On April 28, 2016 Baxalta Incorporated (NYSE: BXLT), a global biopharmaceutical leader dedicated to delivering transformative therapies to patients with orphan diseases and underserved conditions, reported strong first quarter 2016 financial results (Press release, Baxalta, APR 28, 2016, View Source [SID:1234511527]).
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"Baxalta’s strong financial performance continues to highlight the attractive growth prospects that exist across the portfolio," said Ludwig Hantson, chief executive officer and president, Baxalta. "As we embark on the next phase of our journey, the outstanding contributions of our team will result in enhanced access to differentiated therapies that improve patient care and promising new treatments that address unmet medical needs."
Financial Results for the First Quarter 2016
In the first quarter, Baxalta generated net income on a GAAP basis of $145 million and earnings of $0.21 per diluted share. These results include net after-tax special items totaling $181 million, or $0.26 per diluted share, primarily for intangible asset amortization, expenses associated with the company’s separation from Baxter International (NYSE: BAX) and anticipated merger with Shire plc (LSE: SHP, NASDAQ: SHPG), as well as collaboration and business optimization charges.
On an adjusted basis, excluding special items, Baxalta reported first quarter net income of $326 million, or $0.47 per diluted share, which compares favorably to the company’s previously-issued guidance of $0.44 to $0.46 per diluted share. These financial results reflect robust sales, and higher gross margins, providing enhanced flexibility for accelerated investments in research and development, marketing and launch preparedness, and global infrastructure to position the company for future success.
Sales Momentum Across Differentiated Portfolio
In the first quarter, on a GAAP basis, Baxalta’s worldwide revenues of $1.5 billion advanced 14 percent from the prior-year period. Excluding the impact of foreign currency, sales advanced 18 percent.
On a pro forma basis, worldwide revenues increased 10 percent. Excluding the impact of foreign currency, sales advanced 14 percent, exceeding the company’s previously-issued guidance of growth in the 8 to 9 percent range. Within the United States, sales of $879 million rose 16 percent; international sales of $669 million increased 3 percent. Excluding foreign currency, international sales increased 11 percent.
By business, global hematology revenues of $843 million increased 8 percent (excluding the impact of foreign currency) as the company continues to focus on enhancing access and elevating standards of care worldwide. Growth was driven by the U.S. introduction of ADYNOVATE [Antihemophilic Factor (Recombinant), PEGylated], an extended circulating half-life recombinant Factor VIII (rFVIII) treatment for hemophilia A, as well as heightened demand for ADVATE [Antihemophilic Factor (Recombinant)] and FEIBA [Anti-Inhibitor Coagulant Complex], an inhibitor treatment. Also contributing to performance was growth of RIXUBIS [Coagulation Factor IX (Recombinant)], a treatment for hemophilia B, and OBIZUR [Antihemophilic Factor (Recombinant), Porcine Sequence], for the treatment of acquired hemophilia A.
Immunology sales of $653 million advanced 13 percent on a pro forma basis (excluding the impact of foreign currency). The company continues to capitalize on its broad and differentiated portfolio of immunoglobulin therapies, including HYQVIA [Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase], and is driving strong sales of specialty biotherapeutics.
Baxalta’s new oncology business recorded sales of $52 million in the quarter. This reflects revenues of ONCASPAR (pegaspargase), a marketed biologic treatment for acute lymphoblastic leukemia (ALL).
First Quarter 2016 Highlights and Key Milestone Achievements
Baxalta’s disciplined strategic decisions are accelerating innovation and supporting meaningful pipeline achievements, unlocking value for patients, customers and shareholders.
"Our commitment to serving patients is our inspiration," added Hantson. "We have an incredible legacy of developing differentiated therapies. Baxalta’s patient-centric approach will continue to enhance the lives of people with orphan diseases and underserved conditions, and create sustainable, long-term value for all of our partners and stakeholders."
Complementing the company’s strong financial performance in the first quarter are a number of recent achievements:
Expanding the ADYNOVATE label and geographic reach with approval in Japan for the treatment of pediatric, adolescent and adult patients with hemophilia A and for use during surgery; submission in the U.S. of supplemental Biologics License Applications (sBLAs) to the FDA for the treatment of children under the age of 12 with hemophilia A and for use in surgical settings; and the filing of a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for approval under the name, ADYNOVI.
Developing further options for direct factor replacement treatment with the initiation of the Phase 1 first-in-human clinical trial of BAX 826, a second extended half-life treatment based on ADVATE that uses proprietary polysialic acid (PSA) technology and targets weekly dosing for patients with hemophilia A.
Undertaking efforts to expand global access and indications for HYQVIA including recent regulatory approval in Australia. In addition, the company has received orphan drug designation from the FDA for the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP), a neurological disorder characterized by progressive weakness and impaired sensory function in the legs and arms, and a Phase 3 clinical trial is underway.
Leveraging the company’s global development, manufacturing and commercial capabilities to make leading biologics more accessible for patients including BAX 2200 (CHS-0214), a proposed biosimilar of Enbrel (etanercept), which met its primary endpoint in a confirmatory, double-blind, randomized, controlled, two-part clinical study. This ongoing study is evaluating the efficacy and safety of BAX 2200 compared to Enbrel in patients with moderate-to-severe rheumatoid arthritis that is inadequately controlled with methotrexate alone.
Accelerating treatment for patients with significant unmet medical needs with Health Canada’s Priority Review of the New Drug Submission (NDS) for irinotecan liposome injection, also known as "nal-IRI," for the treatment of patients with metastatic adenocarcinoma of the pancreas previously treated with gemcitabine-based therapy. The expedited review is expected to be conducted in the second half of 2016.
Accelerating innovation in growing immuno-oncology portfolio with announcement of global collaboration with Precision BioSciences, a genome editing company, to develop a broad series of allogeneic chimeric antigen receptor (CAR) T cell therapies directed toward areas of major unmet need in multiple cancers. The companies will develop CAR T therapies for up to six unique targets, with the first program expected to enter clinical studies in late 2017.
Additional Information
Given the proposed merger agreement with Shire plc announced on January 11, 2016, Baxalta will not be hosting an investor conference call to discuss financial results. In addition, the company will not be providing financial guidance for the second quarter or full-year 2016, and previously-issued guidance for Baxalta as a standalone entity is no longer applicable.
The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and approval by both Baxalta’s and Shire’s stockholders. The special meeting of stockholders to adopt the merger agreement with Shire will be held on May 27, 2016, at 7:00 a.m. Central Time, for Baxalta stockholders of record as of the close of business on April 11, 2016. The special meeting will be held at Baxalta’s corporate headquarters, located at 1200 Lakeside Drive, Bannockburn, Illinois 60015. The transaction is expected to close shortly after the special meeting takes place, assuming stockholder approval is received by both companies.
Complementary information related to Baxalta’s first quarter 2016 financial results may be accessed by visiting the Baxalta corporate website at investor.baxalta.com.