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 25, 2017 2X Oncology, Inc. ("2X" or the "Company"), a precision medicine company developing targeted therapeutics to address significant unmet needs in hard-to-treat cancers, reported that the Company will participate in the Life Sciences Summit 2017 on November 1-2 in New York City and the Jefferies 2017 London Healthcare Conference on November 15-16 (Press release, 2X Oncology, OCT 25, 2017, View Source [SID1234526101]).

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Chief Executive Officer George O. Elston will participate in and hold 1x1s with investors at both conferences, joined by Chief Financial Officer Jarne Elleholm.

Additionally, Mr. Elston will present in the Emerging Company Showcase at the Life Sciences Summit on Thursday, November 2, 2017 at 3:30pm EDT, with a discussion period to follow.

Investors wishing to meet with 2X Oncology at or around either conference should notify the respective conference one-on-one desk, or contact Amy Raskopf to schedule a meeting.

On October 25, 2017 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported that it filed an application with the Japanese Ministry of Health, Labour and Welfare (MHLW) for the approval of anti-HER2 humanized monoclonal antibody, "Perjeta I.V. Infusion 420mg/14mL [generic name: pertuzumab (genetical recombination)] (hereafter, Perjeta)" for the additional indication of adjuvant therapy for HER2-positive early breast cancer (Press release, Chugai, OCT 25, 2017, View Source [SID1234521138]).

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"Currently, adjuvant chemotherapy with Herceptin for HER2-positive early breast cancer has been recommended in the clinical practice guidelines for breast cancer and has contributed to patients," said Dr. Yasushi Ito, Chugai’s Senior Vice President, Head of Project & Lifecycle Management Unit. "We are going to continue discussions with the health authorities so that adjuvant chemotherapy using Perjeta in combination with Herceptin, which has outperformed the current standard of care, will be used as a new treatment option for patients."

Chugai filed the application with the MHLW based on the results from the APHINITY study (Adjuvant Pertuzumab and Herceptin IN Initial TherapY in Breast Cancer) and several clinical studies. The APHINITY study is an international, phase III, randomised, double-blind, placebo-controlled, two-arm study evaluating the efficacy and safety of Perjeta plus Herceptin and chemotherapy (anthracycline medicine followed by docetaxel monotherapy / docetaxel plus carboplatin) compared to Herceptin and chemotherapy as adjuvant therapy in 4,805 patients with HER2-positive early breast cancer who undergone curative surgery. The primary endpoint of the APHINITY study is invasive disease-free survival (iDFS), which is defined as the time a patient lives without return of invasive breast cancer at any site or death from any cause after adjuvant treatment. The secondary endpoints were cardiac and overall safety, and other endpoints.

The results of the APHINITY study are as follows:

– At three years, iDFS, the primary endpoint, was 94.1% in the Perjeta arm and 93.2% in the control arm, and a statistically significant improvement was observed in the Perjeta arm. Perjeta arm significantly reduced the risk of recurrence or death by 19% compared to control arm (HR=0.81, 95%CI 0.66-1.00, stratified log-rank test, p=0.045).

– The iDFS at four years estimated by the Kaplan-Meier method showed that 92.3% (95%CI: 91.1-93.4) of people treated with the Perjeta arm did not have their breast cancer return compared to 90.6% (95%CI: 89.3-91.8) treated with control arm.

– The safety profile of Perjeta was consistent with that seen in previous studies. The incidence of cardiac events was 0.7% in the Perjeta arm and 0.3% in the control arm.

In the US and Europe, Perjeta is under review for postoperative adjuvant chemotherapy for HER2-positive breast cancer, and the US Food and Drug Administration has granted Priority Review to Perjeta for this indication. Perjeta was approved for adjuvant therapy (before surgery) for HER2-positive early breast cancer in September 2013 in the US and in July 2015 in Europe.

As the top pharmaceutical company in the field of oncology in Japan, Chugai will work for early approval to provide Perjeta as a new treatment option for patients with HER2-positive early breast cancer.

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 Atossa Genetics Inc. (NASDAQ:ATOS), a clinical-stage pharmaceutical company developing novel therapeutics and delivery methods for breast cancer and other breast conditions, reported preliminary results from its Phase 1 study of its proprietary oral Endoxifen (Press release, Atossa Genetics, OCT 25, 2017, View Source [SID1234521149]). All objectives were successfully met:

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– Safety: There were no clinically significant safety signals and no clinically significant adverse events in participants receiving oral Endoxifen.

– Tolerability: Oral Endoxifen was well tolerated at each dose level and for the dosing duration utilized in the study.

– Pharmacokinetics: Oral Endoxifen demonstrated blood levels that have been associated with a therapeutic effect in the adjuvant setting in women with breast cancer.
These data demonstrate the suitability of oral Endoxifen for further clinical development.

The Phase 1 Study

The Phase 1 study was a double-blind, placebo-controlled, repeat dose study of 48 healthy female subjects. Atossa assessed safety, tolerability and the pharmacokinetics of proprietary formulations of both topical and oral Endoxifen dosage forms in varying dose levels over 28 days. The study was conducted in two parts based on route of administration. Preliminary results from the topical arm of the study were announced on September 14, 2017.

Atossa’s Proprietary Endoxifen

Endoxifen is an active metabolite of tamoxifen. Tamoxifen is an FDA-approved drug to prevent new breast cancer as well as recurrent breast cancer in breast cancer patients. Tamoxifen is a “pro-drug” meaning that it must be broken down by the liver into active compounds (metabolites), of which Endoxifen is the most active. It is these active metabolites that have the therapeutic effect.

Oral Endoxifen. Although approximately one million breast cancer survivors take tamoxifen annually, up to half of them do not fully benefit from tamoxifen, meaning they are “refractory,” for a number of reasons including that they do not properly metabolize tamoxifen into its active metabolites. Low endoxifen levels in breast cancer patients taking oral tamoxifen are associated with an increased risk of recurrence or the development of new breast tumors. Thus providing oral Endoxifen directly to the patient without having to be metabolized may help to address this problem.

Topical Endoxifen. A condition called breast density (or, MBD), typically diagnosed by a mammogram, has been shown to be an independent breast cancer risk factor. To date, 30 states require that findings of MBD be directly communicated to the patient. We believe a topical form of Endoxifen could potentially reduce MBD. Although oral tamoxifen has been shown to reduce MBD, the benefit-cost ratio is not acceptable to most physicians and their patients. For example, it is estimated that less than 5% of women at an increased risk of developing breast cancer including those with MBD take oral tamoxifen to prevent breast cancer because of the risk of, or actual side-effects of, oral tamoxifen. We are planning a Phase 2 study of topical Endoxifen in Stockholm, Sweden for the treatment of MBD.

Based on the number of women with MBD and the number of patients who have survived breast cancer but are not fully benefiting from tamoxifen, Atossa estimates that the potential markets for its proprietary oral and topical formulations of Endoxifen could potentially exceed $1 billion in annual sales.

Next Steps

“Based on these positive preliminary results, we are advancing our oral Endoxifen into Phase 2 studies,” commented Dr. Steven C. Quay, CEO and President. “We expect our initial Phase 2 study will be in women who are refractory to tamoxifen and we expect to begin that study in the first quarter of 2018,” continued Dr. Quay.

Breast Cancer Statistics

The American Cancer Society (ACS) estimates that approximately 250,000 women will be diagnosed with breast cancer in the United States this year and that approximately 40,000 will die from the disease. It is the second leading cause of cancer death in American women. Although about 100 times less common than women, breast cancer also affects men. The ACS estimates that the lifetime risk of men getting breast cancer is about 1 in 1,000; 2,470 new cases of invasive breast cancer will be diagnosed; and 460 men will die from breast cancer in 2017.

Conference Call

Atossa Genetics will host a conference call to discuss preliminary results today at 10 am Eastern time.

To listen to the call by phone, interested parties within the U.S. should call 1-844-824-3830, International callers should call 1-412-317-5140 and Canadian callers should call 1-855-669-9657. All callers should ask for the Atossa Genetics conference call. The conference call will also be available through a live webcast at www.atossagenetics.com. Details for the webcast may be found on the Company’s IR events page at View Source

A replay of the call will be available approximately one hour after the end of the call through November 24, 2017. The replay can be accessed via Atossa’s website or by dialing 877-344-7529 (domestic) or 412-317-0088 (international) or Canada Toll Free at 855-669-9658. The replay conference ID number is 10113835.