On February 14, 2019 Incyte Corporation (Nasdaq:INCY) reported its 2018 fourth quarter and year-end financial results, 2019 guidance and provides a status update on the Company’s development portfolio (Press release, Incyte, FEB 14, 2019, View Source [SID1234533310]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

"Sales of Jakafi were strong in 2018, which is a testament to its well-established efficacy and safety profile, and we continue to work with the FDA to facilitate the review of the GVHD indication" stated Hervé Hoppenot, Chief Executive Officer, Incyte. "Our late-stage product portfolio provides us with multiple additional opportunities to accelerate revenue growth. Our submission to the FDA seeking marketing approval of pemigatinib in patients FGFR2 translocated cholangiocarcinoma is expected later this year, as is the submission, by Novartis, for the approval of capmatinib in patients with MET exon-14 skipping non-small cell lung cancer. Results from the pivotal trial of itacitinib in newly-diagnosed GVHD patients are expected later this year, as are the results of two additional pivotal trials of ruxolitinib in patients with steroid-refractory GVHD, as well as proof-of-concept data from the trial of ruxolitinib cream in patients with vitiligo. Success with these product candidates would not only serve to further diversify our sources of revenue, but would also illustrate the productivity of the research and development group at Incyte."

Portfolio Update

Oncology — key highlights

The U.S. Food and Drug Administration (FDA) recently extended the review of the sNDA seeking approval of ruxolitinib (JAK1/JAK2) for the treatment of steroid-refractory acute GVHD, assigning a new Prescription Drug User Fee Act (PDUFA) date of May 24, 2019. The sNDA is supported by data from REACH1, which were presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in December. Incyte is prepared for an immediate launch in the U.S. should ruxolitinib be approved in this new indication.

Phase 3 trials of ruxolitinib in patients with steroid-refractory GVHD (REACH2 [acute]; REACH3 [chronic]) are expected to deliver results in the second half of 2019, as is the Phase 3 trial of itacitinib (JAK1) in patients with steroid-naïve acute GVHD (GRAVITAS-301).

The FDA has recently granted pemigatinib (FGFR) Breakthrough Therapy designation for the treatment of previously treated, advanced/metastatic or unresectable FGFR2 translocated cholangiocarcinoma. The FDA’s Breakthrough Therapy designation is designed to expedite the development and review of drugs for serious conditions that have shown encouraging early clinical results and may demonstrate substantial improvements over available medicines.

The NDA seeking approval of pemigatinib for the second-line treatment of patients with FGFR2 translocated cholangiocarcinoma is expected to be submitted in the third quarter of 2019, and we are now recruiting patients into a pivotal trial of pemigatinib for the first-line treatment of cholangiocarcinoma. A pivotal program for the first-line treatment of patients with bladder cancer is planned to launch this year. Based on data generated from ongoing trials in patients with FGFR-driven cholangiocarcinoma, bladder cancer, and 8p11 MPN, Incyte is planning to initiate a pivotal tumor-agnostic trial evaluating pemigatinib in patients with driver-activations of FGF/FGFR later this year.

Status updates for Incyte’s later-stage clinical programs are provided below.

Indication

Status Update

Ruxolitinib
(JAK1/JAK2)

Steroid-refractory acute GVHD

sNDA accepted for Priority Review (based on REACH1), review period extended by three months; Phase 3 (REACH2)

Ruxolitinib
(JAK1/JAK2)

Steroid-refractory chronic GVHD

Phase 3 (REACH3)

Ruxolitinib
(JAK1/JAK2)

Essential thrombocythemia

Phase 2 (RESET)

Ruxolitinib
(JAK1/JAK2)

Refractory myelofibrosis

Phase 2 in combination with parsaclisib (PI3Kδ), INCB53914 (PIM) or itacitinib (JAK1)

Itacitinib
(JAK1)

Treatment-naïve acute GVHD

Phase 3 (GRAVITAS-301)

Itacitinib
(JAK1)

Treatment-naïve chronic GVHD

Phase 3 (GRAVITAS-309)

Itacitinib
(JAK1)

NSCLC

Phase 1/2 in combination with osimertinib (EGFR)

Pemigatinib
(FGFR1/2/3)

Bladder cancer

Phase 2 (FIGHT-201)

Pemigatinib
(FGFR1/2/3)

Cholangiocarcinoma

Phase 2 (FIGHT-202); Phase 3 (FIGHT-302) now recruiting

Pemigatinib
(FGFR1/2/3)

8p11 MPN

Phase 2 (FIGHT-203)

Pemigatinib
(FGFR1/2/3)

Solid tumors with driver activations of FGF/FGFR

Pivotal program in preparation

INCMGA0012
(PD-1)(1)

Solid tumors

Phase 2 trials (MSI-high endometrial cancer, merkel cell carcinoma, anal cancer)

Parsaclisib
(PI3Kδ)

Non-Hodgkin lymphoma

Phase 2 (CITADEL-203, follicular lymphoma), (CITADEL-204, marginal zone lymphoma), (CITADEL-205, mantle cell lymphoma)

(1) INCMGA0012 licensed from MacroGenics

Incyte also has a portfolio of compounds in proof-of-concept trials, as detailed below.

Small molecules

Monoclonal antibodies

Bispecific antibodies

INCB53914 (PIM)

INCAGN1876 (GITR)(2)

MCLA-145 (PD-L1xCD137)(3)

INCB59872 (LSD1)

INCAGN1949 (OX40)(2)

INCB62079 (FGFR4)

INCAGN2390 (TIM-3)(2)

INCB81776 (AXL/MER)

INCAGN2385 (LAG-3)(2)

INCB01158 (ARG)(1)

Epacadostat (IDO1)

INCB86550 (PD-L1)

Notes:

(1) INCB01158 development in collaboration with Calithera

(2) Discovery collaboration with Agenus

(3) MCLA-145 development in collaboration with Merus

Inflammation / autoimmunity (IAI) — key highlights

Further to randomized Phase 2 data presented in 2018, a Phase 3 program of ruxolitinib cream in patients with atopic dermatitis was initiated in December 2018. Data are expected to be available in 2020.

Data from the randomized Phase 2 trial of ruxolitinib cream in patients with vitiligo are expected in 2019, and a Phase 3 program in the same patient population is planned.

A Phase 2 trial of itacitinib in patients with ulcerative colitis has recently been initiated, as have Phase 2 trials of parsaclisib for the treatment of patients with pemphigus vulgaris, autoimmune hemolytic anemia and Sjögren’s syndrome.

Indication

Status Update

Ruxolitinib cream
(JAK1/JAK2)

Atopic dermatitis

Phase 3

Ruxolitinib cream
(JAK1/JAK2)

Vitiligo

Phase 2; Phase 3 in preparation

INCB54707
(JAK1)

Hidradenitis suppurativa

Phase 2

Itacitinib
(JAK1)

Ulcerative colitis

Phase 2

Parsaclisib
(PI3Kδ)

Pemphigus vulgaris, autoimmune hemolytic anemia, Sjögren’s syndrome

Phase 2

Partnered — key highlights

Lilly and Incyte recently announced that the first two Phase 3 trials of baricitinib as a treatment for moderate to severe atopic dermatitis, BREEZE-AD1 and BREEZE-AD2, met the primary efficacy endpoint compared to placebo. Lilly plans to share the full results from both studies at future scientific venues, as well as the topline data from other ongoing Phase 3 trials later this year.

Further to Phase 2 data presented in 2018, Novartis expects to submit an NDA for capmatinib in patients with non-small cell lung cancer and MET exon 14 skipping mutations this year.

Indication

Status Update

Baricitinib (JAK1/JAK2)(1)

Atopic dermatitis

Phase 3

Baricitinib (JAK1/JAK2)(1)

Systemic lupus erythematosus

Phase 3

Baricitinib (JAK1/JAK2)(1)

Psoriatic arthritis

Phase 3 in preparation (at Lilly)

Baricitinib (JAK1/JAK2)(1)

Severe alopecia areata

Phase 2/3

Capmatinib (MET)(2)

Non-small cell lung cancer, liver cancer

NDA (NSCLC patients with MET exon 14 skipping mutations) expected this year (by Novartis)

(1) Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate to severe rheumatoid arthritis

(2) Worldwide rights to capmatinib licensed to Novartis

2018 Fourth-Quarter and Year-End Financial Results

The financial measures presented in this press release for the three and twelve months ended December 31, 2018 and 2017 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for both revenues and expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers. Reconciliations of GAAP net income (loss) to Non-GAAP net income for the three and twelve months ended December 31, 2018 and 2017 have been included at the end of this press release.

Guidance related to research and development and selling, general and administrative expenses does not include estimates associated with any potential future strategic transactions.

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

Revenues For the quarter ended December 31, 2018, GAAP net product revenues of Jakafi were $380 million as compared to $302 million for the same period in 2017, representing 26 percent growth. For the twelve months ended December 31, 2018, GAAP net product revenues of Jakafi were $1.4 billion as compared to $1.1 billion for the same period in 2017, representing 22 percent growth. For the three months ended December 31, 2018 and 2017, GAAP net product revenues of Iclusig (ponatinib) were $19 million. For the twelve months ended December 31, 2018, GAAP net product revenues of Iclusig were $80 million as compared to $67 million for the same period in 2017.

For the quarter and twelve months ended December 31, 2018, GAAP product royalties from sales of Jakavi (ruxolitinib), which has been out-licensed to Novartis outside of the United States, were $55 million and $195 million, respectively, as compared to $48 million and $152 million, respectively, for the same periods in 2017. For the quarter and twelve months ended December 31, 2018, GAAP product royalties from sales of Olumiant, which has been out-licensed to Lilly globally, were $14 million and $40 million, respectively, as compared to $5 million and $9 million, respectively, for the same periods in 2017.

For the quarter and twelve months ended December 31, 2018, GAAP milestone and contract revenues earned from our collaborative partners were $60 million and $180 million, as compared to $70 million and $175 million, respectively, for the same periods in 2017. Non-GAAP revenues exclude milestone revenues.

For the quarter and twelve months ended December 31, 2018, total GAAP revenues were $528 million and $1.9 billion, respectively, as compared to $444 million and $1.5 billion, respectively, for the same periods in 2017. Total Non-GAAP revenues for the quarter and twelve months ended December 31, 2018 were $468 million and $1.7 billion, respectively, as compared to $374 million and $1.4 billion, respectively, for the same periods in 2017.

Cost of product revenues GAAP cost of product revenues for the quarter and twelve months ended December 31, 2018 was $26 million and $94 million, respectively, as compared to $22 million and $79 million, respectively, for the same periods in 2017. Non-GAAP cost of product revenues for the quarter and twelve months ended December 31, 2018 was $21 million and $73 million, respectively, as compared to $17 million and $58 million, respectively, for the same periods in 2017. Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

Research and development expenses GAAP research and development expenses for the quarter and twelve months ended December 31, 2018 were $304 million and $1.2 billion, respectively, as compared to $447 million and $1.3 billion, respectively, for the same periods in 2017. The decrease in GAAP research and development expenses over the prior year quarter and twelve month period was driven primarily by a decrease in upfront consideration and milestone expenses related to our collaboration agreements.

Non-GAAP research and development expenses for the quarter and twelve months ended December 31, 2018 were $274 million and $1.0 billion, respectively, as compared to $274 million and $865 million, respectively, for the same periods in 2017. Non-GAAP research and development expenses for the quarter and twelve months ended December 31, 2018 exclude the cost of stock-based compensation of $26 million and $101 million, respectively, and upfront consideration and milestones to our collaborative partners of $5 million and $52 million, respectively. Non-GAAP research and development expenses for the quarter and twelve months ended December 31, 2017 exclude the cost of stock-based compensation of $23 million and $90 million, respectively, upfront consideration and milestones paid to our collaborative partners of $150 million and $359 million, respectively, and an asset impairment charge of $12 million.

Selling, general and administrative expenses GAAP selling, general and administrative expenses for the quarter and twelve months ended December 31, 2018 were $108 million and $434 million, respectively, as compared to $98 million and $366 million, respectively, for the same periods in 2017. The increase in GAAP selling, general and administrative expenses from the prior year quarter and twelve month periods were driven by an increase in donations to independent non-profit patient assistance organizations in the United States and additional costs related to the commercialization of Jakafi.

Non-GAAP selling, general and administrative expenses for the quarter and twelve months ended December 31, 2018 were $97 million and $387 million, respectively, as compared to $87 million and $324 million, respectively, for the same periods in 2017. Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation.

Change in fair value of acquisition-related contingent consideration GAAP change in fair value of acquisition-related contingent consideration for the quarter and twelve months ended December 31, 2018 was expense of $7 million and $26 million, respectively, as compared to $10 million and $8 million, respectively, for the same periods in 2017.

Unrealized loss on long term investments GAAP unrealized loss on long term investments for the quarter and twelve months ended December 31, 2018 was $22 million and $44 million, respectively, as compared to $22 million and $24 million, respectively, for the same periods in 2017. The unrealized loss on long term investments for the quarter and twelve months ended December 31, 2018 represents the fair market value adjustments of the Company’s investments in Agenus, Calithera, Merus, and Syros.

Expense related to senior note conversions GAAP expense related to senior note conversions for the twelve months ended December 31, 2018 and December 31, 2017 was $0 million and $55 million, respectively, related to the conversions of certain of our 2018 and 2020 convertible senior notes.

Net income (loss) GAAP net income for the quarter ended December 31, 2018 was $69 million, or $0.32 per basic and diluted share, as compared to net loss of $150 million, or $0.71 per basic and diluted share for the same period in 2017. GAAP net income for the twelve months ended December 31, 2018 was $109 million, or $0.52 per basic and $0.51 per diluted share, as compared to net loss of $313 million, or $1.53 per basic and diluted share for the same period in 2017.

Non-GAAP net income for the quarter ended December 31, 2018 was $87 million, or $0.41 per basic and $0.40 per diluted share, as compared to Non-GAAP net income of $4 million, or $0.02 per basic and diluted share for the same period in 2017. Non-GAAP net income for the twelve months ended December 31, 2018 was $224 million, or $1.06 per basic and $1.04 per diluted share, as compared to Non-GAAP net income of $131 million, or $0.64 per basic and $0.62 per diluted share for the same period in 2017.

Cash, cash equivalents and marketable securities position As of December 31, 2018, cash, cash equivalents and marketable securities totaled $1.4 billion as compared to $1.2 billion as of December 31, 2017.

(1)Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

(2) Adjusted to exclude the estimated cost of stock-based compensation and milestones.

(3) Adjusted to exclude the estimated cost of stock-based compensation.

(4) Adjusted to exclude the change in fair value of estimated future royalties relating to sales of Iclusig in the licensed territory relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

Future Non-GAAP financial measures may also exclude upfront and ongoing milestones relating to third-party collaboration partners, impairment of goodwill or other assets, changes in the fair value of equity investments in our collaboration partners, non-cash interest expense related to the amortization of the initial discount on our 2020 Senior Notes and the impact on our tax provision of discrete changes in our valuation allowance position on deferred tax assets.

Conference Call and Webcast Information

Incyte will hold a conference call and webcast this morning at 8:00 a.m. EDT. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13686537.

If you are unable to participate, a replay of the conference call will be available for 30 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13686537.

The conference call will also be webcast live and can be accessed at www.incyte.com in the Investors section under "Events and Presentations".

About Incyte

Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical company focused on the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit the Company’s website at www.incyte.com.

Follow @Incyte on Twitter at View Source

About Jakafi (ruxolitinib)

Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. Food and Drug Administration for treatment of people with polycythemia vera (PV) who have had an inadequate response to or are intolerant of hydroxyurea. Jakafi is also indicated for treatment of people with intermediate or high-risk myelofibrosis (MF), including primary MF, post—polycythemia vera MF, and post—essential thrombocythemia MF.

Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi (ruxolitinib) outside the United States.

About Iclusig (ponatinib) tablets

Iclusig targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs.

In the EU, Iclusig is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (CML) who are resistant to dasatinib or nilotinib; who are intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation, or the treatment of adult patients with Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL) who are resistant to dasatinib; who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation.

Incyte has an exclusive license from ARIAD Pharmaceuticals, Inc., since acquired by Takeda Pharmaceutical Company Limited, to develop and commercialize Iclusig in the European Union and 22 other countries, including Switzerland, Norway, Turkey, Israel and Russia.

On February 14, 2019 Vor Biopharma, an immuno-oncology company pioneering engineered hematopoietic stem cell (HSC) therapies for the treatment of hematological malignancies, reported a $42 million Series A financing round led by 5AM Ventures and RA Capital Management (Press release, Vor BioPharma, FEB 14, 2019, View Source [SID1234533328]). Johnson & Johnson Innovation – JJDC, Inc . (JJDC), Novartis Institutes for BioMedical Research (NIBR), and Osage University Partners also participated in the round along with Vor Co-founder PureTech Health. Vor plans to use the proceeds from the financing to advance its lead HSC-based candidate for the treatment of acute myeloid leukemia (AML) towards the clinic, and to further build its pipeline to treat hematologic malignancies.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

"Vor’s unique and patented technology platform for enabling targeted immunotherapies using engineered HSCs has the potential to disrupt the treatment landscape for hematologic malignancies," said Kush Parmar, M.D., Ph.D., Managing Partner at 5AM Ventures who has joined the Vor Biopharma Board of Directors as Executive Chair. "We are excited to work with Vor to drive this next chapter of growth forward."

"The need for new therapies for hematologic malignancies is dire. I am gratified that this discovery from my lab continues to advance towards the clinic. This new platform may enable more patients to benefit from the life-saving potential of targeted immunotherapies," said Siddhartha Mukherjee, M.D., D.Phil, Vor Co-founder and Associate Professor of Medicine at Columbia University. "I look forward to further engaging with the scientific community when we publish our results in peer-reviewed journals."

"We are excited about Vor’s bold and novel approach to potentially revolutionize the way stem cell transplants are used to treat severe hematologic cancers," said Joshua Resnick, M.D., Managing Director at RA Capital who has also joined the Vor Biopharma Board of Directors.

Vor’s engineered HSC technology platform is designed to address fundamental limitations of today’s immunotherapies. Vor’s approach has the potential to expand the reach of targeted immunotherapies to a broad range of patient populations and hematological malignancies by enabling new dosing paradigms for cancer-targeted immunotherapies, which can substantially improve the therapeutic window for efficacy and improve patient safety.

"We are delighted to welcome this terrific syndicate of investors, who share our passion, commitment, and vision for bringing Vor’s potentially life-saving new therapies to patients with acute myeloid leukemia and other hematologic malignancies," said Bharatt Chowrira, J.D., Ph.D., Board of Directors at Vor Biopharma and President and Chief of Business & Strategy at PureTech Health

On February 14, 2019 Orion’s and Bayer’s reported that darolutamide plus androgen deprivation therapy (ADT) significantly extends metastasis-free survival with a favorable safety profile compared to placebo plus ADT in non-metastatic castration-resistant prostate cancer (Press release, Orion Biotechnology, FEB 14, 2019, View Source [SID1234533350]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Statistically significant improvement in metastasis-free survival (MFS), with a median MFS of 40.4 months with darolutamide plus androgen deprivation therapy (ADT) versus placebo plus ADT (18.4 months).

Positive trend in overall survival with a 29% reduction in risk of death at interim analysis (P=0.045).

Incidence of treatment-emergent adverse events was similar for darolutamide plus ADT and placebo plus ADT.

Health-related quality of life was maintained.
First results from the Phase III ARAMIS trial with the androgen receptor antagonist darolutamide were presented in an oral presentation at American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium and simultaneously published in The New England Journal of Medicine.
Abstract: 140 – ARAMIS

Results from the pivotal Phase III ARAMIS trial in patients with non-metastatic castration-resistant prostate cancer (nmCRPC) showed a statistically significant improvement in metastasis-free survival (MFS) with darolutamide plus standard of care (ADT) compared to placebo plus ADT (HR=0.41, 95% CI 0.34-0.50; P<0.001). This translates to a 59 percent reduction in the risk of metastasis or death. The median MFS was 40.4 months in the darolutamide arm compared with 18.4 months for the placebo arm – an overall improvement in median MFS of 22 months.

A positive trend in overall survival (OS) was also observed (HR=0.71, 95% CI 0.50-0.99; P=0.045), and all other secondary endpoints demonstrated a benefit in favor of darolutamide. Importantly, the incidence of treatment-emergent adverse events (AEs) with greater than or equal to 5 percent frequency or of grade 3-5 was comparable between darolutamide and placebo arms; only fatigue occurred in more than 10 percent of patients (darolutamide plus ADT resulted in 12.1 percent versus 8.7 percent in patients with placebo plus ADT). Quality of life outcomes were similar between the treatment groups.

These data were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium (ASCO GU) in San Francisco and published simultaneously in The New England Journal of Medicine.

"In addition to a benefit in MFS, a favorable safety profile is critical for these largely asymptomatic nmCRPC patients because treatment decisions can impact their overall well-being, prognosis, compliance with the treatment as well as other medications that are typical for this patient population. These data are exciting for the prostate cancer community; they not only show darolutamide’s significant efficacy in preventing the spread of prostate cancer, but also its favorable tolerability profile that, once approved, may allow patients to continue their day-to-day life without adding any burden," said Karim Fizazi, M.D., Ph.D., Professor of Medicine at the Institut Gustave Roussy, University of Paris Sud, France.

"Prostate cancer patients are still in need of treatments that are not only effective but also safe without adverse events that would compromise their quality of life. Orion is working hard to bring innovative treatments to cancer patients. With the positive results of ARAMIS trial we together with Bayer are one step closer of bringing darolutamide to patients and their treating physicians", said Christer Nordstedt, PhD, MD, Senior Vice President, Research and Development, Orion Corporation.

Bayer plans to discuss the data from the ARAMIS trial with health authorities regarding the submission of new drug applications. Bayer has been granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for darolutamide in men with nmCRPC. Darolutamide is being developed jointly by Bayer and Orion Corporation.

Detailed study results

The MFS benefit observed with darolutamide was consistent across all subgroups of patients. In an interim analysis of OS, darolutamide showed a positive trend, with a 29 percent reduction in the risk of death (HR=0.71, 95% CI 0.50-0.99; P=0.045, median not reached).

In addition, darolutamide plus ADT demonstrated a significant benefit over placebo plus ADT for time to pain progression (40.3 months compared to 25.4 months; HR=0.65, 95% CI 0.53-0.79; P<0.001) and time to cytotoxic chemotherapy (median not reached compared to 38.2; HR=0.43, 95% CI 0.31-0.60; P<0.001). Another secondary endpoint, time to first symptomatic skeletal event (SSE), also demonstrated a benefit in favor of darolutamide (median not reached). Darolutamide extended progression-free survival (PFS) (36.8 months compared to 14.8 months; HR=0.38, 95% CI 0.32-0.45; P<0.001), with a 62 percent risk reduction of local progression, distant metastases or death.

Incidence of treatment-emergent AEs was similar between darolutamide and placebo; most AEs were grade 1 and 2 (55 percent with darolutamide plus ADT and 54 percent with placebo plus ADT). Compared to placebo plus ADT, darolutamide plus ADT did not increase rates of critical AEs including, but not limited to, seizures, falls, fractures, rash, cognitive disorder, mental impairment or hypertension. Patients with a history of seizure were not excluded from the study.

The results of Patient Reported Outcomes (PRO)-based endpoints (based on the Functional Assessment of Cancer Therapy-Prostate; FACT-P, European Organisation for Research and Treatment of Cancer quality of life; EORTC-QLQ-PR25, and EQ-5D-3L questionnaires) demonstrated maintenance of health-related quality of life (HRQoL) with a positive trend favoring darolutamide over placebo.

About the ARAMIS trial design

The ARAMIS trial is a randomized, Phase III, multi-center, double-blind, placebo-controlled trial evaluating the safety and efficacy of oral darolutamide in patients with nmCRPC who are currently being treated with ADT as standard of care and are at high risk for developing metastatic disease. 1,509 patients were randomized in a 2:1 ratio to receive 600 mg of darolutamide twice a day or placebo along with ADT.

The primary endpoint of this trial is MFS defined as time between randomization and evidence of metastasis or death. The secondary endpoints of this trial are OS, time to pain progression, time to initiation of first cytotoxic chemotherapy, time to first SSE, and characterization of the safety and tolerability of darolutamide.

About castration-resistant prostate cancer (CRPC)

Prostate cancer is the second most commonly diagnosed malignancy in men worldwide. In 2018, an estimated 1.2 million men were diagnosed with prostate cancer, and about 358,000 died from the disease worldwide. Prostate cancer is the fifth leading cause of death from cancer in men. Prostate cancer results from the abnormal proliferation of cells within the prostate gland, which is part of a man’s reproductive system. It mainly affects men over the age of 50, and the risk increases with age. Treatment options range from surgery to radiation treatment to therapy using hormone-receptor antagonists, i.e. substances that stop the formation of testosterone or prevent its effect at the target location. However, in nearly all cases, the cancer eventually becomes resistant to conventional hormone therapy.

CRPC is an advanced form of the disease where the cancer keeps progressing even when the amount of testosterone is reduced to very low levels in the body. The field of treatment options for castration-resistant patients is evolving rapidly, but until recently, there have been no effective treatment options for CRPC patients who have rising Prostate-Specific Antigen (PSA) levels while on ADT and no detectable metastases. In men with progressive nmCRPC, a short PSA doubling time has been consistently associated with reduced time to first metastasis and death.

About darolutamide

Darolutamide is a non-steroidal androgen receptor antagonist with a distinct chemical structure that binds to the receptor with high affinity and exhibits strong antagonistic activity, thereby inhibiting the receptor function and the growth of prostate cancer cells. In addition to the Phase III trial ARAMIS in men with nmCRPC, darolutamide is also being investigated in a Phase III study in metastatic hormone-sensitive prostate cancer (ARASENS). Information about these trials can be found at www.clinicaltrials.gov.

On February 13, 2019 Cambrex Corporation (NYSE: CBM), a leading provider of development, manufacturing, testing and technology services for small molecules, reported results for the fourth quarter and full year ended December 31, 2018 (Press release, Cambrex, FEB 13, 2019, View Source [SID1234533274]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Fourth Quarter 2018 Highlights

Announced the acquisition of Avista Pharma Solutions ("Avista"), an early clinical phase Contract Development, Manufacturing and Testing Organization, for approximately $252 million in total cash consideration. This transaction closed on January 2, 2019.

Net revenue was $134.3 million under current U.S. GAAP, ASC 606 ("ASC 606"). Under ASC 605, the previous revenue recognition standard, and the only standard under which fourth quarter 2017 results were reported, Net revenue increased 16% compared to the same quarter last year.

Under current U.S. GAAP, Income from continuing operations was $1.3 million and Diluted EPS was $0.04 per share. This reflects the impacts of the timing of certain tax charges related to tax reform in New Jersey. Under previous U.S. GAAP utilizing ASC 605, Income from continuing operations would have been $32.3 million and Diluted EPS from continuing operations would have been $0.96 per share compared to Income from continuing operations of $40.2 million and Diluted EPS of $1.20 in the same quarter last year. Adjusted Income from continuing operations was $48.7 million and Diluted EPS was $1.44, compared to $42.3 million and $1.26, respectively, for the same quarter last year (see table at the end of this press release).

Under ASC 606, EBITDA was $33.5 million. Adjusted EBITDA, which excludes the impact of adopting ASC 606, Halo’s results and Acquisition and Integration costs, was $70.7 million compared to $65.1 million in the same quarter last year (see table at the end of this press release).

Net debt was $204.1 million at the end of the quarter, a decrease of $23.7 million during the quarter primarily driven by cash flows from operations.

The Company expects full year 2019 Net revenue, which excludes the impact of foreign currency, to be between 21% and 25% higher than 2018 Net revenue as recorded under ASC 606 for both years. Adjusted EBITDA is expected to be between $150 and $160 million (see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).

"We’re very excited to add the early stage development and testing capabilities of Avista Pharma, which when added to the drug product capabilities of Halo Pharma, which we acquired a few months ago, and Cambrex’s legacy drug substance capabilities, makes us a leading global provider of end to end integrated services for small molecules. Combining Cambrex, Halo and Avista will allow us to follow a small molecule from pre-clinical through commercialization and leverage hundreds of new customers and molecule opportunities across a much broader services and manufacturing platform. Integration efforts are well under way with the goal of building a best-in-class fully integrated contract development and manufacturing organization," commented Steven M. Klosk, President and Chief Executive Officer of Cambrex.

"Looking forward, we continue to see strong market conditions in the sectors that we serve. This is especially true in early stage development and testing, where we expect continued strong growth, creating the potential for a large funnel of molecules for which we hope to deliver a broad range of services all the way through commercial approval."

Basis of Reporting

The Company has provided a reconciliation of GAAP to adjusted (i.e. Non-GAAP) amounts at the end of this press release. Cambrex management believes that the adjustments provide useful information to investors due to the magnitude and nature of certain amounts recorded under GAAP.

Fourth Quarter 2018 Operating Results – Consolidated, Continuing Operations

Net revenue under ASC 606 was $134.3 million. Under ASC 605, the revenue recognition standard for which 2017 results were reported, Net revenue increased to $212.3 million, or 16%, from $182.3 million in the same quarter last year. Results under ASC 605 include a 2% unfavorable impact of foreign exchange compared to the fourth quarter of 2017. Net revenue during the fourth quarter of 2018 includes the acquisition of Halo, now our finished dosage form segment, which contributed revenue of $23.4 million under ASC 606 and $23.2 million under ASC 605. Excluding finished dosage form Net revenues, higher sales of controlled substances was the primary driver of the increase under ASC 605 compared to the same quarter last year.

Gross margin under ASC 606 was 36% for the fourth quarter of 2018. Under ASC 605, Gross margin was 41% compared to 43% in the same quarter last year. Excluding the finished dosage form segment and the unfavorable impact of foreign exchange, ASC 605 Gross margin during the quarter was 42%.

Selling, general and administrative expenses were $21.5 million, compared to $18.3 million in the same quarter last year. The increase was mainly due to higher amortization expense related to purchased intangible assets of $3.0 million within the finished dosage form segment.

Research and development expenses were $3.6 million, compared to $4.3 million in the same quarter last year. The decrease is primarily due to lower expenses related to the development of generic drug products.

Acquisition and Integration expenses of $3.4 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista. The acquisition of Avista closed on January 2, 2019.

Operating profit under ASC 606 was $19.8 million for the fourth quarter of 2018. Under ASC 605, Operating profit was $58.8 million compared to $56.3 million in the same quarter last year. The increase was primarily the result of higher gross profit partially offset by higher operating expenses as described above. Adjusted EBITDA was $70.7 million compared to $65.1 million in the same quarter last year (see table at the end of this press release).

Income tax expense under ASC 606 was $17.5 million resulting in an effective tax rate of 93% compared to $15.6 million and an effective tax rate of 28% in the same quarter last year. Income tax expense during the quarter reflects $11.4 million of expense primarily for a state valuation allowance due to New Jersey tax reform enacted during the fourth quarter of 2018. The fourth quarter of 2018 also includes the immediate recognition of certain effects of share-based compensation, acquisition and integration expenses, amortization of purchased intangibles, unrealized gain on investment in equity securities and the finalization of the U.S. tax reform toll charge on undistributed foreign earnings. Under ASC 605 and excluding these items, the effective tax rate would have been approximately 22% during the quarter.

Income from continuing operations under ASC 606 was $1.3 million. Under ASC 605, Income from continuing operations was $32.3 million, or $0.96 per diluted share, compared to $40.2 million, or $1.20 per diluted share, in the same quarter last year.

Adjusted Income from continuing operations, calculated under ASC 605, to be comparable to the prior year results, and including other adjustments described in the table at the end of this press release, was $48.7 million or $1.44 per share, compared to $42.3 million or $1.26 per share in the same quarter last year.

Capital expenditures were $19.1 million and depreciation and amortization was $13.7 million compared to $13.9 million and $8.8 million, respectively, in the same quarter last year.

Net debt was $204.1 million at the end of the quarter, a decrease of $23.7 million during the quarter primarily driven by cash flows from operations.

As a result of the Halo acquisition in September 2018, and to be in alignment with how the business is managed, the Company’s operating segments were aggregated to form two reportable segments, Active Pharmaceutical Ingredients ("APIs") and Finished Dosage Form ("FDF"). The API segment consists of four operating segments which manufactures APIs. The FDF segment consists of one operating segment which manufactures and develops finished dosage form products.

Fourth Quarter 2018 Operating Results – Active Pharmaceutical Ingredients ("API") segment

Net revenue was $110.9 million under ASC 606. Under ASC 605, net revenue was $189.1 million compared to $182.3 in the same quarter last year, a 3.7% increase. Results under ASC 605 include a 2% unfavorable impact of foreign exchange compared to the fourth quarter of 2017. Higher sales of controlled substances was the primary driver of the increase under ASC 605 compared to the same quarter last year.

Gross profit in the fourth quarter of 2018 was $42.6 million. Under ASC 605, Gross profit would have been $81.8 million compared to $78.9 million in the same quarter last year. Gross margins decreased to 38% from 43% in the same quarter last year. Excluding the impact of the new revenue recognition standard, gross margins would have been 43%.

Selling, general and administrative ("SG&A") expenses were $10.2 million in the fourth quarter 2018, compared to $14.0 million in the same quarter last year. The decrease was mainly due to lower personnel related costs and consulting expenses.

Operating profit was $29.3 million under ASC 606 in the fourth quarter 2018. Under ASC 605, operating profit was $68.6 million compared to $61.9 in the fourth quarter 2017. The increase in operating profit under ASC 605 was due to higher gross profit and lower operating expenses.

Fourth Quarter 2018 Operating Results – Finished Dosage Form ("FDF") segment

Results on an ASC 605 basis were not materially different than the reported results under ASC 606.

FDF Net revenue in the fourth quarter of 2018 was $23.4 million under ASC 606.

Gross profit was $5.7 million and gross margin was 24% under ASC 606 in the fourth quarter of 2018.

Selling, general and administrative expenses were $5.4 million in the fourth quarter of 2018 including amortization of purchased intangibles of $3.0 million.

Acquisition and Integration expenses of $1.1 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista.

Operating loss under ASC 606 was $0.7 million. Operating loss includes $1.1 million in integration costs and approximately $3.3 million of increased depreciation and amortization expense resulting from the application of purchase accounting.

Fourth Quarter 2018 Operating Results – Corporate Headquarters

Selling, general and administrative expenses were $5.9 million in the fourth quarter of 2018 compared to $4.3 million in the same quarter last year. The increase is primarily related to higher personnel related expenses.

Acquisition and Integration expenses of $2.3 million for the fourth quarter of 2018 represent costs associated with the acquisitions of Halo and Avista.

Operating loss in the fourth quarter 2018 was $8.8 million compared to $5.6 million in the same quarter last year.

Financial Expectations – Continuing Operations

The following table shows the Company’s current expectations for its full year 2019 financial performance. The expectations in the table below reflect expected results from the business including the recent acquisitions of Halo and Avista. All expectations for 2019, including growth relative to 2018, are based on actual and expected ASC 606 results for both years.

Consistent with the Company’s usual guidance practices, these financial expectations are for continuing operations and exclude the impact of any potential future acquisitions and related transaction and integration expenses, including those related to the recent acquisitions of Halo Pharma and Avista Pharma Solutions, divestitures, restructuring activities, certain tax items discussed below, and the impact of foreign currency on Net revenue.

EBITDA, Adjusted EBITDA and Adjusted Income from continuing operations per share for 2019 will be computed on a basis consistent with the reconciliation of the current quarter financial results in the tables at the end of this press release, except that all 2019 results will be on an ASC 606 basis. Free cash flow is defined as the change in debt, net of cash during the year. Adjusted effective tax rate excludes the immediate recognition of certain benefits of share-based compensation and certain other items adjusted for in the non-GAAP reconciliation tables at the end of this release.

The tax rate will be sensitive to the Company’s geographic mix of income, changes in the tax laws or rates within the countries in which the Company operates and the effects of certain share-based payments. Reconciliations of these measures to measures calculated in accordance with GAAP are not available without unreasonable effort due to the unavailability of certain information needed to calculate certain reconciling items, including interest expense and income tax expense.

We expect M&A and related integration expenses for 2019 to be between $9 and $11 million. These amounts are excluded from our consolidated Adjusted EBITDA and Adjusted income from continuing operations per share guidance included above. These expenses consist of approximately $4.5 million of transaction expenses paid in conjunction with our acquisition of Avista in early January and the remainder will consist of integration expenses incurred across most functional areas throughout 2019. This estimate also includes certain immediate and one-time expenses related to IT systems, but does not include costs to upgrade the two newly acquired businesses to SAP, our ERP software, which will likely happen over the course of 2019 and 2020.

Expectations above include preliminary estimates for Depreciation expense associated with purchase accounting for the Avista acquisition. We expect to finalize the purchase accounting for Avista during the first half of 2019. As a result, expected Depreciation expense and its impact on expected Adjusted Income from continuing operations per share in the table below will likely change when purchase accounting is finalized.

Refer to the tables at the end of this press release which includes items typically adjusted to arrive at the Company’s non-GAAP results.

The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the Company’s 2018 Form 10-K is filed with the SEC.

Conference Call and Webcast

A conference call to discuss the Company’s fourth quarter and full year 2018 results will begin at 8:30 a.m. Eastern Time on February 13, 2019 and can be accessed by calling 1-877-260-1479 for domestic and +1-334-323-0522 for international. Please use the passcode 2955208 and call approximately 10 minutes prior to the start time. A webcast will be available in the Investors section on the Cambrex website located at www.cambrex.com. A telephone replay of the conference call will be available through February 20, 2019 by calling 1-888-203-1112 for domestic and +1-719-457-0820 for international. Please use the passcode 2955208 to access the replay.

On February 13, 2019 Innovent Biologics, Inc. (Innovent) (HKEX: 01801), a world-class biopharmaceutical company that develops, manufactures and commercializes high quality innovative medicines for the treatment of oncology, autoimmune and other major diseases, reported that the first patient has been dosed in a Phase I clinical trial of IBI101, a recombinant fully human anti-tumor necrosis factor receptor superfamily member 4 (anti-OX40) monoclonal antibody (Press release, Innovent Biologics, FEB 13, 2019, View Source [SID1234533290]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

In this Phase I clinical study, the tolerance, safety and primary efficacy of IBI101, either as monotherapy or in combination with Tyvyt (sintilimab injection), an anti-programmed cell death protein 1 (PD-1) antibody, will be evaluated. The study comprises two parts, namely a Phase Ia study with IBI101 as monotherapy and a Phase Ib study with IBI101 in combination with Tyvyt. Patients with advanced solid tumors who have failed standard treatments will be enrolled in the study.

"The Investigational New Drug (IND) application of IBI101, indicated for patients with advanced solid tumors, was approved by the U.S. Food & Drug Administration (FDA) on 5 Dec, 2018. The mechanism of IBI101 is different from that of anti-PD-1 antibodies. IBI101 stimulates the OX40 pathway so as to activate effector T cells, thus enhancing the anti-tumor immune reaction," commented Professor XU Ruihua, Director of Sun Yat-Sen University Cancer Hospital. "Worldwide clinical research on anti-OX40 antibodies is limited so far. We are looking forward to the study results of IBI101."

"Innovent, a China-based company, was established with an ambition to serve global patient needs. We are dedicated to exploring the most advanced research areas in cancer immunotherapy and providing innovative medicines that improve lives around the world. The initiation of Phase I study of IBI101 and dosing of first patient have again demonstrated our efforts and commitment. We truly anticipate further breakthroughs so that more patients will potentially benefit in the future," said Michael Yu, Founder, Chief Executive Officer and Chairman.

About IBI101

IBI101 is a recombinant fully human anti-OX40 monoclonal antibody developed by Innovent with independent intellectual property rights. Pre-clinical data confirms that IBI101 has a clear mechanism of action that enhances the activation of effector T cells and mediates the clearance of regulatory T cells, thus inhibiting the growth of tumor cells. The IND application of IBI101 was approved by the U.S. FDA on 5 Dec, 2018. Agonistic OX40 candidates are expected to be used in combination with our anti-PD-1 monoclonal antibody, Tyvyt (sintilimab injection), and other immunomodulating agents in our R&D pipeline to meet the unmet medical needs of cancer patients. At present, there are no approved monoclonal antibody therapeutics against the same target across the world.

About Tyvyt (sintilimab injection)

Tyvyt (sintilimab injection) is an innovative drug jointly developed in China by Innovent and Eli Lilly and Company. Innovent is currently conducting the clinical studies of sintilimab injection in the United States. Tyvyt (sintilimab injection) is a type of immunoglobulin G4 monoclonal antibody, which binds to PD-1 molecules on the surface of T-cells, blocks the PD-1/ PD-1 Ligand-1 (PD-L1) pathway and reactivates T-cells to kill cancer cells. Tyvyt (sintilimab injection) is the only PD-1 antibody in China branded by both a local biopharmaceutical company and a global pharmaceutical company. Tyvyt (sintilimab injection) has been approved by the National Medical Products Administration (NMPA) for relapsed or refractory classical Hodgkin’s lymphoma (r/r cHL). Currently, more than twenty clinical studies of sintilimab injection, including seven registration studies, are ongoing to evaluate the efficacy of sintilimab injection on other solid tumors.