On May 3, 2016 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company with a diverse portfolio of products in the areas of maternal health, anemia management and cancer supportive care, reported unaudited consolidated financial results for the first quarter ended March 31, 2016 (Filing, Q1, AMAG Pharmaceuticals, 2016, MAY 3, 2016, View Source [SID:1234511834]).

Most notably, the first quarter of 2016 included the approval of a single-dose, preservative-free formulation of Makena (hydroxyprogesterone caproate injection). Prior to the commercial availability of this new Makena formulation, healthcare providers and patients who wanted a preservative-free formulation of hydroxyprogesterone caproate had to use non-FDA-approved, compounded versions. The company believes the commercial launch of the single-dose, preservative-free formulation of Makena will enable AMAG to capture significant additional share from the compounded segment of the market. The company estimates that compounding pharmacies currently hold approximately 37% of the Makena-eligible market. Additionally, AMAG entered into an agreement with a leading provider of home nursing services, which will exclusively administer Makena to all indicated patients who are eligible for their home health services.

"We are off to a strong start in 2016, achieving goals on our next-generation program for Makena, including the commercial launch of our new single-dose, preservative-free formulation, as well as solidifying an important new strategic relationship to further expand access to FDA-approved Makena," said William Heiden, AMAG’s chief executive officer. "First quarter 2016 sales of Makena increased 17% over the prior year, and early data from the recent launch of the new formulation of Makena, including April enrollment data at the Makena Care Connection that is up approximately 50% over March, suggests an acceleration in sales growth. We expect these trends to continue through the remainder of the year and are confirming our annual net product sales guidance for Makena."

"CBR, our newborn stem cell preservation offering, as well as our anemia management and cancer supportive care products, performed in-line with our expectations and remain on track with our 2016 sales guidance," added Mr. Heiden.

1 See summaries of non-GAAP adjustments for the three months ended March 31, 2016 and 2015 at the conclusion of this press release.

First Quarter 2016 and Recent Business Highlights:

· Increased net product sales of Makena to $65 million, compared with $55.5 million in the first quarter of 2015. This growth in sales was driven by a 16% increase in volume as more at-risk pregnant women were treated with Makena. Net revenue per injection was up 1% versus the first quarter of 2015.

· Received approval from the Food and Drug Administration (FDA) in February 2016 for a single-dose, preservative-free formulation of Makena and began commercial promotion in April 2016.

· Entered into a new agreement with a leading provider of home nursing services, which had previously utilized compounded hydroxyprogesterone caproate and now will exclusively provide at-home administration of Makena.

· Continued development of the next-generation program to deliver Makena subcutaneously via an auto-injector, with a range of activities underway, such as CMC work and pilot pharmacokinetic studies. The company currently anticipates filing the supplemental New Drug Application (sNDA) in the second quarter of 2017 and recently received confirmation from the FDA that the review time will be six months from submission.

· Generated a record $24.2 million of Feraheme (ferumoxytol) sales in the first quarter of 2016, or 13% growth over the same period in the prior year. Strong execution of the Feraheme business strategies by the commercial team enabled the company to realize a 7% increase in volume.

· Began enrolling patients in a head-to-head, Phase 3 clinical trial evaluating the safety of Feraheme compared to Injectafer (ferric carboxymaltose injection) in adults with iron deficiency anemia (IDA). This study is intended to support an sNDA filing to broaden the use of Feraheme beyond the current chronic kidney disease (CKD) indication to include all adult IDA patients who have failed or cannot tolerate oral iron treatment.

· Increased cash, cash equivalents and investments by $13.9 million to $480 million, net of $12 million utilized to purchase the company’s common stock and to repay debt.

· Strengthened the executive management team with the additions of Nik Grund as chief commercial officer and Ted Myles as chief financial officer.

First Quarter Ended March 31, 2016 (unaudited)

Financial Results (GAAP Basis)

Total revenues for the first quarter of 2016 were $109.3 million, compared with $89.5 million in the first quarter of 2015. Net product sales of Makena were $65.0 million in the first quarter of 2016, compared with $55.5 million in the same period last year. Sales of Feraheme and MuGard totaled $24.5 million in the first quarter of 2016, compared with $21.9 million in the first quarter of 2015. Service revenue from Cord Blood Registry (CBR), which AMAG purchased in August 2015, totaled $19.5 million in the first quarter of 2016.

Costs of product sales and services totaled $23.8 million in the first quarter of 2016. In the first quarter of 2015, cost of product sales totaled $21.0 million and did not include CBR cost of services. Total operating expenses for the first quarter of 2016 were $78.0 million, compared with $39.7 million for the same period in 2015. The increase in operating expenses was primarily due to the acquisition of CBR in the third quarter of 2015, including the non-cash amortization of intangible assets, and higher research and development

costs. These R&D costs included the initiation of the company’s Phase 3 clinical trial to broaden the use of Feraheme to include all adult IDA patients, costs to support our Makena subcutaneous auto-injector and costs associated with preparing and filing with the FDA for a second source manufacturer of the single-dose, preservative-free formulation of Makena.

The company reported operating income of $7.4 million and a net loss of $7.5 million, or ($0.22) per basic and diluted share, for the first quarter of 2016, compared with operating income of $28.8 million and net income of $12.9 million, or $0.47 per basic share and $0.39 per diluted share, for the same period in 2015.

Financial Results (Non-GAAP Basis)1,2

Non-GAAP revenues totaled $117.9 million in the first quarter of 2016, up from $83.1 million in the first quarter of 2015. Non-GAAP CBR revenue totaled $28.1 million in the first quarter of 2016. The difference between GAAP and non-GAAP revenue for CBR represents purchase accounting adjustments related to deferred revenue. Non-GAAP revenue in 2015 excludes certain non-cash revenue related to the company’s ex-U.S. marketing agreement with its former partner, Takeda Pharmaceutical Company Limited.

Total costs and expenses on a non-GAAP basis totaled $70.4 million resulting in a gross margin of 92% and adjusted EBITDA margin of 40% for the first quarter of 2016. This compares to costs and expenses of $35.7 million in the same period of 2015, which resulted in a gross margin of 96% and adjusted EBITDA margin of 57%. The decline in gross margin resulted from the acquisition of CBR, which carries lower gross margins than the company’s pharmaceutical products. Investments in research and development to enhance the long-term revenue potential of Makena and Feraheme contributed to the lower adjusted EBITDA margin in the first quarter of 2016. Non-GAAP adjusted EBITDA for the first quarter of 2016 was $47.5 million, compared with $47.4 million for the same period in 2015.

After deducting cash interest expense, the company generated first quarter 2016 non-GAAP net income of $32.9 million, or $0.95 per non-GAAP basic share and $0.94 per non-GAAP diluted share. In the first quarter of 2015, non-GAAP net income totaled $40.0 million, or $1.47 per non-GAAP basic share and $1.17 per non-GAAP diluted share.

Balance Sheet Highlights

As of March 31, 2016, the company’s cash and investments totaled approximately $480 million and total debt (principal amount outstanding) was approximately $1.04 billion.

"We are reiterating our full year 2016 guidance for revenue, adjusted EBITDA and non-GAAP net income, including top-line revenue growth of approximately 40%, which underscores the strong recent trends for Makena and the overall underlying demand we are generating across our portfolio of products," said Frank Thomas, president and chief operating officer. "During the quarter and throughout 2016, we are investing in our products through R&D to potentially expand our label for Feraheme and provide more patient- and provider-friendly versions of Makena. We believe these investments will enhance the long-term revenue potential of these products."

2 See share count reconciliation at the conclusion of this press release.

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On May 3, 2016 Rigel Pharmaceuticals, Inc. (Nasdaq:RIGL) reported financial results for the first quarter ended March 31, 2016 (Press release, Rigel, MAY 3, 2016, View Source;p=RssLanding&cat=news&id=2164508 [SID:1234511894]).

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"We look forward to our upcoming Phase 3 data as we continue with our planning for the potential commercial launch of fostamatinib in the United States," said Raul Rodriguez, president and chief executive officer of Rigel. "Also, we initiated the Phase 2 proof-of-concept study with fostamatinib in autoimmune hemolytic anemia (AIHA). We anticipate that the results of these studies as well as the IgA nephropathy study will be forthcoming later this year," he added.

During the first quarter, Rigel announced that patient enrollment was completed for the two studies in the FIT Phase 3 clinical program of fostamatinib in immune thrombocytopenic purpura (ITP). The results from the first study are expected in the middle of 2016, with the results for the second study expected shortly thereafter. Rigel plans to submit a New Drug Application to the Food and Drug Administration in the first quarter of 2017, subject to the results of the program. In addition, Rigel is in the early stages of establishing its sales and marketing infrastructure for the commercial launch of fostamatinib.

For the first quarter of 2016, Rigel reported a net loss of $17.5 million, or $0.19 per share, compared to a net loss of $18.2 million, or $0.21 per share, in the first quarter of 2015.

Contract revenues from collaborations of $5.0 million in the first quarter of 2016, compared to $2.2 million in the first quarter of 2015, were comprised of the amortization of the $30.0 million upfront payment and FTE fees earned pursuant to Rigel’s collaboration and license agreement with Bristol-Myers Squibb.

Rigel reported total costs and expenses of $22.6 million in the first quarter of 2016, compared to $20.4 million in the first quarter of 2015. The increase in costs and expenses was primarily due to the increase in research and development costs related to Rigel’s clinical research programs with fostamatinib in ITP and AIHA.

As of March 31, 2016, Rigel had cash, cash equivalents and short-term investments of $103.6 million, compared to $126.3 million as of December 31, 2015. Rigel expects this amount to be sufficient to fund operations into the third quarter of 2017.

On May 03, 2016 Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported financial results for first quarter 2016 and associated company developments (Press release, Supernus, MAY 3, 2016, View Source [SID:1234511895]).

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Commercial Update

First quarter 2016 product prescriptions for Trokendi XR and Oxtellar XR, as reported by IMS, totaled 114,773, a 49.7% increase over the first quarter of 2015.

Prescriptions
Q1 2016 Q1 2015 Change %

Trokendi XR 85,987 55,227 55.7 %
Oxtellar XR 28,786 21,463 34.1 %

Total 114,773 76,690 49.7 %

Source Data: Product prescriptions as reported by IMS

Total revenue for the first quarter of 2016 was $43.1 million, a 53.1% increase over $28.1 million in the same period last year. Total revenue for both periods consisted almost exclusively of net product sales.

Net Product Sales ($mil.)
Q1 2016 Q1 2015 Change %

Trokendi XR $ 32.3 $ 20.9 54.5 %
Oxtellar XR $ 10.7 $ 7.2 49.3 %

Total $ 43.0 $ 28.1 53.1 %

Consistent with industry trends and the Company’s experience in the first quarter last year, product prescriptions and net product sales for Trokendi XR and Oxtellar XR were unfavorably impacted by the reset of insurance coverage at the beginning of the year, with high deductible and high co-pay programs. Additionally, changes in wholesaler inventory levels and ordering patterns during the first quarter of 2016 had the effect of reducing net product sales by approximately $3 million in the first quarter of 2016.

"Our business continues to post strong growth compared to last year. Total first quarter IMS prescriptions, and net product sales grew by 50% or more compared to the same period last year. We continue to build on the momentum we finished with last year promoting the benefits of our products to patients with epilepsy," said Jack Khattar, President and CEO of Supernus Pharmaceuticals.

Regarding our supplemental new drug application requesting approval to expand the Trokendi XR label to include treatment of migraine in adults, we are ready to launch the new migraine indication once we receive full approval from the FDA.

Progress of Product Pipeline

Enrollment continues for both Phase III trials for SPN-810, which is currently in development for Impulsive Aggression in patients who have ADHD, and for the Phase IIb trial for SPN-812, currently in development for ADHD. The Company continues to expect Phase III data for SPN-810 to be available by mid 2017, and data from the SPN-812 Phase IIb trial to be available by early 2017.

"In addition to our recent findings on the favorable emerging clinical profile of SPN-812 as it relates to adverse events, we completed the evaluation of the cardiac effects portion of the single ascending and multiple ascending dose study. We are pleased to report that there was no clinically significant change in QT interval and other ECG parameters. We believe these additional safety data in adult healthy volunteers, which show a lack of cardiac effects, are very encouraging and further strengthen the differentiation of SPN-812," said Jack Khattar.

Collaboration Update

Shire recently announced positive results of SHP465 in a safety and efficacy study in children and adolescents with ADHD. The study addresses a key U.S. Food and Drug Administration (FDA) requirement, keeping SHP465 on track for resubmission in the fourth quarter of 2016 and a potential launch in the second half of 2017, if it is approved by the FDA. SHP465 was originally developed by Shire Laboratories, the former division of Shire that subsequently became Supernus Pharmaceuticals. Based on the agreement between Supernus and Shire, Shire will pay to Supernus a single-digit percentage royalty on net sales of the product.

Operating Expenses

Research and development expenses in the first quarter of 2016 were $10.6 million, as compared to $3.7 million in the same quarter the prior year. This increase is primarily due to the ongoing Phase III testing of SPN-810 and Phase IIb testing of SPN-812.

Selling, general and administrative expenses in the first quarter of 2016 were $25.2 million, as compared to $19.4 million in the same quarter the prior year. The increase is primarily due to the continued increase in our sales and marketing efforts for both Trokendi XR and Oxtellar XR and the efforts in preparing for the launch of the migraine indication for Trokendi XR.

Operating Income and Earnings Per Share

Operating income in the first quarter of 2016 was $5.3 million, an increase of 55.0% over operating income of $3.4 million in the same period last year. This improvement in operating income is primarily due to the increase in net product sales.

Diluted earnings per share were $0.08 in the first quarter ended March 31, 2016, compared to $0.02 in the same period last year.

Weighted-average diluted common shares outstanding were approximately 51.2 million in the first quarter of 2016, as compared to approximately 44.9 million in the same period the prior year.

Capital Resources

As of March 31, 2016, the Company had $114.0 million in cash, cash equivalents, marketable securities, and long term marketable securities, as compared to $117.2 million at December 31, 2015. As of March 31, 2016, approximately $6.6 million of the Company’s six year, $90 million notes, bearing interest at 7.5% per annum, remain outstanding.

Financial Guidance

For full year 2016, the Company reiterates its expectation that net product sales will range from $200 million to $210 million, R&D expenses to range from $55 million to $65 million, and operating income to range from $28 million to $35 million.

On May 3, 2016 MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX, OTC: MPSYY) reported its first quarter interim statement, outlining the key events of the first three months ending March 31, 2016 (Press release, MorphoSys, MAY 3, 2016, View Source [SID:1234511804]).

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Financial results for the first quarter of 2016

Group revenue in the first quarter of 2016 reached EUR 12.1 million (Q1/2015: EUR 70.4 million), and EBIT was EUR -9.7 million (Q1/2015: EUR 52.8 million). Previous-year figures included a non-recurring effect of approximately EUR 59 million.
The Group’s liquidity position on March 31, 2016 amounted to EUR 287.0 million (December 31, 2015: EUR 298.4 million).
The Company confirmed its 2016 financial year guidance for revenue in the range of EUR 47 million to EUR 52 million and EBIT in the range of EUR -58 million to EUR -68 million.
Operating highlights of the first quarter of 2016

In January, MorphoSys disclosed the receipt of a milestone payment in connection with the start of a global phase 2 clinical study. This study was initiated by Bayer and is designed to support registration of anetumab ravtansine (BAY 94-9343) as a potential new treatment for mesothelioma.
In March, MorphoSys repurchased 52,295 of its own shares in the amount of EUR 2,179,963 to be used for long-term incentive (LTI) programs, specifically the LTI Plan granted on April 1, 2016 to the Company’s Management Board and Senior Management Group.
At the end of the first quarter, MorphoSys’s product pipeline comprised a total of 104 therapeutic antibodies, 26 of which are in clinical development. Three partnered programs are currently in phase 3 trials.
Events after the end of the first quarter of 2016

In early April, MorphoSys announced the start of a phase 2 clinical combination trial which has been named L-MIND (Lenalidomide-MOR208 IN DLBCL), with MOR208 and the cancer drug lenalidomide (Revlimid) in patients with diffuse large B-cell lymphoma (DLBCL).
Also in early April, MorphoSys announced the initiation of a phase 1 trial with the Ylanthia antibody MOR106, which is being co-developed with Galapagos for the treatment of inflammatory diseases.
On April 4, 2016, MorphoSys announced that it filed a lawsuit in the United States (U.S.) District Court of Delaware against Janssen Biotech and Genmab for patent infringement. With this complaint, MorphoSys seeks redress for the infringing manufacture, use and sale of Janssen’s and Genmab’s daratumumab, an antibody targeting CD38.
On April 21, 2016, MorphoSys announced that its partner Novartis confirmed that a phase 2b/3 study examining bimagrumab (BYM338) in sporadic Inclusion Body Myositis (sIBM) did not meet its primary endpoint. Data are currently being reviewed and will inform decisions on the bimagrumab development program. Ongoing clinical trials are being continued at this time.
In EURO million* 3-Months 2016 3-Months 2015


Group Revenues 12.1 70.4
Total Operating Expenses 21.9 17.7
Other Income/Expenses 0.1 0.0
Earnings Before Interest and Taxes – EBIT (9.7) 52.8
Consolidated Net Profit / (Loss) (7.2) 40.9
Total EPS, diluted, in EURO (0.28) 1.55

* Differences due to rounding

"The proprietary portfolio is making excellent progress with the first combination trial of MOR208 now ongoing, and the start of clinical development of MOR106, an innovative new antibody from our collaboration with Galapagos," stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "The outcome of the phase 3 bimagrumab trial was disappointing, but we look forward to reporting on multiple milestones in 2016, including results from the registration trials for guselkumab and additional data from our broad development pipeline."

"The results for the first three months of 2016 are fully in line with our expectations. With our solid financial position, we are well-positioned to continue delivering on our research and development goals," commented Jens Holstein, Chief Financial Officer of MorphoSys AG. "We will continue to focus on the expansion of our pipeline."

Financial Review of the First Three Months of 2016 (IFRS)

In comparison to the previous year, Group revenues declined to EUR 12.1 million (Q1/2015: EUR 70.4 million). Revenues in the comparable period of 2015 contained a non-recurring effect in the amount of about EUR 59 million from the termination of the partnership with Celgene to co-develop and co-promote MOR202. Success-based payments amounted to 8%, or EUR 1.0 million (Q1/2015: 1%, or EUR 0.5 million), of total revenue. The Proprietary Development segment recorded revenues of EUR 0.1 million (Q1/2015: EUR 59.4 million). Revenues in the Partnered Discovery segment comprised EUR 12.0 million (Q1/2015: EUR 11.0 million).

Total operating expenses for the first three months of 2016 amounted to EUR 21.9 million (Q1/2015: EUR 17.7 million). Total research and development expenses were EUR 18.6 million (Q1/2015: EUR 14.7 million). R&D expenses mainly consisted of costs for external lab services and personnel costs. General and administrative expenses increased slightly to EUR 3.2 million (Q1/2015: EUR 3.0 million) mainly driven by higher expenses for personnel. Earnings before interest and taxes (EBIT) amounted to EUR -9.7 million (Q1/2015: EUR 52.8 million).

The Proprietary Development segment reported a segment EBIT of EUR -14.3 million (Q1/2015: EUR 49.7 million), while Partnered Discovery showed a segment EBIT of EUR 7.7 million (Q1/2015: EUR 5.8 million). Proprietary R&D expenses including technology development amounted to EUR 14.6 million (Q1/2015: EUR 10.4 million).

On March 31, 2016, the Group’s liquidity position amounted to EUR 287.0 million compared to EUR 298.4 million on December 31, 2015. The Company’s liquidity is reflected in the balance sheet items "cash and cash equivalents", "available-for-sale financial assets", "bonds, available-for-sale" and current and non-current "financial assets classified as loans and receivables". The decline in liquidity was mainly the result of the use of cash for operations in the first three months of 2016 and for the repurchase of shares for the Group’s long-term incentive programs.

Financial guidance for 2016

MorphoSys re-confirmed its guidance for 2016. MorphoSys anticipates total Group revenues in the range of EUR 47 million to EUR 52 million and expects EBIT to be in the range of EUR -58 million to EUR -68 million. Proprietary R&D expenses are expected to rise to EUR 76 million to EUR 83 million. This guidance does not include any potential in-licensing or co-development of additional development candidates.

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.