss of $26 million a year ago.

For the full year, total revenue increased 15.9% to $393 million, reflecting net investment income of $177 million. Net investment income, which increased $64 million, benefited from a $89 million pretax contribution from the company’s enterprise corporate hedging program. Pretax adjusted earnings were a loss of $72 million, compared with a loss of $139 million a year ago.

DIVIDEND

The board of directors declared the first quarter dividend of $0.28 per share, payable on March 2, 2020 to shareholders of record at the close of business on February 19, 2020.

OUTLOOK

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: "We are pleased with the company’s overall performance for the year. Total pretax adjusted earnings increased 2.5%, which is particularly impressive considering our extensive investments to drive future earned premium growth, which will remain a critical strategic focus for 2020. I am pleased with the Board’s decision to increase the dividend, coming off our 37th consecutive year of dividend increases and a recognition of the stability of our earnings and capital generation. It also demonstrates our commitment to rewarding our shareholders.

"As expected, Aflac Japan saw a decline in total earned premium in 2019 mainly due to limited-pay policies reaching paid-up status, which has minimal effect on profitability. Additionally, as we anticipated, full-year third sector and first sector protection sales were down in the mid-teens, primarily reflecting reduced sales of our cancer insurance through Japan Post and following a strong 2018 with the launch of our revised cancer insurance product. Earned premium growth for third and first sector protection products was 1.3%, which was in line with our expectation. As communicated on our 2020 outlook call, we expect a decline in the range of 0.7% in third sector and first sector protection earned premium for the year.

"With respect to our U.S. operations, our financial results for the year were consistent with our expectations and reflected elevated expenses as a result of ongoing investments in our platform, distribution and customer experience. While sales were down slightly for the year, earned premium grew 1.8%. In line with what we communicated on the 2020 outlook call, we expect Aflac U.S. to generate earned premium growth in the range of 1% and maintain stable persistency. We will continue to invest in product development and efforts to facilitate producer growth and productivity, including the measured roll-out of Aflac Dental and Vision that was initiated in January.

"Turning to investments, net investment income closed out a strong year in the face of lower rates in the U.S. and Japan, while at the same time positioning the credit quality of the portfolio to perform well should there be economic weakness. Consistent with Aflac Global Investments’ business strategy, we closed on the acquisition of a non-controlling minority interest in Varagon Capital Partners in January 2020, where we are also making a multi-year commitment to build a portfolio of middle market loans. A natural extension of our external manager program, we expect this strategy to deliver incremental value in future years.

"We remain committed to maintaining strong capital ratios on behalf of our policyholders and maintaining a strong risk-based capital ratio in the U.S. and solvency margin ratio in Japan. We will also continue to reinvest in our business, recognizing that prudent investment in our platform is also critical to our growth strategy and driving efficiencies that ultimately will impact the bottom line. We balance reinvestment with a focus on increasing the dividend and repurchasing shares. We expect share repurchase will be in the range of $1.3 to $1.7 billion in 2020, with the range allowing us to be more tactical in our deployment strategy. As always, this assumes stable capital conditions and the absence of compelling alternatives.

"As we look to 2020, our objective is to produce stable adjusted earnings per diluted share of $4.32 to $4.52, assuming the 2019 weighted-average exchange rate of 109.07 yen to the dollar. As always, we are working very hard to achieve our earnings-per-share objective while also ensuring we deliver on our promise to policyholders."

*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.

On February 4, 2020 Neurocrine Biosciences, Inc. (NASDAQ: NBIX) reported its financial results for the fourth quarter and full-year ended December 31, 2019 and provided full-year 2020 financial expense guidance (Press release, Neurocrine Biosciences, FEB 4, 2020, View Source [SID1234553833]).

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"I am very pleased with the accomplishments of Neurocrine Biosciences this past year, including our quarterly and full year business results. We anticipate an exciting year ahead as we continue to build a leading global neuroscience-focused biopharmaceutical company," said Kevin Gorman, Ph.D., Chief Executive Officer of Neurocrine Biosciences. "In 2020, we will continue to focus on educating healthcare providers, caregivers and patients to help even more people suffering from the debilitating movements caused by tardive dyskinesia. In addition, we look forward to helping patients with Parkinson’s disease with the anticipated approval of opicapone and the potential expanded use of elagolix to help women with uterine fibroids. By mid-2020, our activities position us to have three approved treatments in four indications and three additional ongoing pivotal studies."

Fourth Quarter and Full Year Net Product Sales Highlights:

INGREZZA net product sales for the fourth quarter and full year 2019 were $238 million and $753 million respectively, representing an increase of over 80% vs. prior period comparisons.

Continued strength in INGREZZA new patient additions in the fourth quarter.

End of fourth quarter 2019 days-on-hand channel inventory increased relative to the third quarter 2019 due to timing of quarter-end purchases resulting in an approximate $11 million benefit to net product sales.

Financial Highlights:

R&D investment increased in the fourth quarter of 2019 versus the fourth quarter of 2018 primarily as a result of the Company’s ongoing activities in Congenital Adrenal Hyperplasia studies and in gene therapy partially offset by prior year spending on the Tourette syndrome program.

SG&A investment increased in the fourth quarter of 2019 versus the fourth quarter of 2018, primarily as a result of the patient-focused disease state awareness campaign, "Talk About TD", and an increase in the Branded Pharmaceutical Drug, or BPD, fee expense.

IPR&D expense of $36 million in the fourth quarter of 2019 reflects the Company’s collaboration with Xenon Pharmaceuticals specific to NBI-921352 (XEN901) for epilepsy.

Fourth quarter of 2019 GAAP net income and diluted earnings per share (EPS) were $34 million and $0.35, respectively, compared to $18 million and $0.19, respectively, in the fourth quarter of 2018.

Fourth quarter of 2019 non-GAAP net income and diluted earnings per share (EPS) were $102 million and $1.05, respectively, compared to $38 million and $0.40, respectively, in the fourth quarter of 2018.

As of December 31, 2019, the Company had cash, cash equivalents and marketable securities totaling $970 million.

A reconciliation of GAAP to non-GAAP quarterly financial results can be found in Tables 3 through 5 at the end of this earnings release.

Recent Events

In December 2019, the Company entered into a license and collaboration agreement with Xenon, a clinical-stage biopharmaceutical company. Pursuant to the terms of the agreement, the Company gained an exclusive license to NBI-921352 (formerly referred to as XEN901), a clinical-stage selective Nav1.6 sodium channel inhibitor with potential in SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other forms of epilepsy, including focal epilepsy. Upon filing of an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) in mid-2020, the Company intends to start a Phase II study in SCN8A-DEE patients in 2H 2020.

In January 2020, the Company announced an option agreement that was originally signed in 2019 with Idorsia granting the Company an option to license ACT-709478, a potent, selective, orally-active, and brain penetrating T-type calcium channel blocker, in clinical development for the treatment of a rare pediatric epilepsy. A Phase II study in a rare pediatric epilepsy is planned in 2H 2020 dependent upon IND application acceptance by the FDA in mid-2020.

Full-Year 2020 Financial Guidance

GAAP and Non-GAAP expense guidance range reflects increased investment in R&D programs including three registrational programs, meaningful investments across early stage programs including Voyager and Xenon collaborations, continued investment in INGREZZA and marketing costs associated with the anticipated launch of opicapone.

GAAP-only guidance includes approximately $100 million of share-based compensation and a $20 million expected milestone payment to BIAL connected with the expected approval of opicapone by the FDA during the second quarter. GAAP-only guidance does not include any other potential milestones or in-process research and development costs associated with current collaborations or future business development activities.

Conference Call and Webcast Today at 4:30 PM Eastern Time

Neurocrine Biosciences will hold a live conference call and webcast today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants can access the live conference call by dialing 877-876-9173 (US) or 785-424-1667 (International) using the conference ID: NBIX. The webcast can also be accessed on Neurocrine Biosciences’ website under Investors at www.neurocrine.com. A replay of the webcast will be available on the website approximately one hour after the conclusion of the event and will be archived for approximately one month.

About INGREZZA (valbenazine) Capsules

INGREZZA, a selective vesicular monoamine transporter 2 (VMAT2) inhibitor, is the first FDA-approved product indicated for the treatment of adults with tardive dyskinesia, a condition associated with uncontrollable, abnormal and repetitive movements of the face, torso, and/or other body parts.

INGREZZA is thought to work by reducing the amount of dopamine released in a region of the brain that controls movement and motor function, helping to regulate nerve signaling in adults with tardive dyskinesia. VMAT2 is a protein in the brain that packages neurotransmitters, such as dopamine, for transport and release from presynaptic neurons. INGREZZA, developed in Neurocrine’s laboratories, is novel in that it selectively inhibits VMAT2 with no appreciable binding affinity for VMAT1, dopaminergic (including D2), serotonergic, adrenergic, histaminergic, or muscarinic receptors. Additionally, INGREZZA can be taken for the treatment of tardive dyskinesia as one capsule, once-daily, together with psychiatric medications such as antipsychotics or antidepressants.

Important Safety Information

Contraindications

INGREZZA is contraindicated in patients with a history of hypersensitivity to valbenazine or any components of INGREZZA. Rash, urticaria, and reactions consistent with angioedema (e.g., swelling of the face, lips, and mouth) have been reported.

Warnings & Precautions

Somnolence

INGREZZA can cause somnolence. Patients should not perform activities requiring mental alertness such as operating a motor vehicle or operating hazardous machinery until they know how they will be affected by INGREZZA.

QT Prolongation

INGREZZA may prolong the QT interval, although the degree of QT prolongation is not clinically significant at concentrations expected with recommended dosing. INGREZZA should be avoided in patients with congenital long QT syndrome or with arrhythmias associated with a prolonged QT interval. For patients at increased risk of a prolonged QT interval, assess the QT interval before increasing the dosage.

Parkinsonism

INGREZZA may cause Parkinsonism in patients with tardive dyskinesia. Parkinsonism has also been observed with other VMAT2 inhibitors. Reduce the dose or discontinue INGREZZA treatment in patients who develop clinically significant parkinson-like signs or symptoms.

Adverse Reactions

The most common adverse reaction (≥5% and twice the rate of placebo) is somnolence. Other adverse reactions (≥2% and >placebo) include: anticholinergic effects, balance disorders/falls, headache, akathisia, vomiting, nausea, and arthralgia.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit MedWatch at www.fda.gov/medwatch or call 1-800-FDA-1088.

On February 4, 2020 Samus Therapeutics, Inc. ("Samus" or the "Company"), a privately held, Boston-based, biopharmaceutical company developing epichaperome inhibitors to intervene in pathological processes and initiate the degradation of disease-associated proteins, reported that Dick Bagley, President and Interim Chief Executive Officer, will present at the BIO CEO & Investor Conference in New York on Tuesday, February 11 at 9:15 a.m. ET (Press release, Samus Therapeutics, FEB 4, 2020, View Source;investor-conference-300998025.html [SID1234553850]).

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On February 4, 2020 Zai Lab Limited (NASDAQ: ZLAB), a China and U.S.-based innovative commercial stage biopharmaceutical company, reported that the first patients have been dosed in two separate clinical studies (Press release, Zai Laboratory, FEB 4, 2020, View Source [SID1234553834]):

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i)Phase 1b dose escalation and expansion clinical study of niraparib, in combination with MGD013, for the treatment of patients with advanced or metastatic gastric adenocarcinoma or gastroesophageal junction adenocarcinoma (collectively as gastric cancer) who failed prior treatment, and

ii)Registrational bridging study of margetuximab, in combination with chemotherapy, for the treatment of patients with metastatic HER2-positive breast cancer, respectively.
Niraparib plus MGD013 Gastric Cancer Phase 1b Study

The Phase 1b clinical study is a single-arm, open-label, dose escalation and expansion study assessing the safety and antitumor activity of niraparib, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor, in combination with MGD013, a first-in-class, bispecific PD-1 x LAG-3 DART molecule, in patients with advanced or metastatic gastric cancer who failed prior treatment.

The primary endpoint of the study is assessing the safety of niraparib in combination with MGD013 in patients with advanced gastric cancer and determining the recommended phase 2 dose. Secondary endpoints include objective response rate (ORR), disease control rate (DCR), progression-free survival (PFS), and overall survival (OS).

Margetuximab plus Chemotherapy HER2-Positive Metastatic Breast Cancer Registrational Bridging Study

The registrational bridging trial is a randomized, open-label study evaluating the efficacy and safety of margetuximab, an Fc-engineered, monoclonal antibody that targets HER2, plus chemotherapy compared to trastuzumab plus chemotherapy in patients with metastatic HER2-positive breast cancer who have received prior anti-HER2 therapies.

The primary endpoint of the study is PFS. Secondary endpoints include OS, ORR, duration of response (DoR) and clinical benefit rate (CBR), as well as safety and pharmacokinetic profile of margetuximab in Chinese patients.

Zai Lab’s partner MacroGenics has submitted a Biologics License Application (BLA) for margetuximab for the treatment of patients with metastatic HER2-positive breast cancer in combination with chemotherapy in December 2019. The submission is based on the safety and efficacy results of the pivotal Phase 3 SOPHIA study. Pending acceptance of the BLA, MacroGenics anticipates a Prescription Drug User Fee Act (PDUFA) date by the end of 2020.

About Gastric Cancer in China

Gastric cancer is the second most common cancer in China (679,100 newly diagnosed cases in 2015) and the second leading cause of death in China (498,000 deaths in 2015). The 5-year overall survival rate of gastric cancer is only 35.9%. Current therapies include surgery, chemotherapy, radiotherapy and targeted therapy. There is limited effective treatment option for patients with advanced or metastatic gastric cancer who have failed prior treatment in China and globally.

About Breast Cancer in China

Breast cancer is the most common cancer in Chinese women, with 272,400 newly diagnosed cases and 70,700 deaths in 2015. Approximately 25%~30% of all types of late stage breast cancer are HER2-positive. The 5-year overall survival rate of breast cancer is 83%. However, after treatment failure or disease progression after second-line anti-HER2 treatment, there is no approved effective treatment in last-line setting in China and globally.

On February 4, 2020 NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally integrated solutions, reported the Company will release its fourth quarter and full year 2019 earnings results on Thursday, February 20, 2020 after the close of the market (Press release, NuVasive, FEB 4, 2020, View Source [SID1234553851]).

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NuVasive will hold a conference call on Thursday, February 20, 2020, at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the fourth quarter and full year 2019. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company’s website at www.nuvasive.com.

After the live webcast, the call will remain available on NuVasive’s website through March 20, 2020. In addition, a telephone replay of the call will be available until February 27, 2020. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers. Please use pin number: 13698333.