On April 25, 2019 Alkermes plc (Nasdaq: ALKS) reported financial results for the first quarter of 2019 (Press release, Alkermes, APR 25, 2019, View Source [SID1234535385]).

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"Our first quarter results reflect the diversity of our business, as the growth of VIVITROL net sales and royalty revenues from INVEGA SUSTENNA offset a decline in AMPYRA royalties, following generic entry in the market. As is typical, during the first quarter we saw the effect of seasonal inventory fluctuations and deductible resets for commercial payer plans impact net sales of our proprietary commercial products, which decreased sequentially. In particular, ARISTADA net sales were impacted more than anticipated by inventory fluctuations which masked underlying prescription growth of approximately 5% compared to last quarter," commented James Frates, Chief Financial Officer of Alkermes. "Today, we are reiterating our financial expectations for 2019, as we continue to position VIVITROL and ARISTADA for long-term growth, invest in our development pipeline and prepare for the potential launch of ALKS 3831."

"The first few months of 2019 were highlighted by the presentation of important new data from large clinical trials of both ALKS 3831 and ARISTADA at the 2019 Congress of the Schizophrenia International Research Society. These innovative studies demonstrated the clear antipsychotic efficacy of our medicines along with our intended patient-focused attributes relating to safety and tolerability. Our recently announced ALPINE study results also provide information useful to clinicians making treatment decisions for their patients," commented Richard Pops, Chief Executive Officer of Alkermes. "Looking ahead, we are focused on executing both commercially and across our development pipeline. With the planned submission of the New Drug Application for ALKS 3831 mid-year, expected regulatory action for diroximel fumarate for multiple sclerosis in the fourth quarter, and increasing momentum in the ALKS 4230 immuno-oncology program, we have a number of key milestones ahead and look forward to updating you on our progress throughout the year."

Quarter Ended Mar. 31, 2019 Financial Highlights

Total revenues for the quarter were $223.1 million, compared to $225.2 million for the same period in the prior year, reflecting the growth in our proprietary product net sales and an offsetting decrease in AMPYRAi revenues following generic entry into the market in 2018.

Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $96.4 million for the quarter, or a basic and diluted GAAP net loss per share of $0.62. This compared to GAAP net loss of $62.5 million, or a basic and diluted GAAP net loss per share of $0.40 for the same period in the prior year.

Non-GAAP net loss was $26.0 million for the quarter, or a non-GAAP basic and diluted net loss per share of $0.17. This compared to non-GAAP net loss of $14.2 million, or a non-GAAP basic and diluted net loss per share of $0.09 for the same period in the prior year.

Quarter Ended Mar. 31, 2019 Financial Results

Revenues

Net sales of VIVITROL were $69.2 million, compared to $62.7 million for the same period in the prior year, representing an increase of approximately 10%.

Net sales of ARISTADAii were $30.3 million, compared to $29.2 million for the same period in the prior year, representing an increase of approximately 4%.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $75.6 million, compared to $68.8 million for the same period in the prior year.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA were $12.2 million, compared to $28.3 million for the same period in the prior year due to generic competition to AMPYRA entering the market in late 2018.

Research and development revenues from the collaboration with Biogen for diroximel fumarate (BIIB098) were $13.9 million, compared to $17.5 million for the same period in the prior year.

Costs and Expenses

Operating expenses were $299.1 million, compared to $287.0 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA.

Other expense during the quarter included a $22.6 million charge due to a decrease in the fair value of contingent consideration, related to Recro Pharma, Inc.’s receipt of a second complete response letter from the United States (U.S.) Food and Drug Administration (FDA) regarding the New Drug Application (NDA) for IV Meloxicam.

Financial Expectations for 2019

Alkermes reiterates its financial expectations for 2019 set forth in its press release dated Feb. 14, 2019.

Recent Events:

Leadership

Appointed Todd Nichols to the role of Senior Vice President of Sales and Marketing. Mr. Nichols joins Alkermes from Celgene and his responsibilities will include leading global commercial activities, including marketing and sales of VIVITROL and ARISTADA, as well as developing and executing the commercial strategy for ALKS 3831 and other development candidates.

ARISTADA

The U.S. Department of Veterans Affairs recently added ARISTADA and ARISTADA INITIO to its National Formulary at parity with other long-acting injectable atypical antipsychotics.

Announced positive topline results from ALPINE (Aripiprazole Lauroxil and Paliperidone palmitate: INitiation Effectiveness), a six-month study evaluating the efficacy, safety and tolerability of ARISTADA and INVEGA SUSTENNA, when used to initiate patients experiencing an acute exacerbation of schizophrenia in the hospital and maintain treatment in an outpatient setting. Results were presented at the 2019 Congress of the Schizophrenia International Research Society (SIRS).

ALKS 3831

Presented new data at SIRS from the phase 3 ALKS 3831 ENLIGHTEN-2 six-month weight study and interim results from the ENLIGHTEN-2 52-week safety extension

study.

Diroximel fumarate

Announced that the FDA accepted for review the NDA for diroximel fumarate. If approved, Biogen intends to market diroximel fumarate under the brand name VUMERITY, which has been conditionally accepted by the FDA and would be confirmed upon approval.

ALKS 4230

Initiated ARTISTRY-2, a new clinical study of ALKS 4230 administered subcutaneously as monotherapy and in combination with the PD-1 inhibitor KEYTRUDA (pembrolizumab) in patients with advanced solid tumors.

Announced a research collaboration with Clovis to evaluate ALKS 4230 in combination with rucaparib, Clovis’ marketed PARP inhibitor, and lucitanib, Clovis’ investigational tyrosine kinase inhibitor.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:30 a.m. ET (1:30 p.m. BST) on Thursday, Apr. 25, 2019, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. BST) on Thursday, Apr. 25, 2019, through Thursday, May 2, 2019, and may be accessed by visiting Alkermes’ website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay access code is 13690081

On April 25, 2019 Rainier Therapeutics, Inc., a privately-held clinical stage drug development company, reported that abstracts related to trials of the company’s lead therapeutic, vofatamab, have been accepted for presentation at the upcoming 2019 American Society for Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, which will take place May 31 to June 4, 2019 in Chicago, Illinois (Press release, Rainier Therapeutics, APR 25, 2019, View Source [SID1234535401]).

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"We are pleased to have abstracts related to our ongoing Phase 2 vofatamab trials accepted for a poster discussion and poster presentations at ASCO (Free ASCO Whitepaper)," said Scott Myers, Chairman and CEO of Rainier Therapeutics. "This includes a preliminary analysis of clinical activity in FIERCE-22 and an interim analysis in FIERCE-21."

Poster Discussion & Poster Presentation:

FIERCE-22: Clinical activity of vofatamab (V) a FGFR3 selective inhibitor in combination with pembrolizumab (P) in WT metastatic urothelial carcinoma, preliminary analysis.

Abstract: 4511

Poster Discussion Session: Genitourinary (Nonprostate) Cancer
Date/Time: Monday, June 3, 2019, 4:30 PM – 6:00 PM,
Location: Hall D2

Poster Session: Genitourinary (Nonprostate) Cancer
Poster Board: #337
Date/Time: Monday, June 3, 2019, 1:15 PM – 4:15 PM,
Location: Hall A

Presenter: Arlene O. Siefker-Radtke, MD, The University of Texas MD Anderson Cancer Center

Poster Presentation:

Interim analysis of the FIERCE-21 phase 2 (P2) study of vofatamab (B-701), a selective inhibitor of FGFR3, as salvage therapy in metastatic urothelial carcinoma (mUC).

Abstract: 4547

Poster Session: Genitourinary (Nonprostate) Cancer
Poster Board: #373
Date/Time: Monday, June 3, 2019, 1:15 PM – 4:15 PM
Location: Hall A

Presenter: Begona Mellado, MD, PhD, Hospital Clinic de Barcelona

About Vofatamab

Vofatamab (formerly B-701) is an antibody specifically targeted against the fibroblast growth factor receptor 3 (FGFR3), a known driver of bladder and potentially other FGFR-driven cancers. Vofatamab is the most advanced targeted antibody specific for FGFR3 known by Rainier Therapeutics to be in clinical development. Vofatamab is currently being evaluated in two clinical trials: FIERCE-21 and FIERCE-22.

FIERCE-21 is a Phase 2 trial evaluating vofatamab in combination with docetaxel and separately vofatamab as monotherapy in patients with locally advanced or metastatic bladder cancer with FGFR3 mutation/fusions who have relapsed after, or are refractory to, at least one prior line of chemotherapy.

FIERCE-22 is a Phase 2 trial evaluating vofatamab in combination with pembrolizumab, an immune checkpoint inhibitor, to determine safety, tolerability and efficacy in the treatment of patients with locally advanced or metastatic bladder cancer, who have progressed following platinum-based chemotherapy and who have not received prior immune checkpoint inhibitor therapy.

For additional information on FIERCE-21, please visit www.clinicaltrials.gov (NCT02401542) and for more information on FIERCE-22, please visit www.clinicaltrials.gov (NCT03123055).

Rainier Therapeutics also plans to study vofatamab in non-muscle invasive bladder cancer (NMIBC) – the FIERCE-23 trial.

On April 25, 2019 AbbVie (NYSE:ABBV) reported its financial results for the first quarter ended March 31, 2019 (Press release, AbbVie, APR 25, 2019, View Source [SID1234535386]).

"We are off to another excellent start, including first quarter sales and earnings above expectations," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Additionally, we have made tremendous progress advancing our pipeline, including the recent approval of SKYRIZI, which has the potential to set a new standard of care in psoriasis and represents a significant long-term opportunity for AbbVie. We are extremely pleased with our strong performance and based on the continued business momentum, are increasing our full-year EPS guidance."

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First-Quarter Results

Worldwide net revenues of $7.828 billion decreased 1.3 percent on a reported basis and increased 0.4 percent operationally.

First-Quarter Results (continued)

Global HUMIRA net revenues of $4.446 billion decreased 5.6 percent on a reported basis, or 3.8 percent operationally. In the U.S., HUMIRA net revenues of $3.215 billion grew 7.1 percent in the quarter. Internationally, HUMIRA net revenues of $1.231 billion decreased 27.9 percent on a reported basis, or 23.0 percent operationally, due to biosimilar competition.

Global net revenues from the hematologic oncology portfolio of $1.173 billion increased 42.8 percent on a reported basis, or 43.2 percent operationally. Global IMBRUVICA net revenues were $1.022 billion, with U.S. net revenues of $829 million and international profit sharing of $193 million. Global VENCLEXTA net revenues were $151 million.

Global HCV net revenues of $815 million decreased 11.3 percent on a reported basis, or 9.1 percent operationally. In the U.S., HCV net revenues of $403 million grew 17.3 percent in the quarter.

On a GAAP basis, the gross margin ratio in the first quarter was 78.4 percent. The adjusted gross margin ratio was 83.3 percent.

On a GAAP basis, selling, general and administrative expense was 21.5 percent of net revenues. The adjusted SG&A expense was 20.0 percent of net revenues.

On a GAAP basis, research and development expense was 16.5 percent of net revenues. The adjusted R&D expense was 15.3 percent of net revenues, reflecting funding actions supporting all stages of our pipeline.

On a GAAP basis, the operating margin in the first quarter was 38.5 percent. The adjusted operating margin was 48.1 percent.

On a GAAP basis, net interest expense was $325 million. On a GAAP basis, the tax rate in the quarter was 3.5 percent. The adjusted tax rate was 7.9 percent.

Diluted EPS in the first quarter was $1.65 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $2.14, up 14.4 percent.

Recent Events

AbbVie announced regulatory approvals for SKYRIZI for the treatment of adult patients with moderate to severe plaque psoriasis who are candidates for systemic therapy or phototherapy. The approvals from the U.S. Food and Drug Administration (FDA) and the Japanese Ministry of Health, Labour and Welfare are based on results from four pivotal Phase 3 studies, ultIMMa-1, ultIMMa-2, IMMvent and IMMhance, evaluating more than 2,000 patients with moderate to severe plaque psoriasis. Additionally, the European Medicines Agency’s Committee for Medicinal Products for Human Use adopted a positive opinion for SKYRIZI for the treatment of moderate to severe plaque psoriasis in adult patients who are candidates for systemic therapy. SKYRIZI is part of a collaboration between Boehringer Ingelheim and AbbVie, with AbbVie leading development and commercialization globally.

Recent Events (continued)

At the American Academy of Dermatology (AAD) Annual Meeting, AbbVie presented data from 19 abstracts, including 10 oral presentations and 9 poster presentations. Long-term data from multiple studies investigating SKYRIZI for the treatment of plaque psoriasis were presented, including the first integrated efficacy analyses highlighting response over time and across various subgroups. Additionally, AbbVie presented up to 40 months of SKYRIZI safety data indicating adverse events were low and similar to comparator groups and data showing that psoriasis patients achieved significantly higher PASI 90 response rates after switching to SKYRIZI versus those who remained on adalimumab. AbbVie also presented results from a Phase 2 upadacitinib atopic dermatitis study, as well as data from HUMIRA (adalimumab) in multiple psoriatic diseases.

AbbVie announced that the FDA accepted for priority review its New Drug Application (NDA) for upadacitinib for the treatment of adult patients with moderate to severe rheumatoid arthritis. Upadacitinib is an investigational once-daily oral JAK1-selective inhibitor being studied for multiple immune-mediated diseases. The NDA is supported by data from the global upadacitinib SELECT Phase 3 rheumatoid arthritis program evaluating more than 4,000 patients with moderate to severe rheumatoid arthritis across five of six Phase 3 studies. AbbVie anticipates a regulatory decision in the third quarter of 2019.

AbbVie announced that the FDA approved the use of IMBRUVICA (ibrutinib) in combination with obinutuzumab, for adult patients with previously untreated chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL). This milestone marked the 10th FDA approval for IMBRUVICA in six different disease areas since 2013 and expands the use of IMBRUVICA, which can already be administered as a single agent or in combination with bendamustine and rituximab for adult CLL/SLL patients. The FDA approval is based on results from the Phase 3 iLLUMINATE study, which showed the combination of IMBRUVICA plus obinutuzumab significantly improved progression-free survival compared to chlorambucil plus obinutuzumab in previously untreated CLL/SLL patients who were 65 years or older, or less than 65 years old with coexisting conditions. The FDA also updated the IMBRUVICA label to include additional long-term efficacy follow-up data from the Phase 3 RESONATE and RESONATE-2 studies, supporting its use as a single agent in CLL/SLL. IMBRUVICA is jointly developed and commercialized with Janssen Biotech, Inc.

AbbVie announced that the FDA granted a fifth Breakthrough Therapy Designation to VENCLEXTA (venetoclax), for use in combination with obinutuzumab as a fixed duration investigational combination, for untreated adult patients with CLL. The designation coincides with the completion of the supplemental New Drug Application (sNDA) submission to the FDA for approval in previously-untreated CLL patients. In addition, the sNDA was granted priority review by the FDA. The sNDA for the VENCLEXTA and obinutuzumab combination is based on data from the Phase 3 CLL14 trial and is being reviewed by the FDA under its Real-Time Oncology Review pilot program. Venetoclax is being developed by AbbVie and Roche and is jointly commercialized by AbbVie and Genentech, a member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.

AbbVie provided an update on the VENCLEXTA multiple myeloma program, announcing that the FDA placed a partial clinical hold on all clinical trials evaluating VENCLEXTA for the investigational treatment of multiple myeloma. The partial clinical hold followed a review of data from the ongoing Phase 3 BELLINI trial, a study in relapsed/refractory multiple myeloma, in which a higher proportion of deaths was observed in the VENCLEXTA arm compared to the control arm of the trial. This action does not impact any of the approved indications for VENCLEXTA, such as CLL or acute myeloid leukemia, and is limited to investigational clinical trials in multiple myeloma. Additional analyses are ongoing and data will be published in a peer-reviewed journal and/or presented at a future medical meeting.

Recent Events (continued)

AbbVie announced a strategic partnership with Teneobio, a biotechnology company developing a new class of biologics for the treatments of cancer, autoimmunity and infectious diseases. Under the agreement, AbbVie and Teneobio will develop and commercialize TNB-383B, a B-cell maturation antigen (BCMA)-targeting immunotherapeutic for the potential treatment of multiple myeloma. TNB-383B is a bispecific antibody that simultaneously targets BCMA and CD3 and is designed to direct the body’s own immune system to target and kill BCMA expressing tumor cells. The collaboration broadens AbbVie’s oncology research platform to expand the development of potentially life-changing treatments for patients.

AbbVie announced a strategic collaboration with Voyager Therapeutics, a clinical-stage gene therapy company focused on developing life-changing treatments for severe neurological diseases. The Voyager Therapeutics transaction expands collaborative efforts on vectorized antibodies to target pathological species of alpha-synuclein for the potential treatment of Parkinson’s disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein. Voyager’s vectorized antibody platform and approach aims to improve the delivery of sufficient quantities of antibodies across the blood-brain barrier by delivering the genes that encode for the production of therapeutic antibodies. The collaboration broadens AbbVie’s neuroscience research platform to expand the development of potentially life-changing treatments for patients.

Full-Year 2019 Outlook

AbbVie is raising its GAAP diluted EPS guidance for the full-year 2019 to $7.26 to $7.36. The company’s 2019 GAAP guidance does not reflect a non-cash charge for contingent consideration related to the approval of SKYRIZI, which is planned to be communicated on the second-quarter earnings call. AbbVie is raising its previously announced adjusted EPS guidance range for the full-year 2019 from $8.65 to $8.75 to $8.73 to $8.83, representing growth of 11.0 percent at the mid-point. The company’s 2019 adjusted diluted EPS guidance excludes $1.47 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.

On April 25, 2019 Seattle Genetics, Inc. (Nasdaq:SGEN) reported financial results for the first quarter ended March 31, 2019 (Press release, Seattle Genetics, APR 25, 2019, View Source [SID1234535402]). The company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development accomplishments and progress with its late-stage clinical programs for cancer.

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"In the first quarter we achieved an important milestone toward becoming a multi-product oncology company with the announcement of positive topline results from the pivotal trial of enfortumab vedotin in patients with locally advanced or metastatic urothelial cancer, and we plan to submit an application for approval to the FDA in 2019," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "We continue to execute on expanding ADCETRIS use in the two frontline indications, and maintain our 2019 net sales guidance of $610 million to $640 million in the U.S. and Canada. We have also advanced our other late-stage programs, including reaching target enrollment in the HER2CLIMB pivotal trial of tucatinib in HER2-positive metastatic breast cancer. We expect to report topline results from HER2CLIMB in 2019."

ADCETRIS and Late-Stage Pipeline Highlights

ADCETRIS Ex-U.S. Regulatory Activities in Frontline Hodgkin Lymphoma: In February 2019, Takeda received approval from the European Commission to extend the marketing authorization for ADCETRIS to include ADCETRIS in combination with AVD (Adriamycin, vinblastine and dacarbazine) in adult patients with previously untreated CD30-positive stage IV classical Hodgkin lymphoma. As a result, Seattle Genetics received a $30 million milestone payment from Takeda.
Enfortumab Vedotin (EV) Pivotal Trial Positive Topline Results; Data Selected for Oral Presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2019 Annual Meeting: In March 2019, Seattle Genetics and Astellas announced positive topline results from the first cohort of the EV-201 clinical trial that enrolled 128 patients with locally advanced or metastatic urothelial cancer who previously received both platinum chemotherapy and a PD-1 or PD-L1 inhibitor. Results showed a 44 percent objective response rate per blinded independent central review. The duration of response was consistent with that recently reported in the previous phase 1 study (EV-101). The most common treatment-related adverse events included fatigue, alopecia, decreased appetite, rash and peripheral neuropathy. The companies plan to submit a Biologics License Application under the U.S. Food and Drug Administration’s (FDA) accelerated approval pathway in 2019.
Tucatinib HER2CLIMB Pivotal Trial Update: Seattle Genetics previously announced enrollment of 480 patients in the HER2CLIMB trial to enable analysis of the primary endpoint of progression-free survival (PFS), with topline data expected to be reported in 2019. In April 2019, Seattle Genetics achieved enrollment of 120 additional patients in HER2CLIMB to reach the target enrollment of 600 patients to support the analyses of key secondary endpoints, including overall survival as well as PFS in patients with brain metastases.
Tisotumab Vedotin (TV) innovaTV 204 Pivotal Trial Update: In March 2019, Seattle Genetics and Genmab completed enrollment in the innovaTV 204 pivotal trial evaluating TV in patients with recurrent and/or metastatic cervical cancer who have relapsed or progressed after standard of care treatment. The trial is designed to support a potential regulatory submission under the FDA’s accelerated approval pathway.
FIRST QUARTER 2019 FINANCIAL RESULTS

Revenues: Total revenues in the first quarter ended March 31, 2019 increased to $195.2 million, compared to $140.6 million for the same period in 2018. Revenues are comprised of the following three components:

Net Product Sales: ADCETRIS net sales for the U.S. and Canada in the first quarter were $135.0 million, a 42 percent increase over net sales of $95.4 million in the first quarter of 2018.
Royalty Revenues: Royalty revenues in the first quarter were $15.6 million, compared to $15.7 million in the first quarter of 2018. Royalty revenues are primarily driven by sales of ADCETRIS outside the U.S. and Canada by Takeda. First quarter 2019 net sales of ADCETRIS in Takeda’s territories increased over the comparable period in 2018; however, royalty revenues for the period in 2018 included additional amounts attributable to Takeda’s portion of certain third-party royalty obligations that expired at the end of 2018.
Collaboration and License Agreement Revenues: Amounts earned under the company’s ADCETRIS and ADC collaborations were $44.6 million in the first quarter of 2019, compared to $29.6 million for the same period in 2018. Collaboration revenues for the first quarter of 2019 included the earned portion of a $30.0 million milestone from Takeda triggered by European Commission approval of ADCETRIS in combination with AVD in adult patients with previously untreated CD30-positive stage IV classical Hodgkin lymphoma.
Research and Development (R&D) Expenses: R&D expenses in the first quarter were $158.3 million, compared to $152.5 million in the first quarter of 2018. The increase reflects additional investment in the company’s late-stage pipeline including EV, tucatinib and TV.

Selling, General and Administrative (SG&A) Expenses: SG&A expenses in the first quarter were $80.3 million, compared to $66.2 million in the first quarter of 2018. The increase was primarily attributed to costs to support commercialization efforts related to frontline ADCETRIS indications, the company’s late-stage programs and higher infrastructure costs to support the company’s continued growth.

Non-cash, share-based compensation cost for the first three months of 2019 was $25.7 million, compared to $16.8 million for the same period in 2018.

Net Loss

Net loss for the first quarter of 2019 was $13.3 million, or $0.08 per diluted share, compared to a net loss of $111.7 million, or $0.73 per diluted share, for the first quarter of 2018. Net loss in the first quarter of 2019 included a non-cash net investment gain of $38.1 million associated with Seattle Genetics’ common stock holdings in Immunomedics, which are marked-to-market.

Cash and Investments

As of March 31, 2019, cash and investments were $418.3 million. In addition, the company held stock investments, primarily in Immunomedics common stock, valued at $151.9 million.

2019 FINANCIAL OUTLOOK

The company’s 2019 financial guidance is detailed below, including updates to its expectations for R&D and SG&A expenses driven primarily by positive results from the EV-201 pivotal trial.

Conference Call Details

Seattle Genetics’ management will host a conference call and webcast with supporting slides to discuss its first quarter 2019 financial results and provide an update on business activities. The event will be held today at 1:30 p.m. Pacific Time (PT); 4:30 p.m. Eastern Time (ET). The live event and supporting slides will be simultaneously webcast on the Seattle Genetics website at www.seattlegenetics.com, under the Investors section. Investors may also participate in the conference call by calling 877-260-1479 (domestic) or 334-323-0522 (international). The conference ID is 6169352. A replay of the live event and supporting slides will be available for at least 30 days. A replay of the audio only will be available by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 6169352. The telephone replay will be available until 5:00 p.m. PT on April 29, 2019.

On April 25, 2019 Illumina, Inc. (NASDAQ: ILMN) reported its financial results for the first quarter of fiscal year 2019 (Press release, Illumina, APR 25, 2019, View Source [SID1234535403]).

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First quarter 2019 results:

Revenue of $846 million, an 8% increase compared to $782 million in the first quarter of 2018
GAAP net income attributable to Illumina stockholders for the quarter of $233 million, or $1.57 per diluted share, compared to $208 million, or $1.41 per diluted share, for the first quarter of 2018
Non-GAAP net income attributable to Illumina stockholders for the quarter of $237 million, or $1.60 per diluted share, compared to $214 million, or $1.45 per diluted share, for the first quarter of 2018 (see the table entitled "Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders" for a reconciliation of these GAAP and non-GAAP financial measures)
Cash flow from operations of $198 million compared to $255 million in the first quarter of 2018
Free cash flow (cash flow from operations less capital expenditures) of $142 million for the quarter compared to $165 million in the first quarter of 2018
Gross margin in the first quarter of 2019 was 69.1% compared to 68.8% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.2% for the first quarter of 2019 compared to 69.8% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2019 were $169 million compared to $137 million in the prior year period. R&D expenses as a percentage of revenue were 20.0%, including 0.8% attributable to Helix. This compares to R&D expenses as a percentage of revenue of 17.5% in the prior year period, including 0.8% attributable to Helix.

Selling, general and administrative (SG&A) expenses for the first quarter of 2019 were $211 million compared to $183 million in the prior year period. Excluding acquisition-related expenses and amortization of acquired intangible assets, non-GAAP SG&A expenses as a percentage of revenue were 23.0%, including 0.7% attributable to Helix. This compares to 22.9% in the prior year period, including 1.1% attributable to Helix.

Depreciation and amortization expenses were $47 million and capital expenditures for free cash flow purposes were $56 million during the first quarter of 2019. At the close of the quarter, the company held $3.6 billion in cash, cash equivalents and short-term investments, compared to $3.5 billion as of December 30, 2018.

"This was a strong start to the year, with $846 million in revenue and more than $1 billion in orders for the first time in Illumina’s history," said Francis deSouza, President and CEO. "Our growth is driven by a broad range of sequencing applications, with 14% sequencing consumable growth in the first quarter, including more than 20% growth in clinical sequencing consumables."

Updates since our last earnings release:

Launched the S Prime (SP) flow cell, enabling smaller batch sizes and lower output sequencing methods on the NovaSeq System
Launched TruSight Oncology 500 as a Research Use Only product, empowering laboratories with comprehensive genomic profiling
Authorized a share repurchase program to repurchase $550 million of outstanding common stock and repurchased approximately $63 million of common stock in the first quarter
Welcomed Susan E. Siegel to Illumina’s Board of Directors, adding leadership experience in personalized medicine and digital health
Accelerated Helix’s path to independence to allow Helix to address a broader opportunity in population and consumer genomics; as a result, Helix will be deconsolidated effective April 25, 2019
Financial outlook and guidance

The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2019, the company continues to expect revenue growth in the range of 13% to 14%, and now expects GAAP earnings per diluted share attributable to Illumina stockholders of $6.29 to $6.39 and non-GAAP earnings per diluted share attributable to Illumina stockholders of $6.63 to $6.73 due to the favorable impact of the Helix deconsolidation.

Except for acquisition-related expenses incurred during the first quarter of 2019 which are reflected in our GAAP guidance, this guidance excludes any impact from the pending acquisition of Pacific Biosciences, which we expect to close in mid-2019.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Thursday, April 25, 2019. Interested parties may access the live teleconference through the Investor Relations section of Illumina’s website under the "company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing 1 (844) 647-5490, or 1 (615) 247-0295 outside North America, both with passcode 9153579.

A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.