On April 25, 2018 PRA Health Sciences, Inc. ("PRA" or the "Company") (NASDAQ:PRAH) reported financial results for the quarter ended March 31, 2018 (Press release, PRA Health Sciences, APR 25, 2018, View Source;p=RssLanding&cat=news&id=2344607 [SID1234525698]).

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For the three months ended March 31, 2018, revenue was $701.8 million, which represents growth of 43.9%, or $214.1 million, compared to the first quarter of 2017 at actual foreign exchange rates. On a constant currency basis, revenue grew $198.3 million, an increase of 40.7% compared to the first quarter of 2017. On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," or ASC 606, using the modified retrospective method for all contracts that were not completed as of January 1, 2018. The prior periods were not restated under this guidance and remain as previously reported. The primary impact of applying this new guidance on our statement of operations is that (i) we now recognize reimbursements from our customers for payments to investigators as revenue, whereas these payments and costs were previously recorded on a net basis, and (ii) we include all reimbursed costs in the total project costs when measuring our progress under our research contracts instead of recording these amounts on a separate basis.

Excluding the impact of the adoption of ASC 606 and reimbursement revenue, revenue increased $132.8 million, which represents growth of 31.1% at actual foreign exchange rates and 28.5% on a constant currency basis. Organic revenue growth, excluding the adoption of ASC 606, reimbursement revenue and $56.8 million of revenue attributable to our Data Solutions segment, was 17.8% at actual foreign exchange rates and 15.2% on a constant currency basis.

Net new business for our Clinical Research segment for the quarter ended March 31, 2018 was $650.3 million, representing a net book-to-bill ratio of 1.29 for the period. Our calculation of the net book-to-bill ratio excludes the revenue impact of adopting ASC 606, excludes reimbursement revenue and excludes revenue from our Data Solutions segment. Net new business during the quarter contributed to an ending backlog of $3.8 billion at March 31, 2018.

"We are off to another solid start and our first quarter results were in line with our expectations" said Colin Shannon, PRA’s Chief Executive Officer. "We continue to execute across the business and I was really pleased with our double-digit revenue and earnings growth and our 1.29 book-to-bill ratio. We are focused on client deliverables and our key strategic objectives, and we look forward to delivering strong results for the rest of 2018."

Direct costs were $381.4 million during the three months ended March 31, 2018 compared to $287.5 million for the first quarter of 2017. The increase in direct costs was primarily due to an increase in labor-related costs of $50.9 million in our Clinical Research segment as we continue to hire billable staff to ensure appropriate staffing levels for our current studies and our future growth. In addition, our Data Solutions segment resulted in $40.6 million of incremental direct costs when compared to the first quarter of 2017. We also had an unfavorable impact of $14.0 million from fluctuation in foreign currency exchange rates during the three months ended March 31, 2018. Excluding the impact of the adoption of ASC 606 and reimbursement revenue, direct costs were 68.1% of revenue during the first quarter of 2018 compared to 67.3% of revenue during the first quarter of 2017. The increase in direct costs as a percentage of revenue was primarily due to the aforementioned increase in salaries and related benefits.

Selling, general and administrative expenses were $91.7 million during the three months ended March 31, 2018 compared to $74.3 million for the first quarter of 2017. Excluding the impact of the adoption of ASC 606 and reimbursement revenue, selling, general and administrative costs were 16.4% of revenue during the first quarter of 2018 compared to 17.4% of revenue during the first quarter of 2017. The decrease in selling, general and administrative expenses as a percentage of revenue is primarily attributable to our ability to continue to effectively leverage our selling and administrative functions.

Transaction-related costs represent changes in the fair value of contingent consideration related to our recent acquisitions. During the three months ended March 31, 2018, we recorded an $11.6 million reduction in the fair value of the earn-out liability associated with the Symphony Health acquisition, which reflects updates to the current estimate.

GAAP net income was $39.0 million for the three months ended March 31, 2018, or $0.59 per share on a diluted basis, compared to GAAP net income of $25.2 million for the three months ended March 31, 2017, or $0.39 per share on a diluted basis.

EBITDA was $98.8 million for the three months ended March 31, 2018, representing an increase of 70.9% compared to the first quarter of 2017. The increase in EBITDA was driven by lower foreign currency losses and the revaluation of the acquisition-related earn-out liability discussed above. Adjusted EBITDA was $95.7 million for the three months ended March 31, 2018, representing growth of 38.2% compared to the first quarter of 2017.

Adjusted net income was $56.2 million for the three months ended March 31, 2018, representing 39.1% growth compared to the first quarter of 2017. Adjusted net income per diluted share was $0.85 for the three months ended March 31, 2018, representing 37.1% growth compared to the first quarter of 2017.

A reconciliation of our non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted net income, adjusted net income per diluted share and our 2018 guidance, to the corresponding GAAP measures is included in this press release.

Guidance

The Company is reaffirming its full year 2018 service revenue guidance to between $2.84 billion and $2.95 billion, GAAP net income per diluted share to between $2.80 and $2.95 and Adjusted Net Income per diluted share to between $4.00 and $4.15. We anticipate an annual effective income tax rate estimate of approximately 24%, which includes the expected impact of the Tax Cuts and Jobs Act enacted in the fourth quarter of 2017. Our effective tax rate may differ from this estimate, due to, among other things, changes to estimates of the geographic allocation of our pre-tax income as well as changes in interpretations, analysis, and additional guidance that may be issued by regulatory agencies as it relates to the Tax Cuts and Jobs Act.

Our guidance assumes a EURO rate of 1.25 and a GBP rate of 1.37. All other foreign currency exchange rates are as of January 31, 2018.

Conference Call Details

PRA will host a conference call at 9:00 a.m. ET on April 26, 2018, to discuss the contents of this release and other relevant topics. To participate, please dial (877) 930-8062 within the United States or (253) 336-7647 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 2471729. The conference call will also be accessible, live via audio broadcast, on the Investor Relations section of the PRA website at investors.prahs.com. A replay of the conference call will be available online at investors.prahs.com. In addition, an audio replay of the call will be available for one week following the call and can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside the United States. The replay ID is 2471729.

Additional Information

A financial supplement with first quarter 2018 results, which should be read in conjunction with this press release, may be found in Investor Relations section of our website at investors.prahs.com in a document titled "Q1 2018 Earnings Presentation."

On April 24, 2018 Radius Health (Nasdaq:RDUS) reported that it will release its first quarter financial results on Thursday, May 10, 2018 (Press release, Radius, APR 24, 2018, View Source [SID1234525621]). The Company will host a conference call and live audio webcast at 8:00 a.m. ET that day to discuss the results and provide a company update.

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Conference Call Information:
Date: Thursday, May 10, 2018
Time: 8:00 a.m. ET
Domestic Dial-in Number: (866) 323-7965
International Dial-in Number: (346) 406-0961
Conference ID: 6964878
Live webcast: View Source

A replay of the conference call/webcast will be available from May 10, 2018 at 7:30 p.m. ET until May 17, 2018 at 6:30 p.m. ET. To access the replay, dial (855) 859-2056 for U.S. or (404) 537-3406 for International. The replay conference ID is 6964878.

The live audio webcast of the call can be accessed from the Investors section of the Company’s website, www.radiuspharm.com. A webcast replay will also be available for 14 days. The full text of the announcement and financial results will also be available on the Company’s website.

On April 24, 2018 Illumina, Inc. (NASDAQ:ILMN) reported its financial results for the first quarter of fiscal year 2018 (Press release, Illumina, APR 24, 2018, View Source [SID1234525639]).

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First quarter 2018 results:

Revenue of $782 million, a 31% increase compared to $598 million in the first quarter of 2017

GAAP net income attributable to Illumina stockholders for the quarter of $208 million, or $1.41 per diluted share, compared to $367 million, or $2.48 per diluted share, for the first quarter of 2017; the prior year period included the impact of a pre-tax gain of $453 million as a result of the GRAIL repurchase of shares from Illumina

Non-GAAP net income attributable to Illumina stockholders for the quarter of $214 million, or $1.45 per diluted share, compared to $94 million, or $0.64 per diluted share, for the first quarter of 2017 (see the table entitled "Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders" for a reconciliation of these GAAP and non-GAAP financial measures)

Cash flow from operations of $255 million compared to $168 million in the first quarter of 2017

Free cash flow (cash flow from operations less capital expenditures) of $165 million for the quarter, compared to $85 million in the first quarter of 2017

Gross margin in the first quarter of 2018 was 68.8% compared to 61.5% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 69.8% for the first quarter of 2018 compared to 66.4% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2018 were $137 million compared to $145 million in the prior year period. Non-GAAP R&D expenses as a percentage of revenue were 17.5%, including 0.8% attributable to Helix. This compares to non-GAAP R&D expenses as a percentage of revenue of 23.3% in the prior year period, including 2.1% attributable to GRAIL and Helix.

Selling, general and administrative (SG&A) expenses for the first quarter of 2018 were $183 million compared to $171 million in the prior year period. Excluding restructuring and amortization of acquired intangible assets, SG&A expenses as a percentage of revenue were 22.9%, including 1.1% attributable to Helix. This compares to 25.6% in the prior year period, including 1.5% attributable to GRAIL and Helix.

Depreciation and amortization expenses were $39 million and capital expenditures for free cash flow purposes were $90 million during the first quarter of 2018. At the close of the quarter, the company held $2.4 billion in cash, cash equivalents and short-term investments, compared to $2.1 billion as of December 31, 2017.

"Our strong first quarter, with momentum across both our sequencing and microarray businesses, was driven by the growing adoption of applications spanning oncology, clinical and non-clinical research, population genomics and personal genomics," said Francis deSouza, President and CEO. "Genomic information is more valuable and actionable than ever before and we believe that we are in the earliest stages of a genomics revolution."

Updates since our last earnings release:

Released the NovaSeq S1 flow cell-reagent kit for the NovaSeq 6000 System

Received a product approval certificate for the NextSeq 550Dx instrument with the Ministry of Food and Drug Safety (MFDS) in South Korea

Announced a collaboration with Bristol-Myers Squibb to utilize Illumina’s next-generation sequencing (NGS) technology to develop and globally commercialize in-vitro diagnostic (IVD) assays in support of Bristol-Myers Squibb’s oncology portfolio

Announced a partnership with Loxo Oncology to develop and commercialize a multi-gene panel for broad tumor profiling, targeting a distributable, NGS-based companion diagnostic (CDx) with a pan-cancer indication

Launched a study with Harvard Pilgrim Health Care, a not-for-profit health services company, designed to gather data intended to support wider average-risk patient access and reimbursement of NGS for non-invasive prenatal testing

Appointed Dr. Phil Febbo to the position of Senior Vice President and Chief Medical Officer

Financial outlook and guidance

The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2018, the company now projects 15% to 16% revenue growth, GAAP earnings per diluted share attributable to Illumina stockholders of $4.45 to $4.55 and non-GAAP earnings per diluted share attributable to Illumina stockholders of $4.75 to $4.85.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, April 24, 2018. Interested parties may access the live teleconference through the Investor Relations section of Illumina’s web site under the "company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing 800-708-4539, or 1-847-619-6396 outside North America, both with passcode 46755682.

A replay of the conference call will be available from 4:30 pm Pacific Time (7:30 pm Eastern Time) on April 24, 2018 through May 1, 2018 by dialing 888-843-7419, or 1-630-652-3042 outside North America, both with passcode 46755682.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

Use of forward-looking statements

This release contains forward-looking statements that involve risks and uncertainties, including our financial outlook and guidance for fiscal 2018 and expectations regarding the development and commercialization of new products. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: (i) challenges inherent in developing, manufacturing, and launching new products and services, including expanding manufacturing operations and reliance on third-party suppliers for critical components; (ii) the timing and mix of customer orders among our products and services; (iii) the impact of recently launched or pre-announced products and services on existing products and services; (iv) our ability to further develop and commercialize our instruments and consumables and to deploy new products, services, and applications, and expand the markets, for our technology platforms; (v) our ability to manufacture robust instrumentation and consumables; (vi) the success of products and services competitive with our own; (vii) our ability to successfully identify and integrate acquired technologies, products, or businesses; (viii) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; and (ix) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.

On April 24, 2018 Takeda Pharmaceutical reported that it has come back with an improved bid for Shire for $64 billion, making it the fifth round of talks (Press release, Takeda, APR 24, 2018, View Source [SID1234525662]). Shire is willing to recommend to the board to accept the offer with an extended deal deadline of May 8.

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"Following several offers from Takeda, the board requested that the advisers of Shire and Takeda enter into a dialogue to discuss whether a further, more attractive proposal may be forthcoming," said Susan Kilsby, Shire’s chairman, at the annual shareholder meeting in Dublin, which lasted only 15 minutes. "As of today the board can confirm that it is reviewing that offer. As of now we can only say that discussions between the advisers of Shire and Takeda are ongoing."

In late March, Takeda expressed an interest in acquiring Shire, although at that time no official bid had been made. Per UK law, Takeda had to make an official offer by 5:00 p.m. (London time) on April 25, 2018. On April 19, Takeda made an official bid of about $66.20 (U.S.) per share, which has a value of around $60 billion (U.S.). Shire rejected the bid, arguing that it undervalued the company.

Shortly afterwards, news broke that Allergan was in talks to acquire Shire, but several hours later Allergan announced it was no longer interested. On April 20, Takeda raised the bid.

In the middle of this, Shire sold its oncology business to France’s Servier for $2.4 billion. Oncology was a very small part of Shire’s portfolio, bringing in only $262 million in 2017. The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.

According to Bloomberg, Takeda and Shire have been negotiating a price and a preliminary announcement may occur today. Under the UK acquisition rules, Takeda must announce a firm offer by Wednesday evening or abandon the approach. However, the companies can seek an extension to finalize a deal.

Aside from overall price, part of the sticking point appears to be amount of cash. The bid last Friday included 21 pounds a share in cash and 26 pounds in new stock for Shire.

Several Japanese lenders, including Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, have agreed to finance the takeover, gathering together 1 trillion yen, or $9.3 billion. Shire’s market value is about $51 billion. Takeda’s market value is about $36 billion. At the end of 2017, Shire reported debt of around $19 billion.

In 2017, Takeda acquired ARIAD Pharmaceuticals for $5.2 billion. In January 2018, Takeda acquired Belgium’s TiGenix NV.

Most analysts expected Takeda to increase the cash portion of the deal, but didn’t see much room for maneuvering.

If the acquisition is completed, it would boost Takeda’s presence in cancer, gastrointestinal, neurology and rare diseases. Christophe Weber, Takeda’s chief executive officer, is pushing for overseas growth in the face of patent expirations and a shrinking domestic population. Bloomberg notes, "Acquiring Shire would vault Takeda, which has few late-stage experimental drugs in its own pipeline, into the ranks of the world’s top pharmaceutical companies. The Japanese company last week raised its offer to 47 pounds a share and lifted the cash portion of the bid after three prior proposals were rejected."

Analysts expect Takeda will seek short-term bank loans first, then replace them with longer-term funds by way of bond sales. S&P Global Ratings suggests that the acquisition would hurt the Japanese company’s credit score. Bloomberg writes, "If the firm borrows all of the cash portion, its ratio of net debt to earnings before interest, taxes, depreciation and amortization could temporarily worsen to 5.4 times, Mizuho Securities Co. estimates."

Atsushi Seki, an analyst at UBS Securities Japan Co., told Bloomberg, "Takeda’s credit could be downgraded to junk temporarily, probably just for the short-term—six months or one year," if the deal is completed.

(Filing, Annual, ERYtech Pharma, 2017, APR 24, 2018, View Source [SID1234525661])

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