Medtronic Reports Fourth Quarter and Fiscal Year 2016 Financial Results

On May 31, 2016 Medtronic plc (NYSE: MDT) reported financial results for its fourth quarter and fiscal year 2016, which ended April 29, 2016 (Press release, Medtronic, MAY 31, 2016, View Source;p=RssLanding&cat=news&id=2173358 [SID:1234512872]).

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The company reported fourth quarter worldwide revenue of $7.567 billion, compared to the $7.304 billion reported in the fourth quarter of fiscal year 2015, an increase of 4 percent, or 6 percent on a constant currency basis. Foreign currency translation had a negative $179 million impact on fourth quarter revenue. As detailed in the financial schedules included through the link at the end of this release, fourth quarter non-GAAP net income and diluted earnings per share (EPS) were $1.796 billion and $1.27, an increase of 7 percent and 9 percent, respectively. As reported, fourth quarter GAAP net income and diluted EPS were $1.104 billion and $0.78.

Fourth quarter U.S. revenue of $4.217 billion represented 56 percent of company revenue and increased 4 percent. Non-U.S. developed market revenue of $2.393 billion represented 31 percent of company revenue and increased 3 percent, or 6 percent on a constant currency basis. Emerging market revenue of $957 million represented 13 percent of company revenue and increased 4 percent, or 15 percent on a constant currency basis.

Medtronic’s fiscal year 2016 revenue of $28.833 billion increased 42 percent, or 7 percent on a comparable, constant currency basis, which adjusts for the impact of foreign currency translation and includes Covidien plc in the prior year comparison, aligning Covidien’s prior year monthly revenue to Medtronic’s fiscal quarters. 2016 revenue growth rates include the benefit from the extra week in the first quarter. Foreign currency translation had a negative $1.502 billion impact on fiscal year 2016 revenue. As detailed in the link at the end of this release, fiscal year 2016 non-GAAP earnings and diluted EPS were $6.228 billion and $4.37, an increase of 31 percent and 2 percent, respectively. As reported, fiscal year 2016 net earnings were $3.538 billion or $2.48 per diluted share, an increase of 32 percent and 3 percent, respectively.

"Our organization once again successfully delivered strong, balanced revenue growth across our groups and geographic regions – growing above the market and exceeding our revenue growth projections," said Omar Ishrak, Medtronic chairman and chief executive officer. "This quarter caps a transformative year for Medtronic, our first full year after closing the largest ever MedTech acquisition. I am pleased with the execution and focus of our teams around the world who delivered sustained revenue growth and exceeded our Covidien cost synergy commitments."

Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH), and Aortic & Peripheral Vascular (APV) divisions. CVG worldwide fourth quarter revenue of $2.736 billion increased 5 percent, or 8 percent on a constant currency basis. CVG revenue performance was driven by strong, balanced growth across all three divisions.
CRHF fourth quarter revenue of $1.492 billion grew 7 percent, or 9 percent on a constant currency basis, significantly outperforming the market on the strength of the Amplia MRI(TM) and Compia MRI(TM) Quad CRT-D launches and ongoing Evera MRI ICD launch in the U.S., adoption of the Micra TPS pacemaker in Europe, continued global adoption of the Reveal LINQ insertable cardiac monitor, and mid-thirties growth in AF Solutions on a constant currency basis.

CSH fourth quarter revenue of $816 million increased 3 percent, or 7 percent on a constant currency basis, led by high-twenties growth on a constant currency basis in transcatheter valves as a result of strong customer adoption of the CoreValve Evolut R. Coronary grew in the low-single digits on a constant currency basis driven by Resolute Onyx(TM) in Europe and emerging markets.
APV fourth quarter revenue of $428 million increased 5 percent, or 8 percent on a constant currency basis, driven by mid-single digit growth on a constant currency basis in Aortic, led by the continued strength of the Endurant IIs aortic stent graft and solid adoption of the Heli-FX EndoAnchor System, as well as strong above-market growth of the clinically differentiated IN.PACT Admiral drug-coated balloon, which holds the leading market position in the U.S. and globally.

Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Solutions and the Patient Monitoring & Recovery (PMR) divisions. MITG worldwide fourth quarter revenue of $2.460 billion increased 3 percent, or 6 percent on a constant currency basis. MITG had a strong quarter of above-market growth in Surgical Solutions and low-single digit growth on a constant currency basis in PMR.

Surgical Solutions fourth quarter revenue of $1.358 billion increased 5 percent, or 9 percent on a constant currency basis, driven by double-digit growth on a constant currency basis in Advanced Energy and upper-single digit growth on a constant currency basis in Advanced Stapling. Early Technologies grew double-digits on a constant currency basis, led by strong growth in GI Solutions.

PMR fourth quarter revenue of $1.102 billion increased 1 percent, or 3 percent on a constant currency basis, driven by growth in Renal Care Solutions from the recent acquisition of Bellco, which offset negative revenue impacts resulting from the product hold of the Puritan Bennett(TM) 980 ventilator and recall of the battery pack in the Capnostream(TM) 20 capnography monitor.

Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Spine, Neuromodulation, Surgical Technologies, and Neurovascular divisions. RTG worldwide fourth quarter revenue of $1.875 billion increased 1 percent, or 3 percent on a constant currency basis. Group results were driven by strong growth in Neurovascular and Surgical Technologies and improved results in Spine, which offset low-single digit declines on a constant currency basis in Neuromodulation.

Spine fourth quarter revenue of $737 million declined 1 percent, or was flat on a constant currency basis. Core Spine and Interventional Spine both delivered improved growth. BMP declined in the low-single digits on a constant currency basis, as mid-single digit growth in the U.S. only partially offset the continued loss of BMP sales in Europe as a result of a product hold.

Neuromodulation fourth quarter revenue of $494 million declined 5 percent, or declined 3 percent on a constant currency basis. In Drug Pumps, the business was negatively affected by challenges related to its April 2015 U.S. FDA consent decree as well as by a recent divestiture of its intrathecal baclofen drug. In addition, Pain Stim and Deep Brain Stimulation (DBS) declined, driven by competitive challenges.

Surgical Technologies fourth quarter revenue of $485 million increased 5 percent, or increased 7 percent on a constant currency basis, with high-teens growth on a constant currency basis in Advanced Energy and high-single digit growth on a constant currency basis in Neurosurgery, offsetting low-single digit declines on a constant currency basis in ENT.

Neurovascular fourth quarter revenue of $159 million increased 20 percent, or 23 percent on a constant currency basis, driven by continued strong growth in stents and flow diversion as a result of customer adoption of the company’s Solitaire(TM) FR revascularization device for the treatment of ischemic stroke, as well as the Pipeline(TM) Flex device in the U.S. and Japan and Pipeline(TM) Shield in Europe for the treatment of intracranial aneurysms.

Diabetes Group
The Diabetes Group includes the Intensive Insulin Management (IIM), Diabetes Service & Solutions (DSS), and Non-Intensive Diabetes Therapies (NDT) divisions. Diabetes Group worldwide fourth quarter revenue of $496 million increased 6 percent, or 10 percent on a constant currency basis. The group had strong, broad-based performance across all three divisions.

IIM grew in the high-single digits on a constant currency basis, driven by continued strong sales in Europe and Asia Pacific of the MiniMed 640G System with the enhanced Enlite sensor and SmartGuard(TM) technology.

NDT grew over 230 percent on a constant currency basis, led by strong U.S. sales of the iPro2 Professional Continuous Glucose Monitor (CGM) technology with Pattern Snapshot.

DSS grew in the high-single digits on a constant currency basis as a result of solid growth of consumables, revenue from the company’s acquisition of Diabeter in Europe, and continued strong growth of the MiniMed Connect, where now over 16,000 people with diabetes are using the product to view their insulin pump and CGM information on a smartphone.

Revenue Outlook and EPS Guidance
The company today provided its initial 2017 revenue outlook and EPS guidance. The company’s baseline goal is to consistently grow revenue in the mid-single digits on a constant currency basis. In fiscal year 2017, given current trends, the company expects constant currency revenue growth to be in the upper-half of the mid-single digit range, which is in the range of 5 to 6 percent and excludes the estimated negative 150 basis point impact from the extra selling week the company had in the first quarter of fiscal year 2016. The company expects a negative impact from foreign currency in fiscal year 2017 of approximately $25 to $75 million based on current exchange rates.

In fiscal year 2017, the company expects non-GAAP diluted EPS in the range of $4.60 to $4.70, which includes an expected $0.20 to $0.25 negative foreign currency impact based on current exchange rates. The company indicated this guidance would imply diluted EPS growth in the range of 12 to 16 percent, after adjusting for the estimated impact of foreign currency translation and the extra selling week in the company’s first quarter of fiscal year 2016.

"As we enter our new fiscal year, we look forward to delivering on our robust pipeline of products and services, expanding our global reach to serve more patients, and partnering with others around the world to develop new value-based business models," said Ishrak. "We believe that Medtronic can play a meaningful leadership role with others in healthcare that can lead to better outcomes for patients, while improving overall healthcare system performance."

20-F/A [Amend] – Annual and transition report of foreign private issuers [Sections 13 or 15(d)]

(Filing, Annual, BioLineRx, 2015, MAY 31, 2016, View Source [SID:1234512873])

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8-K – Current report

On May 31, 2016 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) and Celator Pharmaceuticals, Inc. (Nasdaq: CPXX) reported that they have entered into a definitive agreement for Jazz Pharmaceuticals to acquire Celator for $30.25 per share in cash, or approximately $1.5 billion (Filing, 8-K, Celator Pharmaceuticals, MAY 31, 2016, View Source [SID:1234512874]).

The transaction with Celator is well-suited to advance Jazz Pharmaceuticals’ growth strategy.

· VYXEOS is the first product candidate to demonstrate a statistically significant improvement in Overall Survival in patients with high-risk (secondary) AML1
· U.S. FDA Breakthrough Therapy designation granted for VYXEOS2
· U.S. FDA and European Commission Orphan Drug designation for VYXEOS for the treatment of AML
· VYXEOS is an innovative product candidate based on the Celator CombiPlex platform
· Anticipated long-lived exclusivity for VYXEOS
· Broadens Jazz Pharmaceuticals’ hematology/oncology portfolio
· Worldwide development and commercialization rights to VYXEOS
· Synergies with Jazz Pharmaceuticals’ commercial expertise and infrastructure
· Transaction expected to close in the third quarter of 2016
· Transaction expected to be accretive to Non-GAAP adjusted EPS beginning in 2018 and beyond

1 Included secondary AML and de novo AML with a karyotype characteristic of myelodysplastic syndrome (MDS)
2 U.S. FDA Breakthrough Therapy designation granted for VYXEOS for the treatment of adults with therapy-related AML or AML with myelodysplasia-related changes

"Celator Pharmaceuticals is a strong strategic fit with Jazz Pharmaceuticals. VYXEOS will further diversify our product portfolio and is complementary to our clinical and commercial expertise in hematology/oncology," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals plc. "As Celator is currently preparing a regulatory submission in the U.S. for VYXEOS, this acquisition would add a new orphan product with the potential for short- and long-term revenue generation and expansion of our international commercial platform."

"The planned combination of Jazz and Celator is highly complementary, as both companies are dedicated to bringing differentiated therapies to patients who have high unmet medical needs," said Scott Jackson, chief executive officer of Celator Pharmaceuticals. "We believe that Jazz Pharmaceuticals’ clinical and commercial expertise in hematology/oncology and existing international infrastructure will help realize the value of VYXEOS as a treatment to patients with AML. After thoroughly evaluating our strategic options, our board of directors has unanimously determined that this all-cash transaction is in the best interest of our stockholders."

Transaction Closing
The transaction is structured as a tender offer and second step merger. The closing of the tender offer is conditioned upon customary conditions, including the tender of a majority of the outstanding shares of Celator common stock and expiration or termination of the Hart Scott Rodino waiting period. The transaction is expected to close in the third quarter of 2016.

Certain stockholders of Celator holding approximately 18.4 percent of Celator’s outstanding shares of common stock, including executive officers, members of the Celator board of directors and certain investment funds affiliated with the members of the board of directors, have agreed to tender their shares in the tender offer.

Financing
Jazz Pharmaceuticals expects to finance the transaction with a combination of cash on hand and borrowings under its senior secured credit facility.

Advisors
Jazz Pharmaceuticals’ financial advisor for the transaction is RBC Capital Markets, and its primary legal advisor is Cooley LLP.

Celator Pharmaceuticals’ financial advisor for the transaction is MTS Health Partners, and its primary legal advisor is Kirkland and Ellis LLP.

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6-K – Report of foreign issuer [Rules 13a-16 and 15d-16]

On May 27, 2016 Can-Fite BioPharma Ltd. (NYSE MKT: CANF) (TASE:CFBI), a biotechnology company with a pipeline of proprietary small molecule drugs being developed to treat inflammatory diseases, cancer and sexual dysfunction, reported financial results for the three months ended March 31, 2016 and updates on its drug development programs (Filing, Q1, Can-Fite BioPharma, 2016, MAY 27, 2016, View Source [SID:1234512832]).

Clinical Development Program and Corporate Highlights Include:

● CF101 – Phase II Glaucoma Results Expected in June; Phase III Trials in Rheumatoid Arthritis & Psoriasis Scheduled to Commence in 2016

In June 2016, Can-Fite plans to report data from a Phase II trial of CF101, conducted by its subsidiary OphthaliX, in the treatment of glaucoma and related syndromes of ocular hypertension.

During the first quarter of 2016, Can-Fite submitted a Phase III trial protocol for CF101 in the treatment of rheumatoid arthritis to the European Medicines Agency (EMA) and is currently expecting EMA input.

On March 7, 2016, Can-Fite presented data at the American Academy of Dermatology’s 74th Annual Meeting in Washington D.C. in a poster titled, "Treatment of Plaque-type Psoriasis with Oral CF101: Data from a Phase II/III Clinical Trial." The Company plans to file a Phase III trial protocol for CF101 in the treatment of psoriasis with the EMA in the first half of 2016 and commence the study by the end of 2016.

● CF102 – Conducting Phase II Trial in Liver Cancer & Plans to Commence Phase II Trial in NASH

Can-Fite continues to enroll and dose patients in its global Phase II liver cancer study in the U.S., Europe, and Israel. Completion of enrollment with approximately 78 patients is expected in the second half of 2016. The Company is preparing to file its Phase II protocol for CF102 in the treatment of non-alcoholic steatohepatitis (NASH), with institutional review boards (IRBs) in the second quarter of 2016.

● CF602 – Reports New Pre-Clinical Data & Preparing to Submit an IND to FDA for Treatment of Sexual Dysfunction

Following the end of the first quarter, in April 2016 Can-Fite reported new data for CF602, showing a statistically significant full recovery from erectile dysfunction after one single dose treatment in a pre-clinical diabetic model.

Can-Fite plans to file an investigational new drug (IND) application with the U.S. Food and Drug Administration for a Phase I study of CF602 in the treatment of sexual dysfunction during the fourth quarter of 2016.

"During the first quarter, we made advancements in both our drugs heading into Phase III and our earlier stage indications. For CF101, we look forward to reporting data from our Phase II glaucoma trial and anticipate receiving input from the EMA on our pivotal Phase III rheumatoid arthritis trial in the coming month," stated Can-Fite CEO Dr. Pnina Fishman.

Revenues for the three months ended March 31, 2016 were NIS 0.21 million (U.S. $0.06 million). We did not record any revenues during the three months ended March 31, 2015. The increase in revenue was due to the recognition of a portion of the NIS 5.14 million (U.S. $1.36 million) upfront payment received in March 2015 under the distribution agreement with Cipher Pharmaceuticals.

Research and development expenses for the three months ended March 31, 2016 were NIS 4.08 million (U.S. $1.08 million) compared with NIS 2.33 million (U.S. $0.62 million) for the same period in 2015. Research and development expenses for the first quarter of 2016 comprised primarily of expenses associated with the Phase II study for CF102 as well as expenses for ongoing studies of CF101. The increase is primarily due to costs associated with preparations of the CF101 Phase III studies in the treatment of rheumatoid arthritis and psoriasis.

General and administrative expenses were NIS 2.36 million (U.S. $0.63 million) for the three months ended March 31, 2016 compared to NIS 2.48 million (U.S. $0.66 million) for the same period in 2015. The minimal decrease is primarily due to a reduction in professional services expenses.

Financial income, net for the three months ended March 31, 2016 aggregated NIS 0.44 million (U.S. $0.12 million) compared to financial income, net of NIS 3.3 million (U.S. $0.88 million) for the same period in 2015. The decrease in financial income, net in the first quarter of 2016 was mainly due to a smaller decrease in the fair value of warrants that are accounted as financial liability as compared to the same period in 2015. In addition, the decrease in financial income, net in the first quarter of 2016 was attributable to an increase in expenses due to exchange rate differences as compared to the same period in 2015.

Can-Fite’s net loss for the three months ended March 31, 2016 was NIS 5.79 million (U.S. $1.54 million) compared with a net loss of NIS 1.51 million (U.S. $0.40 million) for the same period in 2015. The increase in net loss for the first quarter of 2016 was primarily attributable to an increase in research and development expenses and a decrease in financial income, net.

As of March 31, 2016, Can-Fite had cash and cash equivalents of NIS 56.61 million (U.S. $15.03 million) as compared to NIS 66.03 million (U.S. $17.53 million) at December 31, 2015. The decrease in cash during the three months ended March 31, 2016 is due to operating expenses.

For the convenience of the reader, the reported NIS amounts have been translated into U.S. dollars, at the representative rate of exchange on March 31, 2016 (U.S. $1 = NIS 3.766).

The Company’s consolidated financial results for the three months ended March 31, 2016 are presented in accordance with International Financial Reporting Standards.

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INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
In thousands (except for share and per share data)

Convenience translation into
U.S. dollars

March 31, March 31, December 31,
2016 2016 2015
Unaudited
USD NIS

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 15,032 56,610 66,026
Other receivable and prepaid expenses 1,384 5,213 2,419

Total current assets 16,416 61,823 68,445

NON-CURRENT ASSETS:

Lease deposits 7 27 27
Property, plant and equipment, net 68 254 236

Total long-term assets 75 281 263

Total assets 16,491 62,104 68,708

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
In thousands (except for share and per share data)


Convenience translation into
U.S. dollars

March 31, March 31, December 31,
2016 2016 2015
Unaudited
USD NIS

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade payables 1,005 3,784 1,803
Deferred revenues 227 857 857
Other accounts payable 843 3,174 4,279

Total current liabilities 2,075 7,815 6,939

NON-CURRENT LIABILITIES:

Warrants exercisable into shares 3,968 14,942 16,725
Deferred revenues 910 3,427 3,641
Severance pay, net 169 636 630

Total long-term liabilities 5,047 19,005 20,996

CONTINGENT LIABILITIES AND COMMITMENTS

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:

Share capital 1,867 7,030 7,030
Share premium 88,389 332,873 332,873
Capital reserve from share-based payment transactions 5,192 19,552 19,288
Warrants exercisable into shares (series 10-12) 2,385 8,983 8,983
Treasury shares, at cost (964 ) (3,628 ) (3,628 )
Accumulated other comprehensive loss (366 ) (1,380 ) (1,401 )
Accumulated deficit (87,267 ) (328,647 ) (322,876 )

Total equity attributable to equity holders of the Company 9,236 34,783 40,269

Non-controlling interests 133 501 504

Total equity 9,369 35,284 40,773

Total liabilities and equity 16,491 62,104 68,708

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
In thousands (except for share and per share data)


Convenience translation into
U.S. dollars

Three months ended March 31,
2016 2016 2015
Unaudited
USD NIS NIS


Revenues 57 214 -

Research and development expenses 1,083 4,077 2,328
General and administrative expenses 628 2,364 2,476

Operating loss 1,654 6,227 4,804

Finance expenses 382 1,438 18
Finance income (499 ) (1,878 ) (3,316 )
Net loss 1,537 5,787 1,506

Other comprehensive loss (income):
Adjustments arising from translating financial statements of foreign operations (7 ) (26 ) 234
Total comprehensive loss 1,530 5,761 1,740

Net loss attributable to:
Equity holders of the Company 1,533 5,771 1,359
Non-controlling interests 4 16 147
1,537 5,787 1,506

Total comprehensive loss attributable to:
Equity holders of the Company 1,527 5,750 1,551
Non-controlling interests 3 11 189
1,530 5,761 1,740

Net loss per share attributable to equity holders of the Company :
Basic and diluted net loss per share 0.06 0.21 0.06

Baxalta Shareholders Vote to Approve Combination

On May 27, 2016 Baxalta Incorporated (NYSE:BXLT) reported the results of a vote on the proposals identified in the definitive proxy statement/prospectus, dated April 18, 2016, at a special meeting of shareholders held earlier this morning relating to the proposed combination with Shire plc (LSE: SHP, NASDAQ: SHPG) (Press release, Baxalta, MAY 27, 2016, View Source [SID:1234512840]). Baxalta shareholders approved the definitive merger agreement with Shire, dated as of January 11, 2016, and the merger transaction, with approximately 98.9 percent of shares outstanding cast in favor of the proposal.

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Earlier today, Shire shareholders of approximately 93.8 percent of the votes cast voted in favor of the adoption of the merger agreement with Baxalta. This represents approximately 75.5 percent of Shire’s total outstanding shares of common stock as of 8:00 a.m. (London time) on May 25, 2016, the record date for the special meeting.

As announced on January 11, 2016, Baxalta and Shire entered into a definitive merger agreement pursuant to which Shire would acquire Baxalta in a stock and cash transaction. Baxalta stockholder approval and Shire shareholder approval are conditions to the merger. The completion of the transaction remains subject to certain other closing conditions, but the companies expect that this transaction will be completed on or about June 3, 2016.