On August 5, 2021 Bayer Group reported strong growth in the second quarter of 2021 (Press release, Bayer, AUG 5, 2021, View Source [SID1234585794]). "Sales at all divisions increased by a double-digit percentage after adjusting for currency and portfolio effects, and we expect this positive sales momentum to continue in all our businesses. We are therefore upgrading our full-year guidance, and now anticipate higher sales and core earnings per share than in our previous forecast," said Werner Baumann, Chairman of the Board of Management, on Thursday. Presenting the company’s half-year financial report, he highlighted how "we have achieved major successes in developing and launching drugs, some of which have blockbuster potential. We have successfully expanded the launch of our cancer drug Nubeqa and are continuously surpassing our own expectations. We have continued to advance the launch of Verquvo for the treatment of symptomatic chronic heart failure, with approvals gained in the European Union and Japan, and we’re now in the process of launching Kerendia in the United States." The latter product was approved in July by the U.S. Food and Drug Administration for the treatment of adult patients with chronic kidney disease and type 2 diabetes. Bayer has also announced the acquisition of Vividion Therapeutics, as the company continues to make strides in implementing its strategy for the Pharmaceuticals Division. "Vividion’s unique technologies and special expertise will significantly strengthen our drug discovery capabilities," Baumann emphasized. Bayer recently formed its own cell and gene therapy platform as part of its transformation strategy for Pharmaceuticals. The platform already has potentially ground-breaking medical innovations in clinical development, such as a therapy for the treatment of Parkinson’s.

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Group sales in the second quarter increased by 12.9 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.) to 10.854 billion euros, after the prior-year period had been significantly impacted by the restrictions introduced in response to COVID-19. EBITDA before special items fell by 10.6 percent to 2.577 billion euros. Negative currency effects impacted sales by 524 million euros and EBITDA before special items by 153 million euros, with the latter also being diminished by allocations to provisions for variable compensation. EBIT came in at minus 2.281 billion euros (Q2 2020: minus 10.784 billion euros) after net special charges of 3.901 billion euros (Q2 2020: 12.511 billion euros). The special charges related primarily to the previously announced allocation to provisions – in the discounted amount of around 3.5 billion euros – in connection with the glyphosate litigations. Other special charges related to impairments and restructuring. Net income amounted to minus 2.335 billion euros (Q2 2020: minus 9.548 billion euros), while core earnings per share from continuing operations increased by 1.3 percent to 1.61 euros.

Free cash flow declined by 17.8 percent to 1.152 billion euros. Net financial debt as of June 30, 2021, increased to 34.361 billion euros, up 1.3 percent from March 31, 2021. Cash inflows from operating activities and positive currency effects almost offset the outflow for the dividend payment and settlement payments for litigations in the United States.

Crop Science grows sales in all regions

In the agricultural business (Crop Science), Bayer increased sales by 10.6 percent (Fx & portfolio adj.) to 5.021 billion euros, with growth in all regions. The division registered double-digit percentage gains in Latin America and Asia/Pacific as well as significant growth in North America after adjusting for currency and portfolio effects. Fungicides (Fx & portfolio adj. plus 22.9 percent) and Herbicides (Fx & portfolio adj. plus 16.2 percent) achieved particularly strong gains. Fungicides registered a significant increase in volumes, primarily in Latin America thanks to the Fox Xpro product, and also in North America due to the launch of new products such as Delaro Complete. The increase in sales at Herbicides was driven by increased volumes and prices, especially in North America, which saw higher volumes for XtendiMax and increased prices for Roundup. Business was also up at Soybean Seeds & Traits, which recorded growth of 9.1 percent (Fx & portfolio adj.) thanks to higher volumes in North America. Sales at Corn Seed & Traits advanced by 8.6 percent (Fx & portfolio adj.), with business benefiting in particular from increased volumes in Latin America and higher prices in North America.

EBITDA before special items at Crop Science decreased by 25.4 percent to 1.018 billion euros, giving a margin of 20.3 percent. Higher prices and volumes along with contributions from ongoing efficiency programs only partly offset an increase in costs, and particularly in the cost of goods sold. Earnings were also diminished by a negative product mix, currency effects of 111 million euros, and the later receipt of license revenues.

Pharmaceuticals raises sales and earnings

Sales of prescription medicines (Pharmaceuticals) rose by 16.2 percent (Fx & portfolio adj.) to 4.494 billion euros. The division’s business showed a robust recovery from the COVID-19 restrictions, particularly in the areas of ophthalmology, women’s healthcare and radiology, while other products such as the oral anticoagulant Xarelto and the newly launched cancer drug Nubeqa also generated tangible growth. Xarelto sales increased by 12.6 percent (Fx & portfolio adj.), largely as a result of significantly expanded volumes in China and Russia. Sales of the ophthalmology drug Eylea were up by 27.4 percent (Fx & portfolio adj.), mainly due to very strong growth as a result of high demand in Europe

EBITDA before special items at Pharmaceuticals increased by 3.0 percent to 1.409 billion euros, driven by the strong growth in sales. This resulted in a margin of 31.4 percent. Research and development expenses increased against the low prior-year figure and were partly attributable to the cell and gene therapy unit. Earnings were also diminished by an increase in the cost of goods sold, expenses for product launches, and a negative currency effect of 26 million euros.

Consumer Health delivers growth and increases profitability

Sales of self-care products (Consumer Health) increased by 12.8 percent (Fx & portfolio adj.) to 1.290 billion euros, with growth in all regions and categories following a soft prior-year quarter. Business benefited from continued high demand in Nutritionals, which saw sales rise by 15.7 percent (Fx & portfolio adj.), and from a strong allergy season in North America, which resulted in a 15.8 percent increase (Fx & portfolio adj.) in sales in the Allergy & Cold category.

EBITDA before special items at Consumer Health advanced by 9.4 percent to 278 million euros. As a result, the EBITDA margin before special items improved by 0.5 percentage points to 21.6 percent. The growth in earnings was primarily driven by the division’s strong business performance and continuous cost management efforts while allowing for additional investments in marketing as part of new product launches and accounting for negative currency effects of 20 million euros.

Outlook: Bayer optimistic for remainder of the year

Following the good business performance in the first half of 2021, Bayer is also optimistic for the remainder of the year and is raising its guidance accordingly. After adjusting for currency effects (i.e. based on the average monthly exchange rates in 2020), the company now expects to post sales of approximately 44 billion euros (previously: approximately 42 billion to 43 billion euros). This now corresponds to an increase of around 6 percent (previously: about 3 percent) on a currency- and portfolio-adjusted basis. Bayer now expects to generate an EBITDA margin before special items of around 26 percent (previously: around 27 percent) on a currency-adjusted basis. This would continue to correspond to EBITDA before special items of 11.2 billion to 11.5 billion euros on a currency-adjusted basis. Core earnings per share are now expected to come in at approximately 6.40 to 6.60 euros on a currency-adjusted basis (previously: approximately 6.10 to 6.30 euros). Free cash flow is now projected to amount to around minus 2 billion to minus 3 billion euros on a currency-adjusted basis (previously: around minus 3 billion to minus 4 billion euros). In addition, the company now expects net financial debt at the end of the year to come in at approximately 36 billion euros (previously: approximately 36 billion to 37 billion euros) on a currency-adjusted basis.

Based on the closing rates on June 30, 2021, the company now expects to generate sales of approximately 43 billion euros (previously: approximately 41 billion euros) for fiscal 2021. This now corresponds to an increase of approximately 6 percent (previously: approximately 3 percent) on a currency- and portfolio-adjusted basis. Bayer is now targeting an EBITDA margin before special items of approximately 25 percent (previously: approximately 26 percent). This would now correspond to EBITDA before special items of 10.6 billion to 10.9 billion euros (previously: 10.5 billion to 10.8 billion euros). Core earnings per share are now projected to come in at approximately 6.00 to 6.20 euros (previously: approximately 5.60 to 5.80 euros). Free cash flow is now expected to amount to around minus 2 billion to minus 3 billion euros (previously: around minus 3 billion to minus 4 billion euros), while net financial debt is now forecast to come in at around 35 billion euros (previously: around 35 billion to 36 billion euros).

Bayer links core financial instrument to ambitious sustainability targets

The company also made good progress in the area of sustainability. For example, Bayer recently amended its existing 4.5-billion-euro revolving credit facility by linking it to climate protection, creating a link between one of its financial instruments and its sustainability targets for the first time. The amendment incorporated the company’s greenhouse gas emission reduction targets into the revolving credit facility: if Bayer misses its reduction targets, it will make a compensation payment to a charitable organization. Through this amendment, Bayer has emphasized its commitment to achieving climate neutrality by 2030 and its holistic sustainability strategy.

After launching an initiative to help farmers sequester carbon in the soil in 2020, Bayer recently extended this decarbonization program to Europe. In addition, the long-term contraceptive Mirena has been added to the product catalogs of the United Nations Population Fund (UNFPA) and the United States Agency for International Development (USAID) for distribution in low- and mid-income countries. This represents a milestone in providing women in these countries with access to family planning. Bayer is investing 250 million euros in Turku, Finland, to expand and modernize the production of contraceptives.

On August 5, 2021 Galapagos NV (Euronext & NASDAQ: GLPG) reported its progress on earlier-stage programs as well as its commercial launch of filgotinib in Europe. Following recent setbacks, the company is moving forward with its revised strategy and operational restructuring announced in May (Press release, Galapagos, AUG 5, 2021, View Source [SID1234585857]). The unaudited H1 financial and operational results are further detailed in the H1 2021 report available on the website, www.glpg.com.

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"Multiple assets are moving through clinical development, and we recently reported positive topline data on our TYK2 compound GLPG3667. In a Phase 1b trial in psoriasis (Pso), clinical activity was observed at 4 weeks, combined with an encouraging safety and tolerability profile. We currently are running an extended dose escalation study in healthy volunteers, and plan to progress GLPG3667 to a Phase 2b dose finding study in Pso as well as a Phase 2 study in ulcerative colitis (UC) in 2022.

We continue to develop our SIK portfolio of molecules, and recently reported encouraging early data from the first patient studies with SIK2/3 inhibitor GLPG3970. In a Phase 1b trial in Pso (CALOSOMA), clinical activity was observed at 6 weeks, and in a Phase 2a trial in UC (SEA TURTLE), biologically important effects were observed on a number of objective endpoints, both of which point to the potential of SIK inhibition as a novel mode of action in inflammation. No activity was observed in the LADYBUG study in rheumatoid arthritis (RA). GLPG3970 was generally safe and well tolerated. Based on these encouraging data, we work on optimizing the pharmacology of follow-up compounds from our SIK portfolio, and plan to bring an improved SIK2/3 molecule into the clinic in 2022.

On the commercial side, we report rapid progress in establishing our commercial operations for Jyseleca across Europe, with 11 countries launched to date. Reimbursement procedures are on track, and we are on target to achieve our commercial objectives.

We remain excited about the potential of our target discovery platform, our drug development capabilities, and the strength of our teams. We want to thank our shareholders for their continued support and patience as we are working hard to build our pipeline and establish Galapagos as a fully integrated European biopharma," said Onno van de Stolpe, CEO of Galapagos.

Bart Filius, President and COO, added, "Following the strategic exercise announced at Q1, we are focused on advancing our pipeline, implementing our savings program, and diligently evaluating business development opportunities. At the same time, we have been delivering on the launch of Jyseleca, building out our organization in new European markets. In line with our review, we reiterate our 2021 operational cash burni guidance of between €580 million and €620 million. We believe that the decisions and actions taken put us on the strongest footing for the future. We look forward to a busy second half of the year, not the least of which is the expected outcome of the regulatory review in Europe of Jyseleca in UC."

(*) The 2020 comparatives have been restated to consider the impact of classifying the Fidelta business as discontinued operations in 2020.

Details of the financial results
Due to the sale of our fee-for-service business (Fidelta) to Selvita on 4 January 2021 for a total consideration of €37.1 million (including customary adjustments for net cash and working capital), the results of Fidelta are presented as "Net profit from discontinued operations" in our unaudited condensed consolidated income statements for the six months ended 30 June 2021 and 30 June 2020.

Revenues and other income from continuing operations
Our revenues and other income from continuing operations for the first six months of 2021 increased to €277.2 million compared to €217.2 million in the first six months of 2020. Our revenues from the Gilead collaboration in the first six months of 2021 (€253.2 million) related to (i) the exclusive access to our drug discovery platform (€115.7 million), (ii) the filgotinib revenue recognition (€136.1 million) and (iii) royalties (€1.4 million).

Our deferred income balance on 30 June 2021 includes €1.9 billion allocated to our drug discovery platform that is recognized linearly over 10 years, and €0.7 billion allocated for the filgotinib development (including considerations for the previous and the renegotiated collaboration combined) that is recognized over time until the end of the development period.

Results from continuing operations
We realized a net loss from continuing operations of €77.2 million for the first six months of 2021, compared to a net loss of €169.2 million for the first six months of 2020.

We reported an operating loss amounting to €97.6 million for the first six months of 2021, compared to an operating loss of €134.4 million for the same period last year.

Our R&D expenditure in the first six months of 2021 amounted to €268.8 million, compared to €262.9 million for the first six months of 2020. This increase, primarily related to our filgotinib program and our Toledo program, was compensated by a decrease for ziritaxestat, the osteoarthritis (OA) program with GLPG1972, and the program in atopic dermatitis (AtD) with MOR106. Personnel costs increased due to an increase in headcount compared to the same period last year and increased costs of our subscription right plans. This factor, and the increased cost of the commercial launch of filgotinib in Europe, contributed to the increase in our S&M and G&A expenses, which were respectively €29.1 million and €76.9 million in the first six months of 2021, compared to respectively €26.9 million and €61.8 million in the first six months of 2020.

We reported a non-cash fair value gain from the re-measurement of initial warrant B issued to Gilead, amounting to €2.8 million, mainly due to the decreased implied volatility of the Galapagos share price and its evolution between 31 December 2020 and 30 June 2021.

Net other financial income in the first six months of 2021 amounted to €17.1 million, compared to net other financial loss of €13.0 million for the first six months of 2020, which was primarily attributable to €33.4 million of currency exchange gain on our cash and cash equivalents and current financial investments in U.S. dollars, to €8.7 million of negative changes in (fair) value of current financial investments and financial assets and to €4.4 million of interest expenses. The other financial expenses also contained the effect of discounting our long term deferred income of €4.8 million.

Results from discontinued operations
The net profit from discontinued operations for the six months ended 30 June 2021 consisted of the gain on the sale of Fidelta, our fee-for-services business, for €22.2 million.

Group net results
We reported a group net loss for the first six months of 2021 of €55.0 million, compared to a group net loss of €165.6 million for the first six months of 2020.

Cash position
Current financial investments and cash and cash equivalents totaled €5,006.6 million on 30 June 2021, as compared to €5,169.3 million on 31 December 2020.

Total net decrease in cash and cash equivalents and current financial investments amounted to €162.7 million during the first six months of 2021, compared to a net decrease of €214.3 million during the first six months of 2020. This net decrease was composed of (i) €223.2 million of operational cash burn, (ii) offset by €2.6 million of cash proceeds from capital and share premium increase from exercise of subscription rights in the first six months of 2021, (iii) €5.8 million negative changes in (fair) value of current financial investments and €35.0 million of mainly positive exchange rate differences, (iv) €28.7 million cash in from disposal of subsidiaries, net of cash disposed.

Finally, our balance sheet on 30 June 2021 held a receivable from the French government (Crédit d’Impôt Rechercheiv) and a receivable from the Belgian Government for R&D incentives, for a total of both receivables of €142.7 million.

Outlook 2021
In 2021, we expect the European regulatory assessment of filgotinib for the treatment of UC and anticipate both an opinion from the Committee for Medicinal Products for Human Use (CHMP) and a decision from the European Commission later this year. We also expect additional reimbursement decisions for filgotinib in RA across a number of European countries. We are on track to complete the transition from our collaboration partner Gilead to us of the full European commercial operations for filgotinib by year-end, and we anticipate reporting on our own European sales of filgotinib starting in the second half of the year.

Completion of the recruitment in the global DIVERSITY Phase 3 trial with filgotinib in Crohn’s disease by our collaboration partner Gilead is also expected later this year.

With regard to our SIK portfolio, we are advancing our SIK3 inhibitor GLPG4399 in healthy volunteers this year, and we aim to advance a follow-up SIK2/3 preclinical candidate into the clinic in 2022.

Following the positive topline data from our TYK2 inhibitor, GLPG3667, we currently are running an extended dose escalation study in healthy volunteers, and we are preparing for a Phase 2b trial in Pso and a Phase 2 trial in UC next year.

In our other programs, by year-end we intend to finalize recruitment into the GLPG2737 Phase 2a trial in polycystic kidney disease.

Following the previously announced review of our plans for 2021, we reiterate our guidance for full year 2021 operational cash burn of €580 to €620 million.

First half-year report 2021

Galapagos’ financial report for the first half-year ended 30 June 2021, including details of the unaudited consolidated results, is accessible via www.glpg.com/financial-reports.

Conference call and webcast presentation

Galapagos will conduct a conference call open to the public tomorrow, 6 August 2021, at 14:00 CET / 8 AM ET, which will also be webcasted. To participate in the conference call, please call one of the following numbers ten minutes prior to commencement:

A question and answer session will follow the presentation of the results. Go to www.glpg.com to access the live audio webcast. The archived webcast will also be available for replay shortly after the close of the call.

On August 5, 2021 Neoleukin Therapeutics, Inc., "Neoleukin" (NASDAQ:NLTX), a biopharmaceutical company utilizing sophisticated computational methods to design de novo protein therapeutics, reported financial results for the second quarter ended June 30, 2021 and provided a midyear corporate update (Press release, Neoleukin Therapeutics, AUG 5, 2021, View Source [SID1234585874]).

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"Our progression to a clinical stage company is a significant milestone, and we remain focused on execution of our clinical development strategy and pipeline expansion as we advance and explore the potential of our de novo protein technology platform," said Jonathan Drachman, M.D., Chief Executive Officer of Neoleukin.

Recent Updates
NL-201
NL-201 is Neoleukin’s lead de novo protein therapeutic candidate, designed to mimic the therapeutic activity of natural cytokines IL-2 and IL-15, while potentially reducing the toxicities associated with high-dose IL-2.

In May 2021, Neoleukin announced dosing of the first patient in a Phase 1 trial of NL-201. The Phase 1 study, underway at clinical sites in the U.S. and Australia, is enrolling patients with advanced, relapsed, or refractory solid tumors. Patients will receive NL-201 as intravenous monotherapy to assess safety, pharmacokinetics, pharmacodynamics, immunogenicity, and antitumor activity. While certain factors, including COVID-19, have had an impact on site activation for our Phase 1 trial of NL-201, we are accelerating site start-up activities to increase the pace of enrollment. Interim data from the ongoing systemic Phase 1 trial of NL-201 is currently anticipated in 2022.

In addition, Neoleukin is assessing plans for a local administration study of NL-201 while prioritizing the NL-201 systemic trial. Management will update timing for future trials as appropriate.

NL-CVX1
NL-CVX1 is a de novo protein that binds to the spike protein of SARS-CoV-2, the virus that causes COVID-19 and blocks infection of human cells. The design and characterization of NL-CVX1 in under three months underscores the speed and versatility of Neoleukin’s de novo protein platform.
In June 2021, in response to the evolving COVID-19 therapeutic landscape, including the widespread availability of effective vaccines, Neoleukin suspended plans to advance this research program into clinical trials.
Other Research Updates
Neoleukin has multiple research projects underway evaluating the applications of de novo protein technology to develop agonists and antagonists of immune pathways. Neoleukin currently plans to discuss its de novo protein pipeline during the second half of 2021.
Summary of Financial Results
Cash Position: Cash and cash equivalents totaled $164.2 million as of June 30, 2021, compared to $192.6 million as of December 31, 2020.
Based upon current internal infrastructure and pipeline initiatives, Neoleukin believes it has sufficient cash to fund operations into 2023.
R&D Expenses: Research and development expenses for the second quarter of 2021 increased to $9.8 million from $4.8 million for the second quarter of 2020. The increase was primarily due to increased expenses incurred from IND-enabling and clinical trial activities related to Neoleukin’s lead product candidate, NL-201, and in connection with the advancement of other Neoleukin technologies.
G&A Expenses: General and administrative expenses for the second quarter of 2021 increased to $5.3 million from $4.9 million for the second quarter of 2020. The increase in general and administrative expenses was primarily due to increases in personnel-related costs as Neoleukin continues to grow its operations. The increase was partially offset by higher costs incurred in the second quarter of 2020 associated with the termination of its Vancouver, Canada office lease.
Net Loss: Net loss for the second quarter of 2021 was $15.1 million compared to a net loss of $9.7 million in the second quarter of 2020.

On August 5, 2021 Geron Corporation (Nasdaq: GERN) reported that it will release its second quarter and year to date 2021 financial results after the market closes on Monday, August 16, 2021 via press release, which will be available on the Company’s website at www.geron.com/investors (Press release, Geron, AUG 5, 2021, View Source [SID1234585889]). Geron will host a conference call to discuss the financial results as well as recent events at 4:30 p.m. ET the same day.

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A live, listen-only webcast will be available on the Company’s website at www.geron.com/investors/events. An archive of the webcast will be available on the Company’s website for 30 days.

Participants may access the conference call live via telephone by pre-registering online using the following link, View Source Upon registration, a phone number, Direct Event Passcode and unique Registrant ID will be sent via email. This information will be needed in order to enter the conference call. Participants are advised to pre-register at least 10 minutes prior to joining the call.

On August 5, 2021 VBL Therapeutics (Nasdaq: VBLT) reported that it will release its second quarter financial results for the period ended June 30, 2021 on Monday, August 16 before market open (Press release, VBL Therapeutics, AUG 5, 2021, View Source [SID1234585904]). Professor Dror Harats, M.D, Chief Executive Officer and Amos Ron, Chief Financial Officer, will host a conference call at 8:30am EDT the same day to discuss the results and provide a corporate update.

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