On March 15, 2019 Diplomat Specialty Pharmacy reported 4th Quarter and 2018 Year End Financial Results (Press release, Diplomat Speciality Pharmacy, MAR 15, 2019, View Source [SID1234534376]).

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4th Quarter Revenue of $1,361 Million, an increase of 18%, Net (Loss) Income Attributable to Diplomat of $(298.0) Million, compared to $6.5 Million, Adjusted EBITDA of $43.5 Million, an increase of 63%
Full Year Revenue of $5,493 Million, an increase of 22%, Net (Loss) Income Attributable to Diplomat of $(302.3) Million, compared to $15.5 Million, Adjusted EBITDA of $167.8 Million, an increase of 65%
FLINT, Mich., March 15, 2019 /PRNewswire/ — Diplomat Pharmacy, Inc. (NYSE: DPLO), the nation’s largest independent provider of specialty pharmacy and infusion services, announced financial results for the quarter and year ended December 31, 2018. All comparisons, unless otherwise noted, are to the quarter or year ended December 31, 2017. The Pharmacy Benefit Management ("PBM") segment comparisons are impacted by the timing of the Company’s acquisitions, which occurred in late 2017. Prior period financials have been recast to include certain direct expenses as part of cost of sales instead of selling, general and administrative ("SG&A") expense for our Specialty segment. This is a reclassification change only and has no impact on overall results.

Diplomat Specialty Pharmacy (PRNewsFoto/Diplomat Pharmacy, Inc.)

Fourth Quarter 2018 Highlights include:

Revenue of $1,361 million, compared to $1,155 million, an increase of 18%
Specialty segment revenue of $1,192 million, compared to $1,143 million
PBM segment revenue of $179 million, compared to $12 million
Specialty segment total prescriptions dispensed of 229,000, compared to 224,000
PBM segment total volume, adjusted to 30-day equivalent, of 1,936,000, compared to 764,000
Gross margin of 6.9% versus 6.3%
Specialty segment gross margin of 5.7% versus 6.0%
PBM segment gross margin of 14.3% versus 32.8%
EPS of $(4.00) per diluted common share versus $0.09 per diluted common share
Adjusted EBITDA of $43.5 million, compared to $26.6 million
Adjusted EBITDA margin of 3.2% versus 2.3%
Net cash provided by operating activities was $1.8 million, compared to $41.6 million
Net Debt; defined as total debt including contingent consideration less cash and equivalents, decreased to $638.2 million, from $646.7 million at September 30, 2018
Full Year 2018 Highlights include:

Revenue of $5,493 million, compared to $4,485 million, an increase of 22%
Specialty segment revenue of $4,791 million, compared to $4,473 million
PBM segment revenue of $729 million, compared to $12 million
Specialty segment total prescriptions dispensed of 918,000, compared to 886,000
PBM segment total volume, adjusted to 30-day equivalent, of 8,171,000, compared to 764,000
Gross margin of 6.8% versus 6.1%
Specialty segment gross margin of 5.9% versus 6.0%
PBM segment gross margin of 13.1% versus 32.8%
EPS of $(4.07) per diluted common share versus $0.23 per diluted common share
Adjusted EBITDA of $167.8 million, compared to $101.8 million
Adjusted EBITDA margin of 3.1% versus 2.3%
Net cash provided by operating activities was $35.0 million, compared to $135.3 million
Brian Griffin, Chairman and CEO of Diplomat, commented "While our 2018 financial results were strong, market conditions in 2019 are significantly more challenging than expected in our specialty and PBM businesses. 2019 is a rebuilding year, and we continue to focus on driving additional volumes to Diplomat by creating partnerships with health plans and hospital systems to meet the demand for better clinical outcomes and management of specialty spend. We are also committed to rebuilding our PBM business."

"The Company’s cost structure is no longer supported by the current business environment and we are accelerating operational efficiency initiatives.

I remain confident that Diplomat is making the right investments and executing the right strategy and operational initiatives to leverage our competitive strengths and position Diplomat for future growth and profitability," said Griffin.

Fourth Quarter Financial Summary:

Revenue for the fourth quarter of 2018 was $1,361 million, compared to $1,155 million in the fourth quarter of 2017, an increase of $206 million or 18%. Our Specialty segment revenue amounted to $1,192 million, compared to $1,143 million in the prior year quarter, while revenue from our PBM segment amounted to $179 million, compared to $12 million in the prior year quarter. The increase in our Specialty segment was driven by manufacturer price increases and an increase in our oncology and infusion volumes, partially offset by reimbursement compression to maintain contractual relationships with certain payers and a volume decrease in certain therapy classes, including immunology and multiple sclerosis. The increase in our PBM segment is due to timing of our PBM acquisitions late in the fourth quarter of 2017 versus a full quarter impact in the fourth quarter of 2018.

Gross profit in the fourth quarter of 2018 was $93.9 million and generated a 6.9% gross margin, compared to $72.6 million gross profit and a 6.3% gross margin in the fourth quarter of 2017. Gross profit from our Specialty segment was $68.2 million, compared to $68.5 million in the prior year quarter, while gross profit from our PBM segment was $25.6 million, compared to $4.1 million in the prior year quarter. The gross margin increase in the quarter was due to the impact of our PBM acquisitions, partially offset by reimbursement compression in our Specialty segment.

SG&A expenses for the fourth quarter of 2018 were $79.9 million, an increase of $10.2 million, compared to $69.7 million in the fourth quarter of 2017. This increase is primarily driven by a $4.6 million increase in employee cost, including employee cost for our acquired entities, and a $0.6 million increase in share-based compensation. Also contributing to the SG&A expense increase was a $5.9 million increase in amortization expense from definite-lived intangible assets, inclusive of capitalized software for internal use, associated with our acquired entities. We also experienced increases in other SG&A expenses; including, rent due to the addition of our Chandler, Arizona facility, Information Technology ("IT") expense due to the implementation of a new operating system, travel, consulting and professional fees, as well as other miscellaneous expenses. These increases were partially offset by a $2.2 million decrease in acquisition related expenses.

Net (loss) income attributable to Diplomat for the fourth quarter of 2018 was $(298.0) million compared to $6.5 million in the fourth quarter of 2017. This decrease was primarily driven by a $262 million non-cash impairment charge related to goodwill and definite-lived intangible assets associated with our PBM segment due to the effects of client losses and a reduced financial forecast, on our annual impairment analysis, as well as a $46 million non-cash goodwill impairment charge related to our Specialty segment due to the effects of a reduced financial forecast, on our annual impairment analysis. Income from operations for the fourth quarter of 2018, excluding the non-cash impairment charges, was $13.9 million, compared to $2.9 million in the fourth quarter of 2017. We experienced a $6.0 million increase in interest expense due to the outstanding debt required to fund our PBM acquisitions in the fourth quarter of 2017. Our income tax benefit decreased $2.4 million due primarily to a $64.5 million increased tax benefit at statutory rates offset by a $9.8 million impact due to the impairment of our non-deductible goodwill relating to our prior stock acquisitions and a $48.7 million valuation allowance made in the fourth quarter of 2018 on deferred tax assets due to a cumulative loss position driven by the impairment charges. Income taxes were also impacted in the prior year by the passage of the Tax Cuts and Job’s act which, after taking into account the provisions of the Tax Cuts and Jobs Act, caused our net deferred tax liabilities to be re-remeasured for a one-time benefit of approximately $7.9 million. Adjusted EBITDA for the fourth quarter of 2018 was $43.5 million compared to $26.6 million in the fourth quarter of 2017, an increase of $16.9 million.

Earnings per share for the fourth quarter of 2018 was $(4.00) per basic/diluted common share, compared to $0.09 per basic/diluted common share for the fourth quarter of 2017.

Full Year 2018 Financial Summary:

Revenue for 2018 was $5,493 million, compared to $4,485 million in 2017, an increase of $1,007 million or 22%. Specialty segment revenue amounted to $4,791 million, compared to $4,473 million in 2017, while revenue from our PBM segment amounted to $729 million compared to $12 million in 2017. The consolidated revenue increase was principally driven by the full year impact of our 2017 acquisitions, including our PBM acquisitions, and the impact of manufacturer price increases in our Specialty segment. These increases were partially offset by reimbursement compression and by a volume decrease in our immunology, hepatitis C, and multiple sclerosis business categories, as well as other lower margin business categories, including human immunodeficiency virus and osteoporosis, compared to the prior year.

Gross profit in 2018 was $376.0 million and generated a 6.8% gross margin, compared to $274.1 million and a 6.1% gross margin in 2017. Gross profit improved $101.9 million, or 37%, compared to the prior year period. Gross profit from our Specialty segment was $280.6 million, compared to $270.1 million in the prior year, while gross profit from our PBM segment was $95.4 million, compared to $4.1 million in the prior year. The gross margin increase was primarily due to the impact of our PBM acquisitions, partially offset by reimbursement compression in our Specialty segment.

SG&A expenses for 2018 were $335.7 million, an increase of $80.1 million, compared to $255.6 million in 2017. Of this increase, $40.4 million related to employee cost, including employee cost for our acquired entities, a $10.9 million increase in share-based compensation, and a $1.7 million increase in severance and related expenses. Also contributing to the SG&A expense increase was a $27.5 million increase in amortization expense from definite-lived intangible assets, inclusive of capitalized software for internal use, associated with our acquired entities. We further experienced increases in other SG&A expenses including consulting and professional fees; rent due to the addition of our Chandler, Arizona facility; IT expense due to the implementation of a new operating system; recruiting primarily related to our CEO search; travel; as well as other miscellaneous expenses.

Net (loss) income attributable to Diplomat for 2018 was $(302.3) million compared to $15.5 million for 2017. This decrease was primarily driven by a $262 million non-cash impairment charge related to goodwill and definite-lived intangible assets associated with our PBM segment due to the effects of client losses and a reduced financial forecast, on our annual impairment analysis, as well as a $46 million non-cash goodwill impairment charge related to our Specialty segment due to the effects of a reduced financial forecast, on our impairment analysis. Our 2018 income from operations excluding the non-cash impairment charges, was $40.4 million, compared to $18.6 million in 2017. We also experienced a $30.9 million increase in interest expense due to a significant increase in outstanding debt to fund our PBM acquisitions, and a $2.1 million decrease in income tax benefit due to the same factors impacting the fourth quarter 2018. Adjusted EBITDA for 2018 was $167.8 million versus $101.8 million for 2017.

Earnings per share for 2018 was $(4.07) per basic/diluted common share, compared to $0.23 per basic/diluted common share for 2017.

Revised 2019 Financial Outlook

For the full-year 2019, we provide financial guidance as follows:

Revenue between $4.7 and $5.0 billion, versus the previous range of $5.6 to $5.8 billion
Specialty segment revenue between $4.4 and $4.6 billion, versus the previous range of $5.1 to $5.3 billion
PBM segment revenue between $0.3 and $0.4 billion, versus the previous range of $0.45 to $0.5 billion
Net (loss) income attributable to Diplomat between $(37) and $(26) million
Adjusted EBITDA between $110 and $116 million, versus the previous communication of "flat to low single digit percent year over year growth"
Diluted EPS between $(0.50) and $(0.34)
Our EPS expectations for 2019 assume approximately 75,300,000 weighted average common shares outstanding on a diluted basis and a tax rate of (21)% and (18)%, for the low- and high-end of the range, respectively, for the full year 2019, each of which could differ materially.

Earnings Conference Call Information

As previously announced, the Company will hold a conference call to discuss its fourth quarter and full year performance this morning, March 15, 2019, at 8:00 a.m. Eastern Time. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 833-286-5805 (647-689-4450 for international callers) and referencing participant code 2672528 approximately 15 minutes prior to the call. A live webcast of the conference call and associated slide presentation will be available on the investor relations section of the Company’s website for approximately 30 days at ir.diplomat.is.

On March 15, 2019 Oragenics, Inc. (NYSE American: OGEN), a leader in the development of new antibiotics against infectious diseases and effective treatments for oral mucositis, reported the enrollment of the 60th patient in its Phase 2 double blind, placebo controlled clinical trial of AG013 (NCT03234465) (Press release, Oragenics, MAR 15, 2019, View Source [SID1234534401]).

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AG013 is an oral mouth rinse composed of a recombinant Lactococcus lactis bacteria strain that contains the coding sequence for human trefoil family factor 1 (hTFF1), which is continually secreted by the bacteria. The trefoil factor family (TFF) is a family of three different peptides secreted by epithelial cells of the gastrointestinal tract in response to injury (Hoffman, 2004). Their presence has been implicated in reducing chemotherapy- and radiation-induced injury, both in preclinical studies (Beck et al., 2004) and in clinical trials (Peterson et al., 2009).

"We are encouraged and pleased to have made this important intermediate progress. The number of patients interested in participating in the clinical trial highlights the need for new treatment options for prevention of severe oral mucositis in this patient population," said Alan Joslyn, CEO of Oragenics, Inc. "While we are confident in the measures we have taken to potentially expedite the pace of patient enrollment in future periods and we remain optimistic about such enrollment rates, given the pace of patient enrollment to date, we now anticipate that the top-line data readout of the AG013 study will likely occur in early 2020."

On March 15, 2019 ProMIS Neurosciences, Inc. (TSX: PMN) (OTCQB: ARFXF), a biotechnology company focused on the discovery and development of antibody therapeutics targeting toxic oligomers implicated in the development of neurodegenerative diseases, reported its operational and financial results for the year ended December 31, 2018. Unless specified otherwise, all amounts are in Canadian dollars (Press release, ProMIS Neurosciences, MAR 15, 2019, View Source [SID1234534377]).

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"Over the course of the past year, the value of our unique discovery and development platform was further evidenced as ProMIS made considerable progress in expanding its portfolio of opportunities across multiple neurodegenerative diseases", stated Eugene Williams, ProMIS’ Executive Chairman.

"PMN310, our lead antibody therapeutic candidate for Alzheimer’s disease, showed further significant positive differentiation in both potential efficacy and safety compared to competitive antibody therapeutics currently in development. In addition, antibody candidates selectively targeting toxic forms of alpha-synuclein for Parkinson’s disease and toxic, aggregated forms of TDP43 for amyotrophic lateral sclerosis (ALS) were identified and further characterized to support initiation of pharmaceutical partnering discussions."

Corporate Highlights

During 2018, we completed private placements providing aggregate gross proceeds of approximately $7,240,000.
In the course of 2018, we received proceeds from the exercise of warrants and stock options in the amount of $1,797,640.
Alzheimer’s disease (AD) program
In January 2018, our lead product candidate for Alzheimer’s disease, PMN310, showed potential for an improved safety profile and improved therapeutic potency in head-to-head comparisons to other amyloid beta- directed antibodies.
In August 2018, we announced further evidence supporting potential for an improved safety profile in direct comparison to other amyloid beta-directed antibodies in clinical development. PMN310 showed no binding to amyloid beta (Aβ) plaque in AD brain samples in contrast to BAN2401 (Biogen/Eisai) and aducanumab, which both displayed robust Aβ plaque reactivity. Binding of therapeutic antibodies to Aβ deposits in brain tissue, in particular blood vessels, is believed to underlie the development of ARIA-E (amyloid-related imaging abnormalities with edema) or brain swelling in treated AD patients.
In June 2018, we announced the initiation of producer cell line development for PMN310, the first major step in the manufacturing process for therapeutic antibodies.
In October 2018, we announced identification of novel targets on misfolded, pathological forms of tau. The development of antibody therapeutics that selectively block these toxic forms of tau constitutes an exciting approach to treating AD and other neurodegenerative diseases.
Parkinson’s disease (PD) and ALS programs
In June 2018, we announced several antibody candidates selectively targeting the aggregated, toxic forms of alpha-synuclein, implicated in the development and progression of PD, as well as TDP43 (TAR DNA binding protein), implicated in the development of ALS.
In October 2018, the neuroprotective effect of our antibodies was evaluated on rat primary dopaminergic neurons injured by exposure to toxic oligomers of alpha-synuclein, an in vitro model of PD. In the test, several of our antibodies, selectively targeting toxic forms of alpha-synuclein, significantly blocked the death of neurons induced by these toxic forms.
People
In March 2018, Sharon Cohen, M.D., was appointed to our Scientific Advisory Board. Dr. Cohen is Medical Director and Principal Investigator of the Toronto Memory Program, an independent medical facility for dementia care and research. Her memory clinic and dementia clinical trials program are the largest and most active in Canada and have contributed substantially to patient care and to global clinical trial cohorts.
In September 2018, James Kupiec, M.D., was appointed Chief Medical Officer. Dr. Kupiec is a physician-scientist with over two decades of broad, hands-on experience in translational, early- and late-stage neuroscience drug development in the pharmaceutical industry.
In December 2018, Rudolph Tanzi, Ph.D., was appointed to our Scientific Advisory Board. Dr. Tanzi is a renowned neuroscientist and geneticist with scientific expertise in Alzheimer’s disease and brain health. He serves as Vice-chair of Neurology, Director of the Genetics and Aging Research Unit, and as a Director of the Henry and Allison McCance Center for Brain Health at Massachusetts General Hospital. He is also the Joseph P. and Rose F. Kennedy Professor of Neurology at Harvard Medical School.
In January 2019, we completed a private placement providing aggregate gross proceeds of approximately $2,198,800.
Financial Results

Annual Results of Operations

The Company’s net loss for the year ended December 31, 2018 was $10,167,050, compared to a net loss of $6,019,970 for the year ended December 31, 2017. Included in the net loss for the year ended December 31, 2018 were non-cash expenses of $1,081,600, representing share-based compensation and amortization of an intangible asset, compared to $700,953 for the year ended December 31, 2017. The increase in the net loss for the year ended December 31, 2018 is mainly related to the costs associated with developing the Company’s AD therapeutics program, increased contracted resources and associated costs, supporting its patent portfolio, associated general corporate expenditures and higher share-based compensation.

Research and development expenses for the year ended December 31, 2018 were $7,409,546, as compared to $3,704,010 in the year ended December 31, 2017. The increase in research and development expense for the year ended December 31, 2018 is primarily attributed to higher research program costs for the AD therapeutics program, increased contracted resources, share-based compensation, recruiting and travel expense.

General and administrative expenses for the year ended December 31, 2018 were $2,757,979, as compared to $2,318,752 in the year ended December 31, 2017. The increased expenditures for 2018 is primarily attributable to increased investor relations/public relations, salaries and associated costs and other professional fees, offset by foreign exchange gain on U.S. dollar denominated expenses decreased legal expense and share-based compensation.

Outlook

As a prelude to the first PMN310 clinical trial in AD, ProMIS anticipates using a novel biomarker approach that may show evidence of slowing of neuronal death early in the development program. To accomplish this, we plan to initiate a natural history evaluation of biomarker changes in untreated, early AD patients.

We anticipate potential initial results of the first clinical trial with PMN310 in late 2020.

The Company will also continue to further characterize the potential benefits of its programs selectively targeting toxic aggregates of TDP43 in ALS and toxic forms of alpha-synuclein in PD to further support on-going pharmaceutical partnering discussions.

On March 15, 2019 KIYATEC, Inc. reported that the company has opened Inova Health System (Inova) and Roswell Park Comprehensive Care Center as sites for its U.S. clinical study, 3D-PREDICT, to validate the company’s test as a patient-specific predictor of response to cancer therapies in ovarian, glioblastoma (GBM) and rare cancer patients (Press release, KIYATEC, MAR 15, 2019, View Source [SID1234534402]).

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"The addition of Inova Health System and Roswell Park Comprehensive Cancer Center to our clinical study is an important milestone as we continue on the path to determine the best drug option for cancer patients before they begin their treatment journey," said Matthew Gevaert, CEO of KIYATEC. "Both hospitals are known for their excellence in clinical research and patient care, most notably in ovarian cancer. Not only will this be significant for our trial, it underscores their commitment to finding the best, personalized care for their patients."

The 3D-PREDICT clinical study analyzes a patient’s live cancer cells, grown in KIYATEC’s laboratory within a biologically-relevant 3D microenvironment, to determine whether those cells respond to guideline-recommended cancer drugs. Evidence from the company’s earlier pilot study established a correlation between patient-specific predicted tumor response and actual patient clinical response to cancer therapy. The 3D-PREDICT study is a fully prospective, multi-institutional effort to validate the predictive accuracy of the test and correlate response predictions to clinical outcomes among patients with newly diagnosed and relapsed ovarian cancer, glioblastoma and certain rare tumors. The 3D-PREDICT study is anticipated to continue through 2022. Details on the trial can be found on Clinicaltrials.gov.

"Roswell Park has the unique distinction of being the first clinical center in the world to focus exclusively on cancer, and we are continuously seeking new and improved methods to provide the best care for our patients," said Kunle Odunsi, MD, PhD, FRCOG, FACOG, deputy director, chair of gynecologic oncology and executive director of the Center for Immunotherapy, Roswell Park Comprehensive Cancer Center, and lead investigator. "The 3D-PREDICT trial presents an opportunity to utilize an emerging technology for identifying biomarkers of response in our ovarian cancer immunotherapy research."

Inova has already accrued patients into the trial and G. Larry Maxwell, MD, Chairman of Obstetrics and Gynecology and co-director of Inova’s Women’s Health Integrated Research Center (WHIRC) is the lead investigator. Inova Strategic Investments, the strategic investing division of the Inova Health System, is an investor in KIYATEC. The division invests in companies that align with Inova’s strategic priorities of delivering personalized health and healthcare services.

KIYATEC will be exhibiting at the Society for Gynecologic Oncology (SGO) 50th Annual Meeting on Women’s Cancer, which is being held March 16-19, 2019 at the Hawaii Convention Center in Honolulu, Hawaii.

On March 15, 2019 MorphoSys AG presented the corporate presentation (Press release, MorphoSys, MAR 15, 2019, View Source [SID1234534390]).

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