On February 26, 2020 Universal Health Services, Inc. (NYSE: UHS) reported that its reported net income attributable to UHS was $245.2 million, or $2.79 per diluted share, during the fourth quarter of 2019 as compared to $158.1 million, or $1.70 per diluted share, during the comparable quarter of 2018 (Press release, Universal Health Services, FEB 26, 2020, View Source [SID1234554827]). Net revenues increased 5.1% to $2.896 billion during the fourth quarter of 2019 as compared to $2.754 billion during the fourth quarter of 2018.

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Included in our reported, and our adjusted, net income attributable to UHS during the fourth quarter of 2019 is a pre-tax unrealized gain of $16.7 million, or $.15 per diluted share (included in "Other (income), expense, net"), resulting from an increase in the market value of shares of certain marketable securities held for investment and classified as available for sale. Included in our reported, and our adjusted, net income attributable to UHS during the fourth quarter of 2018 is a pre-tax unrealized loss of $12.5 million, or $.10 per diluted share, resulting from a decrease in the market value of these shares.

As indicated on the attached Schedule of Non-GAAP Supplemental Information ("Supplemental Schedule"), there were no significant adjustments made to our reported net income attributable to UHS during the fourth quarter of 2019.

As reflected on the Supplemental Schedule, our adjusted net income attributable to UHS during the fourth quarter of 2018 was $220.1 million, or $2.37 per diluted share, Included in our reported results during the fourth quarter of 2018, is a net aggregate unfavorable after-tax impact of $62.0 million, or $.67 per diluted share, consisting primarily of the following: (i) an unfavorable after-tax impact of $24.5 million, or $.26 per diluted share, resulting from a $31.9 million pre-tax increase in the reserve established in connection with the civil aspects of the government’s investigation of our behavioral health care facilities ("DOJ Reserve"), as discussed below, and; (ii) an unfavorable after-tax impact of $37.7 million, or $.41 per diluted share, resulting from a $49.3 million provision for intangible asset impairment, as discussed below.

As calculated on the attached Supplemental Schedule, our earnings before interest, taxes, depreciation & amortization ("EBITDA net of NCI", NCI is net income attributable to noncontrolling interests), was $485.1 million during the fourth quarter of 2019 as compared to $359.9 million during the fourth quarter of 2018. Our adjusted earnings before interest, taxes, depreciation & amortization ("Adjusted EBITDA net of NCI"), which excludes the impacts of other (income) expense, net, as well as the unfavorable impact of the above-mentioned increase in the DOJ Reserve and provision for asset impairment, was $465.8 million during the fourth quarter of 2019 as compared to $453.6 million during the fourth quarter of 2018.

Consolidated Results of Operations, As Reported and As Adjusted – Twelve-month periods ended December 31, 2019 and 2018:
Reported net income attributable to UHS was $814.9 million, or $9.13 per diluted share, during the twelve-month period ended December 31, 2019 as compared to $779.7 million, or $8.31 per diluted share, during the comparable twelve-month period of 2018. Net revenues increased 5.6% to $11.378 billion during 2019 as compared to $10.772 billion during 2018.

Included in our reported, and our adjusted, net income attributable to UHS are pre-tax unrealized gains of $4.1 million, or $.04 per diluted share, during the twelve-month period ended December 31, 2019, and $6.0 million, or $.05 per diluted share, during the twelve-month period ended December 31, 2018. As discussed above, these unrealized gains resulted from increases in the market value of shares of certain marketable securities held for investment and classified as available for sale.

For the twelve-month period ended December 31, 2019, our adjusted net income attributable to UHS, as calculated on the attached Supplemental Schedule, was $891.8 million, or $9.99 per diluted share, as compared to $894.4 million, or $9.53 per diluted share, during the twelve-month period of 2018.

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2019, is an aggregate net unfavorable after-tax impact of $77.0 million, or $.86 per diluted share, resulting from: (i) an unfavorable after-tax impact of $74.6 million, or $.84 per diluted share, resulting from a $97.6 million provision for asset impairment, as discussed below; (ii) an unfavorable after-tax impact of $14.6 million, or $.16 per diluted share, resulting from an increase in the DOJ Reserve and the net estimated federal and state income taxes due on the portion of the DOJ Reserve that is estimated to be non-deductible for income tax purposes, as discussed below, and; (iii) a favorable after-tax impact of $12.2 million, or $.14 per diluted share, resulting from our adoption of ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09").

As reflected on the Supplemental Schedule, included in our reported results during the twelve-month period ended December 31, 2018, is a net aggregate unfavorable after-tax impact of $114.6 million, or $1.22 per diluted share, consisting of: (i) an unfavorable after-tax impact of $78.2 million, or $.83 per diluted share, resulting from a $102.3 million pre-tax increase in the DOJ Reserve, as discussed below; (ii) an unfavorable after-tax impact of $37.7 million, or $.40 per diluted share, resulting from a $49.3 million provision for intangible asset impairment, as discussed below, partially offset by; (iii) a favorable after-tax impact of $1.2 million, or $.01 per diluted share, resulting from our adoption of ASU 2016-09.

As calculated on the attached Supplemental Schedule, our EBITDA net of NCI, was $1.707 billion during the twelve-month period ended December 31, 2019 as compared to $1.624 billion during the twelve-month period ended December 31, 2018. Our Adjusted EBITDA net of NCI, which excludes the impacts of other (income) expense, net, as well as the unfavorable impacts of the above-mentioned provisions for asset impairment and increases in the DOJ Reserve, was $1.802 billion during the twelve-month period ended December 31, 2019 as compared to $1.762 billion during the twelve-month period ended December 31, 2018.

Acute Care Services – Three and twelve-month periods ended December 31, 2019 and 2018:
During the fourth quarter of 2019, at our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 2.1% and adjusted patient days increased 6.0%, as compared to the fourth quarter of 2018. At these facilities, net revenue per adjusted admission increased 5.3% while net revenue per adjusted patient day increased 1.4% during the fourth quarter of 2019 as compared to the fourth quarter of 2018. Net revenues from our acute care services on a same facility basis increased 7.9% during the fourth quarter of 2019 as compared to the fourth quarter of 2018.

During the twelve-month period ended December 31, 2019, at our acute care hospitals on a same facility basis, adjusted admissions increased 4.8% and adjusted patient days increased 5.7%, as compared to the full year of 2018. At these facilities, net revenue per adjusted admission increased 2.5% while net revenue per adjusted patient day increased 1.7% during the twelve-month period ended December 31, 2019 as compared to the full year of 2018. Net revenues from our acute care services on a same facility basis increased 7.7% during 2019 as compared to 2018.

Behavioral Health Care Services – Three and twelve-month periods ended December 31, 2019 and 2018:
During the fourth quarter of 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 0.8% while adjusted patient days increased 0.9% as compared to the fourth quarter of 2018. At these facilities, net revenue per adjusted admission increased 4.0% while net revenue per adjusted patient day increased 3.9% during the fourth quarter of 2019 as compared to the comparable quarter in 2018. On a same facility basis, our behavioral health care services’ net revenues increased 4.5% during the fourth quarter of 2019 as compared to the fourth quarter of 2018.

During the twelve-month period ended December 31, 2019, at our behavioral health care facilities on a same facility basis, adjusted admissions increased 1.2% while adjusted patient days increased 0.6% as compared to the full year of 2018. At these facilities, net revenue per adjusted admission increased 2.2% while net revenue per adjusted patient day increased 2.7% during the full year of 2019 as compared to 2018. On a same facility basis, our behavioral health care services’ net revenues increased 3.1% during the twelve-month period ended December 31, 2019 as compared to the full year of 2018.

Net Cash Provided by Operating Activities and Share Repurchase Program:
For the twelve months ended December 31, 2019, our net cash provided by operating activities increased to $1.438 billion as compared to $1.275 billion generated during the full year of 2018. The $164 million net increase was due to: (i) a favorable change of $110 million resulting from an increase in net income plus/minus depreciation and amortization expense, stock-based compensation expense, provision for asset impairment, net gains on sale of assets and costs related to extinguishment of debt; (ii) a favorable change of $29 million in accrued and deferred income taxes, and; (iii) $25 million of other combined net favorable changes.

In conjunction with our January 1, 2019 adoption of ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities", we have included the net cash outflows/inflows, which were paid/received in connection with foreign exchange contracts that hedge our investment in the U.K., in investing cash flows on the consolidated statements of cash flows. During the twelve-month period ended December 31, 2019, in connection with foreign exchange contracts that hedge our investment in the U.K., we had $19.8 million of net cash outflows, as compared to $66.2 million of net cash inflows during the year ended December 31, 2018. Prior to 2019, these net outflows/inflows were included in operating cash flows. Prior period amounts have been reclassified to conform with current year presentation on the consolidated statements of cash flows included herein.

In July, 2019, our Board of Directors authorized a $1.0 billion increase to our stock repurchase program, which increased the aggregate authorization to $2.7 billion from the previous $1.7 billion authorization approved in various increments since 2014. Pursuant to this program, which had an aggregate available repurchase authorization of $756.1 million as of December 31, 2019, shares of our Class B Common Stock may be repurchased, from time to time as conditions allow, on the open market or in negotiated private transactions.

In conjunction with our stock repurchase program, during the fourth quarter of 2019, we have repurchased approximately 1.29 million shares at an aggregate cost of $181.2 million (approximately $141 per share). During the full year of 2019, we have repurchased approximately 5.40 million shares at an aggregate cost of $706.2 million (approximately $131 per share). Since inception of the program in 2014 through December 31, 2019, we have repurchased approximately 16.07 million shares at an aggregate cost of approximately $1.94 billion (approximately $121 per share).

Agreement in Principle with DOJ’s Civil Division and DOJ Reserve:
As previously disclosed on July 25, 2019, we have reached an agreement in principle with the DOJ’s Civil Division, and on behalf of various states’ attorneys general offices, to resolve the civil aspect of the government’s investigation of our behavioral health care facilities for $127 million subject to requisite approvals and preparation and execution of definitive settlement and related agreements. At that time, we also disclosed that we were further advised that the previously disclosed investigations being conducted by the DOJ’s Criminal Frauds Section in connection with these matters had been closed.

In connection with the agreement in principle with the DOJ’s Civil Division, during the twelve-month period ended December 31, 2019, we recorded a pre-tax increase of approximately $11.0 million in the DOJ Reserve, which includes related fees and costs due to or on behalf of third-parties. There was no change to the DOJ Reserve during the fourth quarter of 2019. The aggregate pre-tax DOJ Reserve amounted to approximately $134 million as of December 31, 2019. As of December 31, 2018, the aggregate pre-tax DOJ Reserve amounted to approximately $123 million, including pre-tax increases of $31.9 million and $102.3 million recorded during the three and twelve-month periods ended December 31, 2018, respectively.

In late August, 2019, we received the initial draft of the settlement agreement from the DOJ’s Civil Division. Negotiations regarding the terms and conditions of the settlement agreement continue. Based upon the terms and provisions included in the draft settlement agreement, and related subsequent discussions, our financial statements for the twelve-month period ended December 31, 2019 include an unfavorable provision for income taxes of $6.2 million resulting from the net estimated federal and state income taxes due on the portion of the aggregate pre-tax DOJ Reserve that is estimated to be non-deductible for income tax purposes.

Since the agreement in principle with the DOJ’s Civil Division is subject to certain required approvals and negotiation and execution of definitive settlement agreements, as well as finalization and execution of a corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services, we can provide no assurance that definitive agreements will ultimately be finalized. We therefore can provide no assurance that final amounts paid in settlement or otherwise, or associated costs, or the income tax deductibility of such payments, will not differ materially from our established reserve and assumptions related to income tax deductibility. Please see Item 3-Legal Proceedings in our Form 10-K for the year ended December 31, 2019 for additional disclosure in connection with this matter.

Provision for Asset Impairment – Foundations Recovery Network
Our financial results for twelve-month period ended December 31, 2019, include an aggregate pre-tax provision for asset impairment of $97.6 million recorded in connection with Foundations Recovery Network, L.L.C. ("Foundations"), which was acquired by us in 2015. This pre-tax provision for asset impairment includes: (i) a $74.9 million impairment provision to write-off the carrying value of the Foundations’ tradename intangible asset, and; (ii) a $22.7 million impairment provision to reduce the carrying value of real property assets of certain Foundations’ facilities.

Our financial results for the three and twelve-month periods ended December 31, 2018, include a pre-tax provision for asset impairment of $49.3 million to reduce the carrying value of a tradename intangible asset to approximately $75 million from approximately $124 million as originally recorded in connection with our acquisition of Foundations.

These provision for asset impairments, which are included in other operating expenses in our consolidated statements of income for the all applicable periods, were recorded after evaluation of the estimated fair value of the Foundations’ tradename as well as certain related real property assets. The provisions for asset impairments were impacted by the following: (i) decisions made by management during 2019 to cancel the opening of future planned de novo facilities; (ii) reductions in projected future patient volumes, revenues and cash flows based upon the operating trends and financial results experienced by existing facilities that significantly lagged expectations, and; (iii) competitive pressures experienced in certain markets that were deemed to be permanent.

2020 Operating Results Forecast:
Reflected below is our 2020 guidance range for consolidated net revenues, earnings before interest, taxes, depreciation & amortization, and the impacts of other income/expense and net income attributable to noncontrolling interests ("Adjusted EBITDA net of NCI"), adjusted net income attributable to UHS per diluted share ("Adjusted EPS-diluted") and capital expenditures.

Adjusted EPS-diluted and Adjusted EBITDA net of NCI, are non-GAAP financial measures and should be examined in connection with net income determined in accordance with GAAP as presented in the consolidated financial statements and notes thereto in this report or in our filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2019. Please see the Supplemental Non-GAAP Disclosures – 2020 Operating Results Forecast schedule as included herein for additional information and a reconciliation to the financial forecasts as computed in accordance with GAAP.

Our 2020 guidance contains a number of assumptions including, but not limited to, the following:

The 2020 forecasted amounts exclude the impact of future items, if applicable, that are nonrecurring or non-operational in nature including items such as changes in the DOJ Reserve (including the income tax deductibility assumptions) established in connection with the agreement in principle with the Department of Justice-Civil Division (see below for additional disclosure), pre-tax unrealized gains/losses resulting from increases/decreases in the market value of shares of certain marketable securities held for investment and classified as available for sale, our adoption of ASU 2016-09, and other potential material items including, but not limited to, reserves for various matters including settlements, legal judgments and lawsuits, potential impacts of non-ordinary course acquisitions, divestitures, joint ventures or other strategic transactions, costs related to extinguishment of debt, gains/losses on sales of assets and businesses, impairment of long-lived and intangible assets, other amounts that may be reflected in the current financial statements that relate to prior periods, and the impact of share repurchases that differ from included assumptions. It is also subject to certain conditions including those as set forth below in General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures.
Our net revenues are estimated to be approximately $11.960 billion to $12.116 billion representing an increase of approximately 5.1% to 6.5% over our 2019 net revenues of approximately $11.378 billion.
Our Adjusted EBITDA net of NCI is estimated to be approximately $1.823 billion to $1.902 billion representing an increase of approximately 1.1% to 5.5% over our 2019 Adjusted EBITDA net of NCI of $1.802 billion.
The Adjusted EPS-diluted guidance range of $10.30 per diluted share to $11.00 per diluted share represents an increase of approximately 3.1% to 10.1% over our adjusted net income attributable to UHS of $9.99 per diluted share for the year ended December 31, 2019, as calculated on the attached Supplemental Schedule.
Conference call information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on February 27, 2020. The dial-in number is 1-877-648-7971.

A live broadcast of the conference call will be available on our website at www.uhsinc.com. Also, a replay of the call will be available following the conclusion of the live call and will be available for one full year.

Adoption of ASU 2016-02, "Leases (Topic 842): Amendments to the FASB Accounting Standards Codification":
Effective January 1, 2019, we adopted ASU 2016-02 which requires companies to, among other things, recognize lease assets and lease liabilities on the balance sheet. Our consolidated balance sheet as of December 31, 2019 includes right of use assets-operating leases and operating lease liabilities (current and noncurrent) recorded in connection with our adoption of ASU 2016-02. Prior period financial statements were not adjusted for the effects of this new standard.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
One of the nation’s largest and most respected providers of hospital and healthcare services, Universal Health Services, Inc. has built an impressive record of achievement and performance. Growing steadily since our inception into an esteemed Fortune 500 corporation, our annual revenues were $11.378 billion during 2019. In 2020, UHS was again recognized as one of the World’s Most Admired Companies by Fortune; in 2019 ranked #293 on the Fortune 500; and in 2017, listed #275 in Forbes inaugural ranking of America’s Top 500 Public Companies.

Our operating philosophy is as effective today as it was 40 years ago, enabling us to provide compassionate care to our patients and their loved ones. Our strategy includes building or acquiring high quality hospitals in rapidly growing markets, investing in the people and equipment needed to allow each facility to thrive, and becoming the leading healthcare provider in each community we serve.

Headquartered in King of Prussia, PA, UHS has more than 90,000 employees and through its subsidiaries operates 26 acute care hospitals, 328 behavioral health facilities, 42 outpatient facilities and ambulatory care access points, an insurance offering, a physician network and various related services located in 37 U.S. states, Washington, D.C., Puerto Rico and the United Kingdom. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE:UHT). For additional information on the Company, visit our web site: View Source

On February 26, 2020 Dialectic Therapeutics, Inc., a Texas-based biotechnology company focused on creating innovative new technologies to end cancer, reported it has received a $3 million Seed Award for Product Development Research from the Cancer Prevention & Research Institute of Texas (CPRIT) (Press release, Dialectic Therapeutics, FEB 26, 2020, View Source;research-institute-of-texas-301011702.html [SID1234554844]).

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Dialectic will use the funding from the CPRIT Seed Award to further the development of its lead product candidate, DT2216, a unique compound built using its proprietary and novel Antiapoptotic Protein Targeted Degradation (APTaD) technology. In pre-clinical studies, DT2216 selectively induces cancer cells to degrade B-cell lymphoma extra large, or BCL-XL, stimulating the cells to commit suicide or become more susceptible to chemotherapy. DT2216 is currently in the IND-enabling phase for use as a single agent or as part of a combination therapy in hematologic cancers.

"We are honored and delighted to have received this Seed Award from CPRIT and the state of Texas, and it significantly advances our effort to develop novel drug candidates that address a significant need in cancer treatment. This grant will give us the opportunity to reach clinical relevance faster," said Dr. David Genecov, Dialectic’s President and Chief Executive Officer. "The CPRIT funding will support continued development of our lead candidate, DT2216, which we believe may be a first-in-class anticancer agent targeting BCL-XL, the most commonly over-expressed antiapoptotic protein in cancer."

On February 26, 2020 NuVasive, Inc. (NASDAQ: NUVA) reported the pricing of its offering of $450,000,000 aggregate principal amount of 0.375% Convertible Senior Notes due 2025 (the "Convertible Notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, NuVasive, FEB 26, 2020, View Source;301012315.html [SID1234554951]). NuVasive also granted to the initial purchasers of the Convertible Notes a 13-day option to purchase up to an additional $50,000,000 aggregate principal amount of the Convertible Notes. The sale of the Convertible Notes to the initial purchasers is expected to settle on March 2, 2020, subject to customary closing conditions, and is expected to result in approximately $435.9 million in net proceeds to NuVasive after deducting fees and estimated offering expenses payable by NuVasive (assuming no exercise of the initial purchasers’ option to purchase additional Convertible Notes).

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The Convertible Notes will be general unsecured obligations of NuVasive and interest will be paid semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2020. The Convertible Notes will mature on March 15, 2025, unless earlier repurchased, redeemed or converted. Prior to the close of business on the business day immediately preceding September 15, 2024, the Convertible Notes will be convertible at the option of holders only upon the satisfaction of certain conditions and during certain periods. Thereafter until close of business on the second scheduled trading day preceding maturity, the Convertible Notes will be convertible at the option of the holders at any time regardless of these conditions. Conversions of Convertible Notes will be settled in cash, shares of NuVasive common stock or a combination thereof, at NuVasive’s election. The Convertible Notes will not be redeemable at NuVasive’s option prior to March 20, 2023. On or after March 20, 2023 until the close of business on the business day immediately preceding September 15, 2024, the Convertible Notes will be redeemable at NuVasive’s option if the last reported sale price of NuVasive’s common stock for at least 20 trading days in any 30 trading day period has been at least 130% of the conversion price for the Convertible Notes.

The initial conversion rate is 10.7198 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $93.29 per share of NuVasive common stock). The conversion rate and the corresponding conversion price will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the notes represents a premium of approximately 35% to the $69.10 per share closing price of NuVasive’s common stock on February 26, 2020.

If NuVasive undergoes a fundamental change (as defined in the indenture governing the Convertible Notes), holders may require NuVasive to purchase for cash all or part of their Convertible Notes at a purchase price equal to 100% of the principal amount of the Convertible Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. In addition, if the Company calls any or all of the Convertible Notes for redemption or certain make-whole fundamental changes occur, NuVasive will, in certain circumstances, increase the conversion rate for any Convertible Notes converted in connection with such redemption or such make-whole fundamental change.

In addition, in connection with the pricing of the Convertible Notes, NuVasive entered into privately negotiated convertible note hedge transactions and warrant transactions with certain dealers, including affiliates of certain of the initial purchasers of the Convertible Notes (the "Option Counterparties"). The convertible note hedge transactions are expected generally to reduce the potential dilution to NuVasive’s common stock upon any conversion of Convertible Notes and/or offset any cash payments NuVasive is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, in each case upon conversion of the Convertible Notes. The warrant transactions could separately have a dilutive effect to the extent that the market price per share of NuVasive’s common stock exceeds the applicable strike price of the warrants. However, subject to certain conditions, NuVasive may elect to settle all or a portion of the warrants in cash. The strike price of the warrant transactions will initially be approximately $127.84 per share, which represents a premium of approximately 85% over the last reported sale price of NuVasive’s common stock on February 26, 2020, and is subject to certain adjustments under the terms of the warrant transactions.

NuVasive expects that in connection with establishing their initial hedges of these transactions, the Option Counterparties and/or their respective affiliates will enter into various derivative transactions with respect to NuVasive’s common stock and/or purchase NuVasive’s common stock in secondary market transactions concurrently with, or shortly after, the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of NuVasive’s common stock or the Convertible Notes at that time. In addition, NuVasive expects that the Option Counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to NuVasive’s common stock and/or purchasing or selling NuVasive’s common stock or other securities of NuVasive in secondary market transactions following the pricing of the Convertible Notes and prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of Convertible Notes). This activity could also cause or avoid an increase or a decrease in the market price of NuVasive’s common stock or the Convertible Notes, which could affect the ability of holders of Convertible notes to convert the Convertible Notes and, to the extent the activities occur during any observation period related to a conversion of the Convertible Notes, could affect the amount of cash and/or the number and value of shares of NuVasive common stock that holders will receive upon conversion of the Convertible Notes.

NuVasive intends to use approximately $31.2 million of the net proceeds from the offering to pay the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds to NuVasive from the warrant transactions). Additionally, if the initial purchasers exercise their option to purchase additional Convertible Notes, NuVasive may sell additional warrants and use a portion of the proceeds from the sale of the additional Convertible Notes to enter into additional convertible note hedge transactions with the Option Counterparties.

NuVasive also expects to use approximately $75,000,000 of the net proceeds from the offering to repurchase shares of its common stock from purchasers of the Convertible Notes in the offering in privately negotiated transactions concurrently with the offering. NuVasive intends to use the remaining net proceeds of the offering for working capital and other general corporate purposes, which may include potential mergers and acquisitions, to refinance indebtedness, and for repurchases of outstanding Convertible Senior Notes due 2021 (the "2021 Notes"). NuVasive may also use net proceeds from the offering for additional repurchases of shares of common stock in accordance with the Company’s stock repurchase program, which NuVasive’s Board of Directors recently amended to allow for repurchases of up to $150,000,000 of the Company’s common stock through December 31, 2021. The repurchase of shares of common stock and any repurchase of the 2021 Notes could have the effect of raising or maintaining the market price of NuVasive’s common stock above levels that would otherwise have prevailed, or preventing or retarding a decline in the market price of NuVasive’s common stock, and thereby impacting the trading price of the Convertible Notes. In the case of repurchases of common stock effected concurrently with the offering, this activity could have affected the market price of NuVasive’s common stock and could have resulted in a higher effective conversion price for the Convertible Notes.

The offering is only being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Neither the Convertible Notes nor any shares of NuVasive’s common stock issuable upon conversion of the Convertible Notes have been or are expected to be registered under the Securities Act or under any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

On February 26, 2020 Halozyme Therapeutics, Inc. (NASDAQ: HALO) reported that it will be presenting at the Cowen and Company 40th Annual Health Care Conference on Wednesday, March 4 at 11:20 a.m. ET / 8:20 a.m. PT in Boston (Press release, Halozyme, FEB 26, 2020, View Source [SID1234554796]). Dr. Helen Torley, president and chief executive officer, will provide a corporate overview.

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The presentation will be webcast through the "Investors" section of Halozyme’s corporate website at www.halozyme.com, and a recording will be made available for 90 days following the event. To access a live webcast, please visit Halozyme’s website approximately 15 minutes prior to the presentation to register and download any necessary audio software.

On February 26, 2020 Natera, Inc. (NASDAQ: NTRA), a leader in non-invasive genetic testing and the analysis of circulating cell-free DNA, reported financial results for the fourth quarter and the year ended December 31, 2019 and provided an update on recent business progress (Press release, Natera, FEB 26, 2020, View Source [SID1234554828]).

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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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Recent Accomplishments & 2019 Highlights

Generated total revenues of $83.2 million in the fourth quarter of 2019 compared to $67.0 million in the fourth quarter of 2018, an increase of 24%.Generated total revenues of $302.3 million in the year 2019 compared to $257.7 million in the year 2018, exceeding the 2019 revenue guidance range previously provided.
Processed approximately 209,400 tests in the fourth quarter of 2019 and 804,300 tests for the full year 2019, compared to approximately 174,200 tests processed in the fourth quarter of 2018 and 668,600 tests for the full year 2018.
Signed $50 million agreement with BGI Genomics Co., Ltd. to commercialize NGS-based genetic assays for clinical use in China and select markets. Successfully completed initial key milestones.
Entered into partnership to develop and commercialize personalized circulating tumor DNA monitoring assays with Foundation Medicine, Inc. Successfully completed initial key milestones.
Received a positive draft local coverage decision from Medicare for reimbursement of Signatera in colorectal cancer.
Launched the BESPOKE CRC study, a nationwide multi-center registry study for patients diagnosed with Stage II-III colorectal cancer that will prospectively enroll 1,000 or more patients at time of surgery.
Selected by National Cancer Center of Japan for the CIRCULATE-IDEA trial in Japan, a prospective, multi-center, randomized trial for patients with Stage II-III colon cancer.
Achieved total cumulative value of signed contracts for Signatera with pharmaceutical companies exceeding $55 million.
Received a positive final coverage decision from Medicare for reimbursement of Prospera in kidney transplant rejection screening.
Hired Eric Evans, a co-founder of Counsyl, as Chief Scientific Officer.
"2019 was a transformational year for Natera," said Steve Chapman, Natera Chief Executive Officer. "We delivered strong volume growth, consistent average selling price expansion, and reduced cost of goods sold per unit in our reproductive health business. By publishing excellent data, securing coverage decisions, and signing significant commercial partnerships, we opened a path to creating value in new multi-billion-dollar markets in transplant rejection and oncology. Our strong performance leaves us well positioned to continue our momentum in 2020 and beyond."

Fourth Quarter and Year Ended December 31, 2019 Financial Results

Total revenues were $83.2 million in the fourth quarter of 2019 compared to $67.0 million for the fourth quarter of 2018, an increase of 24%. The increase in total revenues was driven primarily by sales of Natera’s Panorama and Horizon tests. Natera processed 209,400 tests in the fourth quarter of 2019, including approximately 198,300 tests accessioned in its laboratory, compared to 174,200 tests processed in the fourth quarter of 2018, including approximately 162,900 tests accessioned in its laboratory. Despite selling its Evercord business in the third quarter of 2019, Natera achieved an overall increase of approximately 20% for the quarter.

Total revenues for 2019 were $302.3 million compared to $257.7 million in 2018, which represents an increase of 17%. In 2019, Natera processed approximately 804,300 tests including approximately 753,800 tests accessioned in its laboratory, compared to approximately 668,600 tests processed in 2018, including approximately 625,900 tests accessioned in its laboratory. Despite selling the Evercord business in the third quarter of 2019, Natera achieved an overall increase of approximately 20% for the year.

In the three months ended December 31, 2019, Natera recognized revenue on approximately 200,800 tests for which results were reported to customers in the period (tests reported), including approximately 189,700 tests accessioned in its laboratory, compared to approximately 172,500 tests reported, including approximately 162,500 tests accessioned in its laboratory, in the fourth quarter of 2018, an overall increase of 16% for the quarter.

In 2019, Natera recognized revenue on approximately 763,900 tests reported, including approximately 718,500 tests accessioned in its laboratory, compared to approximately 631,800 tests reported, including approximately 594,300 tests accessioned in its laboratory, in 2018, an overall increase of 21% for the year.

Gross profit1 for the three months ended December 31, 2019 and 2018 was $38.8 million and $24.2 million, respectively, representing a 47% and 36% gross margin, respectively. Natera was able to achieve higher gross margins in Q4 2019 as a result of improved cost of goods sold per test and approximately $3.8 million in license and development revenues earned under strategic partnership agreements. Gross profit for the year ended December 31, 2019 and 2018 was $126.9 million and $91.6 million, respectively, representing a 42% and 36% gross margin, respectively. Natera was able to achieve higher gross margins in the year 2019 as a result of improved cost of goods sold per test and approximately $16.4 million in license and development revenues earned under strategic partnership agreements.

Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the fourth quarter of 2019 were $73.6 million, an increase of approximately 37% compared to $53.9 million in the same period of the prior year. The increase was driven primarily by higher personnel-related expenses resulting from an increase in commercial activities and an increase in research and development activities under strategic partnerships. Total operating expenses, net of gain from the disposal of the Evercord business of $14.4 million in the year ended December 31, 2019 were $243.1 million, an increase of approximately 18% compared to $206.2 million in the same period of the prior year. The increase was driven primarily by higher personnel-related expenses and increased commercial activities, offset by the gain from the disposal of the Evercord business in the third quarter of 2019.

Loss from operations for the fourth quarter of 2019 was $34.8 million compared to $29.7 million for the same period of the prior year. Loss from operations for 2019 was $116.3 million compared to $114.6 million for the prior year.

Net loss for the fourth quarter of 2019 was $35.2 million, or ($0.46) per diluted share, compared to net loss of $31.8 million, or ($0.51) per diluted share, for the same period in 2018. Weighted average shares outstanding were 76.5 million in the fourth quarter of 2019. Net loss for the full year 2019 was $124.8 million, or ($1.79) per diluted share, compared to net loss of $128.2 million or ($2.22) per diluted share for the full year 2018. Weighted average shares outstanding were 69.6 million in 2019.

At December 31, 2019, Natera held $441.0 million in cash, cash equivalents, short-term investments and restricted cash, compared to $158.5 million as of December 31, 2018—the increase resulting from the successful completion of two equity offerings in second and fourth quarters of 2019. As of December 31, 2019, Natera had a total outstanding debt balance of $123.8 million, comprised of $50.1 million with accrued interest under its $50.0 million line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $73.7 million under its debt agreement with OrbiMed Advisors.

2020 Financial Outlook

Natera anticipates 2020 total revenue of $335 million to $350 million; 2020 cost of revenues to be approximately 51% to 57% of revenues; selling, general and administrative costs to be approximately $240 million to $260 million; research and development costs to be $80 million to $90 million, and net cash burn to be $125 million to $150 million2.