On November 6, 2018 UroGen Pharma Ltd. (Nasdaq:URGN), reported that management will present at two investor conferences in November 2018 (Press release, UroGen Pharma, NOV 6, 2018, View Source;p=RssLanding&cat=news&id=2375526 [SID1234530784]):

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Stifel 2018 Healthcare Conference
Tuesday, November 13
9:30AM Eastern Time
New York, NY
Jefferies 2018 London Healthcare Conference
Thursday, November 15
9:20AM Greenwich Mean Time
London, UK
A live audio webcast of each event will be available on the Investors section of UroGen’s website, www.urogen.com. A replay of each webcast will be available on the website for approximately two weeks.

On November 6, 2018 PDL BioPharma, Inc. ("PDL" or "the Company") (NASDAQ: PDLI) reported financial results for the three and nine months ended September 30, 2018 including (Press release, PDL BioPharma, NOV 6, 2018, View Source [SID1234530825]):

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Third Quarter Financial Highlights

Total revenues of $67.9 million.

GAAP net income attributable to PDL’s shareholders of $25.6 million or $0.18 per share.

Non-GAAP net income attributable to PDL’s shareholders of $12.3 million. A reconciliation of GAAP to non-GAAP financial results can be found in Table 3 at the end of this news release.

Cash and cash equivalents of $401.0 million as of September 30, 2018.

Completed a $25.0 million share repurchase program authorized in September 2017 by repurchasing 0.6 million shares of common stock in the open market during the quarter for $1.4 million.

Announced new share repurchase program of up to $100.0 million.

"Our third quarter revenues increased 8% from the prior year to $68 million, reflecting higher product sales and $42 million in royalty rights revenue that included an increase in fair value of the royalty rights from Assertio Therapeutics, formerly known as Depomed, as a result of our purchase of the remaining interest in royalty payments of this asset," said John P. McLaughlin, CEO of PDL. "We benefitted from a particularly strong showing during the quarter from the type 2 diabetes drug Glumetza, and I’m pleased to report that overall the Assertio asset has performed substantially better than we expected. With Tekturna, we are cautiously optimistic about the transition to a non-personal promotion campaign from a direct sales model, which we completed mid-way through the third quarter. Tekturna sales remained stable throughout the quarter, with the new sales strategy reducing costs and increasing profitability."

"We announced a new $100 million share repurchase program in late September after completing the previous program early in the third quarter," he added. "While to date we have been unable to execute any share buybacks under the new program due to blackout periods, we plan to begin aggressively repurchasing shares once the blackout is lifted."

"After serving as CEO for more than 10 years, I have informed the board of directors of my intention to retire as CEO at year-end 2018 while continuing to serve on the board," said McLaughlin. "It has been a pleasure to serve PDL and its shareholders. I’m gratified to announce our plan for PDL President, Dominique Monnet, to succeed me as CEO effective December 31, 2018 and to simultaneously join the PDL board. Dominique is a seasoned industry veteran with a track record of commercial success in biopharmaceutical development and has been an integral part of our management team for more than a year. I’m confident in Dominique’s leadership abilities and am delighted to be transferring the CEO responsibilities to his very capable hands."

Mr. Monnet joined PDL as President in September 2017, bringing more than 30 years of leadership experience in the biotech and pharmaceutical industries. He was instrumental in overseeing global commercialization operations, including successful new product launches, while serving in senior management positions at Alexion Pharmaceuticals, Amgen and Schering-Plough.

"It is a privilege to succeed John as we continue to execute our strategy to accelerate PDL’s growth and deliver value to our shareholders," said Monnet. "Under John’s leadership, PDL built a very strong balance sheet and an impressive track-record of investments. As a result, we are exceptionally well positioned to pursue exciting acquisition and partnership opportunities and invest and nurture companies and products that have the potential to grow, succeed and return superior shareholder value. I am delighted that John has agreed to remain on the Board, and I look forward to my continued partnership with the teams at PDL, Noden and Lensar."

Revenue Highlights

•
Total revenues of $67.9 million for the three months ended September 30, 2018 included:
◦
Product revenues of $24.4 million, which consisted of $17.8 million from sales of Tekturna and Tekturna HCT in the U.S. and Rasilez and Rasilez HCT in the rest of the world (collectively, the Noden Products), and $6.6 million for product revenue from the LENSAR Laser System;
◦
Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $42.2 million, primarily related to the Assertio royalty asset;
◦
Royalties from PDL’s licensees to the Queen et al. patents of $0.5 million, which consisted of royalties earned on sales of Tysabri; and
◦
Interest revenue from note receivable investment to CareView Communications ("CareView") of $0.8 million.

•
Total revenues for the third quarter of 2018 were $67.9 million, compared with $62.7 million for the third quarter of 2017, reflecting PDL’s strategic shift to a pharmaceutical business model.
◦
Product revenue was $24.4 million, a 22% increase from $20.1 million for the comparable prior-year quarter due to sales of the Noden Products and the LENSAR Laser System, the latter of which PDL did not begin to recognize until May 2017. Product revenues accounted for 36% of total revenues compared with 32% in the third quarter of 2017;
◦
Product revenue from the Noden Products was $9.7 million in the U.S. and $8.1 million in the rest of the world;
◦
PDL recognized $42.2 million in revenue from royalty rights – change in fair value, compared with $35.4 million in the prior-year period. The increase was due to the increased fair value of the Assertio royalty rights as a result of the purchase of all of Assertio’s remaining interest in royalty and milestone payments payable on sales of type 2 diabetes products licensed by Assertio, offset by declines in fair value adjustments for certain other royalty right assets;
▪
PDL received $19.1 million in net cash royalties from its royalty rights for the third quarter of 2018, compared with $26.3 million for the prior-year period. The decrease is mainly due to higher royalties in 2017 as a result of the launch of the authorized generic for Glumetza in February 2017 sold by a subsidiary of Bausch Health Companies Inc. (formerly known as Valeant Pharmaceuticals International, Inc.);
◦
Royalties from PDL’s licensees to the Queen et al. patents were $0.5 million, compared with $1.4 million for the third quarter of 2017 as product supply of Tysabri manufactured prior to patent expiry in the U.S. have been extinguished and ex-U.S. product supplies are rapidly being depleted; and
◦
Interest revenue from the note receivable investment to CareView was $0.8 million. Interest revenue decreased from $5.3 million in the prior-year due to the sale of the kaléo, Inc. note receivable in September 2017.

•
Total revenues for the nine months ended September 30, 2018 were $153.0 million, compared with $252.0 million for the nine months ended September 30, 2017:
◦
Product revenue was $79.5 million, a 54% increase from $51.5 million for the prior-year period. Product revenue for 2018 consisted of $62.0 million from sales of the Noden Products and $17.5 million from sales of the LENSAR Laser System;
◦
PDL recognized $66.1 million in revenue from royalty rights – change in fair value, compared with $132.2 million for the prior-year period;
▪
PDL received $57.0 million in net cash royalties from its royalty rights year-to-date 2018, compared with $74.4 million for the prior-year period;

◦
Royalties from PDL’s licensees to the Queen et al. patents were $4.5 million, compared with $31.9 million for the prior-year period; and
◦
Interest revenue from note receivable investment to CareView was $2.3 million. Interest revenue decreased from $17.0 million in the comparable nine-month period of 2017 due to the above-noted sale of the kaléo, Inc. note receivable in September 2017.
◦
License and other revenue decreased by $18.9 million primarily due to a $19.5 million payment received in 2017 from Merck as part of the previously announced settlement agreement to resolve the patent infringement lawsuits related to Keytruda.

Operating Expense Highlights

•
Operating expenses for the three months ended September 30, 2018 of $31.2 million increased $1.0 million from $30.1 million for the three months ended September 30, 2017. The increase was a result of the Noden Products and LENSAR contributing additional cost of product revenue of $6.0 million and $0.4 million, respectively, due to increased revenue from the Noden Products and recognition of costs of product revenue for ex-U.S. revenue and increased revenue from LENSAR, as well as general and administrative expenses increasing 10%, or $1.2 million, primarily due to stock-based compensation awards granted in the period, partially offset by lower asset management and asset purchase professional expenses. The increase in operating expenses was partially offset by lower intangible asset amortization expense due to the second quarter of 2018 impairment of the intangible assets related to the Noden Products, as well as by reduced sales and marketing expenses related to the change in marketing strategy of the Noden Products.
•
Operating expenses for the nine months ended September 30, 2018 were $237.1 million, a $149.0 million increase from $88.1 million for the prior-year period. The increase was primarily a result of the impairment of the Noden intangible asset of $152.3 million, as well as the Noden Products and LENSAR contributing additional cost of product revenue of $20.0 million and $4.4 million, respectively, which was due to increased revenue from the Noden Products and recognition of costs of product revenue for ex-U.S. revenue and increased revenue from LENSAR, which PDL did not begin to recognize until May 2017, partially offset by the decrease in fair value of the contingent liability.

Stock Repurchase Programs

•
From July 1, 2018 to July 5, 2018, the Company completed its $25.0 million stock repurchase program with the repurchase of 0.6 million shares of its common stock at a weighted average price of $2.44 per share, for a total of $1.4 million.
•
PDL repurchased 8.7 million shares of its common stock under the $25.0 million share repurchase program during the nine months ended September 30, 2018, for an aggregate purchase price of $25.0 million, or an average cost of $2.86 per share, including trading commission. All shares repurchased were retired.
•
Since initiating its first stock repurchase program in March 2017, the Company has used $55.0 million to repurchase a total of 22.1 million shares of its common stock.
•
On September 21, 2018, the Company’s board of directors authorized the repurchase of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $100.0 million pursuant to a new share repurchase program.

Other Financial Highlights

•
PDL had cash and cash equivalents of $401.0 million as of September 30, 2018, compared with cash, cash equivalents and short-term investments of $532.1 million as of December 31, 2017.
•
The reduction in cash balance for the nine months ended September 30, 2018 was primarily a result of retiring the remaining $126.4 million of principal from PDL’s 4.0% Convertible Senior Notes due 2018, plus $2.6 million of accrued interest, common stock repurchases of $25.0 million and the $20.0 million purchase of Assertio’s remaining interest in royalty and milestone payments payable on sales of type 2 diabetes products licensed by Assertio, partially offset by the proceeds from royalty rights of $57.0 million.

Conference Call and Webcast Details

PDL will hold a conference call to discuss financial results and provide a business update at 4:30 p.m. Eastern time today, November 6, 2018. Slides to accompany the conference call are available in the Investor Relations section of www.pdl.com.

To access the live conference call via phone, please dial 844-535-4071 from the U.S. and Canada or 706-679-2458 internationally. The conference ID is 6461756. A telephone replay will be available beginning approximately one hour after the call through one week following the call and may be accessed by dialing 855-859-2056 from the U.S. and Canada or 404-537-3406 internationally. The replay passcode is 6461756.

To access the live and subsequently archived webcast of the conference call, go to the Company’s website at www.pdl.com and go to the Investor Relations section and select "Events & Presentations."

On November 6, 2018 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company" or "we") reported its third-quarter 2018 financial results (Press release, Valeant, NOV 6, 2018, View Source [SID1234530865]).

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"In addition to another consecutive quarter of overall organic growth2, the Company delivered organic growth2 across all reporting segments and generated robust cash flow from operations in the third quarter of 2018," said Joseph C. Papa, chairman and CEO, Bausch Health. "These results demonstrate that our progress toward transformation is on track as we continue to execute within our core businesses, launch new products, resolve legacy issues and reduce the total quantum of our debt."

"As we look to the end of the year, we are maintaining our full-year revenue guidance range and raising our full-year Adjusted EBITDA (non-GAAP) guidance range," continued Mr. Papa.

Company Highlights

Executing on Core Businesses and Advancing Pipeline

Reported revenue in the Bausch + Lomb/International segment decreased by 7% compared to the third quarter of 2017, primarily due to divestitures and discontinuations; revenue in this segment grew organically2 by 3% compared to the third quarter of 2017, primarily due to volume increases in all businesses of the segment
Segment reported eighth consecutive quarter of organic revenue growth2
LUMIFY has become the number one physician-recommended brand in the Redness Reliever category3 and one of the top 2 brands in the category4, achieving a weekly market share of 26%5
Launched AQUALOX (Silicone hydrogel, or SiHy, daily) in Japan in September 2018
Grew revenue in the Salix segment by 2% compared to the third quarter of 2017 despite generic competition following the loss of exclusivity for UCERIS
XIFAXAN revenue increased by 11% compared to the third quarter of 2017
Launched PLENVU, a one-liter PEG bowel cleansing preparation for colonoscopies, in the United States
U.S. launch of LUCEMYRA, the first and only non-opioid medication for the mitigation of withdrawal symptoms to facilitate abrupt discontinuation of opioids in adults, with US WorldMeds
Entered into an exclusive agreement with Dova Pharmaceuticals, Inc. to co-promote DOPTELET in the United States, for the treatment of thrombocytopenia in adult patients with chronic liver disease who are scheduled to undergo a procedure
Entered into an amendment to an existing license agreement with Alfasigma S.p.A. (Alfasigma) to initiate a late-stage clinical program to study an investigational formulation of rifaximin in patients with Postoperative Crohn’s disease
Expanded microbiome research and discovery through strategic collaboration with Cedars-Sinai Medical Center
Continued efforts to stabilize the Ortho Dermatologics segment
The U.S. Food and Drug Administration (FDA) approved the New Drug Application (NDA) for ALTRENO Lotion for the treatment of acne vulgaris, and ALTRENO has now launched
The FDA has provided tentative approval of the NDA for BRYHALI Lotion for the topical treatment of plaque psoriasis in adult patients; the Company plans to launch BRYHALI Lotion, as scheduled, later this month, following receipt of final FDA approval, which is pending due to the expiration of exclusivity for a related product
The FDA accepted the resubmission of the NDA for DUOBRII6 Lotion for the topical treatment of plaque psoriasis with a PDUFA action date of Feb. 15, 2019
Released first annual Corporate Social Responsibility report
Addressing Debt

$522 million of cash generated from operations was used to repay more than $360 million of debt in the third quarter of 2018
Repaid $114 million of senior secured term loans and $250 million of revolver borrowings
Eliminated all mandatory amortization for the remainder of 2018
Additionally, on Oct. 26, 2018, redeemed $125 million aggregate principal amount of outstanding 7.50% unsecured Senior Notes due 2021, using cash generated from operations
Resolving Legal Issues

Achieved dismissals or other positive outcomes in resolving and managing litigation and investigations in approximately 60 matters since Jan. 1, 2018
Resolved the XIFAXAN intellectual property litigation with Actavis Laboratories FL, Inc., preserving market exclusivity for XIFAXAN 550 mg tablets until 20287
Resolved the legacy Salix investigation by the U.S. Securities and Exchange Commission with no monetary penalty; settlement remains subject to approval by the U.S. District Court for the Southern District of New York
Resolved outstanding arbitration with Alfasigma
Third-Quarter 2018 Revenue Performance
Total reported revenues were $2.136 billion for the third quarter of 2018, as compared to $2.219 billion in the third quarter of 2017, a decrease of $83 million, or 4%. Excluding the impact of the 2017 divestitures and discontinuations of $112 million and the unfavorable impact of foreign exchange of $30 million, revenue grew organically2 by 3% compared to the third quarter of 2017, driven by organic growth2 across all four segments.

Bausch + Lomb/International Segment
Bausch + Lomb/International segment revenues were $1.147 billion for the third quarter of 2018, as compared to $1.234 billion for the third quarter of 2017, a decrease of $87 million, or 7%. Excluding the impact of divestitures and discontinuations of $94 million, and the unfavorable impact of foreign exchange of $29 million, the Bausch + Lomb/International segment grew organically2 by approximately 3% compared to the third quarter of 2017.

Salix Segment
Salix segment revenues were $460 million for the third quarter of 2018, as compared to $452 million for the third quarter of 2017, an increase of $8 million, or 2%, despite generic competition following the loss of exclusivity for UCERIS. Growth in the segment was driven by higher sales of XIFAXAN, as well as higher sales of RELISTOR, which grew 88% in the third quarter of 2018 compared to the third quarter of 2017.

Ortho Dermatologics Segment
Ortho Dermatologics segment revenues were $177 million for the third quarter of 2018, which was in line with the third quarter of 2017. Excluding the unfavorable impact of foreign exchange of $1 million, the Ortho Dermatologics segment grew organically2 by 1% compared to the third quarter of 2017. Revenues in the Global Solta business grew by 12% on a reported basis and by 15% organically2 compared to the third quarter of 2017, driven by demand and the launch of the Thermage FLX System in additional markets around the world.

Diversified Products Segment
Diversified Products segment revenues were $352 million for the third quarter of 2018, as compared to $356 million for the third quarter of 2017, a decrease of $4 million, or 1%. The decline in revenue was partially offset by growth in the Generics business. Excluding the impact of divestitures and discontinuations of $16 million, the Diversified Products segment grew organically2 by 4% compared to the third quarter of 2017.

Operating Income
Operating income was $117 million for the third quarter of 2018, as compared to an operating income of $38 million for the third quarter of 2017, an increase of $79 million. The increase in operating results for the third quarter of 2018 primarily reflects favorable Cost of Goods Sold (COGS) and Selling, General and Administrative Expenses (SG&A), partially offset by an increase in Research & Development (R&D).

Net Loss
Net loss for the three months ended Sept. 30, 2018 was $350 million, as compared to net income of $1.301 billion for the same period in 2017, a decrease of $1.651 billion. The decrease is primarily due to a tax benefit of $1.397 billion generated in the third quarter of 2017 as a result of the completion of internal tax reorganization efforts that the Company had begun in the fourth quarter of 2016.

Adjusted net income (non-GAAP) for the third quarter of 2018 was $403 million, as compared to $367 million for the third quarter of 2017, an increase of $36 million, or 10%. The increase was primarily due to a reduction in interest expense of $39 million in the third quarter of 2018 and a lower tax rate due to changes in product and geography mix.

Operating Cash
The Company generated $522 million of cash from operations in the third quarter of 2018, as compared to $490 million in the third quarter of 2017, an increase of $32 million, or 7%. The increase in cash from operations was attributable to profitable operating results and improved working capital.

EPS
GAAP Earnings Per Share (EPS) Diluted for the third quarter of 2018 was ($1.00), as compared to $3.69 for the third quarter of 2017.

Adjusted EBITDA(non-GAAP)
Adjusted EBITDA (non-GAAP) was $916 million for the third quarter of 2018, as compared to $951 million for the third quarter of 2017, a decrease of $35 million, or 4%.

2018 Financial Outlook
Bausch Health has maintained its full-year revenue guidance range for 2018 and has raised its full-year Adjusted EBITDA (non-GAAP) guidance range for 2018:

Full-Year Revenues in the range of $8.15 – $8.35 billion
Full-Year Adjusted EBITDA (non-GAAP) in the range of $3.30 – $3.45 billion from $3.20 – $3.35 billion
The Company is taking proactive steps to improve working capital through an ongoing efficiency initiative, Project CORE (Cost Optimization and Revenue Enhancement). As part of Project CORE, the Company plans to proactively reduce U.S. channel inventory in the fourth quarter of 2018, which we expect will result in a reduction in revenue and a decrease in profit. Despite this anticipated reduction in revenue, the Company is maintaining full-year revenue guidance, primarily due to actual outperformance and changes in the expected timing of products losing exclusivity, and is raising Adjusted EBITDA (non-GAAP) guidance, primarily due to actual outperformance and lower actual and expected SG&A expense.

Other than with respect to GAAP Revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. In periods where significant acquisitions or divestitures are not expected, the Company believes it might have a basis for forecasting the GAAP equivalent for certain costs, such as amortization, which would otherwise be treated as non-GAAP to calculate projected GAAP net income (loss). However, because other deductions (such as restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP). The guidance provided in this section represents forward-looking information, and actual results may vary. Please see the risks and assumptions referred to in the Forward-looking Statements section of this news release.

Additional Highlights

Bausch Health’s cash and cash equivalents were $973 million at Sept. 30, 2018
The Company’s availability under the Revolving Credit Facility was approximately $980 million at Sept. 30, 2018
Conference Call Details

Date:

Tuesday, Nov. 6, 2018

Time:

8:00 a.m. ET

Webcast:

View Source

Participant Event Dial-in:

+1 (888) 317-6003 (United States)

+1 (412) 317-6061 (International)

+1 (866) 284-3684 (Canada)

Participant Passcode:

4973686

Replay Dial-in:

+1 (877) 344-7529 (United States)

+1 (412) 317-0088 (International)

+1 (855) 669-9658 (Canada)

Replay Passcode:

10125383 (replay available until Nov. 13, 2018)

On November 6, 2018 Eidos Therapeutics, Inc. (Eidos) (Nasdaq:EIDX), a clinical stage biopharmaceutical company focused on addressing the large unmet need in transthyretin (TTR) amyloidosis (ATTR), reported its financial results for the quarter ended September 30, 2018 and provided an update on the Company’s recent achievements (Press release, Eidos Therapeutics, NOV 6, 2018, View Source [SID1234576272]).

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"We are working to advance the AG10 clinical development program," said Neil Kumar PhD, chief executive officer of Eidos. "The Phase 1 data demonstrated that AG10 was well tolerated at blood concentrations resulting in near-complete TTR stabilization in healthy volunteers. We are announcing the results from the Phase 2 study in ATTR cardiomyopathy patients at the 2018 American Heart Association Annual Scientific Sessions on November 10, 2018."

Recent Achievements and Upcoming Milestones

Eidos presented Phase 1 data at the 2018 Annual Scientific Meeting of the Heart Failure Society of America, demonstrating that AG10 was well tolerated and establishing clinical proof-of-concept in healthy adult volunteers.

The U.S Food & Drug Administration granted Orphan Drug Designation to AG10 for the treatment of ATTR.

The European Medicines Agency adopted a positive opinion for the designation of AG10 as an orphan medicinal product for the treatment of ATTR.

The Journal of Medicinal Chemistry published the design and preclinical characterization of AG10, demonstrating that AG10’s potentially superior stabilizing activity is driven by the unique ability to mimic the disease-protective T119M mutation and its selectivity for TTR.

The Phase 2 study of AG10 in ATTR cardiomyopathy (ATTR-CM) wild-type and mutant patients with symptomatic heart failure (NYHA Class II-III) concluded and eligible subjects entered a long term, open label extension study.

Eidos will present the Phase 2 data for AG10 in ATTR-CM at the Annual Scientific Sessions of the American Heart Association (AHA) in a late-breaking Featured Science oral presentation on November 10, 2018 at 10am EST. Eidos will also host a conference call and webcast on November 12, 2018 at 8am EST to discuss the results of the Phase 2 trial. Details for the conference call can be found at www.eidostx.com.
Financial Results for the Third Quarter 2018

Cash and cash equivalents totaled $166.6 million at September 30, 2018 compared with $5.5 million at December 31, 2017.

Research and development expenses were $7.9 million for the third quarter of 2018, compared to $2.3 million for the same period of 2017, an increase of $5.6 million. The increase was primarily due to increased expenses for contract consultants, contract manufacturing and other activities for AG10 clinical trials and increases in headcount and related salaries and expenses.

General and administrative expenses were $2.6 million for the third quarter of 2018 compared to $0.5 million for the same period in 2017, an increase of $2.1 million. The increase was primarily due to increased salaries and employee-related expenses and increases in professional fees and services in connection with becoming a public company.

Net loss for the quarter ended September 30, 2018 was $10.2 million or $0.29 per common share, compared to a net loss of $2.8 million or $0.74 per common share for the same period in 2017.

About AG10
AG10 is an orally administered small molecule designed to potently stabilize tetrameric transthyretin, or TTR, thereby halting at its outset the series of molecular events that give rise to amyloidosis, or ATTR. AG10 has completed a Phase 2 clinical trial in patients with ATTR cardiomyopathy and symptomatic heart failure. Results from this trial will be presented on November 10, 2018 at the American Heart Association’s Annual Scientific Sessions.

AG10 was designed to mimic a naturally-occurring variant of the TTR gene (T119M) that is considered a "rescue mutation" because it has been shown to prevent ATTR in individuals also carrying a pathogenic, or disease-causing, mutation in their other copy of the TTR gene. To our knowledge, AG10 is the only TTR stabilizer in development that has been observed to mimic the "super-stabilizing" properties of this rescue mutation that have been well described.

On November 6, 2018 Diplomat Pharmacy, Inc. (NYSE: DPLO), the nation’s largest independent provider of specialty pharmacy services, reported financial results for the quarter ended September 30, 2018 (Press release, Diplomat Speciality Pharmacy, NOV 6, 2018, View Source [SID1234530763]). All comparisons, unless otherwise noted, are to the quarter ended September 30, 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 change is a reclassification only and has no impact on overall results.

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Third Quarter 2018 Highlights include:

Revenue of $1,373 million, compared to $1,125 million, an increase of 22%
Specialty segment revenue of $1,212 million, compared to $1,125 million
PBM segment revenue of $170 million, which was not part of the business in the prior year period
Specialty segment total prescriptions dispensed of 230,000, compared to 222,000
PBM segment total volume, adjusted to 30-day equivalent, of 1,931,000
Gross margin of 6.8% versus 5.8%
Specialty segment gross margin of 5.5% versus 5.8%
PBM segment gross margin of 15.5%
EPS of $0.00 per diluted common share versus $0.01
Adjusted EBITDA of $41.9 million, compared to $23.2 million
Adjusted EBITDA margin of 3.1% versus 2.1%
Net cash used in operating activities was $33.4 million, compared to net cash provided by operating activities of $38.3 million
Net Debt, including contingent consideration, increased to $646.7 million, from $609.2 million at June 30, 2018
Brian Griffin, Chairman and CEO of Diplomat, commented, "Third quarter results were solid as we continue to successfully execute on our growth plan. Results were driven by strong Specialty segment growth and PBM performance. We recently opened our new state-of-the-art distribution and call center facility in Chandler, Arizona, furthering our efforts to provide the highest quality patient care nationwide. Every day we put our patients first, while at the same time investing in initiatives to drive further growth and productivity."

Third Quarter Financial Summary:

Revenue for the third quarter of 2018 was $1,373 million, compared to $1,125 million in the third quarter of 2017, an increase of $248 million or 22%. Revenue was comprised of $1,212 million and $170 million from our Specialty segment and our Pharmacy Benefit Management ("PBM") segment, respectively. The increase in our Specialty segment was driven by manufacturer price increases, approximately $10 million from our recent acquisitions, access to dispense drugs that were new in the past year and increased volume due to both payor and physician relationships. These increases were partially offset by a decrease in hepatitis C business versus the prior year period and reimbursement compression.

Gross profit in the third quarter of 2018 was $93.4 million and generated a 6.8% gross margin, compared to $65.1 million gross profit and a 5.8% gross margin in the third quarter of 2017. Gross profit was comprised of $67.0 million and $26.3 million from our Specialty segment and PBM segment, respectively. The gross margin increase in the quarter was primarily due to the impact of our PBM acquisitions, partially offset by reimbursement compression in our Specialty segment.

SG&A expenses for the third quarter of 2018 were $83.4 million, an increase of $20.6 million, compared to $62.8 million in the third quarter of 2017. This increase is primarily driven by an $11.0 million increase in employee cost, including employee cost for our acquired entities and a $4.0 million increase in share-based compensation. Also contributing to the SG&A expense increase was a $7.0 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, travel, consulting and professional fees, as well as other miscellaneous expenses. These increases were partially offset by a $2.4 million decrease in acquisition related expenses.

Net income attributable to Diplomat for the third quarter of 2018 was $0.2 million compared to $1.0 million in the third quarter of 2017. This decrease was primarily driven by an $8.1 million increase in interest expense due to a significant increase in outstanding debt to fund our PBM acquisitions, partially offset by a $7.6 million increase in income from operations. Adjusted EBITDA for the third quarter of 2018 was $41.9 million compared to $23.2 million in the third quarter of 2017, an increase of $18.7 million.

Earnings per share for the third quarter of 2018 was $0.00 per basic/diluted common share, compared to $0.01 per basic/diluted common share for the third quarter of 2017.

2018 Financial Outlook

For the full-year 2018, we are updating our previous financial guidance:

Revenue between $5.5 and $5.7 billion, versus the previous range of $5.5 and $5.9 billion
Net (loss) income attributable to Diplomat between $(7.5) and $2.6 million, versus the previous range of $(11.0) and $0.5 million
Adjusted EBITDA between $164 and $170 million, no change to previous range
Diluted EPS between $(0.10) and $0.03, versus the previous range of $(0.15) and $0.01
Our EPS expectations assume approximately 74,300,000 weighted average common shares outstanding on a diluted basis and a tax rate of (10)% and 40% versus (5)% and 32%, for the low- and high-end of the range, respectively, for the full year 2018, each of which could differ materially.

Earnings Conference Call Information

As previously announced, the Company will hold a conference call to discuss its third quarter performance this evening, November 6, 2018, at 5:00 p.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 7553049 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 90 days at ir.diplomat.is.