On July 31, 2019 McKesson Corporation (NYSE:MCK) reported that revenues for the first quarter ended June 30, 2019, were $55.7 billion compared to $52.6 billion a year ago, an increase of 6% on a reported basis and an increase of 7% on an FX-adjusted basis (Press release, McKesson, JUL 31, 2019, View Source [SID1234537960]).

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On the basis of U.S. generally accepted accounting principles ("GAAP"), first-quarter earnings per diluted share from continuing operations was $2.27, compared to a loss per diluted share of $(0.69) a year ago.

First-quarter Adjusted Earnings per diluted share was $3.31, an increase of 14% compared to $2.90 a year ago, primarily driven by growth in the U.S. Pharmaceutical and Specialty Solutions segment and a lower share count, partially offset by a higher tax rate.

"McKesson is off to a strong start in fiscal 2020, and our first-quarter earnings performance exceeded our expectations," said Brian Tyler, chief executive officer. "Based on the momentum from our first-quarter results and our confidence in the full year outlook, we are raising our previous guidance range for fiscal 2020 and now expect Adjusted Earnings per diluted share of $14.00 to $14.60."

For the first quarter, McKesson used cash from operations of $51 million, and invested $111 million internally, resulting in negative free cash flow of $162 million. During the quarter, McKesson paid $46 million for acquisitions, and returned $759 million of cash to shareholders via $684 million of common stock repurchases and $75 million of dividend payments. The Board of Directors also approved a 5% increase in the quarterly dividend to $0.41 per share. The company ended the quarter with cash and cash equivalents of $1.9 billion.

U.S. Pharmaceutical and Specialty Solutions Segment

First-quarter revenues were $44.2 billion, up 8%, driven primarily by market growth, partially offset by branded to generic conversions. GAAP operating profit was $579 million and GAAP operating margin was 1.31%. Adjusted operating profit was $600 million, up 11%, and adjusted operating margin was 1.36%.
European Pharmaceutical Solutions Segment

First-quarter revenues were $6.7 billion, down 3% on a reported basis and up 3% on an FX-adjusted basis, driven primarily by market growth in the pharmaceutical distribution business. GAAP operating profit was $5 million and GAAP operating margin was 0.07%. Adjusted operating profit was $35 million, down 53%, and adjusted operating margin was 0.52%. On an FX-adjusted basis, adjusted operating profit was $37 million, down 50%, and adjusted operating margin was 0.52%, driven by the weak retail pharmacy environment in the U.K.
Medical-Surgical Solutions Segment

First-quarter revenues were $1.9 billion, up 12%, driven by an acquisition and growth in the Primary Care and Extended Care businesses. The aforementioned acquisition closed in the prior fiscal year on June 1, 2018, and has now been fully lapped. GAAP operating profit was $125 million and GAAP operating margin was 6.57%. Adjusted operating profit was $159 million, up 27%, and adjusted operating margin was 8.36%.
Other remaining businesses (primarily including McKesson Canada, McKesson Prescription Technology Solutions (MRxTS) and the equity method investment in the Change Healthcare Joint Venture (Change Healthcare))

First-quarter revenues were $3.0 billion, down 1% on a reported basis and up 2% on an FX-adjusted basis, driven primarily by growth in our MRxTS business. GAAP operating profit was $141 million and adjusted operating profit was $276 million, up 30%. On an FX-adjusted basis, adjusted operating profit was $279 million, up 31%.
Company Updates

Change Healthcare, Inc., a leading independent healthcare technology company, began trading on the Nasdaq Global Select Market under the trading symbol "CHNG" on June 27, 2019.
For the fourth year in a row, McKesson was named a ‘Best Place to Work’ for Disability Inclusion. McKesson earned a top-ranking score of 100 on the 2019 Disability Equality Index (DEI), a joint initiative of the American Association of People with Disabilities (AAPD) and Disability:IN.
Dr. Ken Washington joined McKesson’s Board of Directors as a new independent director effective July 1, 2019.
Fiscal 2020 Outlook and Change Healthcare Update

McKesson raised fiscal 2020 Adjusted Earnings per diluted share guidance to $14.00 – $14.60 from a range of $13.85 – $14.45.

Following the completion of the Change Healthcare, Inc. IPO, McKesson owns approximately 58.5% of Change Healthcare, reduced from 70%. McKesson will continue to report the equity income from its interest in Change Healthcare based on its revised equity ownership percentage and with a one-month lag.

McKesson reaffirmed the guidance range for adjusted equity earnings from Change Healthcare of approximately $250 million to $270 million in fiscal 2020. This range reflects McKesson’s revised equity ownership, and includes the expected benefit of lower interest expense for Change Healthcare driven by its repayment of long-term debt.

Dividend Declaration

The company’s Board of Directors yesterday declared a 5% increase in the regular quarterly dividend to 41 cents per share of common stock. The dividend will be payable on October 1, 2019, to stockholders of record on September 3, 2019.

Conference Call Details

The company has scheduled a conference call for today, Wednesday, July 31st, at 5:00 PM ET to discuss the company’s financial performance. A live audio webcast of the conference call will be available on McKesson’s Investor Relations website at View Source The conference call can also be accessed by dialing 323-994-2093. The password is ‘McKesson’. A telephonic replay of this conference call will be available for five calendar days. For individuals wishing to listen to the replay, the dial-in number is 719-457-0820 and the pass code is 5579684. An archive of the conference call will also be available on the company’s Investor Relations website at View Source

Upcoming Investor Events

McKesson management will be participating in the following investor conference:

Morgan Stanley 17th Annual Global Healthcare Conference, September 9-11, 2019, in New York, New York.
Audio webcasts will be available live and archived on the company’s Investor Relations website at View Source A complete listing of upcoming events for the investment community is available on the company’s Investor Relations website.

Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, transaction-related expenses and adjustments, LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments. A reconciliation of McKesson’s GAAP financial results to Adjusted Earnings is provided in Schedules 2 and 3 of the financial statement tables included with this release.

The company does not provide forward-looking guidance on a GAAP basis prospectively as McKesson is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

FX-Adjusted

McKesson also presents its financial results on an FX-adjusted basis. The company conducts business worldwide in local currencies, including the Euro, British pound and Canadian dollar. As a result, the comparability of the financial results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. FX-adjusted information is presented to provide a framework for assessing how the company’s business performed excluding the effect of foreign currency exchange rate fluctuations. The supplemental FX-adjusted information of the company’s GAAP financial results and Adjusted Earnings (Non-GAAP) is provided in Schedule 3 of the financial statement tables included with this release.

Free Cash Flow

McKesson also provides free cash flow, a non-GAAP measure. Free cash flow is defined as net cash provided by operating activities less payments for property, plant and equipment and capitalized software expenditures, as outlined in the company’s condensed consolidated statements of cash flows.

On July 31, 2019 PRA Health Sciences, Inc. ("PRA," "we," "us" or the "Company") (NASDAQ: PRAH) reported financial results for the quarter ended June 30, 2019 (Press release, PRA Health Sciences, JUL 31, 2019, View Source [SID1234537978]).

"Our second quarter financial results produced a record level of net new business awards, solid revenue growth, and continued margin expansion, all of which were in line with our expectations," said Colin Shannon, PRA’s Chief Executive Officer. "Although we have modified our expectations around our 2019 revenue targets, market demand remains strong and our objective of delivering broad and flexible services to our clients remains our top priority."

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Net new business for our Clinical Research segment for the three months ended June 30, 2019 was $670.7 million, representing a net book-to-bill ratio of 1.24 for the period. This net new business contributed to an ending backlog of $4.5 billion at June 30, 2019.

For the three months ended June 30, 2019, revenue was $763.3 million, which represents growth of 5.6%, or $40.5 million, compared to the three months ended June 30, 2018 at actual foreign exchange rates. On a constant currency basis, revenue grew $49.1 million, an increase of 6.8% compared to the second quarter of 2018. By segment, the Clinical Research segment generated revenues of $702.2 million, while the Data Solutions segment generated revenues of $61.1 million.

Direct costs, exclusive of depreciation and amortization, were $386.2 million during the three months ended June 30, 2019 compared to $381.7 million for the three months ended June 30, 2018 at actual foreign exchange rates. On a constant currency basis, direct costs increased $15.6 million compared to the second quarter of 2018. Consistent with the first quarter of 2019, the increase in direct costs was primarily driven by an increase in labor-related costs in our Clinical Research segment as we continue to hire billable staff to ensure appropriate staffing levels. Direct costs were 50.6% of revenue during the second quarter of 2019 compared to 52.8% of revenue during the second quarter of 2018.

Selling, general and administrative expenses were $98.8 million during the three months ended June 30, 2019 compared to $91.2 million for the three months ended June 30, 2018. Selling, general and

administrative costs were 12.9% of revenue during the second quarter of 2019 compared to 12.6% of revenue during the second quarter of 2018. The increase in selling, general and administrative expenses is primarily related to an increase in salaries and related benefits, including stock-based compensation expense as we continue to hire staff and an increase in office space and related expenses to support our continued growth.

GAAP net income was $41.1 million for the three months ended June 30, 2019, or $0.62 per share on a diluted basis, compared to GAAP net income of $42.0 million for the three months ended June 30, 2018, or $0.64 per share on a diluted basis.

EBITDA was $107.0 million for the three months ended June 30, 2019, representing an increase of 4.3% compared to the three months ended June 30, 2018. Adjusted EBITDA was $129.4 million for the three months ended June 30, 2019, representing growth of 17.9% compared to the three months ended June 30, 2018.

Adjusted net income was $81.8 million for the three months ended June 30, 2019, representing growth of 23.8% compared to the three months ended June 30, 2018. Adjusted net income per diluted share was $1.22 for the three months ended June 30, 2019, representing growth of 22.0% compared to the three months ended June 30, 2018.

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

First Half 2019 Financial Highlights

For the six months ended June 30, 2019, revenue was $1,485.3 million, which represents growth of 4.3%, or $60.7 million, compared to the six months ended June 30, 2018 at actual foreign exchange rates. On a constant currency basis, revenue grew $81.4 million, representing growth of 5.7% compared to the six months ended June 30, 2018.

Reported GAAP income from operations was $166.7 million, reported GAAP net income was $85.2 million and reported GAAP net income per diluted share was $1.28 for the six months ended June 30, 2019.

Adjusted Net Income was $155.1 million for the six months ended June 30, 2019, an improvement of 26.8% compared to the same period in 2018. Adjusted Net Income per diluted share was $2.32 for the six months ended June 30, 2019, up 25.4% compared to the same period in 2018.

Guidance

The Company is updating its 2019 revenue guidance to between $3.02 billion and $3.10 billion, representing as reported growth of 5% to 8% and constant currency growth of 6% to 8%. We are updating our GAAP net income per diluted share to between $3.60 and $3.70 and Adjusted Net Income per diluted share to between $4.98 and $5.08, representing growth of 16% to 19%. We continue to estimate our annual effective income tax rate at approximately 24%. Our effective tax rate may differ from this estimate, due to, among other things, changes to estimates of the geographic allocation of our pre-tax income as well as changes in guidance from regulatory agencies related to interpretation, analysis and guidance of the U.S. Tax Cuts and Jobs Act.

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

Conference Call Details

PRA will host a conference call at 9:00 a.m. ET on August 1, 2019, to discuss the contents of this release and other relevant topics. To participate, please dial (877) 930-8062 within the United States or (253) 336-7647 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 6295812. The conference call will also be accessible, live via audio broadcast, on the Investor Relations section of the PRA website at investor.prahs.com. A replay of the conference call will be available online at investor.prahs.com. In addition, an audio replay of the call will be available for one week following the call and can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside the United States. The replay ID is 6295812.

Additional Information

A financial supplement with second quarter 2019 results, which should be read in conjunction with this press release, may be found in the Investor Relations section of our website at investor.prahs.com in a document titled "Q2 2019 Earnings Presentation."

On July 31, 2019 Selecta Biosciences, Inc. (NASDAQ: SELB), a clinical-stage biotechnology company focused on unlocking the full potential of biologic therapies based on its immune tolerance platform technology, ImmTOR, reported that CEO and President Carsten Brunn, Ph.D., will participate in a fireside chat at Canaccord Genuity’s 39th Annual Growth Conference in Boston, Mass. at 1:00 p.m. ET on Wednesday, August 07, 2019 (Press release, Selecta Biosciences, JUL 31, 2019, View Source [SID1234537944]). A live and archived webcast of the presentation will be available on the Investors & Media section of the Selecta website at www.selectabio.com.

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On July 31, 2019 Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics reported that Aron Knickerbocker, Chief Executive Officer, is scheduled to present at the following investor conference (Press release, Five Prime Therapeutics, JUL 31, 2019, View Source [SID1234537961]):

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The 2019 Wedbush PacGrow Healthcare Conference Wednesday, August 14, 2019 at 8:35am ET / 5:35am PT
The presentations will be webcast and may be accessed at the "Events & Presentations" section of the Company’s website at:

View Source Five Prime will maintain an archived replay of the webcast on its website for 30 days after the conference.

On July 31, 2019 vTv Therapeutics Inc. (Nasdaq:VTVT) reported financial results for the second quarter that ended June 30, 2019, and provided an update on recent achievements and upcoming events (Press release, vTv Therapeutics, JUL 31, 2019, View Source [SID1234537979]).

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"We made significant progress during the second quarter," said Steve Holcombe, chief executive officer, vTv Therapeutics. "We reported positive results from part 1 of our phase 2 Simplici-T1 trial in type 1 diabetes and began screening patients for our 488-305 trial evaluating azeliragon in patients with mild Alzheimer’s disease and type 2 diabetes. We look forward to continuing to execute successfully on our development plans for each of these drug candidates and advancing them as potential treatments for patients suffering from these diseases."

Recent Achievements and Outlook

Part 1 of the Simplici-T1 Study achieves positive topline results in patients with type 1 diabetes. In June 2019, we announced positive topline results from part 1 of the phase 2 Simplici-T1 Study, a 12-week study to evaluate TTP399 as an add-on to insulin therapy for patients with type 1 diabetes.

In this double-blind, placebo-controlled 12-week trial, the baseline mean HbA1c for the groups treated with TTP399 and placebo was 7.3% and 7.4%, respectively. Patients treated with TTP399 (n=8) showed a statistically significant mean reduction in HbA1c of 0.6% at 12 weeks, while the group treated with placebo (n=11) showed a mean increase in HbA1c of 0.1%, resulting in a mean improvement of 0.7% in the TTP399 group relative to the placebo group (p=0.03).

TTP399 was well tolerated in the study, with no serious adverse event reported, and no report of diabetic ketoacidosis or severe hypoglycemia.

Simplici-T1 Study enrolling patients in Part 2. In May 2019, we began enrolling patients in the part 2 confirmatory phase of the Simplici-T1 Study and expect to report results for that portion of the study in the latter part of the first quarter of 2020.

Screening patients for Phase 2/3 clinical trial of azeliragon. We began screening patients in June 2019 for a Phase 2 clinical trial to evaluate azeliragon as a potential treatment of mild-AD in patients with type 2 diabetes. The randomized, double-blind, placebo-controlled multicenter trial is designed as sequential phase 2 and phase 3 studies operationally conducted under one protocol. Each part of the study will evaluate the efficacy and safety of azeliragon in patients with mild Alzheimer’s disease (screening MMSE 21 to 26, baseline MMSE 19 to 27; and ADAS-cog14 score ≥10) and type 2 diabetes (screening HbA1c 6.5% to 9.5%, inclusive).

vTv expects to report topline results from the phase 2 proof of concept study by the end of the fourth quarter of 2020.

Upcoming Events

vTv will present additional results from Part 1 of the Simplici-T1 Study at the 55th Annual Meeting of the European Association for the Study of Diabetes in Barcelona Spain, September 16–20, 2019 with a poster entitled "Results from the sentinel and learning phase of the Simplici-T1 study, the first clinical trial to test activation of glucokinase as an adjunctive treatment for type 1 diabetes".

Second Quarter 2019 Financial Results

Cash Position: Cash and cash equivalents as of June 30, 2019, were $1.5 million compared to $5.0 million as of March 31, 2019.

Revenue: Revenues were $1.8 million for the second quarter of 2019 versus $0.9 million in the first quarter of 2019. The increase in revenue was driven by the recognition of $1.0 million for one of our license agreements based on the satisfaction of a development milestone.

R&D Expenses: Research and development expenses were $4.2 million in the second quarter of 2019 and $2.8 million in the first quarter of 2019. This increase in R&D expenses was driven primarily by the increase in costs for the 488-305 Study for which we were performing start-up activities, including site activations, in the second quarter of 2019.

G&A Expenses: General and administrative expenses were $2.4 million in each of the second and first quarters of 2019.

Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $5.1 million for the second quarter of 2019 compared to net loss before non-controlling interest of $4.0 million for the first quarter of 2019.

Net Loss Per Share: GAAP net loss per share was $0.10 and $0.26 for the three months ended June 30, 2019 and March 31, 2019, respectively, based on weighted-average shares of 28.0 million and 22.9 million for the three month periods ended June 30, 2019 and March 31, 2019, respectively. Non-GAAP net loss per fully exchanged share was $0.09 and $0.06 for the three months ended June 30, 2019 and March 31, 2019, respectively, based on non-GAAP fully exchanged weighted-average shares of 51.1 million and 46.0 million for the three months ended June 30, 2019 and March 31, 2019, respectively.