Boston Scientific Announces Results For Third Quarter 2019

On October 23, 2019 Boston Scientific Corporation (NYSE: BSX) reported sales of $2.707 billion during the third quarter of 2019 (Press release, Boston Scientific, OCT 23, 2019, View Source [SID1234542465]). This represents growth of 13.1 percent on a reported basis, 14.2 percent on an operational1 basis and 9.3 percent on an organic2 basis, all compared to the prior year period. The company reported GAAP earnings of $126 million or $0.09 per share (EPS), compared to GAAP earnings of $432 million or $0.31 per share a year ago, and achieved adjusted earnings per share of $0.39 for the period, compared to $0.35 a year ago.

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"Our third quarter results reflect accelerated growth fueled by several key product launches, excellent regional performance and the broad strength of our core portfolio, and we continue to invest in building a robust pipeline," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "I am proud of our global teams across Boston Scientific who continue to bring forward new clinical solutions that advance science and help improve patient lives."

Third quarter financial results and recent developments:

Reported third quarter sales of $2.707 billion, representing an increase of 13.1 percent on a reported basis, compared to the company’s guidance range of 8 to 10 percent; 14.2 percent on an operational basis; and 9.3 percent on an organic basis, compared to the company’s guidance range of 7.5 to 9 percent, all compared to the prior year period.3
Reported GAAP earnings of $0.09 per share compared to the company’s guidance range of $0.23 to $0.25 per share, due to acquisition-related charges in the quarter primarily associated with the acquisition of BTG plc (BTG Acquisition or BTG). Achieved adjusted earnings per share of $0.39 compared to the guidance range of $0.37 to $0.39 per share.3
Achieved third quarter revenue growth in all segments compared to the prior year period (excludes BTG Acquisition†):
MedSurg: 13.2 percent reported, 14.1 percent operational and 10.5 percent organic
Rhythm and Neuro: 5.4 percent reported, 6.5 percent operational and 3.9 percent organic
Cardiovascular: 11.3 percent reported, 12.6 percent operational and 12.6 percent organic
Reported third quarter revenue growth in all regions, compared to the prior year period (excludes BTG Acquisition†):
U.S.: 10.6 percent reported and operational
EMEA (Europe, Middle East and Africa): 6.3 percent reported and 10.8 percent operational
APAC (Asia-Pacific): 13.8 percent reported and 14.2 percent operational
Emerging Markets4: 16.1 percent reported and 19.3 percent operational
Commenced launch of the WATCHMAN Left Atrial Appendage Closure Device in Japan upon securing positive local reimbursement; surpassed 100,000 patient implants worldwide. Also presented, at the Transcatheter Cardiovascular Therapeutics (TCT) annual scientific symposium, budget implications data confirming that the WATCHMAN device is an affordable stroke risk reduction strategy for Medicare and Medicare beneficiaries compared to warfarin.
Announced at TCT results from the EVOLVE Short DAPT clinical trial that demonstrated that after being treated with the SYNERGY Bioabsorbable Polymer (BP) Stent, a three-month regimen of dual antiplatelet therapy (DAPT) is non-inferior to a 12-month DAPT regimen in certain patients with high bleeding risk. Also announced CE Mark for the SYNERGY MEGATRON Bioabsorbable Polymer Stent which is designed for use in large proximal vessels.
Received from the Centers for Medicare and Medicaid Services continued new technology add-on payment (NTAP) classification for the SENTINEL Cerebral Protection System and an increased add-on payment for FY2020.
Presented at TCT positive data for the LOTUS TAVR System, a mechanically-expanding valve, including a three-year analysis from the REPRISE III study demonstrating significant, sustained improvement in functional and health status following LOTUS valve implantation versus CoreValve systems (Medtronic), and significantly fewer cases of disabling stroke and moderate or greater paravalvular leak versus the CoreValve system–a self-expanding valve. Additionally, a Medicare budget impact analysis demonstrated the mechanically-expanded LOTUS valve is a less costly alternative to self-expanding valves at one year post procedure in high-risk patients with aortic stenosis.
Announced the U.S. Food and Drug Administration (FDA) approval of ImageReady MRI labeling for the Vercise Gevia Deep Brain Stimulation (DBS) System to be used in a full-body magnetic resonance imaging (MRI) environment.5
Completed clinical trial assessing the performance of the EXALT Model D Single-Use Duodenoscope during endoscopic retrograde cholangiopancreatography procedures, with positive results presented at the United European Gastroenterology Week Congress.
Announced the completion of the acquisition of BTG plc pursuant to the previously announced scheme of arrangement. In addition, divested microspheres and bland embolic bead products to Varian Medical Systems, Inc.
1. Operational revenue growth excludes the impact of foreign currency fluctuations.
2. Organic revenue growth excludes the impact of foreign currency fluctuations and sales from the recent acquisitions of Claret Medical, Inc. (Claret), Augmenix, Inc. (Augmenix), Vertiflex, Inc. (Vertiflex) and BTG plc (BTG Acquisition), each with no prior year comparable sales. Organic revenue growth also excludes the impact of the divestiture of our global embolic microspheres portfolio, a transaction entered into in connection with obtaining the antitrust clearances required to complete the BTG transaction.
3. As the BTG Acquisition had not yet closed, our previously disclosed third quarter guidance did not include the results of BTG.
4. We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. We have revised prior year amounts to the current year’s presentation. The revision had an immaterial impact on prior year Emerging Markets sales.
5. 1.5 Tesla MRI conditional when all conditions of use are met.
† For the third quarter of 2019, there have been no changes to our internal reporting structure and, accordingly, we have not revised our segment reporting or geographic presentation. We will continue to integrate the BTG Acquisition into our operations in the fourth quarter and will reassess our operating and reportable segments as well as geographic presentation for any changes related to our internal reporting structure. Our results of operations include the results of BTG following the acquisition date of August 19, 2019. BTG net sales are substantially U.S. based.

Guidance for Full Year and Fourth Quarter 2019

The company estimates revenue growth for the full year 2019, versus the prior year period, to be in a range of approximately 9 to 9.5 percent on a reported basis (compared to prior guidance of 7 to 8 percent), and to be approximately 7.5 percent on an organic basis (compared to prior guidance of 7 to 8 percent). Full year organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 360 basis points from the acquisitions of Nxthera, Inc., Claret, Augmenix, Vertiflex and BTG, each with no prior period related net sales and the impact of the divestiture of our global embolic microspheres portfolio following the close of the BTG Acquisition. The company now estimates income on a GAAP basis in a range of $0.72 to $0.75 per share (compared to prior guidance of $0.94 to $0.98 per share) and estimates adjusted earnings, excluding certain charges (credits), in a range of $1.55 to $1.58 per share (compared to prior guidance of $1.54 to $1.58 per share).

The company estimates revenue growth for the fourth quarter of 2019, versus the prior year period, to be in a range of approximately 13 to 15 percent on a reported basis and a growth range of approximately 8 to 9 percent on an organic basis. Fourth quarter organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 600 to 680 basis points from the acquisitions of Vertiflex and BTG, each with no prior period related net sales and the impact of the divestiture of our global embolic microspheres portfolio following the close of the BTG Acquisition. The company estimates earnings on a GAAP basis in a range of $0.22 to $0.25 per share and adjusted earnings, excluding certain charges (credits), in a range of $0.42 to $0.45 per share.

Conference Call Information

Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. EDT. The company will webcast the call to interested parties through its website: www.bostonscientific.com. Please see the website for details on how to access the webcast. The webcast will be available for approximately one year on the Boston Scientific website.

Ambrx and NovoCodex form Second Collaboration to Develop and Commercialize Ambrx’s Antibody Drug Conjugates

On October 23, 2019 Ambrx and NovoCodex Biopharmaceuticals Ltd., (NovoCodex), a majority owned company of Zhejiang Medicine Co Ltd., reported that they have formed a second collaboration to develop and commercialize Ambrx’s internally developed site-specific antibody drug conjugates (ADCs). Under the agreement, Ambrx and NovoCodex will join forces to continue the development of ARX305, an Ambrx enabled ADC for the treatment of CD70 positive cancers.

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Under the terms of the agreement, NovoCodex is responsible for developing and commercializing ARX305 in China while Ambrx is responsible for developing and commercializing ARX305 outside of China. NovoCodex will fund global development activities to the end of Phase 1 clinical trials and pay Ambrx an undisclosed upfront payment, development milestones, and a double digit royalty on product sales in China. NovoCodex is also eligible to share in undisclosed portion of ARX305 product sales outside of China.

"We are excited to initiate our second collaboration with NovoCodex following our successful collaboration with ARX788, which is currently in Phase 1 clinical trials for HER2 positive breast and gastric cancers. ARX305 is a natural extension to the first collaboration with the inclusion of another Ambrx enabled ADC that is intended to treat CD70 positive cancers such as Renal Cell Carcinoma and Multiple Myeloma. Further, we continue to align ourselves with China’s leading pharmaceutical companies," said Feng Tian, Ph.D., Chief Executive Officer of Ambrx. "ARX305, which is expected to start Phase 1 clinical trials in early 2021, allows Ambrx to expand its ADC pipeline into multiple cancer types while gaining access to the China market through our partnership with NovoCodex."

Chunbo Li, Chairman of Zhejiang Medicine, commented, "The smooth progress of our first ZMC-Ambrx collaborated ADC project, ARX788, proves that Ambrx’ technology is one of the best methods to make an ADC drug. The new alliance with Ambrx on ARX305 will strengthen our leading position on ADC research, and hopefully will bring new treatment to related cancer patients."

(Press release, Ambrx, OCT 23, 2019, View Source [SID1234671132])

Alkermes Plc Reports Third Quarter 2019 Financial Results and Implementation of Restructuring

On October 23, 2019 Alkermes plc (Nasdaq: ALKS) reported financial results for the third quarter of 2019 and the implementation of a restructuring plan following a review of the company’s operations, cost structure and growth opportunities (Press release, Alkermes, OCT 23, 2019, View Source [SID1234542432]).

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"As the profile of Alkermes changes, our executional priorities are clear: maximize the value of our commercial products and development candidates, streamline our cost structure and position the company for sustained future profitability. The restructuring is designed to further focus our R&D efforts on specific high-potential programs within CNS and oncology, improve financial efficiencies in our SG&A organization and drive growth," commented Richard Pops, Chief Executive Officer of Alkermes. "VIVITROL and ARISTADA provide a strong and growing foundation for our commercial business and the anticipated commercial launch of VUMERITYTM will provide a profitable new source of royalty revenues. We also continue to advance our pipeline programs, with the planned submission of the ALKS 3831 New Drug Application for both schizophrenia and bipolar I disorder this quarter, and the planned presentation of new data from ALKS 4230, our phase 1/2 immuno-oncology asset, at an upcoming medical meeting."

Quarter Ended Sept. 30, 2019 Financial Highlights

Total revenues for the quarter were $255.2 million, compared to $248.7 million for the same period in the prior year, primarily driven by approximately 20% growth in net sales of our proprietary products, partially offset by a decrease in AMPYRAi revenues resulting from generic entry in 2018.

Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $52.9 million for the quarter, or a basic and diluted GAAP net loss per share of $0.34. This compared to GAAP net loss of $34.4 million, or a basic and diluted GAAP net loss per share of $0.22, for the same period in the prior year.

Non-GAAP net loss was $7.0 million for the quarter, or a non-GAAP basic and diluted net loss per share of $0.04. This compared to non-GAAP net income of $11.6 million, or a non-GAAP basic and diluted net earnings per share of $0.07, for the same period in the prior year.

Quarter Ended Sept. 30, 2019 Financial Results

Revenues

Net sales of VIVITROL were $85.2 million, compared to $79.9 million for the same period in the prior year, representing an increase of approximately 7%.

Net sales of ARISTADAii were $53.6 million, compared to $36.1 million for the same period in the prior year, representing an increase of approximately 48%.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $76.7 million, compared to $77.2 million for the same period in the prior year, reflecting lower manufacturing revenues from RISPERDAL CONSTA.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA were $7.7 million, compared to $20.3 million for the same period in the prior year, due to generic competition to AMPYRA entering the market in 2018 in the U.S.

Research and development revenues were $12.7 million, compared to $16.3 million for the same period in the prior year. These revenues were primarily related to the collaboration with Biogen for VUMERITY.

Costs and Expenses

Operating expenses were $308.9 million, compared to $285.9 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA and in the development of ALKS 4230.

"Our third quarter results reflect solid year-over-year growth of VIVITROL and ARISTADA. We are committed to further improving our financial efficiency and focusing the investments we are making to support our future growth," commented James Frates, Chief Financial Officer of Alkermes. "As we approach the end of the year, we are refining our financial expectations for 2019, including an increase in our expectations for non-GAAP net income, to reflect our results year-to-date, expectations for the fourth quarter and the impact of the restructuring announced today."

Restructuring

In October 2019, Alkermes completed a review of the company’s operations, cost structure and growth opportunities and implemented a restructuring plan. The restructuring included the elimination of approximately 160 current positions across the organization, a decrease in the company’s expected near-term hiring plans and implementation of cost-saving measures related to external spend. These efforts are expected to result in cost savings of approximately $150 million. The company expects to record a charge of approximately $15 million in the fourth quarter of 2019 as a result of the restructuring, consisting of one-time termination benefits for employee severance, benefits and related costs.

Financial Expectations for 2019

The following outlines the company’s updated financial expectations for 2019, which include the impact of the restructuring announced today:

Revenues: The company continues to expect total revenues to range from $1.14 billion to $1.19 billion.

Included in this total revenue expectation is the $150 million milestone payment that will be triggered by final approval of VUMERITY by the U.S. Food and Drug Administration (FDA).

The company now expects VIVITROL net sales to range from $330 million to $340 million, revised from the prior expectation of $330 million to $350 million.

The company now expects ARISTADA net sales to range from $185 million to $190 million, revised from the prior expectation of $200 million to $210 million.

Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from $180 million to $190 million.

Research and Development (R&D) Expenses: The company now expects R&D expenses to range from $430 million to $450 million, revised from the prior expectation of $450 million to $480 million.

Selling, General and Administrative (SG&A) Expenses: The company now expects SG&A expenses to range from $590 million to $610 million, revised from the prior expectation of $590 million to $620 million.

Amortization of Intangible Assets: The company continues to expect amortization of intangible assets to be approximately $40 million.

Restructuring: The company expects a restructuring charge of approximately $15 million.

Net Interest Expense: The company now expects net interest expense to range from $0 to $5 million, revised from the prior expectation of $5 million to $10 million.

Other Income/Expense, Net: The company expects a net other expense of approximately $30 million related to the change in fair value of its contingent consideration.

Income Tax Expense: The company now expects income tax expense to range from $0 to $5 million, revised from the prior expectation of $10 million to $15 million.

GAAP Net Loss: The company continues to expect GAAP net loss to range from $135 million to $165 million, or a basic and diluted loss per share of $0.86 to $1.05, based on a weighted average basic and diluted share count of approximately 156 million shares outstanding.

Non-GAAP Net Income: The company now expects non-GAAP net income to range from $70 million to $90 million, or a non-GAAP basic earnings per share of $0.45 to $0.57, based on a weighted average basic share count of approximately 157 million shares outstanding and a non-GAAP diluted earnings per share of $0.44 to $0.57, based on a weighted average diluted share count of approximately 159 million shares outstanding. This compares to the previous expectation of non-GAAP net income in the range of $40 million to $70 million, or a non-GAAP basic earnings per share of $0.26 to $0.45, based on a weighted average basic share count of approximately 156 million shares outstanding and a non-GAAP diluted earnings per share of $0.25 to $0.43, based on a weighted average diluted share count of approximately 161 million shares outstanding.

Share-Based Compensation: The company now expects share-based compensation of approximately $100 million, revised from the prior expectation of approximately $120 million.

Capital Expenditures: The company now expects capital expenditures to range from $80 million to $90 million, revised from the prior expectation of $90 million to $100 million.

Recent Events:

Entered into clinical collaboration with Fred Hutchinson Cancer Research Center for a planned phase 2 multi-site trial to evaluate ALKS 4230 in combination with pembrolizumab in patients with advanced or recurrent head and neck squamous cell cancer.

Received tentative approval from FDA for VUMERITY (diroximel fumarate), a novel oral fumarate with a distinct chemical structure, for the treatment of relapsing forms of MS.

Presented new health economics and outcomes research at the 32nd Annual Psych Congress that highlighted the unmet needs of individuals living with schizophrenia and bipolar I disorder in real-world settings.

Announced the appointment of Richard Gaynor, M.D. and Andy Wilson to the company’s Board of Directors. Dr. Gaynor brings to the Board 18 years of experience in oncology-focused drug development, and Mr. Wilson brings to the Board 30 years of financial expertise and experience in strategic planning and business development. The company also announced the retirement of Floyd Bloom, M.D., a founder of Alkermes, Inc., from the Board.

Announced positive topline results from EVOLVE-MS-2, a phase 3 study designed to evaluate the gastrointestinal (GI) tolerability of VUMERITY compared to TECFIDERA in patients with relapsing-remitting multiple sclerosis.

Entered into a settlement and license agreement with Amneal Pharmaceuticals LLC (Amneal) to resolve Amneal’s inter partes review petition challenging U.S. Patent Number 7,919,499, an Orange Book-listed patent for VIVITROL.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. BST) on Wednesday, Oct. 23, 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 Wednesday, Oct. 23, 2019, through Wednesday, Oct. 30, 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 13694597.

NEW RESEARCH STUDY PROVIDES TARGET VALIDATION FOR MATEON’S FIRST-IN-CLASS RNA THERAPEUTIC OT101 FOR THE TREATMENT OF DIFFICULT TO TREAT FORMS OF CHILDHOOD BRAIN TUMOR

On October 23, 2019 Oncotelic Inc. ("Oncotelic"), a wholly owned subsidiary of Mateon Therapeutics Inc. (OTCQB:MATN) dedicated to the development of innovative treatments for cancer, reported the publication of a peer-reviewed research article authored by Fatih Uckun MD PhD and his colleagues at Oncotelic in the Journal of Clinical Research in Pediatrics (View Source) (Press release, Oncotelic, OCT 23, 2019, View Source [SID1234542449]). The article titled "In silico Molecular Target Validation Demonstrates Transforming Growth Factor Beta 2 is Strongly Expressed in Pediatric Diffuse Intrinsic Pontine Glioma and Glioblastoma Multiforme" demonstrates the therapeutic potential of Mateon’s first-in-class RNA therapeutic OT101 for the treatment of diffuse intrinsic pontine glioma (DIPG) and pediatric glioblastoma multiforme (GBM).

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Citation Reference: Uckun FM, Trieu V, Hwang L, Qazi S. In silico Molecular Target Validation Demonstrates Transforming Growth Factor Beta 2 is Strongly Expressed in Pediatric Diffuse Intrinsic Pontine Glioma and Glioblastoma Multiforme. Clin Res Pediatr 2019;2(1):1-10.

"Our research has revealed that the TGF beta2 gene product, which is the molecular target for OT101/Trabedersen, may serve as a target for immunotherapy in pediatric high-grade gliomas, especially DIPG. These in silico target validation data extend the promising clinical data on the therapeutic activity of OT101 in adults and young adults and further demonstrate the potential of OT101 as a promising drug candidate in the treatment of pediatric DIPG, an orphan disease with a low survival rate and no established or effective standard of care," explained Fatih Uckun, MD, PhD, the Chief Medical Officer of Mateon. "The durable objective responses achieved in adult patients with recurrent/refractory high-grade gliomas after treatment with our lead anti-TGF beta2 compound OT-101 contribute to our optimism that new treatment strategies leveraging OT101 may favorably change the therapeutic landscape for difficult-to-treat brain tumors with a very poor prognosis, including pediatric GBM and DIPG," Dr. Uckun explained. Last month, US Food and Drug Administration (FDA) granted Rare Pediatric Disease Designation for OT101/Trabedersen for the treatment of diffuse intrinsic pontine glioma (DIPG) as a drug for a "rare pediatric disease," as defined in section 529(a)(3) of the Federal Food, Drug, and Cosmetic Act.

OT101, a first-in-class RNA therapeutic designed to abrogate the immunosuppressive actions of TGF-beta 2, is Oncotelic’s lead anti-brain tumor drug candidate. In a completed Phase 2 clinical study, OT-101 exhibited clinically meaningful single-agent activity and induced durable complete and partial responses in recurrent and refractory adult high-grade glioma patients, including adults with GBM. DIPG, an orphan disease with a low survival rate and no established or effective standard of care. Despite numerous clinical trials of chemotherapeutic agents, immuno-oncology drugs and specific targeted therapies, no significant progress has been made in the treatment of DIPG and the prognosis remains dismal, with a mean OS of 9–12 months from the time of diagnosis, a median survival time of approximately 10 months, and a two-year OS rate of less than 10 percent. Five-year survival is less than 3 percent, and many long-term survivors have evidence of moderate or severe cognitive impairment, likely as a consequence of radiation therapy. Chemotherapy does not have an established role in the management of patients with DIPG. Furthermore, there is no standard treatment for progressive DIPG after the failure of radiation therapy and no salvage regimen has been shown to extend survival. Therefore, there is an urgent need for therapeutic innovations for treatment of DIPG, as reflected by multiple treatment modalities being evaluated in early neuro-oncology clinical trials. Further development of OT-101 may offer renewed hope for salvage therapy of pediatric DIPG patients who have this rare and fatal disease.

"As we move Trabedersen through its clinical development for Pediatric Diffuse Intrinsic Pontine Glioma and Glioblastoma Multiforme, we are moving CA4P forward along the same path as potential treatment for Pediatric Unresectable or Metastatic Melanoma- a rare and difficult to treat pediatric skin cancer, " said Dr. Vuong Trieu, Chief Executive Officer of Mateon "From the corporate side we are moving forward with activities to uplist Mateon. Looking forward to updating our shareholders on the coming quarter."

United Therapeutics Corporation to Report Third Quarter 2019 Financial Results Before the Market Opens on Wednesday, October 30, 2019

On October 23, 2019 United Therapeutics Corporation (Nasdaq: UTHR) reported that it will report its third quarter 2019 financial results before the market opens on Wednesday, October 30, 2019 (Press release, United Therapeutics, OCT 23, 2019, View Source [SID1234542466]).

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United Therapeutics will host a teleconference on Wednesday, October 30, 2019, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406, and using access code: 7462119.