On October 25, 2017 Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) reported consolidated financial results for the third quarter ended September 30, 2017 (Press release, Vertex Pharmaceuticals, OCT 25, 2017, View Source [SID1234521175]). Vertex also increased its total 2017 CF product revenue guidance, including revenue guidance for ORKAMBI (lumacaftor/ivacaftor) and KALYDECO (ivacaftor), and reiterated its total 2017 combined GAAP and non-GAAP R&D and SG&A expense guidance.

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In addition, the company today reported top-line results for three clinical studies in CF, including: a Phase 3 study of ORKAMBI in children with CF ages 2 to 5 who have two copies of the F508del mutation; a Phase 3 study of the tezacaftor/ivacaftor combination in people with CF with one copy of the F508del mutation and one copy of a gating mutation; and a Phase 2 study of the ENaC inhibitor VX-371 in combination with ORKAMBI in people with CF who have two copies of the F508del mutation.

Key financial results include:

Three Months Ended September 30,

%

2017

2016

Change

(in millions, except per share and percentage data)
ORKAMBI product revenues, net
$
336

$
234

44%
KALYDECO product revenues, net
$
213

$
176

22%
TOTAL CF product revenues, net
$
550

$
410

34%

GAAP net loss
$
(103
)

$
(39
)

n/a
GAAP net loss per share – diluted
$
(0.41
)

$
(0.16
)

n/a

Non-GAAP net income
$
136

$
43

216%
Non-GAAP net income per share – diluted
$
0.53

$
0.17

212%

"Vertex has never been stronger than it is today with significant progress across all aspects of our business," said Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "We are now treating more patients with our approved medicines than ever before, resulting in significant revenues and

earnings growth. We expect this financial trajectory to continue, driven by our pipeline of transformative CF medicines."

Dr. Leiden continued, "We look forward to continued progress in 2018 with the anticipated approval of our third CF medicine, and advancement into pivotal development of our portfolio of triple combination regimens, which have the potential to treat nearly all CF patients in the future."
Financial Highlights
Revenues:
•
Total CF net product revenues were $549.6 million compared to $409.7 million for the third quarter of 2016.
•
Net product revenues from ORKAMBI were $336.2 million compared to $234.0 million for the third quarter of 2016. The increase in ORKAMBI revenues was driven by a number of factors, including the continued uptake in children with CF ages 6 to 11 in the U.S. and the addition of revenues from European countries where ORKAMBI is currently reimbursed.
•
Net product revenues from KALYDECO were $213.5 million compared to $175.6 million for the third quarter of 2016. The increase in KALYDECO revenues was driven by the approval and uptake among people ages 2 and older in the U.S. who have certain residual function mutations.
Expenses:
•
Combined GAAP R&D and SG&A expenses were $575.7 million compared to $378.4 million for the third quarter of 2016. Combined non-GAAP R&D and SG&A expenses were $333.8 million compared to $295.0 million for the third quarter of 2016.
•
GAAP R&D expenses were $454.9 million compared to $272.4 million for the third quarter of 2016. The increase in GAAP R&D expenses was primarily due to an upfront payment of $160.0 million related to the acquisition of VX-561 (previously known as CTP-656), an investigational once-daily CFTR potentiator, from Concert Pharmaceuticals. Non-GAAP R&D expenses were $243.2 million compared to $211.0 million for the third quarter of 2016. The increase in non-GAAP R&D expenses was primarily attributable to the clinical development of the company’s triple combination regimens for CF.

•
GAAP SG&A expenses were $120.7 million compared to $106.1 million for the third quarter of 2016. Non-GAAP SG&A expenses were $90.6 million compared to $84.0 million for the third quarter of 2016. The increase in GAAP and non-GAAP SG&A expenses was driven by the global support for KALYDECO and ORKAMBI.
Net Income (Loss) Attributable to Vertex:
•
GAAP net loss was $(103.0) million, or $(0.41) per diluted share, for the third quarter of 2017, compared to a net loss of $(38.8) million, or $(0.16) per diluted share, for the third quarter of 2016. The GAAP net loss in the third quarter of 2017 was primarily due to an upfront payment of $160.0 million related to the acquisition of VX-561 from Concert Pharmaceuticals. Non-GAAP net income was $136.4 million, or $0.53 per diluted share, for the third quarter of 2017, compared to $43.1 million, or $0.17 per diluted share, for the third quarter of 2016. Third quarter 2017 non-GAAP net income growth was driven by increased CF product revenues.
Intangible Asset Impairment:
•
Based upon Phase 2 data evaluating VX-371 in combination with ORKAMBI (reported below), Vertex concluded that the intangible asset had become fully impaired, and also resulted in the deconsolidation of Parion Sciences. This impairment caused a write down of the assets, including the intangible asset, related to Parion, offset by the benefit from income taxes and the reversal of non-controlling interest, which resulted in an increase in GAAP net loss of $7.1 million for the third quarter of 2017 and had no impact on non-GAAP net income.
Cash Position:
•
As of September 30, 2017, Vertex had $1.81 billion in cash, cash equivalents and marketable securities compared to $1.43 billion in cash, cash equivalents and marketable securities as of December 31, 2016.

On October 26, 2017 Roche (SIX: RO, ROG; OTCQX: RHHBY) reported that the U.S. Food and Drug Administration (FDA) has accepted the company’s supplemental Biologics License Application (sBLA) for Avastin (bevacizumab) in combination with chemotherapy (carboplatin and paclitaxel), followed by Avastin alone, for the front-line treatment of women with advanced ovarian cancer (Press release, Hoffmann-La Roche, OCT 25, 2017, View Source [SID1234521187]).

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“About 80 percent of women with ovarian cancer are diagnosed in the advanced stages when the disease is difficult to treat and options are limited,” said Sandra Horning, M.D., chief medical officer and head of Global Product Development. “We are committed to working closely with the FDA to bring this potential new treatment option to women with newly diagnosed advanced ovarian cancer as soon as possible.”

This sBLA for Avastin, in combination with carboplatin and paclitaxel, followed by Avastin as a single agent, for the front-line treatment of people with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer, is based on data from the pivotal Phase III GOG-0218 trial. In newly diagnosed advanced ovarian cancer, the first treatment a woman receives after surgery is known as front-line treatment. The FDA is expected to make a decision on approval by June 25, 2018.

This is part of our broader development program for Avastin in ovarian cancer. Avastin is currently approved for treating two different forms of advanced disease that recurred after platinum-based chemotherapy. In addition, Genentech is evaluating Avastin in combination with Tecentriq (atezolizumab) and chemotherapy for the treatment of newly diagnosed advanced ovarian cancer in the Phase III IMagyn050 trial (NCT03038100).

About the GOG-0218 Study
GOG-0218 (NCT00262847) is a multi-center, randomized, double-blind, placebo-controlled Phase III study in 1,873 women with previously untreated advanced epithelial ovarian, primary peritoneal, or fallopian tube carcinoma who already had surgery to remove as much of the tumor as possible. Participants were randomized into one of three treatment arms: chemotherapy alone (carboplatin and paclitaxel), Avastin (15 mg/kg) plus chemotherapy followed by placebo alone, or Avastin plus chemotherapy followed by Avastin alone. Women who received Avastin in combination with chemotherapy, and continued use of Avastin alone for a total duration of 22 cycles, had a median progression-free survival (PFS) of 18.2 months compared to 12.0 months in women who received chemotherapy alone (HR=0.64; 95% CI 0.54 – 0.77, p<0.0001). Secondary endpoints of the study included overall survival (OS) and objective response rate (ORR). Adverse events were consistent with those seen in previous trials of Avastin across tumor types for approved indications. The study was conducted by the Gynecologic Oncology Group (GOG) and their initial results were previously published in the New England Journal of Medicine.

About Ovarian Cancer
Ovarian cancer causes more deaths among women than any other gynecologic cancer in the United States. In 2017, nearly 22,000 women will be diagnosed with ovarian cancer in the U.S. and more than 14,000 will die from the disease. About 80% of ovarian cancer cases are found at an advanced stage, when the cancer has spread beyond the ovaries. Early ovarian cancer often does not have any symptoms and when symptoms, such as abdominal swelling, bloating, abdominal pain, difficulty eating or feeling full quickly, and/or frequent urination, are present, they can be associated by other less serious conditions. Five-year survival rates worsen dramatically based on stage of diagnosis.

About Avastin
With the initial approval in the United States for advanced colorectal cancer in 2004, Avastin became the first anti-angiogenic therapy made widely available for the treatment of patients with an advanced cancer.
Today, Avastin is continuing to transform cancer care through its proven survival benefit (overall survival and/or progression free survival) across several types of cancer. Avastin is approved in Europe for the treatment of advanced stages of breast cancer, colorectal cancer, non-small cell lung cancer, kidney cancer, ovarian cancer and cervical cancer, and is available in the United States for the treatment of colorectal cancer, non-small cell lung cancer, kidney cancer, cervical cancer and recurrent, platinum-resistant and platinum-sensitive ovarian cancer. In addition, Avastin is approved over 70 other countries worldwide for the treatment of patients with progressive glioblastoma following prior therapy. Avastin is approved in Japan for the treatment of the advanced stages of colorectal cancer, non-small cell lung cancer, breast cancer, ovarian cancer and malignant glioma, including newly diagnosed glioblastoma.
Avastin has made anti-angiogenic therapy a fundamental pillar of cancer treatment today. Over two million patients have been treated with Avastin so far. A comprehensive clinical programme with more than 300 ongoing clinical trials is investigating the use of Avastin in over 50 tumour types.

On October 25, 2017 Varian (NYSE:VAR), the world’s leading manufacturer of medical devices and software for treating and managing cancer, reported its fourth-quarter and full-year fiscal 2017 results (Press release, Varian Medical Systems, OCT 25, 2017, View Source [SID1234521176]). All fourth-quarter comparisons in this announcement are year-over-year unless noted otherwise.

Summary

($ in millions except EPS) Q4 2017 Q4 2016 FY 2017 FY 2016
Revenues (from Continuing Operations) $ 739.0 $ 747.2 $ 2,668.2 $ 2,621.1
Growth Reported (1 )% 2 %
Growth Constant Currency (2 )% 2 %
Gross Margin 42.1 % 42.6 % 43.3 % 42.5 %
GAAP Net Earnings (1) $ 82.7 $ 94.3 $ 257.1 $ 325.3
GAAP Net Earnings per Diluted Share (1) $ 0.89 $ 1.00 $ 2.75 $ 3.39
Net Cash Provided by Operating Activities $ 129.6 $ 151.9 $ 399.1 $ 356.3
Non-GAAP Net Earnings (1) (2) $ 100.6 $ 97.7 $ 335.1 $ 354.9
Non-GAAP Net Earnings per Diluted Share (1) (2) $ 1.09 $ 1.03 $ 3.60 $ 3.70

(1) GAAP Net Earnings and Earnings Per Diluted Share and Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share refer only to continuing operations. GAAP and Non-GAAP Earnings Per Diluted Share, for the quarter and fiscal year ended September 29, 2017, were calculated based on diluted shares of 92.6 million and 93.2 million, respectively. For the quarter and fiscal year ended September 30, 2016, the number of diluted shares was 94.5 million and 96.0 million, respectively.
(2) Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share are defined as GAAP Net Earnings and GAAP Earnings Per Diluted Share adjusted to exclude the amortization of intangible assets, acquisition-related expenses and benefits, restructuring and impairment charges and significant litigation charges or benefits and legal costs.

"We finished a transformative year for the company with a solid quarter highlighted by robust gross order growth," said Dow Wilson, CEO of Varian. "During the year, we extended our industry leadership with successful launches of the Halcyon and HyperArc treatment platforms, grew our global footprint and continued to build capabilities to grow beyond our core market. We also booked two more proton orders in the quarter, bringing our total for the year to six."

The company ended the quarter with $716 million in cash and cash equivalents and $350 million of debt. Net cash provided by operating activities was healthy at $130 million in the fiscal fourth quarter and $399 million for the fiscal year, supported by improved cash collections. During the fiscal fourth quarter, the company invested $25 million to repurchase 250,000 shares of common stock.

Gary Bischoping, Varian’s chief financial officer, added, "While the quarter’s profitability results came in short of our expectations, I’m pleased with our team’s ongoing operational and financial discipline. We have more work to do, but we made solid progress toward our long-term objectives. Our orders growth, improving gross margin rate this past year, and continued working capital efficiencies has me looking forward to our next fiscal year."

Oncology Systems Segment
In the fiscal fourth quarter, Oncology revenues for the segment totaled $686 million, up 1 percent in dollars and in constant currency. For the full year, revenues were up 1 percent at $2.5 billion. Gross orders were $964 million, up 7 percent in dollars and in constant currency. Gross orders in the Americas increased 1 percent in dollars and 2 percent in constant currency, with North America growing 8 percent in dollars. In EMEA, gross orders rose 32 percent in dollars and 29 percent in constant currency, to $321 million driven by robust growth in France, Germany, Poland and India; in APAC gross orders declined 10 percent in dollars and 9 percent in constant currency where strong growth across a majority of the region was offset by significant declines in Japan.

Proton Therapy Segment
Revenues in the fourth quarter were down 23 percent at $52 million. For the full year, revenues were up 12 percent at $182 million. In the quarter, the company booked orders totaling $74 million, including orders for ProBeam Compact projects in China and India. For the full fiscal year, proton therapy orders totaled $229 million, more than double the previous year.

Outlook for Full Fiscal Year 2018
We expect the following for fiscal year 2018:
· Revenues to grow by 2 to 4 percent
· Non-GAAP operating earnings to range between 18 and 19 percent of revenue
· Non-GAAP net earnings per diluted share from continuing operations to be in the $4.20 to $4.32 range
· Cash Flow from Operations to be between $475 million and $550 million

We have assumed no change to share count year over year and a tax rate of 23 percent.

Please refer to "Discussion of Non-GAAP Financial Measures" below for a description of items excluded from expected non-GAAP earnings.

Investor Conference Call
Varian Medical Systems is scheduled to conduct its fourth quarter fiscal year 2017 conference call at
2 p.m. PT today. To hear a live webcast or replay of the call, visit the investor relations page on our company’s web site at www.varian.com/investor where it will be archived for a year. To access the call via telephone, dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from outside the U.S. The replay can be accessed by dialing 1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside the U.S. and entering confirmation code 13669524. The telephone replay will be available through 5 p.m. PT, Friday, October 27, 2017.

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On October 25, 2017 Geron Corporation (Nasdaq:GERN) reported that it will announce its financial results for the third quarter ended September 30, 2017, on Wednesday, November 1, 2017, after the market close (Press release, Geron, OCT 25, 2017, View Source [SID1234521151]). Geron’s management will also host a conference call for analysts and investors on Wednesday, November 1, 2017, at 4:30 p.m. Eastern Time to discuss the company’s third quarter results and recent events.

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Participants can access the conference call live via telephone by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The conference ID is 1056465. If accessing the conference call by telephone, please dial in at least 10 minutes early to minimize any delay in joining the call. A live audio-only webcast is also available at View Source or at www.geron.com on the Investors pages, under Events. The audio webcast of the conference call will be available for replay approximately one hour following the live broadcast through December 1, 2017.

On October 25, 2017 GlaxoSmithKline reported Q3 sales of £7.8 billion, +4% AER, +2% CER (Press release, GlaxoSmithKline, OCT 25, 2017, View Source [SID1234521165]).

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Financial highlights

Sales growth in Pharmaceuticals and Consumer Healthcare; Vaccines sales flat
Pharmaceuticals sales £4.2 billion +3% AER, +2% CER; Vaccines £1.7 billion +5% AER, flat at CER; Consumer Healthcare £2.0 billion +5% AER, +2% CER
Improved Total operating margin of 23.9% (+4.9 points, including 0.2 points currency benefit) and EPS (24.8p), primarily reflecting reduced transaction-related charges related to valuations of Consumer Healthcare and HIV businesses
Improved Adjusted Group operating margin of 31.5% (+1.0 point, no currency effect) primarily reflecting leverage from sales growth, focus on costs and benefits of restructuring. Pharmaceuticals 34.0% (-0.3 points, no currency effect); Vaccines 41.3% (+1.6 points, including 0.3 points adverse currency effect); Consumer Healthcare 20.0% (+3.9 points, including 1.3 points currency benefit)
YTD free cash flow £1.6 billion (9 months 2016: £1.3 billion)
19p dividend declared for quarter. Continue to expect 80p for FY 2017
Guidance for 2017 Adjusted earnings per share growth maintained at 3% to 5% CER
Product and pipeline highlights

New product sales of £1.7 billion, +44% AER, +40% CER, driven by continued strong performance from Tivicay/Triumeq in HIV, Relvar/Breo Ellipta and Nucala in Respiratory and meningitis vaccines
Trelegy Ellipta approved in the US for COPD and positive opinion received in Europe. Positive results from landmark IMPACT study show benefits of Trelegy Ellipta in reducing COPD exacerbations compared to dual therapies
Shingrix vaccine for shingles approved in US and Canada
Phase III results for Nucala (mepolizumab) in COPD published in New England Journal of Medicine with regulatory filings planned for this year
In Oncology, CHMP PRIME designation granted for 2857916 (BCMA antibody-drug conjugate) for relapsed and refractory multiple myeloma and new data to be presented at an upcoming scientific conference; option exercised from Adaptimmune to develop T-cell therapy (NY-ESO-1) for multiple tumour types
Q3 2017 results infographic
Emma Walmsley, Chief Executive Officer, GSK said:

“Performance in the quarter showed continued progress with sales growth and improved operating margins. This was driven by targeted cost savings and restructuring and integration benefits, which particularly benefited Vaccines and Consumer Healthcare, and also supported investment in our new products and R&D pipeline. Adjusted earnings per share for Q3 were 32.5p and we remain on course for our full-year earnings guidance, with cash generation continuing to improve. We are also pleased that we have secured major approvals for Trelegy Ellipta in COPD and Shingrix, our shingles vaccine.”