Diplomat Announces 3rd Quarter Financial Results

On November 6, 2017 Diplomat Pharmacy, Inc. (NYSE: DPLO), the nation’s largest independent provider of specialty pharmacy services, reported financial results for the quarter ended September 30, 2017 (Press release, Diplomat Speciality Pharmacy, NOV 6, 2017, View Source [SID1234521604]). All comparisons, unless otherwise noted, are to the quarter ended September 30, 2016.

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Diplomat Specialty Pharmacy (PRNewsFoto/Diplomat Pharmacy, Inc.)

Third Quarter 2017 Highlights include:

Revenue of $1,125 million, compared to $1,181 million
Total prescriptions dispensed of 222,000, compared to 266,000
Gross margin of 7.6% versus 6.6%
Gross profit per prescription dispensed of $360, compared to $289
Net income attributable to Diplomat of $1.0 million, compared to $5.4 million
Adjusted EBITDA of $23.2 million, compared to $22.6 million
Adjusted EBITDA margin of 2.1% versus 1.9%
EPS of $0.01 per diluted common share versus $0.08
Adjusted EPS of $0.25 versus $0.21
Phil Hagerman, CEO and Chairman of Diplomat, commented “Diplomat’s third quarter results were solid as we achieved financial results in-line with our expectations, experienced continued growth in our oncology and infusion businesses and expansion in our access to limited distribution drugs, as well as encouraging trends within the specialty pharmacy industry. I am pleased to announce we have resolved our arbitration with CVS and have transitioned from a PSAO contract to a direct contract with CVS, one of the nation’s largest health care companies. 2017 is a transition year for Diplomat, and we continue to make significant strides, including broadening our services through our acquisitions of NPS and 8th Day Software and enhancing our senior management team to execute on our strategy to become a broader-based health care company.”

Third Quarter Financial Summary:

Revenue for the third quarter of 2017 was $1,125 million, compared to $1,181 million in the third quarter of 2016. The decrease was driven by a loss of approximately $118 million due to contracts that were not renewed in 2017 and approximately $89 million due to a decrease in the demand for hepatitis C drugs versus the prior year period. These decreases were partially offset by approximately $64 million from the impact of manufacturer price increases, approximately $47 million from increased volume and mix with existing payor contracts, approximately $25 million of revenue from our recent acquisitions, and approximately $15 million from drugs that were new in the past year. Our revenue increase year over year excluding the impact of the contract losses was approximately 6%.

Gross profit in the third quarter of 2017 was $85.3 million and generated a 7.6% gross margin, compared to $78.5 million and 6.6% in the third quarter of 2016. The gross margin increase in the quarter was primarily due to the continued growth of our specialty infusion therapeutic category, the impact of our WRB Communications acquisition, each having higher margins, the receipt and recognition of approximately $1 million of insurance proceeds, and the non-repeat of an approximately $4 million direct and indirect remuneration (“DIR”) fee true-up that occurred in the year ago period.

Selling, general, and administrative expenses (“SG&A”) for the third quarter of 2017 were $83.0 million, an increase of $5.9 million, compared to $77.1 million in the third quarter of 2016. Of this change, $4.9 million related to employee cost, of which $5.2 million was employee cost for our recently acquired entities partially offset by operational efficiencies. Also contributing to the SG&A increase was a $2.4 million increase in amortization expense from definite-lived intangible assets, and a $1.9 million increase in the fair value of contingent consideration, both of which are associated with our acquired entities. We also experienced increases in other SG&A; including professional fees, workers’ compensation insurance, and other miscellaneous expenses. These increases were partially offset by the non-repeat of a $4.8 million impairment expense to fully impair certain definite-lived intangible assets in the prior year period. As a percentage of revenue, SG&A excluding change in fair value of contingent consideration and the prior year period impairment was 7.2% for the three months ended September 30, 2017, compared to 6.1% in the prior year period. This increase is primarily attributable to acquisition related amortization, professional fees, and the increased operating complexity associated with both our acquisitions and new drugs.

Net income attributable to Diplomat for the third quarter of 2017 was $1.0 million compared to $5.4 million in the third quarter of 2016. This decrease was primarily driven by the revenue, gross profit, and SG&A explanations above, as well as a $2.6 million change in income taxes. Adjusted EBITDA for the third quarter of 2017 was $23.2 million compared to $22.6 million in the third quarter of 2016.

Earnings per share for the third quarter of 2017 was $0.01 per basic/diluted common share, compared to $0.08 per basic/diluted common share for the third quarter of 2016. Diluted non-GAAP adjusted earnings per share (“Adjusted EPS”) was $0.25 in the third quarter of this year compared to $0.21 in the third quarter of 2016.

2017 Financial Outlook

For the full-year 2017, we are updating our previous financial guidance:

Revenue between $4.4 and $4.6 billion, versus the previous range of $4.3 and $4.6 billion
Net income attributable to Diplomat between $10 and $14 million, versus the previous range of $10 and $16 million
Adjusted EBITDA between $99 and $102 million, versus the previous range of $97 and $103 million
Diluted EPS between $0.15 and $0.20, versus the previous range of $0.15 and $0.23
Adjusted EPS between $0.82 and $0.87, versus the previous range of $0.71 and $0.79
Our EPS and Adjusted EPS expectations assume approximately 68,600,000 weighted average common shares outstanding on a diluted basis and a tax rate of 19%, versus the previous tax rate of 26%, for the full year 2017, which could differ materially.

Earnings Conference Call Information

As previously announced, the Company will hold a conference call to discuss its third quarter performance this evening, November 6, 2017, at 5:00 p.m. Eastern Time. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 833-286-5805 (or 647-689-4450 for international callers) and referencing participant code 95696083 approximately 15 minutes prior to the call. A webcast and audio file of the conference call will be available on the investor relations section of the Company’s website for approximately 90 days at ir.diplomat.is.

AVEO Oncology and EUSA Pharma Announce Promising Phase 1 Results from the Phase 1/2 TiNivo Study of Tivozanib and Nivolumab in Renal Cell Carcinoma

On November 6, 2017 AVEO Oncology (NASDAQ:AVEO) and EUSA Pharma reported the presentation of promising results from the ongoing Phase 1 portion of the TiNivo study, a Phase 1/2 multicenter trial of tivozanib (FOTIVDA) in combination with Bristol-Myers Squibb’s nivolumab (OPDIVO), an immune checkpoint, or PD-1, inhibitor, for the treatment of advanced renal cell carcinoma (RCC) (Press release, AVEO, NOV 6, 2017, View Source;p=RssLanding&cat=news&id=2314412 [SID1234521570]). The results were presented on Friday, November 3, at the 16th International Kidney Cancer Symposium in Miami, in an oral presentation titled "TiNivo: A Phase Ib Dose Escalation Trial of Tivozanib and Nivolumab in Renal Cell Carcinoma" by Laurence Albiges, M.D., Ph.D., Head, Genitourinary Unit, Institute Gustave Roussy, and a lead investigator of the study. A copy of the presentation is available at www.aveooncology.com or further information can be obtained via EUSA Pharma Medical Information.

The Phase 1 portion of the trial enrolled six patients, three with previously untreated metastatic RCC and three who had received first-line treatment. RCC tumor histology included five clear cell (one with sarcomatoid features) and one papillary. Tivozanib was administered to patients in two escalating dose cohorts (1.0 mg/QD and 1.5 mg/QD) in combination with nivolumab at a constant 240 mg every 2 weeks. The combination was well tolerated to the full dose and schedule of single agent tivozanib, with no dose limiting toxicities. The most common adverse events (any grade) were hypertension, asthenia and decreased appetite. No grade 4 adverse events were reported. Two grade 3 events were reported beyond cycle 1 (stomatitis and increased ALT), which did not lead to study discontinuation and were managed concurrently. Unconfirmed best response to date includes a 67% (4/6) partial response (PR) rate and a 100% disease control rate (PR + stable disease). Enrollment of approximately 20 patients in the Phase 2 portion of the trial is ongoing.

"Combining VEGF TKIs and PD-1s holds the potential for synergistic activity against renal cell carcinoma, yet most such combinations demonstrate a high rate of toxicity in the clinic," said Dr. Albiges. "Tivozanib has several distinguishing properties that may enhance its ability to combine with checkpoint inhibitors, including a highest in-class selectivity for the VEGF-Receptor (types 1, 2 and 3), and therefore fewer off-target effects, and the ability to significantly reduce regulatory T cells, thereby enhancing immune activity against the tumor. Tivozanib’s favorable tolerability profile has been demonstrated against sorafenib in the pivotal TIVO-1 study, and early results from the TiNivo study show a tolerable combination and evidence of promising activity."

"We are encouraged by the preliminary tolerability and activity results from the TiNivo study, as we believe they begin to underscore the unique potential of tivozanib-immunotherapy combinations," said Michael Needle, M.D., chief medical officer of AVEO. "With immunotherapy combinations continuing to demonstrate improved outcomes in patients with RCC, it will become increasingly important to leverage the best-in-class VEGF therapies and immunotherapies to optimize efficacy and tolerability in defined populations within this disease. We believe tivozanib is well-positioned within this evolving landscape, and we look forward to presenting the Phase 2 portion of TiNivo in the first half of next year. We also anticipate moving into additional combination studies in the coming quarters."

Lee Morley, EUSA Pharma’s Chief Executive Officer said, "Following the recent European approval of tivozanib (FOTIVDA) for the first-line treatment of patients with advanced RCC, emerging data from the TiNivo study indicates the potential for tivozanib in the setting of combination treatment with immunotherapies. The initial results of the TiNivo study are promising and, in partnership with AVEO, we look forward to developing new and innovative options based on the unique profile of tivozanib which will be important for the future management of patients."

About Tivozanib (FOTIVDA)

Tivozanib (FOTIVDA) is an oral, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI) discovered by Kyowa Hakko Kirin and approved for the treatment of adult patients with advanced renal cell carcinoma in the European Union plus Norway and Iceland. It is a potent, selective and long half-life inhibitor of all three VEGF receptors and is designed to optimize VEGF blockade while minimizing off-target toxicities, potentially resulting in improved efficacy and minimal dose modifications.1,2 Tivozanib has been investigated in several tumors types, including renal cell, colorectal and breast cancers.

10-Q – Quarterly report [Sections 13 or 15(d)]

Xoma has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Xoma, 2017, NOV 6, 2017, View Source [SID1234521616]).

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Novartis reaches another regulatory milestone for CTL019 (tisagenlecleucel) with submission of its MAA* to EMA for children, young adults with r/r B-cell ALL and adult patients with r/r DLBCL

On November 5, 2017 Novartis reported that the company has submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for CTL019 (tisagenlecleucel) for two indications (Press release, Novartis, NOV 5, 2017, View Source [SID1234521573]). The application is for the treatment of children and young adults with relapsed or refractory (r/r) B-cell acute lymphoblastic leukemia (ALL) and for adult patients with r/r diffuse large B-cell lymphoma (DLBCL) who are ineligible for autologous stem cell transplant (ASCT). CTL019 is a novel immunocellular therapy and a one-time treatment that uses a patient’s own T cells to fight cancer.

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"Since the historic FDA approval of Kymriah, formerly CTL019, we have launched, manufactured and supplied this highly individualized immunocelluar therapy in a commercial setting and the submission to the EMA is a major step toward our goal of delivering it to more critically ill cancer patients around the world," said Vas Narasimhan, Global Head of Drug Development and Chief Medical Officer, Novartis. "We look forward to working with the EMA to make CTL019 available to the children and adults who may benefit from this novel therapy."

There has been a dire need for innovative therapies to treat pediatric and young adult patients with r/r B-cell ALL and adult patients with r/r DLBCL, who have few options and historically poor outcomes. DLBCL is the most common subtype of non-Hodgkin lymphoma (NHL), accounting for 40% of all NHL cases globally[1]. If left untreated, r/r DLBCL has a life expectancy of three to four months[2]. In Europe, ALL accounts for approximately 80% of leukemia cases among children[3]. Less than 10% of patients with relapsed or refractory ALL survive five years[4].

"When tisagenlecleucel became a reality for certain patients and their families in the US after approval by the FDA for patients with relapsed or refractory ALL this year, I believe it forever changed the face of cancer treatment," said the study’s principal investigator Stephen J. Schuster, MD, the Robert and Margarita Louis-Dreyfus Professor in Chronic Lymphocytic Leukemia and Lymphoma Clinical Care and Research in Penn’s Perelman School of Medicine and director of the Lymphoma Program at the Abramson Cancer Center. "The data show this is a groundbreaking immunocellular therapy that has the potential to alter outcomes in patients who have limited options. This submission brings us closer to realizing that potential for more patients with fatal blood cancers."

CTL019 is an innovative immunocellular therapy that is a one-time treatment. CTL019 uses the 4-1BB costimulatory domain in its chimeric antigen receptor to enhance cellular expansion and persistence. In 2012, Novartis and the University of Pennsylvania (Penn) entered into a global collaboration to further research, develop and commercialize CAR-T cell therapies, including CTL019, for the investigational treatment of cancers.

"For patients in the EU living with these aggressive forms of blood cancer, we have very limited options to improve their chances of sustained remission after their disease has relapsed or become refractory to initial treatment," said Professor Gilles Salles, MD, PhD, Head of Hematology Department, Hospices Civils de Lyon, Lyon, France. "The data for tisagenlecleucel has provided an optimistic look at the potential to achieve durable responses in two distinct and difficult-to-treat patient populations, helping to address a dire unmet need for patients."

The MAA submission is based on the Novartis-sponsored global, multicenter, phase II ELIANA and JULIET trials, which were conducted in collaboration with Penn. ELIANA is the first pediatric global CAR-T cell therapy registration trial, examining patients in 25 centers in the US, Canada, Australia, Japan and the EU, including: Austria, Belgium, France, Germany, Italy Norway, and Spain.

JULIET is the first multi-center global registration study for CTL019 in adult patients with r/r DLBCL. JULIET is the largest study examining a CAR-T therapy exclusively in DLBCL, enrolling patients from 27 sites in 10 countries across the US, Canada, Australia, Japan and Europe, including: Austria, France, Germany, Italy, Norway and the Netherlands. Data from the six-month primary analysis of JULIET will be presented at the annual meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper) in December 2017.

Novartis plans additional regulatory submissions for CTL019 in pediatric and young adult patients with r/r B-cell ALL and adult patients with r/r DLBCL outside the US and EU in 2018.

About CAR-T
CAR-T is different from typical small molecule or biologic therapies because it is manufactured for each individual patient using their own cells. During the treatment process, T cells are drawn from a patient’s blood and reprogrammed in the laboratory to create T cells that are genetically coded to recognize and fight the patient’s cancer cells and other B cells expressing a particular antigen.

About CTL019 Manufacturing
CTL019 is manufactured for each individual patient using their own cells at the Novartis Morris Plains, New Jersey facility. Novartis has designed a reliable and integrated manufacturing and supply chain platform that allows for an individualized treatment approach on a global scale. This process includes cryopreservation of a patient’s harvested (or leukapheresed) cells, giving treating physicians and centers the flexibility to initiate therapy with CTL019 based on the individual patient’s condition. Building on the company’s experience, having manufactured CAR-T cells for over 250 patients from 11 countries across various indications in clinical trials, it has demonstrated a reproducible product. Novartis continues to advance its CAR-T manufacturing expertise and make investments to support the anticipated demand to meet the needs of patients.

Novartis has also successfully established the CTL019 manufacturing process at the Fraunhofer-Institut for cell therapy and immunology (Fraunhofer-Institut für Zelltherapie and Immunologie) facility in Leipzig, Germany, which currently supports the manufacturing of CTL019 for global clinical trials.

Novartis Leadership in Immuno-Oncology
Novartis is at the forefront of investigational immunocellular therapy as the first pharmaceutical company to initiate global CAR-T trials, and has significantly invested in CAR-T research and worked with pioneers in the field. KymriahTM, the first approved CAR-T cell therapy, is the cornerstone of this strategy. Active research programs are underway targeting other hematologic malignancies and solid tumors, and include efforts focused on next generation CAR-Ts that involve simplified manufacturing schemes and gene edited cells.

Kymriah(TM) (tisagenlecleucel) US Important Safety information (for pediatric and young adult patients with B-cell precursor acute lymphoblastic leukemia)
The full prescribing information, including Boxed WARNING, for Kymriah can be found at: View Source
/files/kymriah.pdf (link is external)

Kymriah may cause side effects that are severe or life-threatening, such as Cytokine Release Syndrome (CRS) or Neurological Toxicities. Patients with CRS may experience symptoms including high fever, difficulty breathing, chills/shaking chills, severe nausea, vomiting and diarrhea, severe muscle or joint pain, very low blood pressure, or dizziness/lightheadedness. Patients may be admitted to the hospital for CRS and treated with other medications.

Patients with neurological toxicities may experience symptoms such as altered or decreased consciousness, headaches, delirium, confusion, agitation, anxiety, seizures, difficulty speaking and understanding, or loss of balance. Patients should be advised to call their health care provider or get emergency help right away if they experience any of these signs and symptoms of CRS or neurological toxicities.

Because of the risk of CRS and neurological toxicities, Kymriah is only available through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS) in the US called Kymriah REMS.

Serious allergic reactions, including anaphylaxis, may occur after Kymriah infusion.
Kymriah can increase the risk of life-threatening infections that may lead to death. Patients should be advised to tell their health care provider right away if they develop fever, chills, or any signs or symptoms of an infection.

Patients may experience prolonged low blood cell counts (cytopenia), where one or more types of blood cells (red blood cells, white blood cells, or platelets) are decreased. The patient’s health care provider will do blood tests to check all of their blood cell counts after treatment with Kymriah. Patients should be advised to tell their health care provider right away if they get a fever, are feeling tired, or have bruising or bleeding.

Patients may experience hypogammaglobulinemia, a condition in which the level of immunoglobulins (antibodies) in the blood is low and the risk of infection is increased. It is expected that patients may develop hypogammaglobulinemia with Kymriah, and may need to receive immunoglobulin replacement for an indefinite amount of time following treatment with Kymriah. Patients should tell their health care provider about their treatment with Kymriah before receiving a live virus vaccine.

After treatment with Kymriah, patients will be monitored life-long by their health care provider, as they may develop secondary cancers or recurrence of their leukemia.

Patients should not drive, operate heavy machinery, or do other dangerous activities for 8 weeks after receiving Kymriah because the treatment can cause temporary memory and coordination problems, including sleepiness, confusion, weakness, dizziness, and seizures.

Some of the most common side effects of Kymriah are difficulty breathing, fever (100.4°F/38°C or higher), chills/shaking chills, confusion, severe nausea, vomiting and diarrhea, severe muscle or joint pain, very low blood pressure, and dizziness/lightheadedness. However, these are not all of the possible side effects of Kymriah. Patients should talk to their health care provider for medical advice about side effects.

Prior to a female patient starting treatment with Kymriah, their health care provider may do a pregnancy test. There is no information available for Kymriah use in pregnant or breast-feeding women. Therefore, Kymriah is not recommended for women who are pregnant or breast feeding. If either sex partner has received Kymriah, patients should talk to their health care provider about birth control and pregnancy.

Patients should tell their health care provider about all the medicines they take, including prescription and over-the-counter medicines, vitamins, and herbal supplements.

After receiving Kymriah, patients should be advised that some commercial HIV tests may cause a false positive test result. Patients should also be advised not to donate blood, organs, or tissues and cells for transplantation after receiving Kymriah.

Disclaimer
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "potential," "can," "will," "plan," "expect," "anticipate," "look forward," "believe," "committed," "investigational," "pipeline," "launch," or similar terms, or by express or implied discussions regarding potential marketing approvals, new indications or labeling for the investigational or approved products described in this press release, regarding our ability to implement, scale and sustain commercial manufacturing for the investigational or approved products described in this press release, regarding our ability to build and sustain a network of treatment centers to offer the investigational or approved products described in this press release, or regarding potential future revenues from such products. You should not place undue reliance on these statements. Such forward-looking statements are based on our current beliefs and expectations regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that the investigational or approved products described in this press release will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Neither can there be any guarantee that Novartis will successfully implement, scale and sustain commercial manufacturing for the investigational or approved products described in this press release, or successfully build and sustain a network of treatment centers to offer the investigational or approved products described in this press release. Nor can there be any guarantee that such products will be commercially successful in the future. In particular, our expectations regarding such products could be affected by, among other things, our ability to successfully implement, scale and sustain commercial manufacturing and build and sustain a network of treatment centers; the uncertainties inherent in research and development, including clinical trial results and additional analysis of existing clinical data; regulatory actions or delays or government regulation generally; our ability to obtain or maintain proprietary intellectual property protection; the particular prescribing preferences of physicians and patients; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures; general economic and industry conditions, including the effects of the persistently weak economic and financial environment in many countries; safety, quality or manufacturing issues, and other risks and factors referred to in Novartis AG’s current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

BioEurope partnering conference in Berlin

On November 5, 2017 MonTa Biosciences reported that attends the BioEurope partnering conference in Berlin from November 4-8 (Press release, MonTa Biosciences, NOV 5, 2017, View Source [SID1234618635]).

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