Summary of Consolidated Financial Results [Japanese GAAP] For the First Quarter of the Fiscal Year Ending March 31, 2022

On July 30, 2021 Nippon Kayaku reported that (Press release, Nippon Kayaku, JUL 30, 2021, View Source [SID1234585676])

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1. Consolidated Business Results for the First Quarter of Fiscal Year Ending March 31, 2022 (April 1, 2021– June 30, 2021) (Figures shown are rounded down to the nearest million yen.)

(1) Consolidated Operating Results(2) Consolidated Financial Position

2. Status of Dividends

3. Consolidated Business Results Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021– March 31, 2022)1. Qualitative Information Concerning Results for the First Quarter

(1) Analysis of Operating Results During the first quarter of this consolidated fiscal year (April 1 to June 30, 2021), the global economy saw economic activity begin to return to normal and signs of economic recovery, due in part to progress on vaccinations for the novel coronavirus (COVID-19). While the Japanese economy continues to experience a slump in consumer spending and other domestic demand relative to Europe and the U.S., business sentiment has improved due to growth in demand accompanying the rebound in overseas economies.

However, a sense of uncertainty remains due to concerns about the resurgence of COVID-19 and deterioration in profitability from the steep rise in raw material prices. The semiconductor shortage has also impacted the automotive industry domestically and overseas. Amid these conditions, the Nippon Kayaku Group worked to implement the key themes and resolve the midand long-term key issues outlined in "KAYAKU Next Stage," the mid-term business plan launched in the fiscal year ended March 31, 2020, while also making active use of flextime, telecommuting, and other systems to accommodate the partial restrictions on corporate activity. We took these steps to ensure the safety of employees working in the Company and at Group companies while also implementing a new lifestyle and promote efficient workstyles aimed at minimizing the impact on our business. As a result, net sales for the first quarter of this consolidated fiscal year totaled 46,447 million yen, an increase of 9,622 million yen (26.1%) year-on-year.

Sales in the functional chemicals, the pharmaceuticals, the safety systems, and other businesses outperformed the first quarter of the previous fiscal year in all segments. Operating income totaled 5,938 million yen, an increase of 3,164 million yen (114.1%) year-on-year. Ordinary income totaled 6,399 million yen, an increase of 3,414 million yen (114.4%) year-on-year. Profit attributable to owners of parent was 5,295 million yen, an increase of 3,546 million yen (202.9%) year-on-year. Regarding changes in accounting policies, the Company implemented the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, revised March 31, 2020) and other guidance from the beginning of the first quarter of this consolidated fiscal year.

We have therefore used numbers based on calculation methods subject to different standards than in the same period of the previous fiscal year. See 2. Quarterly Consolidated Financial Statements and Notes to Quarterly Consolidated Financial Statements, (3) Notes to Quarterly Consolidated Financial Statements (Changes to Accounting Policies) for further details. Performance by business segment is as described below. [Functional Chemicals Business] Sales stood at 20,089 million yen, an increase of 4,256 million yen (26.9%) year-on-year. The functional materials business as a whole outperformed the first quarter of the previous fiscal year.

The outperformance resulted from strong sales of epoxy resins used in semiconductor encapsulation, circuit boards, and LCD cleaners from increased demand for IT equipment due to teleworking, in addition to the proliferation of high-speed (5G) communications devices and IoT, and the increasingly sophisticated electronic equipment in vehicles. The color materials business as a whole outperformed the first quarter of the previous fiscal year. This outperformance was due to a rebound in demand for colorants for inkjet printers in industrial applications and developer for thermal paper, in addition to strong sales of colorants for inkjet printers for consumer use. The catalyst business outperformed the first quarter of the previous fiscal year, both in Japan and exports overseas. In the Polatechno business, a rebound in demand for polarizing films for LCD projectors and dye-type polarizing films, in addition to strong sales of components for X-ray analysis systems resulted in outperformance of the Polatechno business as a whole, compared with the first quarter of the previous fiscal year. Segment profit totaled 3,449 million yen, an increase of 1,945 million yen (129.3%) year-on-year.

This increase resulted from growth in net sales in each business. [Pharmaceuticals Business] Sales stood at 12,773 million yen, an increase of 82 million yen (0.6%) year-on-year. Pharmaceuticals in Japan underperformed the first quarter of the previous fiscal year due to the impact from drug price revisions, despite market penetration of Portrazza, a biomedicine; the switch to antibody biosimilars, TRASTUZUMAB BS and INFLIXIMAB BS; and growth in sales of a cancer-related generic, APREPITANT capsule. Exports and sales of active pharmaceutical ingredients for the Japanese domestic market underperformed while sales of contract production and diagnostic drugs outperformed the same period of the previous fiscal year.

Segment profit totaled 1,925 million yen, a decrease of 225 million yen (10.5%) year-on-year. This resulted from the impact of drug price revisions, in addition to increased expenses related to sales activities adjusted to the new life style and progress on R&D activities. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] For the First Quarter of the Fiscal Year Ending March 31, 2022 This document is an English translation of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan.-3-[Safety Systems Business] Sales reached 11,382 million yen, an increase of 5,081 million yen (80.6%) year-on-year. During the first quarter of this consolidated fiscal year, the automobile market continued to rebound from the slump in global demand caused by the global spread of the novel coronavirus, with the exception of a few regions.

While decrease in the pace of automobile production was seen from the latter half of the period owing to the impact of the semiconductor shortage, sales of airbag inflators, micro gas generators for seatbelt pretensioners, and squibs outperformed the first quarter of the previous fiscal year in both the domestic and overseas businesses, due to strong demand for the period. The increase in sales led to segment profit of 1,799 million yen, an increase of 1,536 million yen (584.2%) from the same period of the previous fiscal year. [Other] Sales stood at 2,202 million yen, an increase of 202 million yen (10.1%) year-on-year. The agrochemicals business overall saw a year-on-year increase in domestic sales and exports. Sales in real estate and other business increased compared to the same period of the previous fiscal year. Segment profit totaled 444 million yen, a decrease of 62 million yen (12.4%) year-on-year. (2) Analysis of Financial Position Total assets were 297,619 million yen, an increase of 3,084 million yen from the end of the previous consolidated fiscal year.

The main increases were in raw materials and stores, an increase of 3,087 million yen; goodwill, an increase of 1,305 million yen; and securities, an increase of 1,241 million yen. The main decreases were in notes and accounts receivable-trade, a decrease of 1,167 million yen; and investment securities, a decrease of 1,021 million yen. Liabilities were 66,807 million yen, an increase of 545 million yen compared to the end of the previous consolidated fiscal year. The main increase was in notes and accounts payable-trade, an increase of 1,121 million yen.

The main decrease was in accounts payable-other, a decrease of 1,165 million yen. Net assets were 230,812 million yen, an increase of 2,538 million yen compared to the end of the previous consolidated fiscal year. The main increases were in retained earnings, an increase of 2,745 million yen; and translation adjustments, an increase of 1,465 million yen. (3) Analysis of Forward-looking Statements, Including Consolidated Business Forecasts The future business environment surrounding the Nippon Kayaku Group is expected to bring further economic rebound as economic activities in Japan and overseas return to normal, owing to progress on vaccination for the novel coronavirus. However, uncertainty over the impact of a change in interest rate policies in different countries and U.S.-China trade friction poses the risk of an economic downswing.

Under these conditions, the Nippon Kayaku Group aims to respond flexibly to changes in the business environment and pursue optimal use of operating capital to increase the shareholder value, as well as expand existing businesses in global growth markets, accelerate the development of new businesses and new products, and enhance profits. Consolidated business results forecasts for the first half and full year consolidated business results forecasts of fiscal year ending March 31, 2022 announced on May 11, 2021 have been revised. See the disclosure today entitled, Notice Concerning Revision of Consolidated Business Results Forecasts for the Fiscal Year Ending March 31, 2022 for further details.

XBiotech Announces Payment of Dividend to Holders of Common Stock

On July 30, 2021 XBiotech Inc. (NASDAQ: XBIT) ("XBiotech") reported that it has completed payment to holders of its Common Stock of a previously announced dividend in the amount of USD$75,000,000.00. Based on the number of shares of Common Stock issued and outstanding on the record date for the dividend, each such holder received USD$2.47 per share on July 23, 2021 (Press release, XBiotech, JUL 30, 2021, View Source [SID1234585457]).

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In the past 18 months, XBiotech’s balance sheet strength has enabled the company to offer approximately USD$495 million in cash to shareholders by way of stock repurchase and dividend distribution. The financial strength of the Company owes to the successful development of a pipeline of True Human antibody drug candidates.

John Simard stated that "XBiotech was pleased to be able to reward its shareholders with a $2.47 per share dividend. Our ability to continue to provide opportunities for shareholders to monetize stock in XBiotech, reflects the strength of our fundamental approach to our industry. It begins with a visionary strategy to create a drug pipeline from natural human immunity—which offers an array of exceptional candidate therapeutics. Proprietary manufacturing technology developed at XBiotech has reduced our capital outlays needed for producing drug product, enabling us to build a drug development infrastructure debt-free. Integrating clinical operations has allowed us to conduct our own clinical trials, to test our breakthrough therapies, for a fraction of the cost of the standard industry approach, which involves the use of expensive clinical research contractors. Finally, from our manufacturing technology and clinical operations, we have generated contract revenue that has largely offset operating costs over the past two years. In short, we have stayed the course with our science and pushed the boundaries of industry practices to develop breakthrough therapies, reduce costs and create returns for our shareholders. We have never been more excited about our pipeline and opportunities than we are today."

About True Human Therapeutic Antibodies
XBiotech’s True Human antibodies are derived without modification from individuals who possess natural immunity to certain diseases. With discovery and clinical programs across multiple disease areas, XBiotech’s True Human antibodies have the potential to harness the body’s natural immunity to fight disease with increased safety, efficacy and tolerability.

Affimed Announces Publication of Comprehensive Preclinical Data Demonstrating the Therapeutic Potential of AFM24 in EGFR-expressing Tumors

On July 30, 2021 Affimed N.V. (Nasdaq: AFMD), a clinical-stage immuno-oncology company committed to giving patients back their innate ability to fight cancer, reported the publication of a comprehensive preclinical in vitro and in vivo data package of its innate cell engager (ICE) AFM24 (CD16A/EGFR) in mAbs (Press release, Affimed, JUL 30, 2021, View Source [SID1234585476]). The published data were the basis for the Investigational New Drug (IND) clearance for Affimed’s ongoing Phase 1/2a study with AFM24 monotherapy in patients with EGFR expressing solid tumors. The preclinical data demonstrates AFM24’s unique mechanism of action that harnesses the innate immune system to induce tumor cell killing via antibody-dependent cell-mediated cytotoxicity (ADCC) and antibody-dependent cell phagocytosis (ADCP).

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"These pre-clinical data are encouraging as they demonstrate the potential for AFM24 to effectively target a broad set of tumors expressing varying levels of EGFR, regardless of their mutational status, and with the potential for less pronounced EGFR-related toxicities than current treatment options," said Arndt Schottelius, M.D., Ph.D., Chief Scientific Officer at Affimed. "This could be highly relevant for many patients with different tumor types despite existing EFGR-targeting therapies as these have limitations in efficacy and safety."

Highlights of the recently published results include:

AFM24 binds with high affinity to CD16A on NK cells and macrophages in vitro.
AFM24 potently induces ADCC via NK cells, and ADCP via macrophages in vitro.
AFM24 is effective against many EGFR-positive tumor cells, regardless of EGFR expression level and KRAS/BRAF mutational status within in vitro studies.
AFM24 is well tolerated up to the highest dose level (75 mg/kg) with no skin and other toxicities in cynomolgus monkeys.
The full manuscript is available here: https://bit.ly/3zLDq3i

About AFM24
AFM24 is a tetravalent, bispecific innate cell engager (ICE) that activates the innate immune system by binding to CD16A on innate immune cells and EGFR, a protein widely expressed on solid tumors, to kill cancer cells. Generated by Affimed’s fit-for-purpose ROCK platform, AFM24 represents a distinctive mechanism of action that uses EGFR as a docking site to engage innate immune cells for tumor cell killing through antibody-dependent cellular cytotoxicity and antibody-dependent cellular phagocytosis.

Affimed is evaluating AFM24 as a monotherapy for patients with advanced EGFR-expressing solid malignancies whose disease has progressed after treatment with previous anticancer therapies. AFM24-101 is a first-in-human Phase 1/2a open-label, non-randomized, multi-center, multiple ascending dose escalation and expansion study and can be found at www.clinicaltrials.gov using the identifier NCT04259450. In addition, Affimed is planning to initiate further studies evaluating AFM24 in combination with Roche’s atezolizumab, an anti-PD-L1 checkpoint inhibitor and, separately, an investigation of AFM24 in combination with NKGen Biotech’s autologous NK cell product.

Takeda Delivers Solid First Quarter FY2021 Results, Positioning Company to Accelerate Topline Growth and Continued Pipeline Progress

On July 30, 2021 Takeda Pharmaceutical Company Limited (TOKYO:4502/NYSE:TAK) ("Takeda") reported financial results for the first quarter of fiscal year 2021 (period ended June 30, 2021). Based on the solid first-quarter results, the Company also confirmed its fiscal year 2021 management guidance and forecast. Fiscal year 2021 remains a year of inflection with Takeda positioned for topline acceleration and continued pipeline progress, including critical regulatory submissions, potential approvals and additional new molecular entities (NMEs) advancing in pivotal studies.

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Costa Saroukos, Chief Financial Officer, commented:
"With the Shire integration behind us and continued transformation over the last two years, we’ve pivoted towards accelerating topline growth and investing in R&D to fuel our highly innovative pipeline. Takeda’s first-quarter results demonstrate the continued strength of our 14 global brands and, with the business momentum from this strong start to our fiscal year, we remain on track towards our full-year management guidance."

"FY2021 is an inflection year for our pipeline as we ramp up strategic R&D investments and the pipeline starts to deliver. We anticipate having five to six Wave 1 pipeline regulatory submissions by the end of this fiscal year, with the potential for five approvals by end of H1 FY2022. The resilience of Takeda’s business model is a testament to our unwavering commitment to serving patients, our people and the planet. We are focused on discovering and delivering life-transforming treatments to people around the world to create and maximize long-term value for society."

FINANCIAL AND BUSINESS HIGHLIGHTS

Results for Q1 FY2021 Ended June 30, 2021

(a) Further information on certain of Takeda’s Non-IFRS measures is posted on Takeda’s investor relations website at View Source." target="_blank" title="View Source." rel="nofollow">View Source
(b) Underlying growth compares two periods (quarters or years) of financial results under a common basis and is used by management to assess the business. These financial results are calculated on a constant currency basis and excluding the impact of divestitures and other amounts that are unusual, non-recurring items or unrelated to our ongoing operations.
(c) Core Operating Profit represents net profit adjusted to exclude income tax expenses, the share of profit or loss of investments accounted for using the equity method, finance expenses and income, other operating expenses and income, amortization and impairment losses on acquired intangible assets and other items unrelated to Takeda’s core operations, such as non-recurring items, purchase accounting effects and transaction related costs.
(d) Free Cash Flow represents cash flows from operating activities, excluding acquisition of plant, property and equipment, intangible assets and investments, and any other cash that is not available to Takeda’s immediate or general business use, and including proceeds from sales of property, plant, sales and redemption of investments and businesses, net of cash and cash equivalents divested.
View Source

Reported Revenue increased +18.4% to 949.6 billion yen ($8.6B); Underlying Core Revenue increased +3.8% vs. FY2020 Q1, driven by the 14 global brands

Takeda’s 14 global brands, with an aggregate reported revenue of 335.6 billion yen ($3.0B), posted year-over-year underlying revenue growth of +6.8% despite quarterly phasing headwinds for TAKHZYRO and IG. Takeda’s 5 key business areas with 708.0 billion yen ($6.4B) in reported revenue represented 87% of core revenues1.
GI with 210.5 billion yen ($1.9B) in reported revenue, with underlying revenue growth of +8% spearheaded by gut-selective ENTYVIO.
Rare Diseases with 155.5 billion yen ($1.4 B) in reported revenue declining -3% on an underlying basis, with HAE growth impacted by phasing, but remains in line with the current plan.
Plasma Derived Therapy (PDT) Immunology with 107.2 billion yen ($1.0B) in reported revenue declining -2% on an underlying basis, impacted by quarterly phasing of Immunoglobulin products, with full-year outlook unchanged.
Oncology with 121.4 billion yen ($1.1B) in reported revenue, with underlying revenue growth +9% driven by indication expansion across the portfolio.
Neuroscience with 113.4 billion yen ($1.0B) in reported revenue, with underlying revenue growth +3% driven by strong rebound of Vyvanse following impact of COVID-19 in the prior year.
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1 Percentage of sales are based on Core revenue; adjusted to remove JPY 133.0B from sale of Japan diabetes portfolio recorded in revenue

Reported Operating Profit increased 48.6% Underlying Core Operating Profit Margin was 30.5% for Q1

Reported operating profit increased 48.6% to 248.6 billion yen ($2.2B) compared to FY2020 Q1, driven by a gain on the sale of the diabetes portfolio in Japan, lower purchase price accounting expenses and lower integration costs. These items more than offset a decrease in other operating income due to a one-time gain recorded in FY2020 Q1.
Underlying core operating profit for the current period declined -2.1% reflecting an increase in R&D investment and is expected to recover to "mid-single digit" growth for the full year.
Continued progress in debt pre-payment with approximately 242.9 billion yen toward $2.2 billion paid in FY2021 Q1.
Achieved several critical pipeline milestones to date in FY2021

Moderna’s COVID-19 Vaccine, approved in Japan for adults in May and expanded age indication to adolescents 12+ years old in July, with distribution underway.
Mobocertinib (TAK-788) filing under review in US, China, and other countries.
Maribavir’s (TAK-620) filing and acceptance in the US and EU, with FDA granting priority review.
Orexin (TAK-994) granted Breakthrough Therapy designation by the FDA for Narcolepsy Type 1.
TAK-999 granted Breakthrough Therapy designation by the FDA for AATD2 Liver Disease
Collaboration with Frazier Healthcare Partners to launch HilleVax, Inc., a biopharmaceutical company to develop and commercialize TAK-214, Takeda’s norovirus vaccine candidate.
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2 AATD = Alpha-1 antitrypsin deficiency

Important recognition in Q1

Two of Takeda’s facilities in Japan and Ireland were recognized by the International Society for Pharmaceutical Engineering (ISPE) with the 2021 Facility Of the Year Awards for the use of digital and innovative technologies to enhance manufacturing capabilities.
FY2021 Guidance

On track towards full-year FY2021 guidance (Unchanged from May 2021)

Key assumptions in FY2021 forecast

Company guidance reflects management’s expectations for continued business momentum across Takeda’s five key business areas, underlying revenue growth of its 14 global brands, and accelerated realization of cost synergies, while continuing to invest in R&D.

FY2021 guidance reflects the following key assumptions, including (1) Takeda expects at least one 505(b)2 competitor for subcutaneous VELCADE to launch in the U.S. around mid FY2021; (2) Takeda does not expect to restart sales of Natpara in the U.S. market in FY2021; and (3) FY2021 guidance does not include the impact of any potential further divestitures beyond what has already been disclosed by Takeda.

To date, Takeda has not experienced a material effect on its financial results as a result of the global spread of the novel coronavirus infectious disease (COVID-19). Based on currently available information, Takeda believes that its financial results for FY2021 will not be materially affected by COVID-19 and, accordingly, Takeda’s FY2021 forecast reflects this belief. However, the situation surrounding COVID-19 remains highly fluid, and future COVID-19-related developments in FY2021, including new or additional COVID-19 outbreaks and additional or extended lockdowns, shelter-in-place orders or other government action in major markets, could result in further or more serious disruptions to Takeda’s business, such as slowdowns in demand for Takeda’s products, supply chain related issues or significant delays in its clinical trial programs. These events, if they occur, could result in an additional impact on Takeda’s business, results of operations or financial condition, as well as result in significant deviations from Takeda’s FY2021 forecast.

For more details on Takeda’s Q1 FY2021 results and other financial information, please visit: View Source

More information on Takeda’s Environmental, Social and Governance (ESG) approach and values-based corporate governance can be found in the 2021 Annual Integrated Report for FY2020, which ended March 31, 2021. This report can be accessed on Takeda’s website at: View Source

Study reveals source of DNA mutations in melanoma

On July 30, 2021 Van Andel Institute reported that The mutations that give rise to melanoma result from a chemical conversion in DNA fueled by sunlight — not just a DNA copying error as previously believed, report a study by Van Andel Institute scientists published today in Science Advances (Press release, Van Andel Institute, JUL 30, 2021, View Source;utm_medium=rss&utm_campaign=pfeifer-melanoma-mutations [SID1234585461]).

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The findings upend long-held beliefs about the mechanisms underlying the disease, reinforce the importance of prevention efforts and offer a path forward for investigating the origins of other cancer types.

Gerd Pfeifer, Ph.D.

"Cancers result from DNA mutations that allow defective cells to survive and invade other tissues. However, in most cases, the source of these mutations is not clear, which complicates development of therapies and prevention methods," said Gerd Pfeifer, Ph.D., a VAI professor and the study’s corresponding author. "In melanoma, we’ve now shown that damage from sunlight primes the DNA by creating ‘premutations’ that then give way to full mutations during DNA replication."

Melanoma is a serious type of skin cancer that begins in pigment-producing skin cells. Although less common than other types of skin cancer, melanoma is more likely to spread and invade other tissues, which significantly reduces patient survival. Previous large-scale sequencing studies have shown that melanoma has the most DNA mutations of any cancer. Like other skin cancers, melanoma is linked to sun exposure, specifically a type of radiation called UVB. Exposure to UVB damages skin cells as well as the DNA within cells.

Most cancers are thought to begin when DNA damage directly causes a mutation that is then copied into subsequent generations of cells during normal cellular replication. In the case of melanoma, however, Pfeifer and his team found a different mechanism that produces disease-causing mutations — the introduction of a chemical base not normally found in DNA that makes it prone to mutation.

DNA comprises four chemical bases that exist in pairs— adenine (A) and thymine (T), and cytosine (C) and guanine (G). Different sequences of these pairs encode all of the instructions for life. In melanoma, the problem occurs when UVB radiation from the sun hits certain sequences of bases — CC, TT, TC and CT — causing them to chemically link together and become unstable. The resulting instability causes a chemical change to cytosine that transforms it into uracil, a chemical base found in the messenger molecule RNA but not in DNA. This change, called a "premutation," primes the DNA to mutate during normal cell replication, thereby causing alterations that underlie melanoma.

These mutations may not cause disease right away; instead, they may lay dormant for years. They also can accumulate as time goes on and a person’s lifetime exposure to sunlight increases, resulting in a tough-to-treat cancer that evades many therapeutic options.

"Safe sun practices are very important. In our study, 10–15 minutes of exposure to UVB light was equivalent to what a person would experience at high noon, and was sufficient to cause premutations," Pfeifer said. "While our cells have built-in safeguards to repair DNA damage, this process occasionally lets something slip by. Protecting the skin is generally the best bet when it comes to melanoma prevention."

The findings were made possible using a method developed by Pfeifer’s lab called Circle Damage Sequencing, which allows scientists to "break" DNA at each point where damage occurs. They then coax the DNA into circles, which are replicated thousands of times using a technology called PCR. Once they have enough DNA, they use next-generation sequencing to identify which DNA bases are present at the breaks. Going forward, Pfeifer and colleagues plan to use this powerful technique to investigate other types of DNA damage in different kinds of cancer.

Other authors include Seung-Gi Jin, Ph.D., Dean Pettinga, Jennifer Johnson and Peipei Li, Ph.D., of VAI.

Research reported in this publication was supported by Van Andel Institute and the National Cancer Institute of the National Institutes of Health under award no. R21CA228089 (Pfeifer). The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.