On April 26, 2018 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the first-quarter 2018 and reaffirmed financial guidance for full-year 2018 (Press release, West Pharmaceutical Services, APR 26, 2018, View Source;p=RssLanding&cat=news&id=2344775 [SID1234525757]).

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(PRNewsfoto/West Pharmaceutical Services, I)

Executive Summary

First-quarter 2018 reported net sales of $415.7 million grew 7.2% over the prior-year quarter. At constant currency, organic sales growth was 0.2%.
First-quarter 2018 reported-diluted EPS was $0.58. Excluding restructuring and other costs, first-quarter 2018 adjusted-diluted EPS was $0.62, as compared to $0.81 in the prior-year quarter. Tax benefits associated with share-based payment transactions were $0.03 in the first-quarter 2018, below our expectations of approximately $0.05 and below the $0.21 impact in the same quarter last year.
The Company is reaffirming full-year 2018 net sales guidance range of $1.720 billion to $1.730 billion. This assumes a translation exchange rate of $1.20 per Euro, unchanged from prior guidance. This represents a conservative assumption given current spot rates.
The Company continues to expect 2018 organic sales growth to be within a range of 6% to 8%.
The Company is reaffirming full-year 2018 adjusted-diluted EPS range of $2.80 to $2.90.
"Adjusted-diluted EPS," "net sales at constant currency" and "organic sales" are Non-GAAP measurements. See discussion under the heading "Non-GAAP Financial Measures" in this release.

Executive Commentary

"Our first-quarter 2018 results were in line with our expectations given the headwinds that we addressed in our last earnings release," said Eric M. Green, President and Chief Executive Officer. "We were pleased to see continued momentum in our Generics market unit and our Contract-Manufactured Products segment. After experiencing customer inventory management issues for much of 2017, our Generics team posted high-single digit organic sales growth, representing the third consecutive quarter of accelerating performance. Contract-Manufactured Products again saw strong growth led by diagnostic devices and injection devices associated with diabetes.

Mr. Green concluded, "We are reaffirming our full-year 2018 financial guidance. We anticipate accelerating organic sales growth over the remainder of the year, as the order flow in our Pharma market unit is expected to follow a similar pattern of improvement that we are experiencing in our Generics market unit. We continue to be the leader in the containment and delivery of injectable biologics and expect a return to normal long-term growth rates in the back half of the year. With sales growth returning to expected levels, gross and operating profit margins should improve as well. We remain on track for initial commercial sales from our Waterford facility later this year and are adding manufacturing capacity to address a growing demand for our administration systems."

First-Quarter 2018 Financial Results (comparisons to prior-year period)

First-quarter 2018 reported net sales of $415.7 million grew 7.2% over the prior-year quarter. At constant currency, organic sales growth was 0.2%. The deconsolidation of operations in Venezuela and the loss of a consumer-product contract manufacturing customer negatively impacted organic sales growth by 390 basis points.

Proprietary Products segment organic sales declined by 1.8%. The impact from the Venezuela deconsolidation negatively affected organic sales growth by 310 basis points. By market unit, first-quarter 2018 Proprietary Products segment sales growth was led by high-single digit growth in Generics, offset by a low-single digit decline in Biologics and a high-single digit decline in Pharma. The Pharma market unit experienced strong growth in the first-quarter last year, which made for an unfavorable growth comparison in Q1 2018. Contract-Manufactured Products segment organic sales growth was 7.9%, despite the loss of a consumer-product contract manufacturing customer.

First-quarter 2018 gross profit margin was 32.3%, compared to 34.6% in the same period last year, a decline of 230 basis points. Two main drivers of this decline were the deconsolidation of Venezuelan operations and the loss of a consumer-product contract manufacturing customer, which cumulatively accounted for $10.7 million of gross profit in the first quarter of last year and adversely affected gross profit margin by 150 basis points. Additionally, under-absorbed overhead from our Waterford facility more than offset gross profit margin improvement from higher efficiencies and price increases.

Effective January 1, 2018, the Company adopted the new accounting rules, which require an acceleration of the timing of revenue recognition on the sale of certain products and tooling agreements in both segments of our business. The cumulative effect had an immaterial negative impact to first-quarter 2018 net sales of $3 million. For the full-year 2018, the Company expects a reduction of $6 million to expected net sales.

The Company has also adopted the new rules for pension accounting. Instead of recognizing pension gains or losses in the "Selling, general and administrative expenses" line on the income statement, these gains or losses are now located "below the line" in non-operating income. The Company has restated Q1 2017 and full-year 2017 results to allow year-over-year comparisons with 2018 performance. The impact on the first-quarter 2018 from this pension accounting change was the reclassification of $1.6 million to Other Non-Operating Income. For the full-year 2018, we estimate that the total reclassification will be approximately $7 million.

In February 2018, the Company announced a restructuring program, expected to be implemented over the following twelve to twenty-four months, that will help streamline our manufacturing plant network and enable us to make investments to drive our high-value proprietary products and healthcare-related contract manufacturing business, and drive margin expansion. The plan will require restructuring expense in the range of $8.0 million to $13.0 million and capital expenditures in the range of $9.0 million to $14.0 million. Once fully completed, we expect that the plan will provide the Company with annualized savings in the range of $17.0 million to $22.0 million. During the three months ended March 31, 2018, the Company recorded $3.3 million in restructuring and related charges.

First-quarter 2018 operating profit margin was 12.8%. On an adjusted basis (excluding restructuring and related charges), operating profit margin was 13.6%, compared to 15.6% in the same period last year. The decline was primarily caused by lower gross profit margin.

For the first-quarter 2018, income tax expense was $12.5 million. Excluding restructuring costs and a net tax charge related to U.S. tax reform, the adjusted effective tax rate was 22.5%, compared to 3.6% in the same period last year. Tax benefits from stock-based compensation were $2.1 million in the first-quarter 2018 as compared to $15.9 million in the same period last year. Excluding benefits from stock-based payments, the effective tax rate was 26.3% as compared to 30.2% last year, which reflects the lower U.S. tax rate enacted at the end of 2017.

During the first-quarter 2018, the Company repurchased 540,000 shares of common stock at a cost of $47.9 million under its buyback program. There are up to 260,000 additional shares available to be repurchased under the program authorized by our Board of Directors that expires in December 2018.

Full-Year 2018 Financial Guidance

The Company continues to expect 2018 organic sales growth to be within our long-term projected 6-8% range. Excluding sales that will not recur in 2018 ($32.6 million of 2017 sales will not recur in 2018 due to the loss of a consumer-product contract manufacturing customer and deconsolidation of our Venezuelan operations), the Company expects 2018 organic sales growth to be at the higher end of that range.

The Company is reaffirming full-year 2018 net sales guidance range of $1.720 billion to $1.730 billion. This assumes a translation exchange rate of $1.20 per Euro. Given recent volatility in currency exchange rates, the Company believes it is prudent to use a conservative exchange. Full-year 2018 adjusted-diluted EPS is expected to be in a range of $2.80 to $2.90.

The Company estimates its 2018 capital spending will be less than $150 million.

First-Quarter Conference Call

The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 9889627.

A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, May 3, 2018, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 9889627.

Forward-Looking Statements

Certain forward-looking statements are included in this release. They use such words as "expected," "continue," "increase," "will," "estimated," "believe," "expect," "estimate," "see," "continued," "anticipate," "remain," and other similar terminology. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this release. There is no certainty that actual results will be achieved in-line with current expectations. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements: customers’ changing inventory requirements and manufacturing plans; customer decisions to move forward with our new products and product categories; average profitability, or mix, of the products we sell; dependence on third-party suppliers and partners; interruptions or weaknesses in our supply chain; increased raw material costs; fluctuations in currency exchange; and the ability to meet development milestones with key customers. This list of important factors is not all inclusive. For a description of certain additional factors that could cause the Company’s future results to differ from those expressed in any such forward-looking statements, see Item 1A, entitled "Risk Factors," in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This press release and the preceding discussion of the Company’s results, financial guidance, and the accompanying financial tables use the following financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP), and therefore are referred to as Non-GAAP financial measures:

Net sales at constant currency (organic sales growth)
Adjusted operating profit
Adjusted operating profit margin
Adjusted income tax expense
Adjusted net income
Adjusted diluted EPS
Net debt
Total invested capital
Net debt-to-total invested capital
The Company believes that these Non-GAAP measures of financial results provide useful information to management and investors regarding business trends, results of operations, and the Company’s overall performance and financial position. The Company’s executive management team uses these financial measures to evaluate the performance of the Company in terms of profitability and efficiency, to compare operating results to prior periods, to evaluate changes in the operating results of each segment, and to measure and allocate financial resources to its segments. The Company believes that the use of these Non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing its financial measures with other companies.

The Company’s executive management does not consider such Non-GAAP measures in isolation or as an alternative to such measures determined in accordance with GAAP. The principal limitation of these financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded. In order to compensate for these limitations, Non-GAAP financial measures are presented in connection with GAAP results. The Company urges investors and potential investors to review the reconciliations of its Non-GAAP financial measures to the comparable GAAP financial measures, and not to rely on any single financial measure to evaluate the Company’s business.

Net sales at constant currency translates the current-period reported sales of subsidiaries whose functional currency is other than the U.S. dollar at the applicable foreign exchange rates in effect during the comparable prior-year period. In calculating adjusted operating profit, adjusted operating profit margin, adjusted income tax expense, adjusted net income and adjusted diluted EPS, the Company excludes the impact of items that are not considered representative of ongoing operations. Such items may include restructuring and related costs, certain asset impairments, other specifically-identified gains or losses, and discrete income tax items. A reconciliation of these adjusted Non-GAAP measures to the comparable GAAP financial measures is included in the accompanying tables.

The following is a description of the item excluded from adjusted operating profit, adjusted income tax expense, adjusted net income, and adjusted diluted EPS for the three months presented in the accompanying tables:

Restructuring and related charges – During the three months ended March 31, 2018, the Company recorded $3.3 million in restructuring and related charges, consisting of $2.0 million for severance charges, $0.1 million for non-cash asset write-downs, and $1.2 million for other non-cash charges.

Tax law changes – During the three months ended March 31, 2018, following additional analysis, the Company recorded a net tax charge of $0.3 million for the estimated impact of U.S. tax reform. During the three and twelve months ended December 31, 2017, the Company had recorded a provisional charge for the estimated impact of U.S. tax reform, based upon its then-current understanding of the U.S. tax reform and the guidance available at the time. The Company will continue to actively monitor the developments relating to U.S. tax reform, and will adjust its estimate as necessary during the one-year measurement period.

On April 26, 2018 Alkermes plc (Nasdaq: ALKS) reported financial results for the first quarter of 2018 (Press release, Alkermes, APR 26, 2018, View Source [SID1234525711]).

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"Our first quarter results were in line with our expectations and reflect the solid growth of our proprietary commercial products and the continued strength of our royalty and manufacturing business," commented James Frates, Chief Financial Officer of Alkermes. "Today, we are updating our financial expectations for 2018, driven primarily by the timing of investments we will make in our commercial organization in preparation for the potential launch of ALKS 5461 in 2019. We remain well positioned to execute on our strategy to drive long-term value through important investments in our development pipeline and the growth of VIVITROL and ARISTADA."

Quarter Ended Mar. 31, 2018 Financial

Total revenues for the quarter were $225.2 million. This compared to $191.8 million for the same period in the prior year, representing an increase of 17%.

·Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $62.5 million for the quarter, or a basic and diluted GAAP net loss per share of $0.40. This compared to GAAP net loss of $68.9 million, or a basic and diluted GAAP net loss per share of $0.45 for the same period in the prior year.

Non-GAAP net loss was $14.2 million for the quarter, or a non-GAAP basic and diluted net loss per share of $0.09. This compared to non-GAAP net loss of $27.9 million, or a non-GAAP basic and diluted net loss per share of $0.18 for the same period in the prior year.

"VIVITROL and ARISTADA continue to demonstrate solid growth year-over-year and we have made significant progress in making these important medicines available to patients. We continue to focus on initiatives to promote broad and seamless access for patients," stated Jim Robinson, President and Chief Operating Officer of Alkermes. "The upcoming potential approval and launch of Aripiprazole Lauroxil NanoCrystal Dispersion (ALNCD), a novel, investigational product designed for initiation onto ARISTADA, is an opportunity to address unmet patient need and expand the ARISTADA product family. Similarly, against the backdrop of new data, funding and policy being implemented to address the opioid epidemic, we have an opportunity to further expand patient access to VIVITROL, increase utilization and drive growth."

Quarter Ended Mar. 31, 2018 Financial Results

Revenues

Net sales of VIVITROL were $62.7 million, compared to $58.5 million for the same period in the prior year, representing an increase of approximately 7%.

Net sales of ARISTADA were $29.2 million, compared to $18.0 million for the same period in the prior year, representing an increase of approximately 62%.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $68.8 million, compared to $60.0 million for the same period in the prior year.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA(1) were $28.3 million, compared to $29.2 million for the same period in the prior year.

Research and development revenues from the collaboration with Biogen for BIIB098 (formerly ALKS 8700) were $17.5 million.

Costs and Expenses

·Operating expenses were $287.0 million, compared to $262.6 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA.

Net interest expense during the quarter was $4.0 million and included a $2.3 million charge related to the refinancing of the company’s term loan. The company refinanced its term loan to extend the maturity to 2023 and reduce the interest rate by 0.5%.

"Alkermes is entering the final stages of development for three of our pipeline candidates. The regulatory review of ALKS 5461 is back on track and we continue to prepare for potential approval and launch in 2019. For ALKS 3831, we recently completed enrollment of the ENLIGHTEN-2 pivotal study, with topline data expected in the fourth quarter of 2018. For BIIB098, preparation of the regulatory submission has begun and we are on track to submit the NDA toward year-end," said Richard Pops, Chief Executive Officer of Alkermes. "We are on the threshold of our next phase of growth. Our dedication and determination to bring these important new medicines to patients are steadfast and we look forward to sharing our progress throughout the year."

Recent Events:

· ALKS 5461: New Drug Application (NDA) accepted for filing by U.S. Food and Drug Administration (FDA) for the adjunctive treatment of major depressive disorder (MDD) in patients with inadequate response to standard antidepressant therapy. A target action date of Jan. 31, 2019 was assigned under the Prescription Drug User Fee Act (PDUFA).

· ALKS 3831: Enrollment completed for ENLIGHTEN-2, a six-month weight study compared to olanzapine in patients with stable schizophrenia. Topline results are expected in the fourth quarter of 2018.

· BIIB098: MRI and relapse results from the phase 3 EVOLVE-MS-1 study in patients with relapsing and remitting multiple sclerosis were presented at the 70th annual meeting of the American Academy of Neurology (AAN).

· James (Jim) Robinson appointed to the role of President and Chief Operating Officer of Alkermes. Mr. Robinson’s responsibilities include leading Alkermes’ global Commercial, Operations, Business Development and Human Resources functions.

3

Financial Expectations for 2018

Alkermes is updating its financial expectations for 2018 to reflect the expected timing of potential approval and launch of ALKS 5461 in 2019. The following outlines Alkermes’ updated financial expectations for 2018.

Revenues: The company continues to expect total revenues to range from $975 million to $1.025 billion, driven by continuing growth of VIVITROL and ARISTADA. Included in this total revenue expectation, Alkermes continues to expect VIVITROL net sales to range from $300 million to $330 million, and ARISTADA net sales to range from $140 million to $160 million.

Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from $180 million to $190 million.

Research and Development (R&D) Expenses: The company continues to expect R&D expenses to range from $415 million to $445 million.

Selling, General and Administrative (SG&A) Expenses: The company now expects SG&A expenses to range from $515 million to $545 million, reduced from a previous expectation of $555 million to $585 million. This reduction is driven by the shift into 2019 of certain launch-related expenditures including the hiring of the ALKS 5461 sales force, and share-based compensation expense related to certain company-wide performance-based restricted stock unit awards, which vest upon FDA approval of ALKS 5461.

Amortization of Intangible Assets: The company continues to expect amortization of intangibles to be approximately $65 million.

Net Interest Expense: The company continues to expect net interest expense to be approximately $10 million.

Income Tax Expense: The company continues to expect income tax expense of up to $10 million.

GAAP Net Loss: The company now expects GAAP net loss to range from $210 million to $240 million, or a basic and diluted loss per share of $1.35 to $1.55, based on a weighted average basic and diluted share count of approximately 155 million shares outstanding. This compares to previous expectations of GAAP net loss in the range of $250 million to $280 million, or a basic and diluted loss per share of $1.61 to $1.81,

based on a weighted average basic and diluted share count of approximately 155 million shares outstanding.

Non-GAAP Net Income (Loss): The company now expects non-GAAP results to range from a non-GAAP net loss of $10 million to a non-GAAP net income of $20 million, or a non-GAAP basic and diluted loss per share of $0.06 to a non-GAAP diluted earnings per share of $0.12, based on a weighted average basic share count of approximately 155 million shares outstanding and a weighted average diluted share count of approximately 161 million shares outstanding. This compares to previous expectations of non-GAAP net loss in the range of $5 million to $35 million, or a basic and diluted non-GAAP net loss per share of $0.03 to $0.23, based on a weighted average basic and diluted share count of approximately 155 million shares outstanding

Share-Based Compensation: The company now expects share-based compensation of approximately $120 million, reduced from approximately $140 million. This reflects the anticipated timing of vesting of certain company-wide performance-based restricted stock unit awards, which vest upon FDA approval of ALKS 5

Capital Expenditures: The company continues to expect capital expenditures to range from $80 million to $90 million.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:30 a.m. ET (1:30 p.m. BST) on Thursday, Apr. 26, 2018, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 888 424 8151 for U.S. callers and +1 847 585 4422 for international callers. The conference call ID number is 6037988. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. BST) on Thursday, Apr. 26, 2018, through 5:00 p.m. ET (10:00 p.m. BST) on Thursday, May 3, 2018, and may be accessed by visiting Alkermes’ website or by dialing +1 888 843 7419 for U.S. callers and +1 630 652 3042 for international callers. The replay access code is 6037988.

On April 26, 2018 Editas Medicine, Inc. (NASDAQ:EDIT), a leading genome editing company, reported that it will host a conference call and webcast on Thursday, May 3, 2018, at 5:00 p.m (Press release, Editas Medicine, APR 26, 2018, View Source;p=RssLanding&cat=news&id=2345072 [SID1234525736]). ET to discuss a corporate update and results for the first quarter of 2018.

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To access the call, please dial 844-348-3801 (domestic) or 213-358-0955 (international) and provide the passcode 6079429. A live webcast of the presentation will be available on the Investors & Media section of the Editas website.

On April 26, 2018 Vical Incorporated (Nasdaq:VICL) reported that the company will report financial results for the three months ended March 31, 2018, before the opening of trading on Thursday, May 3, and conduct a conference call and webcast to discuss the financial results and provide a company update at noon Eastern Time on Thursday, May 3 (Press release, Vical, APR 26, 2018, View Source [SID1234525758]). The call will be open on a listen-only basis to any interested parties. The company will also provide a business update, including details on development programs in the conference call and webcast.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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Conference Call
To listen to the conference call, dial in approximately ten minutes before the scheduled call to (323) 794-2567 (preferred), or (888) 278-8469 (toll-free), and reference confirmation code 1443635. A replay of the call will be available for 48 hours beginning about two hours after the call. To listen to the replay, dial (719) 457-0820 (preferred) or (888) 203-1112 (toll-free) and enter replay passcode 1443635. The call also will be available live and archived through the events page at www.vical.com.

Invited participants may ask questions during the conference call. Others may submit questions before the call by e-mail addressed to [email protected] or by fax to (858) 646-1150. Submitted questions will be screened for appropriateness and general interest. Selected questions received with sufficient notice before the call will be answered as time permits at the end of the call. For further information, contact Vical’s Investor Relations department by phone at (858) 646-1127 or by email at [email protected].

On April 26, 2018 Molecular Partners AG (SIX: MOLN), a clinical-stage biopharmaceutical company developing a new class of drugs known as DARPin therapies*, reported its Interim Management Statement for the period ending March 31, 2018 (Press release, Molecular Partners, APR 26, 2018, View Source [SID1234525713]).

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"We are very pleased with the progress of our pipeline during the first quarter of 2018," said Dr. Patrick Amstutz, Chief Executive Officer of Molecular Partners. "Since the beginning of the year, we presented promising clinical data on additional patients treated with our lead oncology asset, MP0250, in Multiple Myeloma. Moreover, we have entered into a collaboration with AstraZeneca for our second phase 2 study of MP0250 in EGFR-mutated Non-Small Cell Lung Cancer and expect to dose the first patient in the coming weeks. Finally, our existing partner, Allergan, has exercised all three options from our discovery alliance agreement manifesting our mutual conviction in the potential of our DARPin technology in ophthalmology as well as of the success of our joint collaboration."

Additional data reconfirm promising progress of phase 2 study of MP0250 in Multiple Myeloma
MP0250, Molecular Partners’ lead oncology asset, is a phase 2 multi-DARPin candidate that simultaneously targets hepatocyte growth factor (HGF) and vascular endothelial growth factor (VEGF), two prominent tumor escape pathways, and has the potential to reverse resistance to standard of care cancer therapies.

The phase 2 study for this compound is being conducted at centers in Germany, Poland and Italy and continues to progress well. This study is evaluating MP0250 in combination with bortezomib (Velcade) and dexamethasone in patients with multiple myeloma who have failed standard therapies.

The company anticipates further safety data and initial efficacy data before year-end 2018.

AstraZeneca agreed to collaborate in second phase 2 study of MP0250 in Non-Small Cell Lung Cancer (NSCLC) by supplying osimertinib (Tagrisso)
Molecular Partners is collaborating with AstraZeneca (LON: AZN) for its phase 1b/2 clinical study of MP0250 in combination with osimertinib (Tagrisso) in patients with EGFR-mutated Non-Small Cell Lung Cancer (NSCLC) who were pre-treated with osimertinib. Under the collaboration agreement, AstraZeneca will supply osimertinib for the clinical study. The study is planned to enroll approximately 40 patients and will take place in the United States. The first patient is expected to be dosed in the coming weeks. Initial safety data are expected by the end of 2018 with initial efficacy data in 2019.

"We are delighted to welcome AstraZeneca as collaboration partner for our second phase 2 study of MP0250. This underlines the growing interest in MP0250 and indicates the potential value of MP0250 in EGFR-mutated NSCLC," said Dr. Andreas Harstrick, Chief Medical Officer Molecular Partners.

Immuno-oncology: Pre-clinical data on the company’s DARPin "toolbox" and on MP0310
At the Annual Meeting 2018 of the American Association of Cancer Research (AACR) (Free AACR Whitepaper) in Chicago, Molecular Partners presented new pre-clinical data on MP0310 as well as its DARPin "toolbox". MP0310 targets simultaneously 4-1BB and FAP and is the first of many potential DARPin candidates which has been advanced into preclinical development. These tumor-restricted agonists only activate immune cells in the tumor and not in the rest of the body thereby allowing full activation and potentially higher dosing of the anti-cancer agents without as severe side effects.

"We are very pleased with the progress of our portfolio showcasing the innovative power of the DARPin technology in the multi-specific biologics space," commented Michael T. Stumpp, Chief Scientific Officer Molecular Partners. "With MP0310 and other potential candidates from our DARPin toolbox, we are moving forward therapies that have the potential to support existing therapies and provide significant additional patient benefits."

Ophthalmology: Allergan exercised third option for the development of three additional DARPin product candidates
In February, the company’s collaboration partner, Allergan, exercised its third option to develop and commercialize DARPin product candidates arising from its discovery alliance with Molecular Partners. In 2012, Molecular Partners and Allergan had entered into a broad discovery alliance in ophthalmology to spur the development of novel multi-DARPin molecules for diseases with high unmet medical need. Upon the exercise of this last option, Molecular Partners has granted Allergan an exclusive license to the selected three multi-DARPin product candidates for use in ophthalmology.

The alliance broadens the initial collaboration on abicipar and entitles Molecular Partners to certain success-based development, regulatory and sales milestone payments aggregating up to USD 960 million, as well as tiered royalty payments (up to the low double-digit percentage range) on any future product sales. Allergan will be responsible for all future development costs.

Abicipar on track for one-year phase 3 efficacy data in H2 2018
Molecular Partners anticipates that its collaboration partner Allergan will present one-year phase 3 topline data for abicipar in wet age-related macular degeneration (wet AMD) in H2 2018. The company further expects Allergan to communicate the start of the phase 3 studies of abicipar in diabetic macular edema (DME) in H2 2018.

Balance Sheet: Strong cash and equity positions as of March 31, 2018
Molecular Partners’ financial performance for the first quarter 2018 is in-line with management’s expectations and reflects ongoing investments to further expand the company’s proprietary pipeline. Cash and short-term deposits decreased by CHF 11.5 million since year-end 2017 to CHF 129.5 million as of March 31, 2018.

As a result of the adoption of IFRS 15, deferred revenues as of December 31, 2017 of CHF 18.4 million were partly reclassified to equity (CHF 8.9 million) to reflect the accumulated past effect of the adoption as of January 1, 2018. The remaining portion of CHF 9.5 million was recognized as revenues in the first quarter 2018.

As of March 31, 2018, the company employed 113 FTEs (+11% year-over-year), with approximately 90% of employees serving in R&D functions.

"During the first quarter 2018, Molecular Partners’ financial position continued to develop in line with our expectations," said Andreas Emmenegger, Chief Financial Officer Molecular Partners. "Our strong cash position provides us with the required financial flexibility to achieve multiple value-creating inflection points into 2020."

Bill Burns elected Chairman at the 2018 Annual General Meeting
William (Bill) Burns, former CEO of Roche Pharmaceuticals, was elected as Chairman of Molecular Partners at the company’s Annual General Meeting held on April 18. Bill Burns held various executive positions at Roche for 28 years, culminating in his nomination to the position of CEO of Roche Pharmaceuticals and board seats at Roche, Genentech and Chugai Pharmaceuticals. The company will benefit from his vast experience in the development and commercialization of drugs, particularly in oncology, and extensive knowledge of pharmaceutical industry operations.

All other motions recommended by the company’s Board of Directors were approved as well by the shareholders present at the meeting.

Business outlook and priorities
For the company’s proprietary oncology pipeline, the company expects to report in 2018 additional safety data and initial efficacy data from the phase 2 study of MP0250 in patients with multiple myeloma (MM). Subject to the expected dosing of the first patient in the coming weeks, the company also expects initial safety data from the phase 1b/2 study of MP0250 in NSCLC in 2018. For MP0274, the proprietary, single-pathway DARPin drug candidate for the treatment of HER2-positive cancer, Molecular Partners expects initial safety data in Q4 2018 and first efficacy data in 2019.

The company will continue to advance its immuno-oncology pipeline and will present further research and preclinical data for its DARPin candidate MP0310 in 2018. In this promising field, Molecular Partners is increasing its focus on activating agonists in a tumor-restricted way.

In ophthalmology, Molecular Partners will continue to support its strategic partner Allergan in advancing abicipar through phase 3 studies in patients with wet AMD and in initiating the phase 3 studies of abicipar in patients with DME. The company will also continue to support Allergan in further advancing the three pre-clinical ophthalmology assets optioned-in from the existing research collaboration. Allergan is on track to present one-year phase 3 topline data in wet AMD in H2 2018 and anticipates launching abicipar for this indication in the year 2020.

Financial outlook 2018
For the full year 2018, at constant exchange rates, the company continues to expect expenses of CHF 50-60 million, of which around CHF 7 million will be non-cash effective costs for share-based payments, IFRS pension accounting and depreciations. However, this guidance is subject to the progress of the pipeline, mainly driven by manufacturing costs, the speed of enrollment of patients in clinical studies and data from research and development projects.

No guidance can be provided with regard to net cash flow projections. Timelines and potential milestone payments from existing and potentially new partnerships are not disclosed.

*DARPin is a registered trademark owned by Molecular Partners AG.

Financial Calendar
August 30, 2018 – Publication of 2018 Half-year Results
November 01, 2018 – Q3 2018 Management Statement
View Source

About the DARPin Difference
DARPin therapeutics are a new class of protein therapeutics opening an extra dimension of multi-specificity and multi-functionality. DARPin candidates are potent, specific, safe and very versatile. They can engage in more than 5 targets at once, offering potential benefits over those offered by conventional monoclonal antibodies or other currently available protein therapeutics. The DARPin technology is a fast and cost-effective drug discovery engine, producing drug candidates with ideal properties for development and very high production yields.
With their good safety profile, low immunogenicity and long half-life in the bloodstream and the eye, DARPin therapies have the potential to advance modern medicine and significantly improve the treatment of serious diseases, including cancer and sight-threatening disorders. Molecular Partners is partnering with Allergan to advance clinical programs in ophthalmology, and is advancing a proprietary pipeline of DARPin drug candidates in oncology. The most advanced global product candidate is abicipar, a molecule currently in Phase 3, in partnership with Allergan.
Several DARPin molecules for various ophthalmic indications are also in development. The most advanced systemic DARPin molecule, MP0250, is in Phase 1 clinical development for the treatment of solid tumors and in Phase 2 development for hematological tumors. In addition, Molecular Partners intends to further evaluate MP0250 for solid tumors in a phase 1b/2 trial for EGFR-mutated NSCLC. MP0274, the second-most advanced DARPin drug candidate in oncology, has broad anti-HER activity; it inhibits HER1, HER2 and HER3-mediated downstream signaling via Her2, leading to induction of apoptosis. MP0274 has moved into Phase 1. Molecular Partners is also advancing a growing preclinical pipeline that features several immuno-oncological development programs. DARPin is a registered trademark owned by Molecular Partners AG..

"We are very pleased with the progress of our pipeline during the first quarter of 2018," said Dr. Patrick Amstutz, Chief Executive Officer of Molecular Partners. "Since the beginning of the year, we presented promising clinical data on additional patients treated with our lead oncology asset, MP0250, in Multiple Myeloma. Moreover, we have entered into a collaboration with AstraZeneca for our second phase 2 study of MP0250 in EGFR-mutated Non-Small Cell Lung Cancer and expect to dose the first patient in the coming weeks. Finally, our existing partner, Allergan, has exercised all three options from our discovery alliance agreement manifesting our mutual conviction in the potential of our DARPin technology in ophthalmology as well as of the success of our joint collaboration."

Additional data reconfirm promising progress of phase 2 study of MP0250 in Multiple Myeloma
MP0250, Molecular Partners’ lead oncology asset, is a phase 2 multi-DARPin candidate that simultaneously targets hepatocyte growth factor (HGF) and vascular endothelial growth factor (VEGF), two prominent tumor escape pathways, and has the potential to reverse resistance to standard of care cancer therapies.

The phase 2 study for this compound is being conducted at centers in Germany, Poland and Italy and continues to progress well. This study is evaluating MP0250 in combination with bortezomib (Velcade) and dexamethasone in patients with multiple myeloma who have failed standard therapies.

The company anticipates further safety data and initial efficacy data before year-end 2018.

AstraZeneca agreed to collaborate in second phase 2 study of MP0250 in Non-Small Cell Lung Cancer (NSCLC) by supplying osimertinib (Tagrisso)
Molecular Partners is collaborating with AstraZeneca (LON: AZN) for its phase 1b/2 clinical study of MP0250 in combination with osimertinib (Tagrisso) in patients with EGFR-mutated Non-Small Cell Lung Cancer (NSCLC) who were pre-treated with osimertinib. Under the collaboration agreement, AstraZeneca will supply osimertinib for the clinical study. The study is planned to enroll approximately 40 patients and will take place in the United States. The first patient is expected to be dosed in the coming weeks. Initial safety data are expected by the end of 2018 with initial efficacy data in 2019.

"We are delighted to welcome AstraZeneca as collaboration partner for our second phase 2 study of MP0250. This underlines the growing interest in MP0250 and indicates the potential value of MP0250 in EGFR-mutated NSCLC," said Dr. Andreas Harstrick, Chief Medical Officer Molecular Partners.

Immuno-oncology: Pre-clinical data on the company’s DARPin "toolbox" and on MP0310
At the Annual Meeting 2018 of the American Association of Cancer Research (AACR) (Free AACR Whitepaper) in Chicago, Molecular Partners presented new pre-clinical data on MP0310 as well as its DARPin "toolbox". MP0310 targets simultaneously 4-1BB and FAP and is the first of many potential DARPin candidates which has been advanced into preclinical development. These tumor-restricted agonists only activate immune cells in the tumor and not in the rest of the body thereby allowing full activation and potentially higher dosing of the anti-cancer agents without as severe side effects.

"We are very pleased with the progress of our portfolio showcasing the innovative power of the DARPin technology in the multi-specific biologics space," commented Michael T. Stumpp, Chief Scientific Officer Molecular Partners. "With MP0310 and other potential candidates from our DARPin toolbox, we are moving forward therapies that have the potential to support existing therapies and provide significant additional patient benefits."

Ophthalmology: Allergan exercised third option for the development of three additional DARPin product candidates
In February, the company’s collaboration partner, Allergan, exercised its third option to develop and commercialize DARPin product candidates arising from its discovery alliance with Molecular Partners. In 2012, Molecular Partners and Allergan had entered into a broad discovery alliance in ophthalmology to spur the development of novel multi-DARPin molecules for diseases with high unmet medical need. Upon the exercise of this last option, Molecular Partners has granted Allergan an exclusive license to the selected three multi-DARPin product candidates for use in ophthalmology.

The alliance broadens the initial collaboration on abicipar and entitles Molecular Partners to certain success-based development, regulatory and sales milestone payments aggregating up to USD 960 million, as well as tiered royalty payments (up to the low double-digit percentage range) on any future product sales. Allergan will be responsible for all future development costs.

Abicipar on track for one-year phase 3 efficacy data in H2 2018
Molecular Partners anticipates that its collaboration partner Allergan will present one-year phase 3 topline data for abicipar in wet age-related macular degeneration (wet AMD) in H2 2018. The company further expects Allergan to communicate the start of the phase 3 studies of abicipar in diabetic macular edema (DME) in H2 2018.

Balance Sheet: Strong cash and equity positions as of March 31, 2018
Molecular Partners’ financial performance for the first quarter 2018 is in-line with management’s expectations and reflects ongoing investments to further expand the company’s proprietary pipeline. Cash and short-term deposits decreased by CHF 11.5 million since year-end 2017 to CHF 129.5 million as of March 31, 2018.

As a result of the adoption of IFRS 15, deferred revenues as of December 31, 2017 of CHF 18.4 million were partly reclassified to equity (CHF 8.9 million) to reflect the accumulated past effect of the adoption as of January 1, 2018. The remaining portion of CHF 9.5 million was recognized as revenues in the first quarter 2018.

As of March 31, 2018, the company employed 113 FTEs (+11% year-over-year), with approximately 90% of employees serving in R&D functions.

"During the first quarter 2018, Molecular Partners’ financial position continued to develop in line with our expectations," said Andreas Emmenegger, Chief Financial Officer Molecular Partners. "Our strong cash position provides us with the required financial flexibility to achieve multiple value-creating inflection points into 2020."

Bill Burns elected Chairman at the 2018 Annual General Meeting
William (Bill) Burns, former CEO of Roche Pharmaceuticals, was elected as Chairman of Molecular Partners at the company’s Annual General Meeting held on April 18. Bill Burns held various executive positions at Roche for 28 years, culminating in his nomination to the position of CEO of Roche Pharmaceuticals and board seats at Roche, Genentech and Chugai Pharmaceuticals. The company will benefit from his vast experience in the development and commercialization of drugs, particularly in oncology, and extensive knowledge of pharmaceutical industry operations.

All other motions recommended by the company’s Board of Directors were approved as well by the shareholders present at the meeting.

Business outlook and priorities
For the company’s proprietary oncology pipeline, the company expects to report in 2018 additional safety data and initial efficacy data from the phase 2 study of MP0250 in patients with multiple myeloma (MM). Subject to the expected dosing of the first patient in the coming weeks, the company also expects initial safety data from the phase 1b/2 study of MP0250 in NSCLC in 2018. For MP0274, the proprietary, single-pathway DARPin drug candidate for the treatment of HER2-positive cancer, Molecular Partners expects initial safety data in Q4 2018 and first efficacy data in 2019.

The company will continue to advance its immuno-oncology pipeline and will present further research and preclinical data for its DARPin candidate MP0310 in 2018. In this promising field, Molecular Partners is increasing its focus on activating agonists in a tumor-restricted way.

In ophthalmology, Molecular Partners will continue to support its strategic partner Allergan in advancing abicipar through phase 3 studies in patients with wet AMD and in initiating the phase 3 studies of abicipar in patients with DME. The company will also continue to support Allergan in further advancing the three pre-clinical ophthalmology assets optioned-in from the existing research collaboration. Allergan is on track to present one-year phase 3 topline data in wet AMD in H2 2018 and anticipates launching abicipar for this indication in the year 2020.

Financial outlook 2018
For the full year 2018, at constant exchange rates, the company continues to expect expenses of CHF 50-60 million, of which around CHF 7 million will be non-cash effective costs for share-based payments, IFRS pension accounting and depreciations. However, this guidance is subject to the progress of the pipeline, mainly driven by manufacturing costs, the speed of enrollment of patients in clinical studies and data from research and development projects.

No guidance can be provided with regard to net cash flow projections. Timelines and potential milestone payments from existing and potentially new partnerships are not disclosed.

*DARPin is a registered trademark owned by Molecular Partners AG.

Financial Calendar
August 30, 2018 – Publication of 2018 Half-year Results
November 01, 2018 – Q3 2018 Management Statement
View Source

About the DARPin Difference
DARPin therapeutics are a new class of protein therapeutics opening an extra dimension of multi-specificity and multi-functionality. DARPin candidates are potent, specific, safe and very versatile. They can engage in more than 5 targets at once, offering potential benefits over those offered by conventional monoclonal antibodies or other currently available protein therapeutics. The DARPin technology is a fast and cost-effective drug discovery engine, producing drug candidates with ideal properties for development and very high production yields.
With their good safety profile, low immunogenicity and long half-life in the bloodstream and the eye, DARPin therapies have the potential to advance modern medicine and significantly improve the treatment of serious diseases, including cancer and sight-threatening disorders. Molecular Partners is partnering with Allergan to advance clinical programs in ophthalmology, and is advancing a proprietary pipeline of DARPin drug candidates in oncology. The most advanced global product candidate is abicipar, a molecule currently in Phase 3, in partnership with Allergan.
Several DARPin molecules for various ophthalmic indications are also in development. The most advanced systemic DARPin molecule, MP0250, is in Phase 1 clinical development for the treatment of solid tumors and in Phase 2 development for hematological tumors. In addition, Molecular Partners intends to further evaluate MP0250 for solid tumors in a phase 1b/2 trial for EGFR-mutated NSCLC. MP0274, the second-most advanced DARPin drug candidate in oncology, has broad anti-HER activity; it inhibits HER1, HER2 and HER3-mediated downstream signaling via Her2, leading to induction of apoptosis. MP0274 has moved into Phase 1. Molecular Partners is also advancing a growing preclinical pipeline that features several immuno-oncological development programs. DARPin is a registered trademark owned by Molecular Partners AG.