On October 25, 2017 Varian (NYSE:VAR), the world’s leading manufacturer of medical devices and software for treating and managing cancer, reported its fourth-quarter and full-year fiscal 2017 results (Press release, Varian Medical Systems, OCT 25, 2017, View Source [SID1234521176]). All fourth-quarter comparisons in this announcement are year-over-year unless noted otherwise.

Summary

($ in millions except EPS) Q4 2017 Q4 2016 FY 2017 FY 2016
Revenues (from Continuing Operations) $ 739.0 $ 747.2 $ 2,668.2 $ 2,621.1
Growth Reported (1 )% 2 %
Growth Constant Currency (2 )% 2 %
Gross Margin 42.1 % 42.6 % 43.3 % 42.5 %
GAAP Net Earnings (1) $ 82.7 $ 94.3 $ 257.1 $ 325.3
GAAP Net Earnings per Diluted Share (1) $ 0.89 $ 1.00 $ 2.75 $ 3.39
Net Cash Provided by Operating Activities $ 129.6 $ 151.9 $ 399.1 $ 356.3
Non-GAAP Net Earnings (1) (2) $ 100.6 $ 97.7 $ 335.1 $ 354.9
Non-GAAP Net Earnings per Diluted Share (1) (2) $ 1.09 $ 1.03 $ 3.60 $ 3.70

(1) GAAP Net Earnings and Earnings Per Diluted Share and Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share refer only to continuing operations. GAAP and Non-GAAP Earnings Per Diluted Share, for the quarter and fiscal year ended September 29, 2017, were calculated based on diluted shares of 92.6 million and 93.2 million, respectively. For the quarter and fiscal year ended September 30, 2016, the number of diluted shares was 94.5 million and 96.0 million, respectively.
(2) Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share are defined as GAAP Net Earnings and GAAP Earnings Per Diluted Share adjusted to exclude the amortization of intangible assets, acquisition-related expenses and benefits, restructuring and impairment charges and significant litigation charges or benefits and legal costs.

"We finished a transformative year for the company with a solid quarter highlighted by robust gross order growth," said Dow Wilson, CEO of Varian. "During the year, we extended our industry leadership with successful launches of the Halcyon and HyperArc treatment platforms, grew our global footprint and continued to build capabilities to grow beyond our core market. We also booked two more proton orders in the quarter, bringing our total for the year to six."

The company ended the quarter with $716 million in cash and cash equivalents and $350 million of debt. Net cash provided by operating activities was healthy at $130 million in the fiscal fourth quarter and $399 million for the fiscal year, supported by improved cash collections. During the fiscal fourth quarter, the company invested $25 million to repurchase 250,000 shares of common stock.

Gary Bischoping, Varian’s chief financial officer, added, "While the quarter’s profitability results came in short of our expectations, I’m pleased with our team’s ongoing operational and financial discipline. We have more work to do, but we made solid progress toward our long-term objectives. Our orders growth, improving gross margin rate this past year, and continued working capital efficiencies has me looking forward to our next fiscal year."

Oncology Systems Segment
In the fiscal fourth quarter, Oncology revenues for the segment totaled $686 million, up 1 percent in dollars and in constant currency. For the full year, revenues were up 1 percent at $2.5 billion. Gross orders were $964 million, up 7 percent in dollars and in constant currency. Gross orders in the Americas increased 1 percent in dollars and 2 percent in constant currency, with North America growing 8 percent in dollars. In EMEA, gross orders rose 32 percent in dollars and 29 percent in constant currency, to $321 million driven by robust growth in France, Germany, Poland and India; in APAC gross orders declined 10 percent in dollars and 9 percent in constant currency where strong growth across a majority of the region was offset by significant declines in Japan.

Proton Therapy Segment
Revenues in the fourth quarter were down 23 percent at $52 million. For the full year, revenues were up 12 percent at $182 million. In the quarter, the company booked orders totaling $74 million, including orders for ProBeam Compact projects in China and India. For the full fiscal year, proton therapy orders totaled $229 million, more than double the previous year.

Outlook for Full Fiscal Year 2018
We expect the following for fiscal year 2018:
· Revenues to grow by 2 to 4 percent
· Non-GAAP operating earnings to range between 18 and 19 percent of revenue
· Non-GAAP net earnings per diluted share from continuing operations to be in the $4.20 to $4.32 range
· Cash Flow from Operations to be between $475 million and $550 million

We have assumed no change to share count year over year and a tax rate of 23 percent.

Please refer to "Discussion of Non-GAAP Financial Measures" below for a description of items excluded from expected non-GAAP earnings.

Investor Conference Call
Varian Medical Systems is scheduled to conduct its fourth quarter fiscal year 2017 conference call at
2 p.m. PT today. To hear a live webcast or replay of the call, visit the investor relations page on our company’s web site at www.varian.com/investor where it will be archived for a year. To access the call via telephone, dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from outside the U.S. The replay can be accessed by dialing 1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside the U.S. and entering confirmation code 13669524. The telephone replay will be available through 5 p.m. PT, Friday, October 27, 2017.

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On October 24, 2017 Alligator Bioscience (Nasdaq Stockholm: ATORX), a biotechnology company developing antibody-based pharmaceuticals for tumor-directed immunotherapy and Aptevo Therapeutics Inc. (Nasdaq: APVO), a biotechnology company focused on developing novel immuno-oncology and hematology therapeutics, reported further details of the companies’ collaboration on ALG.APV-527, a bispecific antibody targeting 4-1BB and a tumor antigen, now identified as 5T4, which is found on various types of cancer cells (Press release, Alligator Bioscience, OCT 24, 2017, View Source [SID1234538684]).

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5T4 is a protein predominantly expressed on tumor cells. It is present at very low levels or not at all in normal tissue. This enables the immune-activating effect of ALG.APV-527 to be targeted specifically to the tumor and not against normal tissue, the goal being effective tumor-directed immune activation with minimal side effects. The 5T4 tumor antigen is present on a number of different solid tumors, including breast, cervical, non-small-cell-lung, prostate, renal, gastric, colorectal and bladder cancers, indicating that ALG.APV-527 may be used for the treatment of several different types of cancer.

"The fact that 5T4 is selectively expressed on tumor cells in many different cancer indications, but in very low levels in normal tissue, makes it a very attractive target for tumor-directed immunotherapy," said Professor Peter Stern, Manchester University, UK.

By combining a tumor-binding and an immunomodulatory antibody in one molecule, Alligator and Aptevo have created a drug candidate whose effect is localized to the tumor area, activating the tumor-specific immune cells present there.

About Dr. Peter Stern
Professor Peter Stern, University of Manchester, United Kingdom, advisor to the joint venture, discovered the 5T4 antigen in 1988. He is an expert in tumor-associated antigens and virus-associated tumors. Professor Stern’s research has contributed substantially to the development of both cancer vaccines and antibody-based drugs for cancer treatment.

About ALG.APV-527
ALG.APV-527 is a bispecific antibody (4-1BB x 5T4) intended for tumor-directed treatment of solid cancers. The ALG.APV-527 antibody consists of two parts, one part activating tumor-specific T cells through the co-stimulatory receptor 4-1BB (CD137), the other part binding to the 5T4 protein expressed on the surface of tumor cells.

ZIOPHARM Oncology is pleased to share a story from the Ann & Robert H. Lurie Children’s Hospital in Chicago on the Ad-RTS-hIL-12 plus veledimex clinical trial for pediatric patients with brain cancer (Press release, Ziopharm, OCT 24, 2017, View Source [SID1234521136]). As we announced last week, Stewart Goldman, M.D., Division Head Hematology-Oncology, Neuro-Oncology & Stem Cell Transplantation at Lurie Children’s dosed the first patient in this pediatric trial.

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First patient on a new Phase 1 pediatric brain tumor study injected with a common cold virus bioengineered to deliver a gene that mobilizes the immune system; a pill is used to control the targeted immune response

The first patient in a new Phase 1 gene therapy trial for pediatric brain tumors underwent a leading-edge procedure at Ann & Robert H. Lurie Children’s Hospital of Chicago. During surgery to remove the brain tumor, the patient was injected with an adenovirus, a common cold virus, at the tumor site. The virus was bioengineered not to cause illness but rather deliver a gene that produces human interleukin 12 (hIL-12), a powerful protein to jumpstart the immune system to kill remaining tumor cells. For the next 14 days, the patient is given a pill – veledimex – to activate the gene and control the immune response, so that the inflammation fights the tumor without overwhelming the rest of the body.

“Using the immune system to fight cancer is one of the most exciting new directions in cancer research,” said Stewart Goldman, MD, Principal Investigator at Lurie Children’s, Division Head of Hematology, Oncology, Neuro-Oncology and Stem Cell Transplantation,​ and Professor of Pediatrics at Northwestern University Feinberg School of Medicine. “What is most challenging is regulating the immune response we unleash, and that is what we are doing in this study. The pill dose acts like a thermostat with which we can adjust the intensity of the patient’s immune response.”

This is the first gene therapy clinical trial of this type for pediatric brain tumors. It will initially include patients with recurrent or progressive glioblastoma multiforme (rGBM) in the cortex of the brain. At a later date, children with diffuse intrinsic pontine glioma (DIPG), an incurable tumor located in the brain stem, will be added.

“Studies of this approach in adults with rGBM are showing promising results,” said Goldman. “We are hopeful that this will offer a viable treatment to children with gliomas who currently do not have any curative options.”

In addition to Lurie Children’s, the Phase 1 study will be conducted at Dana-Farber Cancer Institute in Boston and the University of California, San Francisco. It is sponsored by ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP), a Boston-based biopharmaceutical company focused on developing new gene and cell-based immunotherapies for cancer. Lurie Children’s cancer program is part of Robert H. Lurie Comprehensive Cancer Center of Northwestern University.

Research at Ann & Robert H. Lurie Children’s Hospital of Chicago is conducted through the Stanley Manne Children’s Research Institute. The Manne Research Institute is focused on improving child health, transforming pediatric medicine and ensuring healthier futures through the relentless pursuit of knowledge. Lurie Children’s is ranked as one of the nation’s top children’s hospitals in the U.S.News & World Report. It is the pediatric training ground for Northwestern University Feinberg School of Medicine. Last year, the hospital served more than 208,000 children from 50 states and 58 countries.

On October 24, 2017 BioInvent International AB (OMXS: BINV) reported that Michael Oredsson will resign as CEO of BioInvent 31 December 2017 (Press release, BioInvent, OCT 24, 2017, http://www.bioinvent.com/en/media/press-releases/releases?id=BAC528D34E9A30A6 [SID1234521144]). Michael took office as CEO of BioInvent in 2013 to restructure the company and refocus on oncology. Now, both the board and Michael believe that it is a good time for a change in leadership, as the company is transitioning to a specific focus on clinical development and R&D.

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“On behalf of the board, I would like to thank Michael for a highly valuable contribution to the company. He has been instrumental in taking the company through a critical phase and I wish him all the best in the future”, says Björn O. Nilsson, Chairman of the Board.

“The challenges of a biotech company are many, but with highly skilled and devoted employees, my work has been both rewarding and stimulating. It has been a privilege to lead the BioInvent organization, but the company now needs more scientific skills in the CEO role. I will of course continue to follow the company closely”, says Michael Oredsson.

The board has initiated a process to recruit a new CEO. If a new CEO is not in place by 1 January, 2018, the present CSO, Björn Frendéus, will serve as acting CEO until the new CEO has been appointed and taken office.

On October 24, 2017 Minneamrita reported that an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for a Phase 1 trial of an oral formulation of the company’s Minnelide for patients with advanced cancers is now active (Press release, Minneamrita Therapeutics, OCT 24, 2017, View Source [SID1234521145]). The first patient to participate in this exciting clinical trial received treatment this past week at HonorHealth Research Institute.

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Dr. Erkut Borazanci, the Principal Investigator at HonorHealth Research Institute, states, “Minnelide has shown promising activity in several different types of preclinical models of cancer. The promise of the drug as an oral formulation, along with combining it with additional chemotherapy like Abraxane, gives us another great option for those with cancer.”

HonorHealth participated in the trial for the intravenous form of Minnelide and is the first clinical site to be open for enrollment for this clinical trial of the new and improved oral formulation. Additional sites are planned to be opened and enrolling patients in the coming months, including the Mayo Clinic.

“With the responses seen in the Phase I trial with the IV formulation, we are hopeful that the improved and more convenient oral administration will demonstrate the same or improved clinical benefit,” said Daniel D. Von Hoff, MD, FACP, and the Virginia G. Piper Distinguished Chair for Innovative Cancer Research.

“We have developed an oral formulation to have an ease of administration, compliance and efficacy. Patients with advanced gastrointestinal cancers and breast cancer can participate in this trial,” said Mohana R. Velagapudi, MD, Chief Executive Officer and Co-Founder of Minneamrita Therapeutics LLC, the trial’s sponsor.

“While we have made significant progress in the treatment of various cancers, patients with cancers arising from the gastrointestinal tract, especially pancreatic cancer, continue to have very poor prognosis. Minnelide has had very promising results in preclinical studies and the Phase I trial. Thus, we are hopeful that it will change the face of these deadly cancers,” said Ashok Saluja, Ph.D., Chief Scientific Officer and Co-Founder of Minneamrita Therapeutics.

Minneamrita chose Translational Drug Development (TD2) as its regulatory and clinical partner in 2012 and has continued its efforts in the development of the oral formulation of Minnelide. “We are honored that Minneamrita selected TD2 as its regulatory and clinical team,” said Dr. Stephen Gately, President and Chief Executive Officer of TD2. “We are proud of the successful IND application filings we have completed for them over the years, and the TD2 team is excited to manage the clinical trial for this important new medicine for patients with cancer.”

Minnelide is a drug derived from the thunder God vine (Tripterygium wilfordii)—also known as lei gong teng—and is native to China, Japan and Korea. Traditional Chinese medicine has used this vine for more than 2,000 years as a treatment for everything from fever to inflammation and autoimmune diseases, such as multiple sclerosis and rheumatoid arthritis.