On August 4, 2022 Lucid Diagnostics Inc. (Nasdaq: LUCD) ("Lucid"), a commercial-stage, cancer prevention medical diagnostics company, and majority-owned subsidiary of PAVmed Inc. (Nasdaq: PAVM, PAVMZ) ("PAVmed"), reported that a recently published American Gastroenterological Association ("AGA") clinical practice update supports esophageal precancer ("Barrett’s Esophagus," "BE") screening to prevent highly lethal esophageal cancer ("EAC") utilizing its EsoGuard Esophageal DNA Test ("EsoGuard") on samples collected with its EsoCheck Cell Collection Device ("EsoCheck") (Press release, Lucid Diagnostics, AUG 4, 2022, View Source [SID1234617607]).

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The clinical practice update entitled "AGA Clinical Practice Update on New Technology and Innovation for Surveillance," the first such update since 2011, was recently published online in the journal, Clinical Gastroenterology and Hepatology. The expert review was commissioned by the AGA’s Clinical Practice Update Committee, its Center for GI Innovation and Technology, and Governing Board to "provide timely guidance on a topic of high clinical importance…" Senior author Srinadh Komanduri M.D., M.S., Professor of Medicine and Surgery, Associate Chief, Division of Gastroenterology and Hepatology and Director of Endoscopy at the Feinberg School of Medicine, Northwestern University, is a member of Lucid’s Medical Advisory Board.

The AGA update mirrors the recently updated American College of Gastroenterology ("ACG") clinical guideline on the same topic, by acknowledging the "significant need for noninvasive screening tools that are easy to administer, patient friendly, and cost-effective for the detection of BE," and endorsing, for the first time, such tools as an acceptable alternative to endoscopy to directly address this need.

Best Practice Advice 2: Non-Endoscopic Cell Collection Devices may be considered as an option to screen for BE.

The clinical practice update specifically mentions EsoCheck, along with Lucid’s EsophaCap device, as such "Non-endoscopic Cell Collection Devices" – the only such devices commercially available in the United States – indicating that they "have demonstrated excellent tolerability, safety, and sensitivity for the diagnosis of BE." The authors cite the seminal NIH-funded multicenter, case-control study published in 2018 in Science Translational Medicine, which demonstrated that EsoGuard is highly accurate at detecting esophageal precancer and cancer, including on samples collected with EsoCheck.

"We are gratified that the AGA has joined the ACG in updating their clinical practice guidelines to recognize the role that groundbreaking technologies, such as EsoGuard and EsoCheck, can play in driving widespread esophageal precancer screening to prevent esophageal cancer deaths," said Lishan Aklog M.D., Lucid’s Chairman and Chief Executive Officer. "We now have a consensus. The two leading gastroenterology professional associations support the use of our nonendoscopic tools as an acceptable alternative to endoscopy – which has unequivocally failed as a screening tool despite over a decade of clinical guidelines recommending screening of at-risk patients. This ongoing failure to screen makes the thousands of esophageal deaths in the U.S. each year a profound and preventable tragedy, which we are determined to eliminate."

The clinical practice update also significantly expands the target population for esophageal precancer screening, including for EsoGuard and EsoCheck, by recommending, for the first time, screening in at-risk patients without symptoms of reflux. The AGA does so by adding a history of chronic gastroesophageal disease ("GERD," commonly known as chronic heartburn) as merely an additional, seventh, risk factor to the six risk factors for BE and EAC that have traditionally identified at-risk symptomatic patients recommended for screening. As a result, chronic symptomatic GERD is no longer a mandatory prerequisite and asymptomatic patients with three other risk factors are now considered appropriate for screening.

Best Practice Advice 1: Screening with standard upper endoscopy may be considered in individuals with at least 3 established risk factors for Barrett’s esophagus (BE) and esophageal adenocarcinoma (EAC), including individuals who are male, non-Hispanic White, age >50 years, have a history of smoking, chronic GERD, obesity or a family history of BE or EAC.

It is estimated that approximately 40% of GERD patients have "silent GERD" without classic symptoms of heartburn, representing an estimated thirty million persons in addition to the estimated fifty million U.S. adults with weekly symptoms of GERD. The AGA experts based their expansion of the target screening population on a growing consensus, driven by data indicating that over 50% of U.S. patients diagnosed with esophageal cancer would not have qualified for screening per traditional clinical practice guidelines – nearly all because they lacked symptoms of GERD. A recently launched NIH-funded and Lucid-supported study, Detection of Barrett s Esophagus in Patients Without GERD Symptoms, seeks to directly demonstrate that EsoGuard performed by Lucid on samples collected with EsoCheck can detect esophageal precancer in such asymptomatic patients.

"We applaud this bold move by the AGA, which represents a profound paradigm shift in how we view screening for esophageal precancer," said Dr. Aklog. "Based on data its experts cite, removing symptomatic GERD as a mandatory prerequisite for screening has the potential to dramatically increase our ability to prevent esophageal cancer deaths through esophageal precancer screening. We believe that ongoing studies, including the NIH-funded ‘non-GERD’ study we are supporting, will provide additional clinical evidence to support the use of EsoGuard and EsoCheck in asymptomatic at-risk patients."

About EsoGuard and EsoCheck

Millions of patients with GERD are at risk of developing esophageal precancer and a highly lethal form of esophageal cancer ("EAC"). Over 80% of EAC patients die within five years of diagnosis, making it the second most lethal cancer in the U.S. The mortality rate is high even in those diagnosed with early stage EAC. The U.S. incidence of EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat. In nearly all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease. All EAC is believed to arise from esophageal precancer, which occurs in approximately 5% to 15% of at-risk GERD patients. Early esophageal precancer can be monitored for progression to late esophageal precancer which can be cured with endoscopic esophageal ablation, reliably halting progression to cancer.

Esophageal precancer screening is already recommended by clinical practice guidelines in millions of GERD patients with multiple risk factors, including age over 50 years, male gender, White race, obesity, smoking history, and a family history of esophageal precancer or cancer. Unfortunately, fewer than 10% of those recommended for screening undergo traditional invasive endoscopic screening. The profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk GERD patient had been screened and then undergone surveillance and curative treatment.

The only missing element for a viable esophageal cancer prevention program has been the lack of a widespread screening tool that can detect esophageal precancer. Lucid believes EsoGuard, performed on samples collected with EsoCheck, is the missing element – the first and only commercially available test capable of serving as a widespread screening tool to prevent esophageal cancer deaths through the early detection of esophageal precancer in at-risk GERD patients. An updated American College of Gastroenterology clinical practice guideline and an American Gastroenterological Association clinical practice update both endorse nonendoscopic biomarker tests as an acceptable alternative to costly and invasive endoscopy for esophageal precancer screening. EsoGuard is the only such test currently available in the United States.

EsoGuard is a bisulfite-converted NGS DNA assay performed on surface esophageal cells collected with EsoCheck, which quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). The assay was evaluated in a 408-patient, multicenter, case-control study published in Science Translational Medicine and showed greater than 90% sensitivity and specificity at detecting esophageal precancer and cancer.

EsoCheck is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute office procedure. It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells. When vacuum suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted region during device withdrawal. Lucid believes this proprietary Collect+Protect technology makes EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected sampling. The sample is sent by overnight express mail to Lucid’s CLIA-certified, CAP-accredited laboratory, LucidDx Labs, for EsoGuard testing.

On August 4, 2022 Eli Lilly and Company (NYSE: LLY) reported its financial results for the second quarter of 2022 (Press release, Eli Lilly, AUG 4, 2022, View Source [SID1234617464]).

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"We had an exciting quarter with the highly anticipated U.S. launch of Mounjaro, the first of potentially five new medicines we intend to launch by the end of 2023," said David A. Ricks, Lilly’s chair and CEO. "We are pleased with the underlying strength of our core business, and we expect our new medicines will add to our growth through the rest of the decade. We are entering a compelling era in our company’s history, as we continue our efforts to expand the number of people our medicines can help."

Lilly Senior Vice President and Chief Financial Officer Anat Ashkenazi provided further commentary on the quarter.

"Excluding revenue from the Alimta loss of exclusivity in major markets, the sale of rights to Cialis in China in the base period, and COVID-19 antibodies, Lilly experienced 6% revenue growth in our core business led by strong performance from key products such as Trulicity, Verzenio and Jardiance," said Ashkenazi. "While we expect that our financial results will continue to be negatively impacted by foreign exchange rates, our revenue guidance for 2022 remains unchanged. Importantly, the inclusion of acquired in-process research and development and development milestone charges in our non-GAAP results will continue to impact comparisons to prior years."

Today, the company is sharing new notable announcements:

The U.S. Food and Drug Administration (FDA) accepted, with Priority Review designation, donanemab for Alzheimer’s disease for review under the accelerated approval pathway.
The FDA also accepted, with Priority Review designation, pirtobrutinib for mantle cell lymphoma for patients previously treated with a BTK inhibitor for review under the accelerated approval pathway.
In collaboration with the U.S. government, Lilly intends to make bebtelovimab commercially available for purchase by U.S. states/territories, hospitals and a broad set of other providers through a sole distributor beginning the week of Aug. 15, which is prior to the anticipated depletion of the U.S. government’s currently available supply.
Lilly shared numerous updates recently on key regulatory, clinical, business development and other events, including:

Mounjaro (tirzepatide) for adults with type 2 diabetes was approved by the FDA and received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use.
Lilly and Incyte’s Olumiant (baricitinib) for adults with severe alopecia areata received approval in the U.S., EU and Japan.
The FDA approved Olumiant for the treatment of certain hospitalized patients with COVID-19.
The company announced positive topline results from Phase 3 clinical trials of lebrikizumab for the treatment of patients with moderate-to-severe atopic dermatitis.
Lilly supplied additional doses of bebtelovimab to the U.S. government in an ongoing effort to provide COVID-19 treatment options for patients.
The company announced plans to invest $2.1 billion in two new Indiana manufacturing sites.
For additional information on these and other important public announcements, visit the news section of Lilly’s website.

Financial Results

A discussion of the non-GAAP financial measures is included under "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)."

Second-Quarter Reported Results

In Q2 2022, worldwide revenue was $6.49 billion, a decrease of 4% compared with Q2 2021, driven by an 11% decrease due to lower realized prices and a 3% decrease from the unfavorable impact of foreign exchange rates, partially offset by a 10% increase in volume. Key growth products, consisting of Trulicity, Verzenio, Jardiance, Taltz, Retevmo, Mounjaro, Emgality, Olumiant, Tyvyt and Cyramza, grew 20% and represented 67% of revenue for Q2 2022, excluding revenue from COVID-19 antibodies. Excluding revenue from Alimta, which lost exclusivity in major markets, the sale of the company’s rights to Cialis in China in Q2 2021, and COVID-19 antibodies, worldwide revenue increased 6% in Q2 2022.

Revenue in the U.S. increased 6%, to $3.93 billion, primarily driven by a 14% increase in volume, partially offset by an 8% decrease due to lower realized prices. Excluding revenue from Alimta and COVID-19 antibodies, revenue in the U.S. increased by 11% driven by key growth products. The lower realized prices in the U.S. were driven by Humalog, due to unfavorable segment mix, as more highly rebated segments made up a larger portion of the business and a list price reduction of Insulin Lispro injection; Alimta and Forteo, due to higher contracted rebates and unfavorable segment mix; and Taltz, due to changes to estimates for rebates and discounts and unfavorable segment mix.

Revenue outside the U.S. decreased 16%, to $2.55 billion, driven by a 14% decrease due to lower realized prices and a 6% decrease from the unfavorable impact of foreign exchange rates, partially offset by a 5% increase in volume. The lower realized prices were primarily driven by the impact of government pricing in China from the National Reimbursement Drug List (NRDL) formulary for certain products, particularly Verzenio and Tyvyt, and volume-based procurement (VBP) for Humalog. The increase in volume outside the U.S. was largely driven by key growth products as well as the NRDL in China, partially offset by decreased volume for Alimta and Cymbalta resulting from the entry of generic competition, the sale of the company’s rights to Cialis in China in Q2 2021, as well as decreased volume for COVID-19 antibodies. Excluding revenue from Alimta, the sale of the company’s rights to Cialis, and COVID-19 antibodies, revenue outside the U.S. decreased by 2%, or an increase of 6% on a constant currency basis.

Gross margin increased 6%, to $5.06 billion, in Q2 2022 compared with Q2 2021. Gross margin as a percent of revenue was 78.0%, an increase of 6.9 percentage points compared with Q2 2021. The increase in gross margin percent was primarily driven by an excess inventory charge of $423.0 million recognized in Q2 2021 related to COVID-19 antibodies and, to a lesser extent, favorable product mix and the effect of foreign exchange rates on international inventories sold, partially offset by lower realized prices.

In Q2 2022, research and development expenses increased 8% to $1.78 billion, or 27% of revenue, driven by higher development expenses for late-stage assets, partially offset by lower development expenses for COVID-19 antibodies.

Marketing, selling and administrative expenses decreased 4% to $1.63 billion in Q2 2022, primarily driven by the favorable impact of foreign exchange rates as well as reduced marketing costs.

In Q2 2022, the company recognized acquired in-process research and development (IPR&D) and development milestone charges of $440.4 million, primarily related to a charge associated with the buy-out of substantially all future obligations that were contingent upon the development, regulatory and commercial successes of the company’s mutant-selective PI3kα inhibitor. In Q2 2021, the company recognized acquired IPR&D and development milestone charges of $42.8 million.

Operating income in Q2 2022 was $1.21 billion, compared to $1.40 billion in Q2 2021. Operating margin percent, defined as operating income as a percent of revenue, was 18.7%, which includes a negative impact of approximately 680 basis points attributed to acquired IPR&D and development milestone charges.

Other income (expense) was expense of $119.2 million in Q2 2022, compared with income of $190.5 million in Q2 2021. The reduction in other income (expense) was primarily driven by net losses on investments in equity securities in Q2 2022 compared with net gains on investments in equity securities in Q2 2021.

The effective tax rate was 12.7% in Q2 2022, compared with 12.8% in Q2 2021. The effective tax rate in Q2 2022 was impacted favorably by the implementation of the provision in the Tax Cuts and Jobs Act (the 2017 Tax Act) that requires capitalization and amortization of research and development expenses for tax purposes starting in 2022 and net losses on investments in equity securities, partially offset by the tax impact related to non-deductible development milestones. The effective tax rate in Q2 2021 reflected the favorable tax impact of an excess inventory charge related to COVID-19 antibodies.

In Q2 2022, net income and earnings per share (EPS) were $952.5 million and $1.05, respectively, compared with $1.39 billion and $1.53 in Q2 2021. Q2 2022 EPS was inclusive of $0.46 of acquired IPR&D and development milestone charges, compared with $0.04 in Q2 2021.

Second-Quarter Non-GAAP Measures

On a non-GAAP basis, Q2 2022 gross margin decreased 3% to $5.18 billion compared with Q2 2021. Gross margin as a percent of revenue was 79.8%, an increase of 0.5 percentage points. The increase in gross margin percent was primarily driven by favorable product mix and the effect of foreign exchange rates on international inventories sold, partially offset by lower realized prices.

Operating income on a non-GAAP basis decreased $627.2 million, or 32%, to $1.33 billion in Q2 2022 compared with Q2 2021. Operating margin percent was 20.5% on a non-GAAP basis, which includes a negative impact of approximately 680 basis points attributed to acquired IPR&D and development milestone charges.

Other income (expense) on a non-GAAP basis was expense of $12.9 million in Q2 2022, compared with income of $5.0 million in Q2 2021.

The effective tax rate on a non-GAAP basis was 14.2% in Q2 2022, compared with 14.3% in Q2 2021. The effective tax rate for Q2 2022 reflects the favorable tax impact related to the implementation of the 2017 Tax Act, offset by the tax impact of non-deductible development milestones.

On a non-GAAP basis, in Q2 2022 net income and EPS were $1.13 billion and $1.25, respectively, compared with $1.68 billion and $1.85 in Q2 2021. Q2 2022 non-GAAP EPS was inclusive of $0.46 of acquired IPR&D and development milestone charges, compared with $0.04 in Q2 2021.

For further detail on non-GAAP measures, see the reconciliation below as well as the "Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)" table later in this press release.

(a) COVID-19 antibodies include sales for bamlanivimab administered alone, for bamlanivimab and etesevimab
administered together, and for bebtelovimab, and were made pursuant to EUAs or similar regulatory authorizations

(b) Humalog includes Insulin Lispro

(c) Jardiance includes Glyxambi, Synjardy and Trijardy XR

(d) Olumiant includes sales of baricitinib that were made pursuant to EUA or similar regulatory authorizations

NM – not meaningful

Trulicity

For Q2 2022, worldwide Trulicity revenue was $1.91 billion, an increase of 25% compared with Q2 2021. U.S. revenue increased 25%, to $1.43 billion, driven by increased demand. Revenue outside the U.S. was $481.7 million, an increase of 24%, driven by increased demand, partially offset by the unfavorable impact of foreign exchange rates and lower realized prices.

Taltz

For Q2 2022, worldwide Taltz revenue increased 7% compared with Q2 2021, to $606.2 million. U.S. revenue increased 3%, to $411.6 million, driven by increased demand, partially offset by lower realized prices due to changes to estimates for rebates and discounts as well as unfavorable segment mix. Revenue outside the U.S. increased 15%, to $194.7 million, driven by increased volume, partially offset by lower realized prices and the unfavorable impact of foreign exchange rates.

Humalog

For Q2 2022, worldwide Humalog revenue decreased 26% compared with Q2 2021, to $447.1 million. Revenue in the U.S. decreased 27%, to $238.8 million, driven by lower realized prices from the impact of an unfavorable segment mix due to more highly rebated segments making up a larger portion of the business and the list price reduction of Insulin Lispro injection. Revenue outside the U.S. decreased 25%, to $208.3 million, driven by lower realized prices due to the impact of VBP in China and, to a lesser extent, the unfavorable impact of foreign exchange rates, partially offset by increased volume.

Verzenio

For Q2 2022, worldwide Verzenio revenue increased 72% compared with Q2 2021, to $588.5 million. U.S. revenue was $384.3 million, an increase of 83%, driven by increased demand. Revenue outside the U.S. was $204.2 million, an increase of 55%, driven by increased demand, partially offset by lower realized prices due to the impact of the NRDL formulary in China and, to a lesser extent, the unfavorable impact of foreign exchange rates.

Jardiance

The company’s worldwide Jardiance revenue for Q2 2022 was $461.0 million, an increase of 29% compared with Q2 2021. U.S. revenue increased 29%, to $250.7 million, primarily driven by increased demand. Revenue outside the U.S. was $210.3 million, an increase of 30%, driven by increased demand, partially offset by the unfavorable impact of foreign exchange rates.

Jardiance is part of the company’s alliance with Boehringer Ingelheim. Lilly reports as revenue royalties received on net sales of Jardiance.

Alimta

For Q2 2022, worldwide Alimta revenue decreased 63% compared with Q2 2021, to $227.7 million. U.S. revenue decreased 51%, to $171.7 million, driven by decreased demand and lower realized prices due to the entry of multiple generics in Q2 2022. Revenue outside the U.S. decreased 78%, to $56.1 million, largely driven by decreased demand due to entry of generic competition.

The company expects continued volume and revenue decline for Alimta as a result of the entry of generic competition due to the loss of patent exclusivity in major markets.

Olumiant

For Q2 2022, worldwide Olumiant revenue decreased 11% compared with Q2 2021, to $186.2 million. U.S. revenue was $10.4 million, representing a decline of $7.4 million compared with Q2 2021, largely driven by the decline in utilization for the treatment of certain hospitalized patients with COVID-19. Revenue outside the U.S. was $175.8 million, a decrease of 8%, primarily driven by the unfavorable impact of foreign exchange rates.

Emgality

For Q2 2022, Emgality generated worldwide revenue of $157.5 million, an increase of 1% compared with Q2 2021. U.S. revenue was $108.6 million, a decrease of 3%, driven by lower realized prices due to higher contracted rebates and unfavorable segment mix, largely offset by increased demand. Revenue outside the U.S. was $48.9 million, an increase of 11%, primarily driven by increased demand, partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.

Tyvyt

For Q2 2022, the company’s Tyvyt revenue in China was $73.6 million, a decrease of 30% compared with Q2 2021, driven by the impact of the NRDL formulary in China, which resulted in lower realized prices that were partially offset by increased volume, as well as increased competitive pressure.

Tyvyt is part of the company’s alliance with Innovent. Lilly reports total sales of Tyvyt made by Lilly as revenue, with payments made to Innovent for its portion of the gross margin reported as cost of sales. Lilly also reports as revenue a portion of the gross margin for Tyvyt sales made by Innovent.

2022 Financial Guidance

The company has updated certain elements of its 2022 financial guidance on both a reported and non-GAAP basis. EPS for 2022 is now expected to be in the range of $6.96 to $7.11 on a reported basis and $7.90 to $8.05 on a non-GAAP basis. The company’s 2022 financial guidance reflects adjustments shown in the reconciliation table below.

The company still anticipates 2022 revenue to be between $28.8 billion and $29.3 billion. This includes an additional $400 million of unfavorability from foreign exchange rates, offset by additional revenue from the company’s COVID-19 antibody, bebtelovimab. The additional revenue from bebtelovimab is inclusive of $275 million from the U.S. government purchase agreement announced in June 2022 as well as estimated revenue from the commencement of non-U.S. government distribution.

The company’s outlook for gross margin, marketing, selling, and administrative expenses, and research and development expenses remain unchanged. While the range is unchanged, marketing, selling and administrative expenses include additional marketing investments in select key growth products during the second half of the year.

Acquired IPR&D and development milestone charges are now expected to be approximately $610 million, reflecting total charges in the first half of the year. This financial guidance does not include any impact from potential or pending business development transactions in the second half of the year.

Operating margin percent has been reduced by 100 basis points and is now expected to be approximately 27% on a reported basis and approximately 29% on a non-GAAP basis, primarily due to the impacts attributable to foreign exchange rates and acquired IPR&D and development milestone charges to date.

Other income (expense) for 2022 is now expected to be expense in the range of $500 million to $600 million on a reported basis and is still expected to be expense in the range of $0 to $100 million on a non-GAAP basis. The company’s updated reported guidance reflects the impact of net losses on investments in equity securities during Q2 2022.

The company’s financial results for Q2 2022 include the favorable impact related to the implementation of the provision of the 2017 Tax Act that requires capitalization and amortization of research and development expenses for tax purposes. The company’s financial guidance for reported and non-GAAP tax rates of approximately 13% to 14% assumes this provision of the 2017 Tax Act will be deferred or repealed by Congress effective for 2022. If this provision of the 2017 Tax Act is not deferred or repealed by Congress effective for 2022, the company expects the reported and non-GAAP tax rates to be approximately 10% to 11%.

Based on these changes, the company has lowered reported EPS guidance by $0.34 to now be in the range of $6.96 to $7.11 and lowered non-GAAP EPS guidance by $0.25 to now be in the range of $7.90 to $8.05. The $0.25 reduction in the non-GAAP EPS range is driven entirely from the impact of foreign exchange rates, as the EPS impact of increased acquired IPR&D and development milestone charges and marketing investments in select key growth products are offset by the impact of additional sales of bebtelovimab.

Non-GAAP guidance reflects adjustments presented in the earnings per share table above.

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the Q2 2022 financial results conference call through a link on Lilly’s website at investor.lilly.com/webcasts-and-presentations. The conference call will begin at 9 a.m. Eastern time today and will be available for replay via the website.

Non-GAAP Financial Measures

Certain financial information for 2022 and 2021 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the periods. Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release. The press release and related materials provide certain GAAP and non-GAAP figures excluding the impact of foreign exchange rates. We recalculate current period figures on a constant currency basis by keeping constant the exchange rates from the base period. Beginning in 2022, presentations of non-GAAP financial measures will not include adjustments for upfront charges and development milestones related to acquired IPR&D. Non-GAAP financial measures for Q2 2021 have been adjusted to reflect this updated presentation. The company’s 2022 financial guidance is being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company’s business.

On August 4, 2022 Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN), a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, reported financial results for the second quarter of 2022, and associated Company developments (Press release, Supernus, AUG 4, 2022, View Source [SID1234617529]).

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Qelbree Launch Update

Total IQVIA prescriptions were 62,938 in the second quarter of 2022, an increase of 33% compared to total prescriptions of 47,324 in the first quarter of 2022. In June 2022, the most recent month available, total prescriptions reached 23,403.
Qelbree continues to expand its base of prescribers, with approximately 9,276 prescribers in the second quarter of 2022, up from 6,900 prescribers from the first quarter of 2022.
Continued progress in securing and improving managed care coverage.
Supernus launched Qelbree for adult patients in May 2022.
Product Pipeline Update

SPN-830 (apomorphine infusion device) – Continuous treatment of motor fluctuations ("off" episodes) in Parkinson’s disease (PD)

The Company continues to work closely with the U.S. Food and Drug Administration (FDA) as it reviews the New Drug Application (NDA) resubmission for SPN-830 for the continuous treatment of motor fluctuations ("off" episodes) in Parkinson’s disease. The Company is preparing for the commercial launch of SPN-830 in the first quarter of 2023, assuming timely approval by the FDA. The FDA has established a PDUFA target action date in early October 2022.
SPN-820 – Novel first-in-class activator of mTORC1

The Company continues to enroll patients in a Phase II multi-center, randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression. The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale.
SPN-817 – A novel product candidate for the treatment of epilepsy

An open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures is expected to start in the fourth quarter of 2022.
Financial Highlights

Net Product Sales

For the three months ended June 30, 2022, net product sales were $165.5 million, a 19% increase over $138.6 million for the same period in 2021. For the six months ended June 30, 2022, net product sales were $312.9 million, a 17% increase over $267.0 million for the same period in 2021. The increases in both periods were primarily due to net product sales of GOCOVRI and growth in net product sales of Qelbree and Oxtellar XR.

The following table provides information regarding our net product sales during the three and six months ended June 30, 2022 and 2021 (dollars in millions):

Operating earnings (GAAP and non-GAAP)

For the three months ended June 30, 2022 operating earnings (GAAP) were $11.3 million, as compared to $34.1 million for the same period in 2021. For the six months ended June 30, 2022 operating earnings (GAAP) were $13.3 million, as compared to $47.3 million for the same period in 2021. The decreases in both periods were primarily due to activities to support the launch of Qelbree, costs associated with GOCOVRI and amortization of acquired intangible assets from the Adamas Acquisition.

For the three months ended June 30, 2022, adjusted operating earnings (non-GAAP) were $37.6 million, compared to $37.4 million in the second quarter of 2021. For the six months ended June 30, 2022, adjusted operating earnings (non-GAAP) was $65.7 million, compared to $62.7 million in the second quarter of 2021.

Reconciliation of GAAP to Non-GAAP Adjustments

An itemized reconciliation between operating earnings on a GAAP basis and operating earnings on a non-GAAP basis is as follows (dollars in millions):

Non-GAAP operating earnings adjusts for non-cash items including amortization of intangible assets, share-based compensation expense, change in fair value of contingent consideration, and depreciation. Included in the amortization of intangible assets for the three and six months period ended June 30, 2022 was amortization of acquired intangible assets from the Adamas Acquisition in November 2021.

Net earnings (GAAP)

For the three months ended June 30, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $7.9 million and $0.14, respectively, as compared to $23.7 million, or $0.43 per diluted share, in the same period in 2021.

For the six months ended June 30, 2022, net earnings (GAAP) and diluted earnings per share (GAAP) were $33.5 million and $0.57, respectively, as compared to $29.4 million, or $0.54 per diluted share, in the same period in 2021.

Cash, cash equivalents and marketable securities

At June 30, 2022, the Company’s cash, cash equivalents, current and long-term marketable securities are approximately $508.2 million, compared to $458.8 million as of December 31, 2021. This increase was primarily due to cash generated from operations.

Full Year 2022 Financial Guidance (GAAP)

For full year 2022, the Company reiterates its prior financial guidance as set forth below (dollars in millions):

Full Year 2022 Financial Guidance – GAAP to Non-GAAP Adjustments

An itemized reconciliation between projected operating earnings on a GAAP basis and projected operating earnings on a non-GAAP basis is as follows (dollars in millions):

Non-GAAP Financial Information

This press release contains a financial measure, non-GAAP operating earnings, which does not comply with United States generally accepted accounting principles (GAAP). The non-GAAP financial measure should be considered in addition to, not as a substitute for or in isolation from, or superior to measures prepared in accordance with GAAP. Non-GAAP operating earnings adjust for non-cash share-based compensation expense, depreciation and amortization, and accretion of contingent consideration, and for factors that are unusual, non-recurring or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables in this press release. We believe the use of non-GAAP operating earnings is useful supplemental information to investors regarding the Company’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. There are limitations associated with the use of non-GAAP financial measures. Including such measures may not be entirely comparable to similarly titled measures used by other companies, may not reflect all items of income and expense, as applicable, that affect our operations, potential differences among calculation methodologies, may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure. Investors are encouraged to review the reconciliation. The Company’s 2022 financial guidance is also being provided on both a reported and a non-GAAP basis.

Conference Call Details

Supernus will host a conference call and webcast today, August 4, 2022, at 4:30 p.m. Eastern Time to discuss these results.

A live webcast will be available in the Events & Presentation section of the Company’s Investor Relations website www.supernus.com/investors.

Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.

Following the live call, a replay will be available on the Company’s Investor Relations website www.supernus.com/investors. The webcast will be available on the Company’s website for 60 days following the live call.

On August 4, 2022 PDS Biotechnology Corporation (Nasdaq: PDSB), a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer immunotherapies and infectious disease vaccines based on the Company’s proprietary Versamune and Infectimune T cell activating technologies, reported that its independent Data Monitoring Committee (DMC) met for its scheduled review of PDS0101 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab) for the potential treatment of recurrent or metastatic HPV16-positive head and neck cancer (Press release, PDS Biotechnology, AUG 4, 2022, View Source [SID1234617545]).

Data from the 43 patients included both Stage 1 and Stage 2 checkpoint inhibitor (CPI) naïve subjects and Stage 1 CPI refractory subjects in the safety analysis. Assessment of clinical efficacy was not a focus of the DMC meeting review. Based on their review of patients with available safety data, PDS0101 in combination with KEYTRUDA continues to appear safe and well tolerated. Specifically, there were no drug discontinuations related to toxicity as of the DMC review. In addition, there were no Grade 3 or greater treatment-related adverse events attributed to the combination. The DMC recommended continuing the trial with no modifications.

"The safety profile of PDS0101 in combination with KEYTRUDA was consistent with previously reported studies of KEYTRUDA alone." mentioned Dr. Lauren V. Wood, Chief Medical Officer of PDS Biotech. "The safety data in patients with recurrent or metastatic HPV16-positive head and neck cancer continues to appear to be well tolerated. We look forward to evaluating this further in the VERSATILE-002 trial."

VERSATILE-002 enrollment has progressed to Stage 2 for the checkpoint inhibitor (CPI) naive cohort and is ongoing in Stage 1 for the CPI refractory cohort. The DMC is comprised of an independent group of clinical and scientific leaders in the field of immuno-oncology and is responsible for reviewing and evaluating patient safety and efficacy data in the Phase 2 VERSATILE-002 trial.

KEYTRUDA is a registered trademark of Merck Sharp and Dohme LLC, a subsidiary of Merck & Co., Inc., Rahway, NJ, USA.

About VERSATILE-002

VERSATILE-002 is a single-arm Phase 2 trial evaluating the safety and efficacy of PDS0101, an HPV16-targeted investigational T cell-activating immunotherapy that leverages PDS Biotech’s proprietary Versamune technology, in combination with Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab). The combination is being evaluated in CPI-naïve and CPI-refractory patients with recurrent/metastatic HPV16-positive head and neck squamous cell carcinoma (HNSCC) and was granted Fast Track designation by the Food and Drug Administration in June 2022.

In June 2022, preliminary efficacy and safety data were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting for CPI-naïve patients (PR link). Preliminary data from the first 19 patients demonstrated that 77% of the patients with available imaging (17 of 19) had either disease stabilization or tumor shrinkage. Additionally, the overall survival rate of these patients at 9-months was 87%.

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On August 4, 2022 Nektar Therapeutics (Nasdaq: NKTR) reported financial results for the second quarter ended June 30, 2022 (Press release, Nektar Therapeutics, AUG 4, 2022, View Source [SID1234617561]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Cash and investments in marketable securities at June 30, 2022, were approximately $628.2 million as compared to $798.8 million at December 31, 2021, which is expected to support operations into 2025.

"Over the last several months, we developed and began implementing a new strategic plan that prioritizes specific investment into the most promising biologic therapeutic candidates in the pipeline, NKTR-358, NKTR-255, and key research programs," said Howard W. Robin, President and CEO of Nektar. "With our partner, Eli Lilly, NKTR-358 is advancing, and we will be presenting in September data from a Phase 1b study in atopic dermatitis patients and in the first half of 2023 data from a Phase 2 study in lupus patients. Our plan provides Nektar with the opportunity to create significant value for our shareholders and to focus our internal development efforts on the potential of NKTR-255, our wholly owned IL-15 program, in combination with cell therapies and other mechanisms in both liquid and solid tumor settings. Importantly, we also have the required capital to fund our pipeline to reach potential value-inflection points for each program."

Summary of Financial Results

Revenue, which primarily includes non-cash royalty revenue, in the second quarter of 2022 was $21.6 million as compared to $28.3 million in the second quarter of 2021. Revenue for the first half of 2022 was $46.4 million as compared to $52.0 million in the first half of 2021. Total operating costs and expenses in the second quarter of 2022 were $174.4 million as compared to $138.5 million in the second quarter of 2021. Total operating costs and expenses in the first half of 2022 were $315.8 million as compared to $271.6 million in the first half of 2021. Operating costs and expenses for both the second quarter and first half of 2022 include $57.3 million in non-cash impairment charges and $27.8 million in severance expense relating to the wind down of the bempegaldesleukin program.

R&D expense in the second quarter of 2022 was $42.7 million as compared to $101.3 million for the second quarter of 2021. For the first half of 2022, R&D expense was $150.0 million as compared to $196.9 million in the first half of 2021. R&D expense decreased for both the second quarter and first half of 2022 due to the wind down of the bempegaldesleukin program.

G&A expense was $20.5 million in the second quarter of 2022 and $29.6 million in the second quarter of 2021. For the first half of 2022, G&A expense was $47.9 million as compared to $61.2 million in the first half of 2021. G&A expense decreased for both the second quarter and first half of 2022 due to the wind down of the bempegaldesleukin program.

We recorded $106.0 million in restructuring, impairment and other costs of terminated program in the second quarter of 2022, related to the wind down of the bempegaldesleukin program. This includes the $57.3 million in non-cash lease and equipment impairment charges, $27.8 million in severance expense and $21.0 million primarily for clinical trial and related employee compensation costs for the bempegaldesleukin program.

Net loss for the second quarter of 2022 was $159.1 million or $0.85 basic and diluted loss per share as compared to a net loss of $125.5 million or $0.69 basic and diluted loss per share in the second quarter of 2021. Net loss in the first half of 2022 was $249.5 million or $1.34 basic and diluted loss per share as compared to a net loss of $248.5 million or $1.37 basic and diluted loss per share in the first half of 2021.

Second Quarter 2022 and Recent Business Highlights:

In May 2022, the interim assessment committee (IAC) reviewed interim efficacy and safety data from the ongoing Phase 2 double blinded, placebo-controlled study of NKTR-358 in 280 patients with systemic lupus erythematosus and recommended that the Phase 2 study continue to completion without modification. The study, which is being conducted by Eli Lilly in partnership with Nektar, will continue as planned and no further unblinding of study data will occur. The IAC review included unblinded interim data from approximately 60% of patients who completed the 24-week treatment period.
In July 2022, Nektar announced the promotion of Jillian B. Thomsen to Senior Vice President (SVP) & Chief Financial Officer. Ms. Thomsen has served as SVP, Finance & Chief Accounting Officer of Nektar since 2008, and is a key member of our Executive Committee.
Conference Call to Discuss Second Quarter 2022 Financial Results

Nektar management will host a conference call to review the results beginning at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time, Thursday, August 4, 2022.

This press release and a live audio-only Webcast of the conference call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: View Source The web broadcast of the conference call will be available for replay through September 4, 2022.

To access the conference call, follow these instructions:

Dial: (833) 634-2591 (U.S); (412) 317-6040 (international)

In the event that any non-GAAP financial measure is discussed on the conference call that is not described in this press release, or explained on the conference call, related information will be made available on the Investors section of the Nektar website as soon as practical after the conclusion of the conference call.