On July 28, 2016 Cambrex Corporation (NYSE: CBM, "Cambrex") reported results for the second quarter ended June 30, 2016 (Press release, Cambrex, JUL 28, 2016, View Source [SID:1234514088]).

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Highlights
Sales increased 12% (11% excluding the impact of foreign currency) to $119.1 million compared to $106.4 million in the same quarter last year.
GAAP Diluted EPS from continuing operations was $0.63 compared to $0.60 in the same quarter last year and Adjusted Diluted EPS was $0.68 compared to $0.63 in the same quarter last year.
Adjusted EBITDA increased 6% to $36.7 million compared to $34.6 million in the same quarter last year (see table at the end of this release).
Net cash was $52.5 million at the end of the second quarter, a decrease of $33.1 million during the quarter.
The Company closed on a new five-year $500 million Senior Revolving Credit Facility that provides significant flexibility to execute its growth strategy.
The Company increased its financial guidance for full year sales and Adjusted EBITDA. The Company expects full year 2016 sales, excluding the impact of foreign currency, to increase between 10% and 13% compared to 2015. The Company expects Adjusted EBITDA to be between $144 and $149 million, a 12% to 16% increase compared to 2015 (see Financial Expectations section below).
"We are very pleased with our second quarter and year to date results. Sales growth and profit margins year to date are in line with our outlook coming into the year and we expect continued strong growth in the second half of 2016," commented Steven M. Klosk, President and Chief Executive Officer of Cambrex. "We saw growth across all product categories and we were also awarded two new late stage projects, demonstrating that we continue to be favorably positioned to take advantage of positive market dynamics. Our first half results, coupled with our visibility into the rest of the year, provide the basis for our increased financial guidance.

"Earlier this month we announced the completion and validation of our $50 million state-of-the-art production and warehousing expansion at our Charles City, Iowa facility. As overall industry trends remain favorable, we will continue to invest aggressively to increase our small and large scale capabilities."

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

Second Quarter 2016 Operating Results – Continuing Operations
Sales were $119.1 million, compared to $106.4 million in the same period last year, representing a 12% increase. Foreign exchange favorably impacted reported sales growth by 1%. The sales increase primarily reflects higher volumes in all of our product categories, partially offset by lower pricing.

Gross margins decreased to 41% from 43% compared to the same quarter last year. The decrease was primarily due to lower pricing and higher inventory reserves, including higher reprocessing costs, partially offset by favorable product mix. Foreign currency had a negligible impact on gross margins in the second quarter of 2016.

Selling, general and administrative expenses were $13.6 million, compared to $14.1 million in the same quarter last year. The decrease was mainly due to lower bonus, recruiting and relocation expenses, partially offset by increased personnel costs and sales and marketing expenses.

Research and development expenses were $4.1 million, compared to $2.7 million in the same quarter last year. The increase is primarily related to increased personnel costs and costs to develop new generic drug products.

Operating profit increased to $30.8 million from $29.2 million in the same quarter last year. The increase in operating profit was primarily the result of higher gross profit, partially offset by higher research and development and sales and marketing expenses. Adjusted EBITDA was $36.7 million compared to $34.6 million in the same quarter last year.

Income tax expense was $9.8 million resulting in an effective tax rate of 32% compared to expense of $9.5 million and an effective tax rate of 33% in the same quarter last year.

Income from continuing operations was $20.8 million or $0.63 per share compared to $19.5 million or $0.60 per share in the same quarter last year. Adjusted income from continuing operations was $22.3 million or $0.68 per share, compared to $20.5 million or $0.63 per share in the same quarter last year (see table at the end of this release).

Capital expenditures and depreciation were $9.9 million and $5.5 million, respectively, compared to $14.5 million and $5.2 million, respectively, in the same quarter last year.

The decrease in net cash of $33.1 million during the quarter was primarily due to the timing of accounts receivable collections, increased inventory production and capital spending.

Financial Expectations – Continuing Operations
The following table shows the Company’s current expectations for its full year 2016 financial performance versus its expectations from the previous quarter:

Current Expectations Previous Expectations

Gross sales increase 10% – 13% 8% – 12%

Adjusted EBITDA $144 – $149 million $142 – $148 million

Adjusted income from
continuing operations
per share $2.49 – $2.61 $2.46 – $2.58

Free cash flow $60 – $70 million $60 – $70 million

Capital expenditures $70 – $75 million $70 – $75 million

Depreciation $25 – $27 million $26 – $28 million

Effective tax rate 32% – 34% 32% – 34%

Consistent with prior guidance for the full year 2016, these financial expectations are for continuing operations and exclude the impact of any potential acquisitions, divestitures, restructuring activities, outcomes of tax disputes and any charges related to any future sale of the Company’s Zenara business located in Hyderabad, India. Sales expectations exclude the impact of foreign exchange. EBITDA, Adjusted EBITDA and Adjusted income from continuing operations per share for 2016 will be computed on a basis consistent with the reconciliation of the second quarter 2016 financial results in the tables at the end of this release. Free cash flow is defined as the change in debt, net of cash during the year. The tax rate will be sensitive to the Company’s geographic mix of income.

The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the Company’s second quarter 2016 Form 10-Q is filed with the SEC.

On July 28, 2016 Integra LifeSciences Holdings Corporation (NASDAQ:IART) reported its financial results for the second quarter ending June 30, 2016 (Press release, Integra LifeSciences, JUL 28, 2016, View Source [SID:1234514090]).

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Highlights:

Second quarter revenue increased 17.2% over the prior-year quarter to $249.3 million and organic revenue increased 10.7%;
GAAP gross margin was 64.1% and adjusted gross margin was 69.2%;
GAAP net income increased 6.1% to $12.8 million and adjusted net income increased 21.3% to $30.3 million;
Commercial release of Integra(R) Omnigraft(TM) Dermal Regeneration Matrix began;
Integra Fin-Lock(TM) Glenoid for the Titan(TM) Modular Shoulder System launched; and
Raising 2016 full-year sales guidance range to $992 million to $1.002 billion; Raising organic sales guidance to 9%.
Total revenues for the second quarter were $249.3 million, reflecting an increase of $36.6 million, or 17.2%, over the second quarter of 2015. This reflects strong performance in both business segments; Orthopedics and Tissue Technologies revenue increased 38.2% and Specialty Surgical Solutions revenue increased 7.8%.

Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, revenues increased 10.7% over the second quarter of 2015.

"Solid performance from our two segments, as well as strength in both U.S. and international sales, contributed to the results for the second quarter," said Peter Arduini, Integra’s President and Chief Executive Officer. "We are accelerating growth as we continue to execute on our clinical and commercial strategy with the launch of several new products, including Omnigraft for the treatment of diabetic foot ulcers."

The Company reported GAAP net income of $12.8 million, or $0.32 per diluted share, for the second quarter of 2016 compared to GAAP net income of $12.0 million, or $0.35 per diluted share, for the second quarter of 2015. Results for the second quarter of 2016 include the addition of 3.8 million shares issued in an equity offering in August 2015 and approximately 1.6 million diluted shares associated with the December 2016 convertible notes and warrants.

Adjusted measures discussed below are computed with the adjustments to GAAP reporting set forth in the attached reconciliation.

Adjusted net income for the second quarter of 2016 was $30.3 million, or $0.79 per share, compared to adjusted net income of $24.9 million, or $0.75 per share, in the second quarter of 2015.

Adjusted EBITDA for the second quarter of 2016 was $54.6 million, or 21.9% of revenue, compared to $47.7 million, or 22.4% of revenue, in the prior year’s second quarter.

Operating cash flow for the second quarter was $38.1 million. Adjusted free cash flow conversion for the trailing twelve months ended June 30, 2016 was 59.8% versus 80.6% in the prior-year trailing twelve-month period.

The Company elected to adopt accounting standard FASB Update No. 2016-09 in the second quarter of 2016. Excluding the benefit of this adoption, the Company’s second quarter GAAP earnings per share would have been $0.30, and adjusted earnings per share would have been $0.78. The adoption of this standard allows the Company to recognize increased tax benefits, which were previously recorded in shareholders’ equity, through the income statement when employees exercise options or when shares vest. The adoption of this standard is reflected in our results as if it had occurred at the beginning of the year. The early adoption of this accounting standard decreased our tax expense in the second quarter of 2016 and had a GAAP net impact of $0.07 per share on a year-to-date basis. This impact was a $0.03 benefit to adjusted earnings per share on a six-month basis, since we treat the discrete benefit as a rate item in our adjusted tax rate. We expect that the full-year benefit to both our GAAP and adjusted results will be about $0.07 per share, although the GAAP benefit has been recognized during the first six months of the year, and the adjusted benefit will be recognized as a $0.03 benefit in the first half and approximately $0.04 in the second half of 2016. The Company is providing a supplemental schedule on the website to show first quarter results as if the new standard had been adopted. Access to that supplemental information is available at investor.integralife.com.

Outlook for 2016

Based on the second quarter’s results, the Company is raising its full-year 2016 revenue guidance to a new range of $992 million to $1.002 billion, up from prior guidance of $985 million to $1.0 billion. The Company is raising its full-year 2016 organic revenue growth to 9% from its previous guidance of approximately 8%. The Company is also raising its full-year GAAP and adjusted earnings per share guidance by $0.04 per diluted share and narrowing our guidance range to a new range of $1.78 – $1.88 and $3.43 – $3.53, respectively. This change reflects the impact from the adoption of the new accounting change, the expected additional share dilution on the 2016 convertible notes and warrants, and a slight outperformance in the second quarter results.

"In the second quarter, we continued to see positive momentum across our product portfolio, which allowed us to continue to make investments in our clinical pipeline and commercial infrastructure," said Glenn Coleman, Integra’s Chief Financial Officer. "We continue to expect margin expansion as we move through the back half of the year and are well-positioned to meet our full-year financial and strategic objectives."

In the future, the Company may record, or expects to record, certain additional revenues, gains, expenses or charges as described in the Discussion of Adjusted Financial Measures below that it will exclude in the calculation of adjusted EBITDA and adjusted earnings per share for historical periods and in providing adjusted earnings per share guidance.

On July 27, 2016 OncoCyte Corporation (NYSE MKT:OCX), a developer of novel, non-invasive blood based tests for the early detection of cancer, and The Wistar Institute, an international biomedical research leader in cancer, immunology and infectious diseases, reported that research results for a lung cancer diagnostic test being developed by The Wistar Institute and OncoCyte under a license from Wistar have been accepted for an Original Investigation Slide Presentation at the prestigious American College of Chest Physician’s CHEST 2016 annual meeting, which will be held in Los Angeles this October (Press release, BioTime, JUL 27, 2016, View Source;p=RssLanding&cat=news&id=2188711 [SID:1234514058]).

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The Presentation "A Blood Based Non-Small Cell Lung Cancer Diagnostic" will be presented by Louise Showe, Ph.D., professor of Molecular and Cellular Oncogenesis Program at The Wistar Institute and lead scientist on the study. Dr. Showe will report on results of a study that was conducted at Wistar and analyzed 610 human blood samples. Preliminary study results were announced in April of this year. The study replicated a previous study that was carried out at Wistar, the results of which were presented by Wistar at the American Thoracic Society conference in May of 2015.

OncoCyte must now independently validate the current results in its own follow-up study. In this study the Company will examine samples that it is collecting and will analyze them using its own laboratory facility and equipment. OncoCyte anticipates the validation study will begin in August 2016 and will be completed during the fourth quarter of 2016.

If the validation study is successful, OncoCyte intends to implement its commercialization plans with respect to the lung cancer diagnostic test, including hiring a dedicated sales force, building out its commercial infrastructure, and moving towards completion of and obtaining CLIA certification for its own diagnostic laboratory. The Company plans to launch its lung cancer diagnostic test in the first half of 2017.

"The acceptance of the data for presentation at CHEST is another step in validating our approach to diagnosing lung cancer and bringing it closer to commercialization by OncoCyte," said Dr. Showe.

"CHEST’s acceptance of this presentation on the effectiveness of our non-invasive diagnostic for the early detection of lung cancer is a significant development for OncoCyte and Wistar," commented William Annett, Chief Executive Officer of OncoCyte. "Each year there are 160,000 deaths related to lung cancer, in part because there is no effective test to reliably diagnose lung cancer at an early enough stage. We believe that OncoCyte’s non-invasive lung cancer diagnostic could represent an important step forward for patients, doctors and payers by improving outcomes and lowering costs. We look forward to continuing the next steps in the product development process and to providing additional updates in the coming months."

On July 27, 2016 The Medicines Company (NASDAQ:MDCO) reported its business and financial results for the second quarter ended June 30, 2016 (Press release, Medicines Company, JUL 27, 2016, View Source;p=RssLanding&cat=news&id=2188751 [SID:1234514063]).

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During the second quarter of 2016, the Company delivered strong execution against its strategic objectives by driving further advancement of its four potential blockbuster development programs and taking actions that generated non-dilutive capital and strategic and operational flexibility to enable it to continue to unlock the value of these programs.

Key highlights included:

PRODUCT DEVELOPMENT

CARBAVANCE (meropenem-vaborbactam): Announced that Carbavance met both FDA and EMA pre-specified primary endpoints in the Phase 3 TANGO 1 clinical trial in patients with complicated urinary tract infections. Carbavance also demonstrated statistical superiority over piperacillin-tazobactam, with overall success in 98.4% of patients treated with Carbavance, using the FDA primary endpoint. Carbavance was well-tolerated in the trial. This follows the granting of Fast Track status for Carbavance by the Food and Drug Administration (FDA) in April 2016 and the designation of Carbavance as a Qualified Infectious Disease Product, as authorized under the GAIN Act, in 2013. Enrollment is continuing in the Phase 3 TANGO 2 clinical trial, comparing Carbavance’s safety, tolerability, and efficacy with best available therapy in patients with serious infections due to confirmed or suspected CRE. The Company expects to submit a New Drug Application to the FDA in early 2017.

PCSK9si (PCSK9 synthesis inhibitor): Announced completion of patient enrollment ahead of schedule in the Phase 2 ORION-1 clinical trial of PCSK9si, an investigational first-in-class RNA interference proprotein convertase subtilisin/kexin type 9 synthesis inhibitor. Interim three-month and six-month efficacy and safety data from patients in ORION-1 are expected to be available, analyzed and presented before the end of 2016.

MDCO-216: Completed enrollment of more than 100 of 120 total planned patients in the MILANO-PILOT study evaluating MDCO-216’s effects on atherosclerotic plaque burden. Pursuant to the Interim Statistical Analysis Plan governing monitoring by the Independent Data Monitoring Committee (IDMC), an interim safety and efficacy analysis is currently being performed for the first 40 patients who have completed the end of treatment. The interim analysis will be reviewed by the IDMC in August. The Company is blinded and firewalled from all clinical data during the IDMC’s evaluation. If there are no safety concerns that require further evaluation and if pre-defined efficacy criteria are met, the IDMC will provide efficacy data from the first 40 patients to the Company. In any event, the Company expects to provide an update on the MILANO-PILOT trial in August.

ABP-700: Completed Phase 1 clinical pharmacology, dosing and safety studies in more than 300 subjects, including ABP-700’s use with pre- and co-medications routinely given as part of procedural sedation and induction of general anesthesia. In June, the Company dosed the first patient in a Phase 2 clinical trial for procedural sedation. The trial is expected to enroll 75 patients undergoing elective colonoscopies at three sites in The Netherlands. In consultation with the FDA, the Company will perform an additional animal study to support the submission of an Investigational New Drug Application in the United States. We expect to report results from the Phase 2 trial before the end of 2016.

STRATEGIC ACTIONS

Generated non-dilutive capital by completing the sale of the Company’s non-core cardiovascular products (Cleviprex (clevidipine) injection emulsion, Kengreal (cangrelor), and rights to Argatroban for injection) to Chiesi for an initial payment of $264 million in cash plus the potential to receive up to $480 million in sales-based milestone payments.
Continued to implement the previously announced restructuring plan designed to reduce operating expenses and R&D by $65 million to $80 million annually.
Completed the offering and sale of $402.5 million aggregate principal amount of 2.75% convertible notes due 2023 and repurchased $220 million (approximately 80%) of the Company’s 2017 convertible notes.
Continued to build senior management depth with the addition of Tony Kingsley, President and Chief Operating Officer, to help oversee the day-to-day operations and lead the Company’s commercial activities.
"We continue our focus on saving lives, alleviating suffering, and improving the economic efficiency of healthcare, but our purpose has magnified with the scale of the problems we are addressing with our programs and the numbers of patients we can potentially touch," said Clive Meanwell, M.D., Ph.D., Chief Executive Officer of The Medicines Company. "Through our execution over the last three quarters we have put ourselves in a position to focus on these big problems with our four core clinical development projects. We expect the pace of our progress to continue through the rest of 2016 with important clinical milestones for PCSK9si, MDCO-216, Carbavance and ABP-700."

Second-Quarter 2016 Financial Summary from Continuing Operations

Worldwide net revenue was $54.7 million in the second quarter of 2016 compared to $74.5 million in the second quarter of 2015. Included in total net revenue for the second quarter of 2016 was $24.4 million of royalty revenues derived from the gross profit of authorized generic sales of Angiomax (bivalirudin) by Sandoz, Inc. Worldwide Angiomax/Angiox (bivalirudin) net product sales were $15.8 million in the second quarter of 2016 compared to $65.6 million in the second quarter of 2015, with net product sales in the United States decreasing to $12.8 million in the second quarter of 2016 from $60.5 million in the second quarter of 2015, driven by the loss of Angiomax exclusivity in July 2015. Other products, including Ionsys, Minocin for Injection, and Orbactiv, along with the recently-divested non-core cardiovascular products, recorded sales of $14.5 million in the second quarter of 2016 compared to $8.9 million in the second quarter of 2015.

The sale of the Company’s non-core cardiovascular products resulted in a gain of $288.3 million, which was recorded in the second quarter of 2016.

Net income from continuing operations in the second quarter of 2016 was $181.8 million, or $2.51 per share, compared to net loss from continuing operations of $67.4 million, or $1.02 per share, in the second quarter of 2015. Adjusted net loss(1) from continuing operations in the second quarter of 2016 was $43.0 million, or $0.62(1) per share, compared to $45.2 million, or $0.69(1) per share, in the second quarter of 2015.

Second-Quarter 2016 Financial Summary from Discontinued Operations

In the first quarter of 2016, the Company completed the sale of its hemostasis products. Net income from discontinued operations in the second quarter of 2016 was $0.6 million, or $0.01 per share, compared to $20.9 million, or $0.31 per share, in the second quarter of 2015.

First-Half 2016 Financial Summary from Continuing Operations

Worldwide net revenue was $105.0 million in the first half of 2016 compared to $184.6 million in the first half of 2015. Included in total net revenue in the first half of 2016 was $43.3 million of royalty revenues derived from the gross profit of authorized generic sales of Angiomax (bivalirudin) by Sandoz, Inc. Worldwide Angiomax/Angiox(bivalirudin) net product sales were $32.7 million in the first half of 2016 compared to $166.3 million in the first half of 2015, with net product sales in the United States decreasing to $26.0 million in the first half of 2016 from $155.6 million in the first half of 2015, driven by the loss of Angiomax exclusivity in July 2015. Other products, including Ionsys, Minocin for Injection, and Orbactiv, along with the recently-divested non-core cardiovascular products, recorded sales of $29.0 million in the first half of 2016 compared to $18.3 million in the first half of 2015.

The sale of the Company’s non-core cardiovascular products resulted in a gain of $288.3 million, which was recorded in the second quarter of 2016.

Net income from continuing operations in the first half of 2016 was $91.5 million, or $1.27 per share, compared to net loss from continuing operations of $63.1 million, or $0.96 per share, in the first half of 2015. Adjusted net loss(1) from continuing operations in the first half of 2016 was $114.1 million, or $1.64(1) per share, compared to $44.8 million, or $0.68(1) per share in the first half of 2015.

First-Half 2016 Financial Summary from Discontinued Operations

Net loss from discontinued operations in the first half of 2016 was $1.5 million, or $0.02 per share, compared to net income from discontinued operations of $21.5 million, or $0.33 per share, in the first half of 2015.

(1)
Adjusted net loss and adjusted loss per share from continuing operations are non-GAAP financial performance measures with no standardized definitions under U.S. GAAP. For further information and a detailed reconciliation, refer to the Non-GAAP Financial Performance Measures and Reconciliations of GAAP to Adjusted Net Loss and Adjusted Loss per Share sections of this release for explanations of the amounts excluded and included to arrive at adjusted net loss and adjusted loss per share amounts.
At June 30, 2016, the Company had $644 million in cash and investments compared to $373 million at the end of 2015.

On July 27, 2016 DNAtrix, a clinical stage biotechnology company developing virus-driven immunotherapies for cancer, reported that the European Medicines Agency (EMA) has granted PRIority MEdicines (PRIME) designation for DNX-2401 as a promising new treatment for recurrent glioblastoma (Press release, DNAtrix, JUL 27, 2016, View Source [SID1234525538]).

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The PRIME initiative was launched by the EMA in March of 2016 to accelerate the regulatory approval of breakthrough therapies that target an unmet medical need. By offering prompt interaction with Sponsors developing innovative therapies, the objective is to provide patients who have few treatment options with early access to priority medicines that could provide significant benefit.

DNX-2401 is a potent oncolytic adenovirus that targets and kills cancer cells, while leaving normal cells intact. Multiple clinical studies in patients with recurrent glioblastoma and gynecologic cancer have shown that DNX-2401 has a favorable safety profile, strong tumor-killing potential and can trigger an antitumor immune response.

"We are pleased and honored that the European Medicines Agency has recognized the potential of our oncolytic immunotherapy DNX-2401 to make a positive impact on glioblastoma," said Joanna Peterkin, M.D., M.S., Chief Medical Officer of DNAtrix. "We look forward to working with the EMA on this important development program for DNX-2401, with the goal of improving the quality of life of patients with brain tumors."

DNAtrix has multiple ongoing studies, including a multicenter Phase 2 clinical study evaluating DNX-2401 with the checkpoint inhibitor pembrolizumab in patients with recurrent glioblastoma. For more information about this study, refer to Clinicaltrials.gov (NCT02798406).
About DNX-2401 in Glioblastoma

DNX-2401 is an investigational oncolytic immunotherapy designed to treat cancer, with glioblastoma as the initial indication. Glioblastoma is the most aggressive form of brain cancer, which has a median survival of 15 months following a patient’s initial diagnosis. DNX-2401 sets off a chain reaction of tumor cell killing by selectively replicating within glioblastoma cells (but not normal cells), causing tumor destruction and further spread of the oncolytic virus to adjacent tumor cells. This process can also trigger an anti-tumor immune response. DNX-2401 is currently being investigated in several clinical studies and has been well tolerated in all settings. Compelling results from Phase 1 clinical studies in recurrent glioblastoma indicate that DNX-2401 can (1) replicate in human brain tumors for a period of weeks to months, (2) trigger immune cell infiltration into the tumor, (3) cause ongoing tumor destruction detectable by MRI and (4) induce durable responses to therapy. In these studies, patient survival has been prolonged in a subset of patients, including in those achieving a complete response.