On May 3, 2022 Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) reported results for the quarter ended March 31, 2022 (Press release, Teva, MAY 3, 2022, View Source [SID1234613369]).

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Mr. Kåre Schultz, Teva’s President and CEO, said, 2022 is off to a solid start with the successful launch of a first generic version of Revlimid in the United States, and gains in market share for AJOVY both in the United States and in Europe, where it has solidified its leadership position as the second leading brand. AUSTEDO continues to grow as more patients with tardive dyskinesia are being diagnosed and are receiving treatment. We are also pleased to continue resolving opioid-related litigations with recent settlements in Florida and Rhode Island including the provision of lifesaving opioid treatments and recovery medicines for those who need them."

Mr. Schultz continued: "While easing of COVID-19 related restrictions has led to positive momentum in our European business, we are seeing fluctuations of foreign exchange rates, and have therefore lowered our 2022 revenue outlook, while reaffirming our earnings and cash flow guidance."

First Quarter 2022 Consolidated Results

Revenues in the first quarter of 2022 were $3,661 million, a decrease of 8%, or 5% in local currency terms, compared to the first quarter of 2021. This decrease was mainly due to lower revenues in our North America segment primarily related to generic products and COPAXONE, partially offset by higher revenues from Anda and generic products in our Europe segment.

Exchange rate movements during the first quarter of 2022, including hedging effects, negatively impacted our revenues by $133 million and our GAAP and non-GAAP operating income by $56 million and $59 million, respectively.

GAAP gross profit was $1,740 million in the first quarter of 2022, a decrease of 7% compared to the first quarter of 2021. GAAP gross profit margin was 47.5% in the first quarter of 2022, compared to 47.2% in the first quarter of 2021. The increase in gross profit margin was mainly driven by our network consolidation activities, as well as a change in product portfolio mix in our International Markets segment, partially offset by the unfavorable mix of generic products in our North America segment and lower revenues from COPAXONE. Non-GAAP gross profit was $1,986 million in the first quarter of 2022, a decrease of 7% compared to the first quarter of 2021. Non-GAAP gross profit margin was 54.2% in the first quarter of 2022, compared to 53.8% in the first quarter of 2021.

GAAP Research and Development (R&D) expenses in the first quarter of 2022 were $225 million, a decrease of 11% compared to the first quarter of 2021. Non-GAAP R&D expenses were $221 million, or 6.0% of quarterly revenues, in the first quarter of 2022, compared to $244 million, or 6.1%, in the first quarter of 2021. In the first quarter of 2022, our R&D expenses related primarily to specialty product candidates in neuroscience (such as migraine, movement disorders/ neurodegeneration and neuropsychiatry, including post-approval commitments), immunology (such as respiratory medicines) and selected other areas, as well as generic products including biosimilars. Our lower R&D expenses in the first quarter of 2022, compared to the first quarter of 2021, were mainly due to a decrease in neuroscience (in the pain and migraine and headache therapeutic areas), as well as various generics projects.

GAAP Selling and Marketing (S&M) expenses in the first quarter of 2022 were $584 million, flat compared to the first quarter of 2021. Non-GAAP S&M expenses were $552 million, or 15.1% of quarterly revenues, in the first quarter of 2022, compared to $549 million, or 13.8%, in the first quarter of 2021.

GAAP General and Administrative (G&A) expenses in the first quarter of 2022 were $296 million, an increase of 2% compared to the first quarter of 2021. Non-GAAP G&A expenses were $252 million, or 6.9% of quarterly revenues, in the first quarter of 2022, compared to $278 million, or 7%, in the first quarter of 2021.

GAAP other income and Non-GAAP other income in the first quarter of 2022 was $52 million, compared to $5 million in the first quarter of 2021. Other income in the first quarter of 2022 was mainly the result of settlement proceeds in our International Markets segment.

GAAP operating loss in the first quarter of 2022 was $713 million, compared to operating income of $434 million in the first quarter of 2021. GAAP operating loss in the first quarter of 2022 was mainly affected by legal settlements and loss contingencies, primarily related to an update of the estimated settlement provision recorded in connection with the remaining opioid cases. Non-GAAP operating income in the first quarter of 2022 was $1,013 million, a decrease of 6%, compared to $1,077 million in the first quarter of 2021. This decrease in non-GAAP operating income was mainly due to lower profit in our North America segment, partially offset by higher profit in our Europe and International Markets segments. Non-GAAP operating margin was 27.7% in the first quarter of 2022, compared to 27.1% in the first quarter of 2021.

EBITDA (defined as operating income (loss), excluding amortization and depreciation expenses) was negative $390 million in the first quarter of 2022, compared to EBITDA of $809 million in the first quarter of 2021. Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation expenses) was $1,135 million in the first quarter of 2022, a decrease of 6% compared to $1,206 million in the first quarter of 2021.

GAAP financial expenses, net were $258 million in the first quarter of 2022, compared to $290 million in the first quarter of 2021. Financial expenses in the first quarter of 2022, were mainly comprised of interest expenses of $238 million. Financial expenses in the first quarter of 2021 were mainly comprised of interest expenses of $239 million and loss on revaluations of marketable securities of $64 million. Non-GAAP financial expenses, net were $247 million in the first quarter of 2022, compared to $227 million in the first quarter of 2021.

In the first quarter of 2022, we recognized a GAAP tax expense of $2 million, on pre-tax loss of $971 million. In the first quarter of 2021, we recognized a tax expense of $62 million, on pre-tax income of $144 million. Our tax rate for the first quarter of 2022 was mainly affected by legal settlement charges and interest expense disallowances. Non-GAAP income taxes in the first quarter of 2022 were $142 million, or 18.5%, on pre-tax non-GAAP income of $766 million. Non-GAAP income taxes in the first quarter of 2021 were $146 million, or 17%, on pre-tax non-GAAP income of $851 million. Our non-GAAP tax rate in the first quarter of 2022 was mainly affected by the mix of products we sold and interest expense disallowances.

We expect our annual non-GAAP tax rate for 2022 to be 18%-19%, unchanged from our outlook provided in February 2022.

GAAP net loss attributable to Teva and GAAP diluted loss per share were $955 million and $0.86, respectively, in the first quarter of 2022, compared to net income of $77 million and diluted earnings per share of $0.07 in the first quarter of 2021. Non-GAAP net income attributable to Teva and non-GAAP diluted earnings per share in the first quarter of 2022 were $609 million and $0.55, respectively, compared to $699 million and $0.63 in the first quarter of 2021.

The weighted average diluted shares outstanding used for the fully diluted share calculation for the three months ended March 31, 2022 and 2021 was 1,107 million shares. The weighted average diluted shares outstanding used for the fully diluted share calculation on a non-GAAP basis for the three months ended March 31, 2022 and 2021 was 1,112 million and 1,107 million shares, respectively.

As of March 31, 2022 and 2021, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,145 million and 1,130 million, respectively.

Non-GAAP information: Net non-GAAP adjustments in the first quarter of 2022 were $1,564 million. Non-GAAP net income and non-GAAP EPS for the first quarter of 2022 were adjusted to exclude the following items:

Legal settlements and loss contingencies of $1,124 million;
Amortization of purchased intangible assets of $200 million, of which $178 million is included in cost of sales and the remaining $22 million in S&M expenses;
Impairment of long-lived assets of $165 million, comprised mainly of impairment of intangible assets of product rights assets in connection with the Actavis Generics acquisition;
Restructuring expenses of $57 million;
Contingent consideration expense of $33 million, mainly related to an increase in future royalties;
Equity compensation expenses of $24 million;
Finance expenses of $11 million;
Other items of $91 million; and
Income tax of $140 million.
Teva believes that excluding such items facilitates investors’ understanding of its business.

Commencing in the first quarter of 2022, we no longer exclude IPR&D acquired in development arrangements from our non-GAAP financial measures. In our comparable non-GAAP financial measures for the first quarter of 2021, we excluded $5 million IPR&D acquired in development arrangements. We are not recasting the non-GAAP presentation for the first quarter of 2021 since the adjustment is not significant. We are making this change to our presentation of non-GAAP financial measures to improve comparability of our non-GAAP presentation to those of other companies in the pharmaceutical industry that are making a similar change to their presentations beginning in the first quarter of 2022.

For further information, see the tables below for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures and the information under "Non-GAAP Financial Measures." Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow used in operating activities during the first quarter of 2022 was $49 million, compared to $405 million in the first quarter of 2021. The lower cash flow used in operating activities in the first quarter of 2022 was mainly due to changes in working capital items resulting from a decrease in accounts receivables net of SR&A in connection with the decrease in revenues.

Free cash flow (defined as cash flow used in operating activities, cash used for capital investments, beneficial interest collected in exchange for securitized accounts receivables, proceeds from divestitures of businesses and other assets and cash used for acquisition of businesses, net of cash acquired) was $117 million in the first quarter of 2022, compared to $59 million in the first quarter of 2021. The increase in the first quarter of 2022 resulted mainly from lower cash flow used in operating activities, partially offset by lower sales of assets.

As of March 31, 2022, our debt was $22,917 million, compared to $23,043 million as of December 31, 2021. This decrease was mainly due to exchange rate fluctuations. Our debt as of March 31, 2022 was effectively denominated in the following currencies: 61% in U.S. dollars, 36% in euros and 3% in Swiss francs. The portion of total debt classified as short-term as of March 31, 2022 was 9%, compared to 6% as of December 31, 2022. Our financial leverage was 69% as of March 31, 2022, compared to 67% as of December 31, 2021. Our average debt maturity was approximately 6.2 years as of March 31, 2022, compared to 6.4 years as of December 31, 2021.

In April 2022, we entered into an unsecured syndicated sustainability-linked revolving credit facility ("RCF") of $1.8 billion with a maturity date of April 2026, with two one-year extension options, which replaces Teva’s existing revolving credit facility. The RCF is linked to two sustainability performance targets. The RCF margin may increase or decrease depending on the Company’s sustainability performance.

Segment Results for the First Quarter of 2022

North America Segment

Our North America segment includes the United States and Canada.

The following table presents revenues, expenses and profit for our North America segment for the three months ended March 31, 2022 and 2021:

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Revenues from our North America segment in the first quarter of 2022 were $1,737 million, a decrease of $251 million, or 13%, compared to the first quarter of 2021, mainly due to a decrease in revenues from generic products and COPAXONE, partially offset by higher revenues from ANDA.

Revenues in the United States, our largest market, were $1,638 million in the first quarter of 2022, a decrease of $216 million or 12% compared to the first quarter of 2021.

Revenues by Major Products and Activities

The following table presents revenues for our North America segment by major products and activities for the three months ended March 31, 2022 and 2021:

Generic products revenues in our North America segment (including biosimilars) in the first quarter of 2022 were $899 million, a decrease of 15% compared to the first quarter of 2021, mainly due to increased competition on key products and lower volumes, partially offset by higher revenues from lenalidomide capsules (the generic version of Revlimid) and Truxima.

In the first quarter of 2022, our total prescriptions were approximately 302 million (based on trailing twelve months), representing 8.2% of total U.S. generic prescriptions according to IQVIA data.

On March 7, 2022 we announced the launch of the first generic version of Revlimid (lenalidomide capsules), in 5mg, 10mg, 15mg, and 25mg strengths, in the United States. These lenalidomide capsules are a prescription medicine used in adults for the treatment of (i) multiple myeloma in combination with the medicine dexamethasone, (ii) certain myelodysplastic syndromes, and (iii) mantle cell lymphoma following specific prior treatment.

AJOVY revenues in our North America segment in the first quarter of 2022 increased by 16% to $36 million, compared to the first quarter of 2021, mainly due to growth in volume.

AUSTEDO revenues in our North America segment in the first quarter of 2022 increased by 6%, to $154 million, compared to $146 million in the first quarter of 2021, mainly due to growth in volume.

BENDEKA and TREANDA combined revenues in our North America segment in the first quarter of 2022 decreased by 10% to $82 million, compared to the first quarter of 2021, mainly due to the availability of alternative therapies and continued competition from Belrapzo (a ready-to-dilute bendamustine hydrochloride product from Eagle).

COPAXONE revenues in our North America segment in the first quarter of 2022 decreased by 48% to $86 million, compared to the first quarter of 2021, mainly due to generic competition in the United States and a decrease in glatiramer acetate market share due to availability of alternative therapies.

Anda revenues in our North America segment in the first quarter of 2022 increased by 18% to $342 million, compared to $289 million in the first quarter of 2021, mainly due to higher demand for COVID-related products.

North America Gross Profit

Gross profit from our North America segment in the first quarter of 2022 was $890 million, a decrease of 17%, compared to $1,074 million in the first quarter of 2021. This decrease was mainly due to lower gross profit from generic products and lower gross profit from COPAXONE.

Gross profit margin for our North America segment in the first quarter of 2022 decreased to 51.2%, compared to 54.0% in the first quarter of 2021. This decrease was mainly due to a change in the mix of generic products and COPAXONE.

North America Profit

Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our North America segment in the first quarter of 2022 was $402 million, a decrease of 30% compared to $577 million in the first quarter of 2021, mainly due to lower revenues, as discussed above.

Europe Segment

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

The following table presents revenues, expenses and profit for our Europe segment for the three months ended March 31, 2022 and 2021:

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than $0.5 million or 0.5%, as applicable.

Revenues from our Europe segment in the first quarter of 2022 were $1,156 million, a decrease of 5%, or $58 million, compared to the first quarter of 2021. In local currency terms, revenues increased by 3%. In the first quarter of 2021, our lower revenues were impacted by the implications of the COVID-19 pandemic. In the first quarter of 2022, our higher revenues were attributed to higher demand for generic and OTC products resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, as well as higher sales of cough and cold products. In the first quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of $67 million, net of hedging effects.

Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the three months ended March 31, 2022 and 2021:

Generic products revenues in our Europe segment in the first quarter of 2022, including OTC products, increased by 1% to $876 million, compared to the first quarter of 2021. In local currency terms, revenues increased by 8%, mainly due to higher demand for generic and OTC products, resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, as well as higher sale of cough and cold products.

AJOVY revenues in our Europe segment in the first quarter of 2022 increased to $30 million, compared to $16 million in the first quarter of 2021, mainly due to growth in European countries in which AJOVY had previously been launched, as well as launches and reimbursements in additional European countries.

COPAXONE revenues in our Europe segment in the first quarter of 2022 decreased by 29% to $72 million, compared to the first quarter of 2021. In local currency terms, revenues decreased by 24%, due to price reductions and a decline in volume resulting from competing glatiramer acetate products.

Respiratory products revenues in our Europe segment in the first quarter of 2022 decreased by 24% to $71 million compared to the first quarter of 2021. In local currency terms, revenues decreased by 19%, mainly due to price reductions.

Europe Gross Profit

Gross profit from our Europe segment in the first quarter of 2022 was $694 million, an increase of 1% compared to $688 million in the first quarter of 2021.

Gross profit margin for our Europe segment in the first quarter of 2022 increased to 60.0%, compared to 56.6% in the first quarter of 2021. This increase was mainly due to lower cost of goods sold, mainly driven by our network consolidation activities, as well as a decrease in write-offs.

Europe Profit

Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in the first quarter of 2022 was $381 million, an increase of 13%, compared to $338 million in the first quarter of 2021. This increase was mainly due to higher gross profit and reduced expenses, as discussed above.

International Markets Segment

Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel.

On February 1, 2021, we completed the sale of the majority of the generic and operational assets of our business venture in Japan.

In February 2022, Russia launched an invasion of Ukraine. As of the date of this press release, sustained conflict and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results. We have no manufacturing or R&D facilities in these markets. During the first quarter of 2022, the impact of this conflict on our International Markets segment results of operations and financial condition was immaterial.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended March 31, 2022 and 2021:

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Revenues from our International Markets segment in the first quarter of 2022 were $492 million, flat compared to the first quarter of 2021. In local currency terms, revenues increased by 8% compared to the first quarter of 2021, mainly due to higher revenues in certain markets, partially offset by lower revenues in Japan resulting from the divestment mentioned above, as well as regulatory price reductions and generic competition to off-patented products. Revenues continued to be affected by the ongoing impact of the COVID-19 pandemic on markets and on customer stocking and purchasing patterns.

Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the three months ended March 31, 2022 and 2021:

Generic products revenues in our International Markets segment in the first quarter of 2022, which include OTC products, decreased by 1% in U.S. dollar. In local currency terms, revenues increased by 9% to $388 million, compared to the first quarter of 2021. This increase was mainly due to higher revenues in certain markets, partially offset by lower sales in Japan resulting from the divestment mentioned above, as well as regulatory price reductions and generic competition to off-patented products in Japan.

AJOVY was launched in certain markets in our International Markets segment, including Japan in August 2021. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the first quarter of 2022 were $6 million, compared to $1 million in the first quarter of 2021.

COPAXONE revenues in our International Markets segment in the first quarter of 2022 were $10 million, compared to $12 million in the first quarter of 2021.

AUSTEDO was launched in early 2021 in China for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia and was also launched in Israel during 2021. In October 2021, we received marketing approval for both indications in Brazil. We continue with additional submissions in various other markets.

International Markets Gross Profit

Gross profit from our International Markets segment in the first quarter of 2022 was $286 million, an increase of 10% compared to $260 million in the first quarter of 2021.

Gross profit margin for our International Markets segment in the first quarter of 2022 increased to 58.1%, compared to 53.0% in the first quarter of 2021. This increase was mainly due to a change in product portfolio mix, price increases largely as a result of rising costs due to inflationary pressure and a positive impact from hedging activity, partially offset by regulatory price reductions and generic competition to off-patented products in Japan.

International Markets Profit

Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in the first quarter of 2022 was $179 million, an increase of 47%, compared to $122 million in the first quarter of 2021. This increase was mainly due to higher gross profit as well as other income.

Other Activities

We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("APIs") to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our North America, Europe or International Markets segments described above.

Our revenues from other activities in the first quarter of 2022 were $275 million, a decrease of 5% compared to the first quarter of 2021. In local currency terms, revenues were flat.

API sales to third parties in the first quarter of 2022 were $181 million, an increase of 2% in both U.S. dollars and local currency terms, compared to the first quarter of 2021.

Teva will host a conference call and live webcast including a slide presentation on Tuesday, May 3, 2022, at 8:00 a.m. ET to discuss its first quarter 2022 results and overall business environment. A question & answer session will follow.

A live webcast of the call will be available on Teva’s website at: ir.tevapharm.com. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on the Company’s website or by calling the following numbers: United States 1-866-331-1332; International +44 (0) 3333 009785; passcode: 8636304.

On March 3, 2022 Incyte (Nasdaq:INCY) reported 2022 first quarter financial results, and provides a status update on the Company’s clinical development portfolio (Press release, Incyte, MAY 3, 2022, View Source [SID1234613393]).

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"Our double-digit growth in the first quarter reflects the strong performance of Jakafi (ruxolitinib) – supported by the successful launch in chronic graft-versus-host disease (GVHD) in the United States – as well as continued growth for Pemazyre (pemigatinib) in Europe and Japan and, importantly, the fast uptake of Opzelura (ruxolitinib) cream in atopic dermatitis in the United States," said Hervé Hoppenot, Chief Executive Officer, Incyte. "Opzelura is an important growth driver for Incyte and the U.S. launch is off to an excellent start with over 38,000 patients treated during the first quarter and significant progress with payers on securing access for patients. Later this year we have the potential to launch Opzelura in a second indication in the U.S. and we expect a regulatory decision in Europe for the treatment of patients with vitiligo who currently have no approved therapies for repigmentation. Our strong product growth and robust pipeline position us well for long-term growth and diversification."

Portfolio Updates

MPNs and GVHD – key highlights

LIMBER (Leadership In MPNs BEyond Ruxolitinib) program: The new drug application (NDA) for once-daily ruxolitinib (QD) is on track for submission in the first half of this year. Initial data from the ongoing combination trials of ruxolitinib with INCB57643 (BET) and INCB00928 (ALK2) are expected later this year.

1 Development collaboration with Cellenkos, Inc.

2 Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals.

Other Hematology/Oncology – key highlights

Pemazyre: The ongoing launches in the U.S., Europe and Japan continue to go well. In March, Pemazyre was approved in China by the National Medical Products Administration (NMPA) for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth receptor 2 (FGFR2) fusion or rearrangement as confirmed by a validated diagnostic test that have progressed after at least one prior line of systemic therapy.

A Phase 2 open-label study evaluating the efficacy and safety of pemigatinib in adults with previously treated glioblastoma or other primary central nervous system tumors harboring activating FGFR1-3 alterations (FIGHT-209) and a Phase 2 open-label study evaluating the efficacy and safety of pemigatinib in adults with relapsed or refractory advanced non-small cell lung cancer with an FGFR alteration (FIGHT-210) are being initiated.

Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 2 (L-MIND); Phase 3 (B-MIND)

First-line DLBCL: Phase 3 (frontMIND)

Relapsed or refractory follicular lymphoma (FL) and relapsed or refractory marginal zone lymphoma (MZL): Phase 3 (inMIND)

Relapsed or refractory B-cell malignancies: PoC (topMIND) with parsaclisib (PI3Kδ)

Relapsed or refractory B-cell malignancies: PoC with lenalidomide and plamotamab being initiated2

1 Development of tafasitamab in collaboration with MorphoSys.

2 Clinical collaboration with MorphoSys and Xencor, Inc. to investigate the combination of tafasitamab plus lenalidomide in combination with Xencor’s CD20xCD3 XmAb bispecific antibody, plamotamab.

3 Retifanlimab licensed from MacroGenics.

Inflammation and Autoimmunity (IAI) – key highlights

Dermatology

Strong U.S. launch of Opzelura in atopic dermatitis (AD): Over 38,000 new patients were prescribed Opzelura in the first quarter with positive physician and patient feedback driving the robust uptake. Refill rates continue to increase with refills comprising 23% of total prescriptions in the last week of Q1. Substantial progress has been made in securing access to Opzelura for patients, and we now have agreements in place with payers which account for 146 million total lives covered including 82 million commercial lives.

We have established a broad clinical development program within dermatology that includes multiple new indications for ruxolitinib cream, as well as new products.

Ruxolitinib cream in vitiligo in the U.S. and Europe: In March, 52-week safety and efficacy data from the two Phase 3 TRuE-V studies evaluating ruxolitinib cream in vitiligo, presented at the American Academy of Dermatology (AAD) annual meeting, demonstrated that a longer duration of therapy with ruxolitinib cream was associated with greater repigmentation in patients with vitiligo. A supplemental new drug application (sNDA) and a marketing authorization application (MAA) for ruxolitinib cream as a treatment for vitiligo are under review at the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA), respectively. The Prescription Drug User Fee Act (PDUFA) target action date was extended to July 18, 2022. Ruxolitinib cream has the potential to become the first product approved for repigmentation in vitiligo and would be a new therapeutic option for the millions of patients living with the disease today, pending regulatory decision.

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A Phase 2 open-label study is being initiated to assess whether repigmentation response in some patients with vitiligo may be enhanced by adding phototherapy to treatment with ruxolitinb cream.

Ruxolitinib cream in chronic hand eczema (CHE): Incyte continues to expand the development of ruxolitinib cream into new indications as part of its life cycle management strategy. Two Phase 3 trials evaluating ruxolitinib cream in chronic hand eczema are being initiated (TRuE-CHE1 and TRuE-CHE2).

INCB54707 (JAK1) development across three indications: We are also assessing INCB54707, our JAK1 specific inhibitor, in Phase 2 studies for hidradenitis suppurativa, prurigo nodularis and vitiligo. There is significant potential with each of these indications where there are limited, and in some cases, no FDA-approved therapies.

1 Novartis’ rights for ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration.

Discovery and early development – key highlights

Incyte’s portfolio of other earlier-stage clinical candidates is summarized below.

Oral PD-L1 Program: At SITC (Free SITC Whitepaper) last year, Incyte highlighted clinical safety and efficacy data for the oral PD-L1 program which included three compounds, INCB86550, INCB99280 and INCB99318. Tumor shrinkage was observed for all three oral PD-L1 inhibitors. With regards to safety, both INCB99280 and INCB99318 did not show peripheral neuropathy seen with INCB86550. In May, the decision was made to prioritize the development of INCB99280 and INCB99318 based on positive therapeutic ratios.

INCB123667 (CDK2): In the cell cycle, the serine threonine kinase, CDK2, regulates the transition from the G1 phase (cell growth) to the S-phase (DNA replication). INCB123667 is a novel, potent and selective oral small molecule inhibitor of CDK2 which has been shown to suppress tumor growth as monotherapy and in combination with standard of care, in Cyclin E amplified tumor models, in vivo. A Phase 1 dose-escalation and dose-expansion study of INCB123667 in adults with selected advanced or metastatic solid tumors is being initiated.

1 Discovery collaboration with Agenus.

Partnered – key highlights

Ruxolitinib in acute and chronic GVHD: In March, Incyte and Novartis announced a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for ruxolitinib in acute and chronic GVHD, based on data from the Phase 3 REACH2 and REACH3 trials. GVHD is a life-threatening complication of stem cell transplants, with no established standard of care in Europe for patients who do not adequately respond to first-line steroid treatment.

Baricitinib in alopecia areata (AA): In March, Incyte and Eli Lilly presented 52-week data at the American Academy of Dermatology (AAD) annual meeting demonstrating that nearly 40% of adults with alopecia areata and who were taking baricitinib 4mg saw at least 80% scalp hair coverage. There are no approved treatments for AA.

Capmatinib in NSCLC: In April, Incyte and Novartis announced a positive opinion from the CHMP based on data from the Phase 2 GEOMETRY mono-1 study showing an overall response rate (ORR) of 51.6% in a cohort evaluating second-line patients only and 44% in all previously-treated patients with advanced non-small cell lung cancer (NSCLC) harboring alterations leading to MET exon 14 skipping.

Indication and status

1 Jakavi (ruxolitinib) licensed to Novartis ex-US.

2 Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis; approved as Olumiant in EU and Japan for certain patients with atopic dermatitis.

3 Worldwide rights to capmatinib licensed to Novartis.

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2022 First Quarter Financial Results

The financial measures presented in this press release for the three months ended March 31, 2022 and 2021 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

Financial Highlights

Product and Royalty Revenues Product and royalty revenues for the three months ended March 31, 2022 increased 20% over the prior year comparative period primarily as a result of increases in Jakafi, Pemazyre and Opzelura net product revenues, and higher royalty revenues from Jakavi and Olumiant. Jakafi net product revenues for the three months ended March 31, 2022 increased 17% over the prior year comparative period, primarily driven by growth in patient demand. The 49% growth in Olumiant royalty revenues for the quarter ended March 31, 2022 reflects an increase in net product sales as a result of the use of Olumiant for the treatment of COVID-19.

1 Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.

2 Non-GAAP research and development expenses exclude the cost of stock-based compensation.

3 Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation and legal settlements.

4 Non-GAAP change in fair value of acquisition-related contingent consideration is null.

Research and development expenses GAAP and Non-GAAP research and development expense for the three months ended March 31, 2022 increased 15% and 18%, respectively, compared to the same period in 2021 primarily due to continued investment in our late stage development assets.

Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the three months ended March 31, 2022 increased 36% and 56%, respectively, compared to the same period in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatment of atopic dermatitis.

Other Financial Information

Operating income GAAP operating income for the three months ended March 31, 2022 increased compared to the same period in 2021, driven by growth in product and royalty revenues.

Cash, cash equivalents and marketable securities position As of March 31, 2022 and 2021, cash, cash equivalents and marketable securities totaled $2.5 billion and $2.3 billion, respectively.

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2022 Financial Guidance

The Company has reaffirmed its full year 2022 financial guidance, as detailed below. Guidance does not include revenue from Opzelura or the impact of any potential future strategic transactions.

1Pemazyre in the U.S., EU and Japan and Iclusig and Minjuvi in the EU.

2Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation.

3 Adjusted to exclude the estimated cost of stock-based compensation.

Conference Call and Webcast Information
Incyte will hold a conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13728884.

If you are unable to participate, a replay of the conference call will be available for 90 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13728884.

The conference call will also be webcast live and can be accessed at investor.incyte.com.

About Incyte
Incyte is a Wilmington, Delaware-based, global biopharmaceutical company focused on finding solutions for serious unmet medical needs through the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit Incyte.com and follow @Incyte.

About Jakafi (ruxolitinib)
Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. FDA for treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.

Jakafi is also indicated for treatment of polycythemia vera (PV) in adults who have had an inadequate response to or are intolerant of hydroxyurea, in adults with intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF and for treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older.

9

Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi (ruxolitinib) outside the United States. Jakafi is a registered trademark of Incyte Corporation. Jakavi is a registered trademark of Novartis AG in countries outside the United States.

About Opzelura (ruxolitinib) Cream

Opzelura (ruxolitinib) cream is a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, is the first and only topical JAK inhibitor approved for use in the United States for the topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis (AD) in non-immunocompromised patients 12 years of age and older whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable. Use of Opzelura in combination with therapeutic biologics, other JAK inhibitors, or potent immunosuppressants, such as azathioprine or cyclosporine, is not recommended.

In October 2021, Incyte announced the validation of the European Marketing Authorization Application (MAA) for ruxolitinib cream as a potential treatment for adolescents and adults (age >12 years) with non-segmental vitiligo with facial involvement. Additionally, in December 2021, Incyte announced the acceptance and priority review of the supplemental New Drug Application (sNDA) for ruxolitinib cream as a potential treatment for adolescents and adults (age ≥12 years) with vitiligo.

Incyte has worldwide rights for the development and commercialization of ruxolitinib cream, marketed in the United States as Opzelura.

Opzelura is a trademark of Incyte.

About Monjuvi/Minjuvi (tafasitamab)
Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting monoclonal antibody. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab incorporates an XmAb engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism including Antibody-Dependent Cell-Mediated Cytotoxicity (ADCC) and Antibody-Dependent Cellular Phagocytosis (ADCP).

In the United States, Monjuvi (tafasitamab-cxix) is approved by the U.S. Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory DLBCL not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

In Europe, Minjuvi (tafasitamab) received conditional approval, in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant (ASCT).

Tafasitamab is being clinically investigated as a therapeutic option in B-cell malignancies in several ongoing combination trials.

Minjuvi and Monjuvi are registered trademarks of MorphoSys AG. Tafasitamab is co-marketed by Incyte and MorphoSys under the brand name Monjuvi in the U.S., and marketed by Incyte under the brand name Minjuvi in the EU.

XmAb is a registered trademark of Xencor, Inc.

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About Pemazyre (pemigatinib)
Pemazyre is a kinase inhibitor indicated in the United States for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or other rearrangement as detected by an FDA-approved test*. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

In Japan, Pemazyre is approved for the treatment of patients with unresectable biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy.

In Europe, Pemazyre is approved for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy.

Pemazyre is a potent, selective, oral inhibitor of FGFR isoforms 1, 2 and 3 which, in preclinical studies, has demonstrated selective pharmacologic activity against cancer cells with FGFR alterations.

Pemazyre is marketed by Incyte in the United States, Europe and Japan.

Pemazyre is a trademark of Incyte Corporation.

* Pemazyre (pemigatinib) [Package Insert]. Wilmington, DE: Incyte; 2020.

About Iclusig (ponatinib) tablets

Ponatinib (Iclusig) targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs.

In the EU, Iclusig is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (CML) who are resistant to dasatinib or nilotinib; who are intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation, or the treatment of adult patients with Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL) who are resistant to dasatinib; who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation.

Click here to view the Iclusig EU Summary of Medicinal Product Characteristics.

Incyte has an exclusive license from Takeda Pharmaceuticals International AG to commercialize ponatinib in the European Union and 29 other countries, including Switzerland, UK, Norway, Turkey, Israel and Russia. Iclusig is marketed in the U.S. by Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited.

On May 3, 2022 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the first quarter ended March 31, 2022 (Press release, Veracyte, MAY 3, 2022, View Source [SID1234613409]).

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"I am extremely pleased with our team’s strong results in the first quarter," said Marc Stapley, Veracyte’s chief executive officer. "Last year we assembled the critical elements needed to drive near and long-term growth, including our acquisitions of Decipher Biosciences and HalioDx, complementing our prior acquisition of the nCounter diagnostic platform. We opened this year with the organization re-aligned to fully execute our strategic plan initiatives. With our innovative lab-based business and international reach, enabled by the automated nCounter platform, we are positioned to achieve our vision of improving outcomes for patients all over the world."

Key Business Highlights:

Increased first quarter total revenue by 85% to $67.8 million, compared to the first quarter of 2021;
Grew test volumes to 23,245, an increase of 61% compared to the first quarter of 2021;
Announced that new, expanded data will be presented at the upcoming American Thoracic Society (ATS) 2022 International Conference on the Percepta Nasal Swab test’s performance in current and former smokers with lung nodules, regardless of their smoking history burden;
Announced that three abstracts will be presented at the upcoming American Urological Association conference highlighting new data on the genomic underpinnings of prostate and bladder cancers, derived from analyses of the Decipher GRID database;
Introduced the Veracyte Biopharma Atlas, a unique pan-cancer database of comprehensive biomarkers linked to clinical outcome data leveraging Veracyte’s unique multi-omic and immuno-oncology capabilities, at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting in April;
Announced that an updated clinical practice guideline, as well as a review article and separate commentary, were published in journals of the American Thoracic Society and highlight the role of the Envisia Genomic Classifier in the diagnosis of idiopathic pulmonary fibrosis (IPF); and
Ended the first quarter of 2022 with cash and cash equivalents of $163.6 million.
First Quarter 2022 Financial Results

Total revenue for the first quarter of 2022 was $67.8 million, compared to $36.7 million in the first quarter of 2021. Testing revenue was $56.0 million, an increase of 69% compared to $33.1 million in the first quarter of 2021 driven by the strong performance of our Decipher urology portfolio. Product revenue was $3.0 million, a decrease of 3% compared to $3.1 million in the first quarter of 2021 as volume growth was offset by an approximately 5% currency headwind due to a decline in exchange rates. Biopharmaceutical and other revenue was $8.8 million, an increase of $8.2 million compared to $0.6 million in the first quarter of 2021, driven primarily by the contribution of the HalioDx acquisition.

Total gross margin for the first quarter of 2022, including the amortization of acquired intangible assets, was 58%, compared to 62% in the first quarter of 2021. Non-GAAP gross margin, excluding the amortization of acquired intangible assets and other acquisition related expenses was 65%, compared to 66% in the first quarter of 2021.

Operating expenses, excluding cost of revenue, were $54.4 million, a decrease of 20% compared to the first quarter of 2021. Non-GAAP operating expenses, excluding the cost of revenue, amortization of acquired intangible assets and other acquisition related expenses, were $49.1 million compared to $31.9 million in the first quarter of 2021.

First quarter 2022 net loss was $14.5 million, an improvement of 65% compared to the first quarter of 2021. Basic and diluted net loss per common share was $0.20, an improvement of 70% compared to the first quarter of 2021. Net cash used by operating activities in the first quarter of 2022 was $8.9 million, an improvement of $31.7 million compared to the first quarter of 2021.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Note Regarding Use of Non-GAAP Financial Measures."

2022 Financial Outlook

The company is currently projecting full year 2022 total revenue of $265 million to $275 million, representing year-over-year growth of 21% to 25% compared to the prior year. This compares to our prior 2022 total revenue guidance of $260 million to $275 million.

Conference Call and Webcast Details

Veracyte will host a conference call and webcast today at 4:30 p.m. Eastern Time to discuss the company’s financial results and provide a general business update. The conference call will be webcast live from the company’s website and will be available via the following link: View Source The webcast should be accessed 10 minutes prior to the conference call start time. A replay of the webcast will be available for one year following the conclusion of the live broadcast and will be accessible on the company’s website at View Source

On May 3, 2022 Aura Biosciences Inc. (NASDAQ: AURA), a clinical-stage biotechnology company developing a novel class of virus-like drug conjugate (VDC) therapies for multiple oncology indications, reported that Elisabet de los Pinos, PhD, Chief Executive Officer of Aura will present at the 2022 Bank of America Healthcare Conference (Press release, Aura Biosciences, MAY 3, 2022, View Source [SID1234613427]). The conference is being held in Las Vegas, Nevada and the presentation will take place on Tuesday, May 10, 2022, at 4:55 p.m. PT.

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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

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A live webcast of the presentation will be available on the "Investors & Media" page under the "Events & Presentations" section of the Company’s website at View Source, where a replay of the webcast will be archived for 90 days following the presentation date.

On May 3, 2022 West Pharmaceutical Services, Inc. (NYSE: WST), a global leader in innovative solutions for injectable drug administration, reported that it will participate in the Bank of America Securities 2022 Healthcare Conference taking place May 9-13, 2022, in Las Vegas, NV (Press release, West Pharmaceutical Services, MAY 3, 2022, View Source [SID1234613444]). Management will present on Tuesday, May 10, 2022, at 11:20 AM PDT.

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!

It will also present at the 42nd Annual William Blair Growth Stock Conference in Chicago, IL on Monday, June 6, 2022, as well as at the Jefferies Global Healthcare Conference in New York, NY on Thursday, June 9, 2022.

A live audio webcast will be available in the "Investors" section of the Company’s website at www.westpharma.com. Replay of the webcasts will be available for approximately 90 days after the events.