On May 3, 2016 Mylan N.V. (NASDAQ, TASE: MYL) reported its financial results for the quarter ended March 31, 2016 (Press release, Mylan, MAY 3, 2016, View Source [SID:1234511897]).

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Financial Highlights
Total revenues of $2.19 billion, up 19% on a constant currency basis compared to the prior year period (up 17% on a U.S. GAAP basis)
Generics segment third party net sales of $1.93 billion, up 19% on a constant currency basis (up 17% on a U.S. GAAP basis). All regions in the Generics segment showed positive year-over-year growth.

Specialty segment third party net sales of $247.9 million, up 17%
Adjusted diluted earnings per ordinary share ("EPS") of $0.76, up 9% compared to the prior year period; U.S. GAAP diluted EPS of $0.03, down 77% as a result of higher operating expenses, including amortization expense related to acquisitions completed during 2015

Reaffirms 2016 total revenues guidance of $10.5 billion to $11.5 billion, the midpoint of which represents an increase of 16% versus 2015, and 2016 adjusted diluted EPS guidance of $4.85 to $5.15, the midpoint of which represents an increase of 16% versus 2015 (U.S. GAAP diluted EPS of $2.38 to $2.43, the midpoint of which represents an increase of 41% versus 2015)
Mylan CEO Heather Bresch commented, "We are off to a great start in 2016 with our strong first quarter results delivering year-over-year constant currency total revenues growth of 19% and adjusted diluted EPS growth of 9%. We showed again the strength and resilience of Mylan’s diverse, global platform, with double digit revenue growth in Europe, Rest of World and Specialty and high single digit revenue growth in North America. Based on our first quarter performance, we remain highly confident in our guidance and our business outlook for the full year 2016. Despite much external focus and discussion of the pricing environment, consistent with our previously communicated 2016 guidance and given Mylan’s position as a large-scale, differentiated player, we continue to see nothing out of the ordinary to change our generic pricing assumptions of low- to mid-single digit erosion for the full year.

Almost a decade ago, we laid out our vision and strategy for growth and our belief that it would come from both organic and inorganic initiatives to create unmatched scale in manufacturing, broad breadth in our product portfolio, and expansion across all geographic territories – all with the aim of achieving our mission of providing access to medicine to patients around the world. We are excited about our pending acquisition of Meda, which will further strengthen and diversify our business in terms of product portfolio, customer channels, and geography, and position us for continued growth and value creation over the near- and long-term. I am pleased to note that Meda’s Q1 2016 earnings results reported this morning were in-line with our modeled expectations for the business, and we remain fully committed to and look forward to closing this transaction."
Total Revenues

Three Months Ended

March 31,
(Unaudited; in millions)
2016

2015

Percent
Change
Total Revenues
$
2,191.3

$
1,871.7

17%
Generics Segment Third Party Net Sales
1,928.2

1,643.5

17%
North America*
919.7

855.0

8%
Europe
587.7

406.2

45%
Rest of World*
420.8

382.3

10%
Specialty Third Party Net Sales
247.9

211.1

17%
Other Revenues
15.2

17.1

(11)%
*Beginning in the first quarter of 2016, the Company reclassified sales from its Brazilian operation from the Rest of World region to the North America region. The amount reclassified for the three months ended March 31, 2015 was approximately $10.2 million.

Generics Segment Revenues
Generics segment third party net sales were $1.93 billion for the quarter, an increase of 17% when compared to the prior year period. When translating third party net sales for the current quarter at prior year comparative period exchange rates ("constant currency"), third party net sales increased by 19%.

Third party net sales from North America were $919.7 million for the quarter, an increase of 8% when compared to the prior year period. This increase was principally due to net sales from products launched since April 1, 2015 ("new products"), and to a lesser extent, incremental net sales from our established products. Factors offsetting this increase were lower sales on existing products. Constant currency third party net sales from North America increased by 8%.

Third party net sales from Europe were $587.7 million for the quarter, an increase of 45% when compared to the prior year period. This increase was primarily the result of incremental net sales from our established products as well as new products. Higher volumes on existing products, primarily in France, were offset by lower pricing throughout Europe, due to government-imposed pricing reductions and competitive market conditions. Constant currency third party net sales from Europe increased by 47%.
Third party net sales from Rest of World were $420.8 million for the quarter, an increase of 10% when compared to the prior year period. This increase was primarily driven by incremental net sales from established products, net sales by Jai Pharma Limited (certain female healthcare businesses acquired from Famy Care Limited), and to a lesser extent, new product launches across the region. Higher volumes in Japan and Australia also contributed to the increase. These increases were partially offset by lower pricing throughout the region and a decrease in third party net sales volumes from our operations in India, in particular the anti-retroviral ("ARV") franchise. Constant currency third party net sales from Rest of World increased by 15%.

Specialty Segment Revenues
Specialty segment reported third party net sales were $247.9 million for the quarter, an increase of 17% when compared to the prior year period. This increase was primarily the result of higher volumes of the EpiPen Auto-Injector and higher sales of the Perforomist Inhalation Solution.

Total Gross Profit
Adjusted gross profit was $1.18 billion and adjusted gross margins were 54% for the quarter as compared to adjusted gross profit of $990.6 million and adjusted gross margins of 53% in the comparable prior year period. The current quarter increase was primarily due to the incremental contribution from established products in the first quarter of 2016 as well as new product introductions, partially offset by decreased margins on existing products in North America. U.S. GAAP gross profit was $907.0 million and $830.1 million for the first quarter of 2016 and 2015, respectively. U.S. GAAP gross margins were 41% and 44% in the first quarter of 2016 and 2015, respectively. The decrease in gross margins relates principally to additional amortization expense related to acquisitions completed during 2015.

Total Profitability
Adjusted earnings from operations for the quarter were $490.1 million, up 14% from the comparable prior year period. U.S. GAAP earnings from operations were $105.6 million for the quarter, a decrease of 34% from the comparable prior year period. R&D expense on an adjusted basis increased primarily as a result of the continued development of our respiratory, insulin and biologics programs. U.S. GAAP R&D expense also increased primarily as a result of an upfront payment made to Momenta for $45 million related to the Company’s collaboration agreement. SG&A expense on a U.S. GAAP and adjusted basis primarily increased due to the incremental expense related to the established products.

EBITDA, which is defined as net earnings (excluding the non-controlling interest and losses from equity method investees) plus income taxes, interest expense, depreciation and amortization, was $417.3 million for the quarter ended March 31, 2016, and $340.5 million for the comparable prior year quarter. Adjusted net earnings attributable to Mylan N.V. increased by $77.2 million to $386.3 million compared to $309.1 million for the prior year comparable period. U.S. GAAP net earnings attributable to Mylan N.V. decreased by $42.7 million to $13.9 million for the quarter ended March 31, 2016, as compared to $56.6 million for the comparable prior year period. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $583.7 million for the quarter ended March 31, 2016 and $504.6 million for the comparable prior year period. Adjusted diluted EPS increased 9% to $0.76 compared to $0.70 in the prior year comparable period. U.S. GAAP diluted EPS decreased from $0.13 to $0.03 as a result of higher operating expenses, including amortization expense related to acquisitions completed during 2015.

Cash Flow
Adjusted cash provided by operating activities was $202 million for the three months ended March 31, 2016 compared to $336 million for the comparable prior year period. On a U.S. GAAP basis, net cash provided by operating activities was $81 million for the three months ended March 31, 2016 compared to $267 million for the comparable prior year period. Capital expenditures were approximately $52 million for the three months ended March 31, 2016 as compared to approximately $48 million for the comparable prior year period. Adjusted free cash flow was $150 million for the three months ended March 31, 2016, compared to $288 million in the prior year period.

On May 3, 2016 Fresenius reported Q1 results for 2016(Press release, Fresenius, MAY 3, 2016, View Source [SID:1234511838]).

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Q1/2016:
Sales: €6.9 billion (+7%, +7% in constant currency)
EBIT1: €959 million (+13%, +11% in constant currency)
Net income1,2: €362 million (+24%, +23% in constant currency)
Ulf Mark Schneider, CEO of Fresenius, said: "We have seen a strong start into 2016, reflected in our double-digit earnings growth. All business segments and regions have contributed to this success, demonstrating yet again enormous consistency in our sales and earnings development. We remain fully on track to achieve our 2016 and mid-term targets."
12015 before special items
2Net income attributable to shareholders of Fresenius SE & Co. KGaA
Group guidance for 2016 confirmed
Fresenius confirms its guidance for 2016. Sales are expected to increase by 6% to 8% in constant currency. Net income1,2, is expected to grow by 8% to 12% in constant currency.
The net debt/EBITDA3 ratio is expected to be approximately 2.5 at the end of 2016.
1Net income attributable to shareholders of Fresenius SE & Co. KGaA
22015 before special items
3Calculated at FY average exchange rates for both net debt and EBITDA; excluding potential acquisitions
7% sales growth in constant currency
Group sales increased by 7% (7% in constant currency) to €6,914 million (Q1/2015: €6,483 million). Organic sales growth was 7%. Acquisitions contributed 1% and divestitures reduced sales by 1%.
Group sales by region:

23% net income1 growth in constant currency
Group EBITDA2 increased by 11% (10% in constant currency) to €1,237 million (Q1/2015: €1,115 million). Group EBIT2 increased by 13% (11% in constant currency) to €959 million (Q1/2015: €851 million). The EBIT margin2 increased to 13.9% (Q1/2015: 13.1%).
Group net interest decreased to -€152 million (Q1/2015: -€165 million), mainly due to more favorable financing terms and lower net debt.
The Group tax rate (before special items) decreased to 28.4% (Q1/2015: 30.2%), mainly due to a lower tax rate at Fresenius Medical Care.
Noncontrolling interest increased to €216 million (Q1/2015: €187 million), of which 95% was attributable to the noncontrolling interest in Fresenius Medical Care.
Group net income1,2, increased by 24% (23% in constant currency) to €362 million (Q1/2015: €292 million). Earnings per share1,2 increased by 22% (22% in constant currency) to €0.66 (Q1/2015: €0.54).
1Net income attributable to shareholders of Fresenius SE & Co. KGaA
22015 before special items
3Calculated at FY average exchange rates for both net debt and EBITDA; excluding potential acquisitions
Continued investment in growth
Spending on property, plant and equipment was €313 million (Q1/2015: €273 million), primarily for the modernization and expansion of dialysis clinics, production facilities and hospitals. Total acquisition spending was €204 million (Q1/2015: €104 million).
Cash flow development
Operating cash flow decreased by 37% to €334 million (Q1/2015: €531 million) with a margin of 4.8% (Q1/2015: 8.2%). The decrease was mainly due to an adjustment in invoicing within the quarter and the timing of cash payroll payments at Fresenius Medical Care North America. Fresenius Medical Care expects that these effects will have no meaningful impact on the full year 2016 cash flow.
Free cash flow before acquisitions and dividends decreased to €2 million (Q1/2015: €258 million). Free cash flow after acquisitions and dividends was -€241 million (Q1/2015: €256 million).
Solid balance sheet structure
The Group’s total assets decreased by 1% (increased 1% in constant currency) to €42,445 million (Dec. 31, 2015: €42,959 million). Current assets grew by 1% (3% in constant currency) to €10,584 million (Dec. 31, 2015: €10,479 million). Non-current assets decreased by 2% (increased 1% in constant currency) to €31,861 million (Dec. 31, 2015: € 32,480 million).
Total shareholders’ equity was virtually unchanged at €18,009 million (Dec. 31, 2015: €18,003 million). In constant currency, it increased by 3%. The equity ratio increased to 42.4% (Dec. 31, 2015: 41.9%).
Group debt decreased by 1% (increased 1% in constant currency) to €14,549 million (Dec. 31, 2015: € 14,769 million). As of March 31, 2016, the net debt/EBITDA ratio was 2.671 (Dec. 31, 2015: 2.681).
12015 before special items; at LTM average exchange rates for both net debt and EBITDA
Business Segments
Fresenius Medical Care
Fresenius Medical Care is the world’s largest provider of products and services for individuals with renal diseases. As of March 31, 2016, Fresenius Medical Care was treating 294,043 patients in 3,432 dialysis clinics. Along with its core business, the company seeks to expand the range of medical services in the field of care coordination.

9% sales growth in constant currency
Strong sales and EBIT growth in North America
2016 outlook confirmed
Sales increased by 6% (9% in constant currency) to US$4,205 million (Q1/2015: US$3,960 million). Organic sales growth was 7%. Acquisitions contributed 2%. Currency translation effects reduced sales by 3%.
Health Care services sales (dialysis services and care coordination) increased by 7% (9% in constant currency) to US$3,414 million (Q1/2015: US$3,182 million). Dialysis product sales increased by 2% (6% in constant currency) to US$791 million (Q1/2015: US$778 million).
In North America, sales increased by 10% to US$3,044 million (Q1/2015: US$2,771 million). Health Care services sales grew by 10% to US$2,832 million (Q1/2015: US$2,571 million). Dialysis product sales increased by 6% to US$212 million (Q1/2015: US$200 million).
Sales outside North America decreased by 2% (increased by 7% in constant currency) to US$1,158 million (Q1/2015: US$1,180 million). Health Care services sales decreased by 5% (increased by 6% in constant currency) to US$582 million (Q1/2015: US$611 million). Dialysis product sales increased by 1% (8% in constant currency) to US$576 million (Q1/2015: US$569 million).
EBIT increased by 7% (8% in constant currency) to US$540 million (Q1/2015: US$504 million). The EBIT margin was 12.8% (Q1/2015: 12.7%).
Net income1 increased by 9% (8% in constant currency) to US$228 million (Q1/2015: US$210 million).
Operating cash flow decreased by 60% to US$180 million (Q1/2015: US$447 million). The cash flow margin was 4.3% (Q1/2015: 11.3%). The decrease was mainly due to an adjustment in invoicing within the quarter and the timing of cash payroll payments at Fresenius Medical Care North America. Fresenius Medical Care expects that these effects will have no meaningful impact on the full year 2016 cash flow.
Fresenius Medical Care confirms its outlook for 2016. The company expects sales to grow by 7% to 10% in constant currency and net income1 is expected to increase by 15% to 20%2 in 2016.
For further information, please see Fresenius Medical Care’s Investor News at www.freseniusmedicalcare.com.
1Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
22015 before GranuFlo/NaturaLyte settlement costs (-US$37 million after tax) and before acquisitions (US$9 million after tax); hence the basis for expected net income growth is US$1,057 million.

Fresenius Kabi
Fresenius Kabi offers intravenously administered generic drugs, clinical nutrition and infusion therapies for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products.

10% organic sales growth in Q1
19% constant currency EBIT1 growth in Q1
2016 outlook confirmed
Sales increased by 5% (8% in constant currency) to €1,470 million (Q1/2015: €1,394 million). Organic sales growth was 10%. Divestitures and currency translation effects reduced sales by 2% and 3% respectively.
Sales in Europe decreased by 1% (increased organically by 1%) to €512 million (Q1/2015: €518 million), mainly due to the divestment of the German oncology compounding business in February 2015. Sales in North America increased by 22% (organic growth: 20%) to €567 million (Q1/2015: €473 million). North American sales growth was mainly driven by persisting IV drug shortages as well as new product launches. Adverse currency translation effects decreased sales in Asia-Pacific by 5% (increased organically by 7%) to €254 million (Q1/2015: €268 million) and in Latin America/Africa by 5% (increased organically by 21%) to €128 million (Q1/2015: €135 million).
EBIT1 increased by 20% (19% in constant currency) to €309 million (Q1/2015: €257 million). The EBIT margin1 improved to 21.0% (Q1/2015: 18.5%).
Net income2 increased by 28% (26% in constant currency) to €179 million (Q1/2015: €140 million).
Based on the excellent net income development operating cash flow increased by 49% to €124 million (Q1/2015: €83 million) with a margin of 8.4% (Q1/2015: 6.0%).
Fresenius Kabi confirms its outlook for 2016 and projects low single-digit organic sales growth. EBIT1 in constant currency is expected to be roughly flat compared with 2015.
12015 before special items
2Net income attributable to shareholders of Fresenius Kabi AG; 2015 before special items
Fresenius Helios
Fresenius Helios is Germany’s largest hospital operator. HELIOS operates 111 hospitals, thereof 87 acute care clinics (including seven maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin, Wiesbaden and Wuppertal) and 24 post-acute care clinics. HELIOS treats more than 4.7 million patients per year, thereof approximately 1.3 million inpatients, and operates more than 34,000 beds.

3% organic sales growth
50 bps EBIT margin1 increase to 11.1%
2016 outlook confirmed
Sales increased by 3% to €1,435 million (Q1/2015: €1,391 million). Organic sales growth was 3%. Acquisitions and divestitures had no material effect.
EBIT1 grew by 8% to €159 million (Q1/2015: €147 million). The EBIT margin1 increased to 11.1% (Q1/2015: 10.6%).
Net income2 increased by 16% to €124 million (Q1/2015: €107 million).
Fresenius Helios confirms its outlook for 2016 and projects organic sales growth of 3% to 5%. EBIT is expected to increase to €670 to €700 million.
12015 before special items
2Net income attributable to shareholders of HELIOS Kliniken GmbH; 2015 before special items
Fresenius Vamed
Fresenius Vamed manages projects and provides services for hospitals and other health care facilities worldwide. The portfolio ranges along the entire value chain: from project development, planning, and turnkey construction, via maintenance and technical management, to total operational management.

Project and service business contributed equally to 6% organic sales growth
Strong order intake of €237 million
2016 outlook confirmed
Sales increased by 5% (5% in constant currency) to €218 million (Q1/2015: €208 million). Organic sales growth was 6%. Sales in the project business increased by 6% to €85 million (Q1/2015: €80 million). Sales in the service business grew by 4% to €133 million (Q1/2015: €128 million).
EBIT remained unchanged with €7 million (Q1/2015: €7 million). The EBIT margin was 3.2% (Q1/2015: 3.4%).
Net income1 grew by 25% to €5 million (Q1/2015: €4 million).
Order intake increased to €237 million (Q1/2015: €192 million). As of March 31, 2016, order backlog grew to €1,803 million (December 31, 2015: €1,650 million).
Fresenius Vamed confirms its outlook for 2016 and expects organic sales growth in the range of 5% to 10% and EBIT growth of 5% to 10%.

On May 3, 2016 Delcath Systems, Inc. (NASDAQ: DCTH), a specialty pharmaceutical and medical device company focused on the treatment of primary and metastatic liver cancers, reported that John Wayne Cancer Institute in Los Angeles, California and Duke Cancer Institute in Durham, North Carolina have been activated as clinical trial sites in the Company’s FOCUS Phase 3 Clinical Trial for Patients with Hepatic Dominant Ocular Melanoma (the FOCUS Trial) (Press release, Delcath Systems, MAY 3, 2016, View Source;p=RssLanding&cat=news&id=2164208 [SID:1234511809]). The prestigious centers join Moffitt Cancer Center in Tampa, Florida as active participants in the FOCUS Trial. Delcath plans to include approximately 30 cancer centers in the United States and Europe in the FOCUS Trial.

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"We are pleased to add these highly-respected cancer centers to our FOCUS Phase 3 trial," said Jennifer K. Simpson, Ph.D., MSN, CRNP, President and CEO of Delcath Systems. "Interest in participating in the FOCUS trial is high among other major cancer centers in both the United States and Europe, and we expect to announce further trial site activations in the coming months."

About the FOCUS Trial

The FOCUS Trial is evaluating the safety, efficacy and pharmacokinetic profile of the Company’s Melphalan/HDS system versus best alternative care in 240 patients with ocular melanoma liver metastases. The FOCUS Trial’s primary endpoint is a comparison of overall survival between the two study arms; secondary and exploratory endpoints include progression-free survival, overall response rate and quality-of-life measures. The FOCUS Trial is being conducted under a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA). The SPA provides agreement that the Phase 3 trial design adequately addresses objectives that, if met, would support the submission for regulatory approval of Melphalan/HDS.

On May 3, 2016 Illumina, Inc. (NASDAQ: ILMN) reported its financial results for the first quarter of fiscal year 2016 (Press release, Illumina, MAY 3, 2016, View Source [SID:1234511839]).

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First quarter 2016 results:

Revenue of $572 million, a 6% increase compared to $539 million in the first quarter of 2015, and an increase of 7% on a constant currency basis
GAAP net income attributable to Illumina stockholders for the quarter of $90 million, or $0.60 per diluted share, compared to $137 million, or $0.92 per diluted share, for the first quarter of 2015
Non-GAAP net income attributable to Illumina stockholders for the quarter of $106 million, or $0.71 per diluted share, compared to $135 million, or $0.91 per diluted share, for the first quarter of 2015 (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 $40 million and free cash flow of negative $14 million for the quarter, compared to $67 million and positive $30 million in the prior year period. Increased operating expenses and higher capital expenditures contributed to the lower free cash flow.
Gross margin in the first quarter of 2016 was 69.4% compared to 69.6% in the prior year period. Excluding the effect of non-cash stock compensation expense and amortization of acquired intangible assets, non-GAAP gross margin was 71.7% for the first quarter of 2016 compared to 72.2% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2016 were $124.0 million compared to $91.8 million in the prior year period. R&D expenses included $10.7 million and $11.3 million of non-cash stock compensation expense in the first quarters of 2016 and 2015, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 19.8%, including 0.9% attributable to GRAIL and Helix. This compares to 14.9% in the prior year period.

Selling, general and administrative (SG&A) expenses for the first quarter of 2016 were $149.2 million compared to $116.3 million in the prior year period. SG&A expenses included $22.0 million and $18.0 million of non-cash stock compensation expense in the first quarters of 2016 and 2015, respectively. Excluding these charges, amortization of acquired intangible assets, and contingent compensation, SG&A expenses as a percentage of revenue were 21.9%, including 0.6% attributable to GRAIL and Helix. This compares to 18.0% in the prior year period.

Depreciation and amortization expenses were $33.2 million and capital expenditures were $53.4 million during the first quarter of 2016. The company settled the remaining 0.25% Convertible Senior Notes of $75.5 million. At the close of the quarter, the company held $1.34 billion in cash, cash equivalents and short-term investments, compared to $1.39 billion as of January 3, 2016.

"As we have previously shared, Q1 was a slower start to the year than we expected," stated Jay Flatley, Chairman and CEO. "Our view of the growth potential of the sequencing market remains unchanged, as the largest opportunities are in their earliest stages of development. In the near-term, we are focused on improving execution to restore the growth rate we believe our markets can support."

Updates since our last earnings release:

Introduced BaseSpace Informatics Suite, a complete set of genomics software tools and solutions to facilitate precision medicine and genomics research
Applied CE mark to VeriSeq NIPT Analysis Software for use in clinical laboratories
Announced partnerships to enable long read applications including co-marketing agreements with 10X Genomics and NRGene
Entered into a partnership with Genomics England to develop a platform and knowledge base to improve and automate genome interpretation
Committed $100 million to a new venture capital firm that will pursue early stage investments which are strategically aligned with Illumina’s vision
Announced that on July 5, 2016 Jay Flatley will assume the role of Executive Chairman of the Board of Directors and Francis deSouza will be appointed President and Chief Executive 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 2016, the company is projecting approximately 12% revenue growth and non-GAAP earnings per diluted share attributable to Illumina stockholders of $3.35 to $3.45. For the second quarter 2016, the company is projecting revenue of $590 million to $595 million and non-GAAP earnings per diluted share attributable to Illumina stockholders of $0.72 to $0.74.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, May 3, 2016. Interested parties may listen to the call by dialing 888.687.3295 (passcode: 85797542), or if outside North America by dialing +1.503.406.4070 (passcode: 85797542). Individuals may access the live teleconference in the Investor Relations section of Illumina’s web site under the "company" tab at www.illumina.com.

A replay of the conference call will be available from 5:00 pm Pacific Time (8:00 pm Eastern Time) on May 3, 2016 through May 10, 2016 by dialing 855.859.2056 (passcode: 85797542), or if outside North America by dialing +1.404.537.3406 (passcode: 85797542).

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 stock compensation expense, 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 believes that presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of the company’s core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the company’s past and future operating performance.

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.

On May 03, 2016 Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA) today reported its financial results for the first quarter ended March 31, 2016 (Press release, Momenta Pharmaceuticals, MAY 3, 2016, View Source [SID:1234511810]).

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For the first quarter of 2016, the Company reported total revenues of $19.9 million, including $14.8 million in product revenues from Sandoz’s sale of Glatopa (glatiramer acetate injection). Momenta reported a net loss of $(24.0) million, or $(0.35) per share for the first quarter compared to a net loss of $(21.9) million, or $(0.40) per share for the same period in 2015. At March 31, 2016, the Company had cash, cash equivalents, and marketable securities of $362.8 million compared to $350.0 million at December 31, 2015.

"Since the beginning of 2016, Momenta has made steady progress in each of our business areas," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals. "Our biosimilars pipeline continues to advance. The pivotal trial for M923, our biosimilar version of HUMIRA developed in collaboration with Baxalta, is now fully enrolled and our collaboration with Mylan for the development of six biosimilar candidates received HSR clearance and is progressing nicely. In our novel drug portfolio, our Phase 2 trial of necuparanib in patients with pancreatic cancer continues to enroll, and we remain on track for availability of top line data in the second half of 2017. We also received regulatory clearance to initiate a Phase 1 dosing study for M281, our novel anti-FcRn antibody, and anticipate dosing our first subject in the next several weeks.

"For the remainder of 2016, we look forward to continued progress across our pipeline of biosimilar and novel drug programs including the presentation of final Phase 1 results from our necuparanib trial and Phase 1 study of M923," continued Mr. Wheeler.

First Quarter Highlights and Recent Events

Complex Generics:

In the first quarter of 2016, Momenta recorded $14.8 million in product revenues from Sandoz’s Glatopa sales. Since the launch of Glatopa in June 2015, Momenta has recorded $58.2 million in product revenues from Sandoz’s sales of Glatopa reflecting $67.3 million in profit share net of a deduction of $9.1 million for reimbursement to Sandoz of the Company’s share of pre-launch Glatopa-related legal expenses.
The ANDA submitted by Sandoz for a three-times-a-week generic COPAXONE 40 mg (glatiramer acetate injection) is under FDA review. The Company expects to receive tentative regulatory approval in 2016.
A district court trial challenging Teva’s four Orange Book-listed patents for COPAXONE 40 mg (glatiramer acetate injection) is scheduled for September 26, 2016.
Momenta’s product revenues from Sandoz’s net sales of enoxaparin sodium injection decreased from $2.7 million in the first quarter of 2015 to zero for the same period in 2016.
Biosimilars:

In April 2016, Momenta and Baxalta completed enrollment in the pivotal clinical trial for M923, a biosimilar candidate of HUMIRA (adalimumab). The companies are targeting first regulatory submission in 2017 and a first commercial launch as early as 2018. The Company plans to present data from the pharmacokinetics study of M923 in a poster session at the European League against Rheumatism (EULAR) Annual Congress in London on June 10, 2016.
In January 2016, Momenta announced a global collaboration with Mylan N.V. to develop, manufacture and commercialize six of the Company’s biosimilar candidates, including M834, a biosimilar candidate of ORENCIA (abatacept). On February 9, 2016, the companies received clearance for the collaboration under the Hart-Scott-Rodino Antitrust Improvements Act. In the first quarter of 2016 Momenta received an upfront cash payment of $45 million from Mylan.
In January 2016, the U.S. Patent and Trademark Office (PTAB) instituted Momenta’s request for an Inter Partes Review proceeding to challenge Bristol Myers Squibb’s U.S. formulation Pat. 8,476,239 for ORENCIA. The Company expects a decision from the PTAB in January 2017.
Novel Drugs:
Necuparanib (novel oncology candidate)

Momenta’s Phase 2 trial to evaluate the antitumor activity of necuparanib in combination with Abraxane (nab-paclitaxel) plus gemcitabine, versus Abraxane plus gemcitabine alone, is enrolling. The Company expects to have clinical data in the second half of 2017.
Momenta continues to collect data from the Phase 1 study of necuparanib and plans to present final data in a poster session at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June 2016.
Autoimmune Drugs
Momenta’s three novel autoimmune candidates are in preclinical development. These candidates include a hyper-sialylated IVIg (hsIVIg), a high potency alternative to IVIg, and two recombinant molecules: M230, a Selective Immunomodulator of Fc receptors (SIF3) and M281, an anti-FcRn monoclonal antibody. The Company is advancing the recombinant candidates with a goal of initiating clinical trials in 2016 for M281, and in 2017 for M230. The Company is continuing its efforts to identify and explore potential collaboration opportunities for the further development and commercialization of its hsIVIg program.

First Quarter 2016 Financial Results

Total revenues for the first quarter of 2016 were $19.9 million compared to $8.6 million for the same period in 2015. Total revenues for the first quarter of 2016 include $14.8 million in product revenue from Glatopa, which launched in June 2015, and no product revenue from enoxaparin, as no contractual profit was earned on Sandoz’s net sales of enoxaparin for the quarter. Total revenue in the first quarter of 2015 included enoxaparin product revenue of $2.7 million. The decrease in enoxaparin product revenue is due to the change in collaboration economics from a royalty payment to 50% profit share, decreased unit sales due to lower market share and continued competitive pricing.

Collaborative research and development revenue for the first quarter of 2016 was $5.1 million compared to the $5.8 million recorded in the same quarter last year. In the first quarter of 2016, the Company received a $45.0 million upfront payment from Mylan. The upfront payment was allocated to the six products and will be recognized as revenue ratably over the estimated development periods of the six products in the collaboration. In the first quarter of 2016, $0.9 million of collaborative revenue from Mylan was recognized. The decrease in the balance of research and development revenue of $1.6 million from the 2015 period to the 2016 period is due primarily to lower reimbursable costs for M923, as Baxalta has assumed clinical development responsibility for that program.

The Company expects that collaborative research and development revenue earned by Momenta related to reimbursement from Baxalta and Sandoz will fluctuate from quarter to quarter in 2016 depending on research and development activities. The quarterly recognition of consideration under the Company’s collaborations with Baxalta and Mylan is expected to be $2.4 million and $1.8 million per quarter, respectively.

Research and development expenses for the first quarter of 2016 were $28.8 million (net of $3.7 million reimbursable from Mylan), compared to $22.7 million for the same period in 2015. The increase of $6.1 million, or 27%, from the 2015 period was due to increases of $5.0 million in personnel-related expenses primarily attributed to the reversal of prior period share-based compensation expense in the first quarter of 2015 associated with performance-based stock awards, $3.3 million in third-party research and process development costs for the Company’s biosimilar and novel autoimmune drug programs, $0.6 million of facility and depreciation expense, $0.6 million in necuparanib Phase 2 clinical trial expenses and $0.3 million in professional fees.

General and administrative expenses for the quarter ended March 31, 2016 were $15.6 million, compared with $7.9 million for the same period in 2015. The increase of $7.7 million, or 97%, was due to $6.3 million in personnel-related expenses primarily due to the reversal of prior period share-based compensation expense in the first quarter of 2015 associated with performance-based stock awards and a $1.4 million increase in professional fees.

At March 31, 2016, Momenta had $362.8 million in cash, cash equivalents and marketable securities.

Financial Guidance

The Company’s guidance for the first quarter of 2016 for operating expenses, excluding stock-based compensation expense and net of collaborative reimbursement revenues from Sandoz and Baxalta, was $45 – $55 million. As shown in the table below, reported operating expenses, excluding stock-based compensation expense and net of collaborative reimbursement revenues from Sandoz and Baxalta, were $37.9 million. The guidance for the first quarter did not include consideration of the Mylan collaboration, in which the Company presents the cost sharing reimbursement from Mylan as a reduction in operating expenses. Excluding the impact of the Mylan collaboration cost-sharing of $3.8 million, operating expenses were $41.7 million, as compared with guidance of $45 – $55 million. The lower expenses in the first quarter were primarily due to the timing of process development and manufacturing activities.

Three Months
Ended March 31,
2016 2015
Operating expenses:
As reported $ 44,404 $ 30,639
Share-based compensation (expense) income (4,828 ) 4,385
Less: Collaborative reimbursement (1,686 ) (4,154 )
Subtotal 37,890 30,870
Add: Mylan collaboration cost-sharing 3,792 —
$ 41,682 $ 30,870

Today, Momenta provided guidance that it expects operating expenses (which will be reported net of Mylan’s share of collaboration expenses), excluding stock-based compensation expense and net of collaborative reimbursement revenues from Sandoz and Baxalta, to be approximately $40 – $45 million per quarter for the remainder of 2016.