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Year-to-date and Q3 2020 results

On November 5, 2020 AstraZeneca reported increases in the top line, profit and cash, underpinned by a strategy of sustainable growth through innovation (Press release, AstraZeneca, NOV 5, 2020, View Source [SID1234570263]). Total Revenue was in line with expectations and the operating performance continued to improve, with earnings growth in the third quarter reflecting Collaboration Revenue and Other Operating Income and Expense weighted towards the fourth quarter. As a result, full-year guidance remains unchanged.

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Pascal Soriot, Chief Executive Officer, commented:
"We made encouraging headway in the quarter, despite the ongoing disruption from the COVID-19 pandemic. Highlights of the sales performance included further success in Oncology and an acceleration in the progress of Farxiga. Our pipeline also excelled, with Farxiga expanding its potential beyond diabetes and heart failure with ground-breaking new data in chronic kidney disease, while regulatory submission acceptance was achieved for anifrolumab in lupus. In the fight against COVID-19, we advanced our vaccine collaboration with the University of Oxford and are launching Phase III trials for our long-acting antibody combination for the prophylaxis and treatment against COVID-19 for people who need an immediate defence or whose weaker immune systems mean they are less likely to benefit from a vaccine.

We continue to progress in line with our expectations and maintain our full-year guidance, which is underpinned by the strategy of sustainable growth through innovation."Highlights of Total Revenue in the year to date included:

-An increase in Product Sales of 9% (11% at CER) to $18,879m. The new medicines6 improved by 34% (36% at CER) to $9,894m, including new-medicine growth in Emerging Markets of 61% (68% at CER) to $2,189m. Globally, the new medicines represented 52% of Total Revenue (YTD 2019: 42%). The fall in Collaboration Revenue in the third quarter primarily reflected the comparative effect of milestone receipts in Q3 2019 in respect of Lynparza-Oncology growth of 23% (24% at CER) to $8,185m, while New CVRM7 increased by 7% (10% at CER) to $3,450m. Respiratory & Immunology declined by 1% (an increase of 1% at CER) to $3,841m and fell in the third quarter by 12% to $1,165m, a result of particular challenges facing Pulmicort in China

-An increase in Emerging Markets of 6% (11% at CER) to $6,466m, with China growth of 9% (11% at CER) to $4,013m. The latter included an adverse impact of 14 percentage points (15 at CER) from reduced sales of Pulmicort. In the third quarter, China grew by 6% to $1,354m 2-An increase in the US of 12% in the year to date to $6,445m and in Europe by 6% (7% at CER) to $3,709m. Europe Product Sales grew by 10% in the quarter (8% at CER) to $1,259m, with a decline in Total Revenue of 9% (11% at CER) to $1,262m reflecting the fall in level of the aforementioned Lynparza Collaboration Revenue receipts, which are recognised and reported in the Europe region Guidance The Company provides guidance for FY 2020 at CER.

Financial guidance for FY 2020 is unchanged. Total Revenue is expected to increase by a high single-digit to a low double-digit percentage and Core EPS is expected to increase by a mid-to high-teens percentage.

AstraZeneca recognises the heightened risks and uncertainties from the impact of COVID-198. Variations in performance between quarters can be expected to continue. The Company is unable to provide guidance and indications on a Reported basis because AstraZeneca cannot reliably forecast material elements of the Reported result, including any fair-value adjustments arising on acquisition-related liabilities, intangible asset impairment charges and legal-settlement provisions.

Please refer to the cautionary-statements section regarding forward-looking statements at the end of this announcement. Indications The Company provides indications for FY 2020 at CER:

-The Company is focused on improving operating leverage-A Core Tax Rate of 18-22%. Variations in the Core Tax Rate between quarters are anticipated to continue-Capital Expenditure is expected to be broadly stable versus the prior year Currency impact If foreign-exchange rates for October to December 2020 were to remain at the average of rates seen in the year to date, it is anticipated that there would be a low single-digit adverse impact on Total Revenue and Core EPS. The Company’s foreign-exchange rate sensitivity analysis is contained within the operating and financial review. Financial summary

-Total Revenue, comprising Product Sales and Collaboration Revenue, increased by 8% in the year to date (10% at CER) to $19,207m. Product Sales grew by 9% (11% at CER) to $18,879m, driven primarily by the performances of the new medicines across the three therapy areas and Emerging Markets

-The Reported and Core Gross Profit Margins9 were stable at 80% and 81%, respectively. A Core Gross Profit Margin in the third quarter of 79% was also unchanged versus the prior year

-Reported Total Operating Expense declined by 2% in the year to date (1% at CER) to $12,646m and represented 66% of Total Revenue (YTD 2019: 73%). Core Total Operating Expense increased by 4% (5% at CER) to $10,979m and represented 57% of Total Revenue (YTD 2019: 59%)-Reported R&D Expense increased by 8% in the year to date to $4,272m; Core R&D Expense increased by 9% to $4,165m. The increases partly reflected investment in the pipeline, including the development of datopotomab deruxtecan (DS-1062), and the ending in 2019 of the release of the upfront funding of Lynparza development as part of the collaboration with MSD10-Reported SG&A Expense declined by 7% in the year to date (5% at CER) to $8,084m; Core SG&A Expense increased by 1% (3% at CER) to $6,524m.

The difference in the movements partly reflected fair-value adjustments arising on acquisition-related liabilities, as well as an increase in legal provisions recognised in 2019, offset by additional intangible asset impairment charges recorded in the year to dateReported Other Income and Expense reduced by 15% in the year to date (14% at CER) to $888m.

Core Other Income and Expense fell by 16% in the year to date (15% at CER) to $889m and, in the third quarter, by 19% (20% at CER) to $285m-The Reported Operating Profit Margin increased in the year to date by six percentage points to 19%; the Core Operating Profit Margin increased by one percentage point to 28%-Reported EPS of $1.66 in the year to date represented an increase of 111% (113% at CER). Core EPS grew by 13% (16% at CER) to $2.95-Net Cash Inflow from Operating Activities of $3,001m in the year to date. This was a year-on-year increase of $1,407m, partly reflecting a $1,328m improvement in Reported Operating Profit to $3,675m and a favourable movement in the Increase in Working Capital and Short-Term Provisions Commercial summary Oncology Total Revenue increased by 23% in the year to date (24% at CER) to $8,185m.Respiratory & Immunology Total Revenue declined by 1% in the year to date (an increase of 1% at CER) to $3,841m. The impact of reduced sales of Pulmicort amounted to 15 percentage points of Total Revenue growth.Sales of Pulmicort, of which the majority were in China, were adversely impacted in the year to date by the effects of COVID-19. Pulmicort sales in Emerging Markets declined by 43% in the year to date (42% at CER) to $479m and by 60% in the third quarter (59% at CER) to $109m.

Emerging Markets Emerging Markets increased by 6% in the year to date (11% at CER) to $6,466m, including:

-A China increase of 9% (11% at CER) to $4,013m; the performance was adversely impacted by the aforementioned effects of COVID-19 on sales of Pulmicort. Q3 2020 Total Revenue increased by 6% to $1,354m

-An ex-China increase of 3% (10% at CER) to $2,453m. Q3 2020 Total Revenue declined by 7% (an increase of 2% at CER) to $783m, partly driven by the impact of divestments in prior periods COVID-19 The Company is managing a number of challenges from the ongoing pandemic, including:-reduced levels of patient screenings, diagnoses, testing and elective procedures-less face-to-face engagement with healthcare practitioners for commercial field-sales teams-additional costs and procedures related to COVID-19, such as facilities cleaning, personal protective equipment and colleague testing.

AstraZeneca is dedicated to providing safe-working environments for colleagues and suppliers-an increase in Distribution Expense-an impact on initiation, ongoing recruitment and follow-up in some clinical trials, primarily in the early stage. It remains prudent to assume that additional delays will arise as a consequence of the pandemic Despite a delayed global recovery, AstraZeneca is well-placed to manage these challenges. The unprecedented environment has also provided multiple opportunities to explore more efficient ways of working, which have the potential to provide long-term benefits to patients and to the Company.

In addition, AstraZeneca has mobilised research efforts to target the SARS-CoV-2 virus, to provide protection to societies and individuals against COVID-19 and to treat patients with severe disease. Late-stage clinical trials of the recombinant adenovirus vaccine candidate, AZD1222, are ongoing in a number of countries, including the UK, Brazil, South Africa and the US. The European Medicines Agency (EMA) announced in October 2020 that its Committee for Medicinal Products for Human Use (CHMP) had started a rolling review of data for AZD1222, the first COVID-19 vaccine to be reviewed under these arrangements. In the same month, the Company advanced into two Phase III clinical trials of AZD7442 to evaluate safety and efficacy in preventing infection, with plans for further trials for the treatment of COVID-19.

Further details of the Company’s broad COVID-19 research and development programme are shown in the research and development section of this announcement.

Details of AstraZeneca’s potential vaccine and its work with governments and other organisations can be found in the sustainability section of this announcement. Sustainability summary Recent developments and progress against the Company’s sustainability priorities are reported below: a) Access to healthcare During the period, AstraZeneca‘s Chief Executive Officer (CEO), Pascal Soriot, signed a vaccines pledge in collaboration with nine biopharmaceutical CEOs, committing to the continued safety and well-being of vaccinated individuals as the top priority in the development of the first COVID-19 vaccines. b) Environmental protection As part of its Ambition Zero Carbon strategy, the Company announced it had accelerated delivery of its renewable power-sourcing targets, achieving 100% supply of certified renewable imported power across all sites worldwide by the end of 2020, five years ahead of its original RE100 (renewable energy) commitments; along with switching to electric vehicles (EV100) and increasing energy productivity (EP100) by 2025. c) Ethics and transparency Highlighting the Company’s continued commitment to transparency and ethical conduct, a new Data and Artificial Intelligence (AI) Ethics position statement was published during the period to establish and make visible AstraZeneca’s principles around this emerging field of practice. A more extensive sustainability update is provided later in this announcement.

Conference call A conference call and webcast for investors and analysts will begin at 11:45am UK time today. Details can be accessed via astrazeneca.com. Reporting calendar The Company intends to publish its full-year and fourth-quarter results on Thursday, 11 February 2021.

Summary of Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2021(PDF?438KB)

On November 5, 2020 Sysmex reported that Summary of Consolidated Financial Results [ IFRS ] for the First Six Months of the Fiscal Year Ending March 31, 2021 (Press release, Sysmex, NOV 5, 2020, View Source [SID1234570262])

1. Results for the First Six Months of the Fiscal Year Ending March 31, 2021
2. Dividend
3. Financial Forecast for the Year Ending March 31, 2021
4. Other Information

(1) Changes in significant consolidated subsidiaries (which resulted in changes in scope of consolidation):
No (2) Changes in accounting policies and accounting estimates 1) Changes in accounting policies required by IFRS: No 2) Other changes in accounting policies:
No 3) Changes in accounting estimates: No

(3) Number of outstanding stock (common stock) 1) Number of outstanding stock at the end of each fiscal period (including treasury stock): 209,344,432 shares as of Sep. 30, 2020; 209,266,432 shares as of Mar. 31, 2020 2)

Number of treasury stock at the end of each fiscal period: 446,856 shares as of Sep. 30, 2020; 446,680 shares as of Mar. 31, 2020 3) Average number of outstanding stock for each period (cumulative): 208,859,643 shares for the six months ended Sep. 30, 2020 208,731,410 shares for the six months ended Sep. 30, 2019

Note: Quarterly summaries of financial results are excluded from quarterly reviews.

* Explanation regarding the appropriate use of financial forecast and other information

1. The forecasts and future projections contained herein have been prepared on the basis of rational decisions given the information available as of the date of announcement of this document. These forecasts do not represent a commitment by the Company, and actual performance may differ substantially from forecasts for a variety of reasons.

Please refer to "3) Consolidated financial forecast" within "

1. Qualitative information on quarterly financial results" on page 5 of the attachment to this document for cautionary statements concerning the conditions and performance forecasts that serve as the basis for these forecasts.

2. Supplementary financial materials (in Japanese and English) will be posted on the Sysmex website on Thursday, November 5, 2020.

1. Qualitative information on quarterly financial results 1) Operating performance analysis Future-related information contained in the text below is based on the judgement as of the end of the fiscal period under review.

During the first six months of the fiscal year ending March 31, 2021, economic activity in Japan was down substantially as the result of the COVID-19 pandemic. Although this activity gradually picked up in Japan after the state of emergency declaration was lifted, infections persist, making the outlook highly uncertain. Except in certain regions, the pandemic has continued to spread overseas. Although economic activity has resumed, we believe it will take some time for the economy to return to pre-pandemic levels. On the healthcare front, Japan’s medical and healthcare field is expected to remain robust due to an aging society and increasingly diverse health and medical needs.

Looking overseas, the populations of developed countries are aging, while economic growth in emerging markets is causing healthcare demand to increase and prompting higher levels of healthcare quality and service enhancements. These trends are promoting efficient healthcare, with structural changes brought about by artificial intelligence, information and communications technology, and other breaking technologies. However, with the number of COVID-19 cases rising globally, considerations about healthcare systems and public health capable of responding to pandemics like we are currently experiencing are exerting pressure and are likely to cause a major transformation of the healthcare environment itself. Restrictions on outings and other activities in individual countries led to a decline in demand, including a drop in the number of tests conducted at medical institutions.

Although the easing of restrictions on movement did cause demand to resurge somewhat, the pandemic persists. If this situation is prolonged, performance could be affected further. Against this backdrop, Sysmex applied for manufacturing and marketing approval of a reagent for detecting antigens of SARS-CoV-2, the coronavirus that causes COVID-19. This reagent is used in conjunction with our HISCL-5000/HISCL-800 automated immunoassay systems, and detects SARS-CoV-2 antigens present in nasopharyngeal swabs. The reagent, used in conjunction with the HISCL-5000/HISCL-800, provides highly sensitive test results.

This combination delivers rapid test results in 17 minutes and augments testing efficiency by processing 200 tests per hour (with the HISCL-5000). Sysmex remains committed to the establishment of diagnosis/treatment methods for COVID-19 by way of diverse testing, including PCR tests, antigen tests, antibody tests and cytokine tests, as well as hematology and coagulation tests. Meanwhile, health insurance coverage went into effect for RAS gene mutation testing of blood for colorectal cancer using the RAS gene1 mutation testing kit (OncoBEAM2 RAS CRC kit). This testing is used in the selection of treatment methods using anticancer agent for patients for which physical biopsies are difficult.

This product is used to test samples of tumor-derived DNA suspended in the blood of colorectal cancer patients, detecting RAS gene mutations to a high degree of sensitivity. As the testing uses blood samples, it places less of physical and mental burden on the patient than biopsies, allowing for simple testing. Health insurance coverage will allow more patients to receive this testing to help doctors determine appropriate treatment methods. In August 2020, the hinotori Surgical Robot System became the first Japanese-made robotic assisted surgery system to receive manufacturing and marketing approval. This system, which was also covered under national health insurance in September 2020, was developed by Medicaroid Corporation. Medicaroid was jointly established by Kawasaki Heavy Industries, Ltd., and Sysmex. On this system, arms of the operation unit used in surgery are designed to reduce interference between the arms and the assisting doctor, which is expected to make operations smoother.

As the general agent for Medicaroid products, Sysmex has exclusive global sales and service rights. To begin, we are working toward an early introduction targeting the Japanese urology market.

1 RAS gene: As the likelihood is high that patients with RAS gene (KRAS/NRAS gene) mutations will not benefit (prolongation of life, tumor reduction) from the administration of anti-EGFR drugs, companion diagnostics may be performed to treat the gene mutation first.

2 OncoBEAM: The name of Sysmex’s technology to detect minute gene mutations circulating in the blood with a high degree of sensitivity using BEAMing technology, which was developed at Johns Hopkins University. (BEAM is an acronym for "bead, emulsion, amplification and magnetics." This gene analysis method combines digital PCR (ultrahigh-sensitivity PCR) and flow cytometry technologies for highly sensitive analysis of genetic mutations.)

In Japan, sales of reagents and services increased in the life science field. However, instrument sales were down, mainly in the hematology field and for large orders in other fields, due primarily to the impact of COVID-19. Also, sales of reagents were down in the urinalysis and immunochemistry fields. As a result, sales in Japan fell 6.2% year on year, to ¥21,275 million. Overseas, instrument sales increased in the urinalysis, hemostasis and immunochemistry fields. Mainly because of the COVID-19 pandemic, however, reagent sales were down, centered on the hematology, urinalysis and immunochemistry fields. Consequently, overseas sales decreased 7.9% year on year, to ¥110,807 million.

The overseas sales ratio fell 0.2 percentage point, to 83.9%. Selling, general and administrative expenses declined 4.9% year on year, to ¥38,078 million, largely because of activities at all destinations being restricted in the face of the COVID-19 pandemic. As a result, during the first six months of the fiscal year ending March 31, 2021, the Group recorded consolidated net sales of ¥132,082 million, down 7.6% year on year. Operating profit declined 28.0%, to ¥20,004 million; profit before tax decreased 27.9%, to ¥18,090 million; and profit attributable to owners of the parent fell 28.1%, to ¥12,653 million.

Performance by segment

(1) Japan In Japan, sales of reagents and services increased in the life science field. However, instrument sales were down, mainly in the hematology field and for large orders in other fields, due primarily to the impact of COVID-19. Reagent sales also decreased in the urinalysis and immunochemistry fields. As a result, sales in Japan fell 6.3% year on year, to ¥23,241 million. On the profit front, although SG&A and R&D expenses declined, lower sales and a deteriorating cost of sales ratio caused gross profit to worsen. Accordingly, segment profit (operating profit) fell 27.7%, to ¥12,951 million.

(2) Americas Sales were down in North America. Although instrument sales rose in the hemostasis field, instrument and reagent sales declined in the hematology field, mainly because of the COVID-19 pandemic. In Central and South America, sales were down despite higher instrument sales in the hematology field, mainly as the result of lower reagent sales in the hematology field. As a result, sales in the Americas came to ¥27,200 million, down 10.1% year on year.-4-Segment profit (operating profit) fell 60.5% year on year, to ¥375 million, despite lower SG&A expenses, as the result of lower gross profit stemming from lower sales and a deteriorating cost of sales ratio

(3) EMEA Sales in the EMEA region declined 2.5% year on year, to ¥37,196 million. Instrument sales rose in the hematology and life science fields, but reagent sales decreased in the hematology, urinalysis and life science fields, mainly due to the spread of the COVID-19 pandemic. Segment profit (operating profit) fell 4.9%, to ¥3,624 million, despite lower SG&A expenses, as gross profit fell as the result of lower sales and a deteriorating cost of sales ratio.

(4) China In China, sales fell 10.1% year on year, to ¥33,591 million. Instrument sales increased in the hematology, urinalysis and immunochemistry fields, and the hemostasis field saw higher reagent sales. Mainly due to the impact of COVID-19, however, reagent sales were down in the hematology, urinalysis and immunochemistry fields. Segment profit (operating profit) decreased 70.8% year on year, to ¥1,210 million, despite lower SG&A expenses, as gross profit declined due to lower sales and a worsening cost of sales ratio.

(5) Asia Pacific Mainly because of COVID-19, sales of reagents decreased in the hematology and urinalysis fields. As a result, sales in the Asia Pacific region decreased 12.5% year on year, to ¥10,852 million. Segment profit (operating profit) fell 41.3% year on year, to ¥944 million. SG&A expenses fell, but lower sales and a deteriorating cost of sales ratio caused gross profit to fall.

2) Financial conditions analysis

(1) Financial conditions As of September 30, 2020, total assets amounted to ¥380,817 million, down ¥8,474 million from March 31, 2020. As main factors, trade and other receivables (current assets) fell ¥7,862 million, and property, plant and equipment were down ¥2,509 million, while intangible assets rose ¥2,390 million. Meanwhile, total liabilities as of September 30, 2020 were ¥94,835 million, down ¥16,109 million. Principal decreases included trade and other payables, which were down ¥10,389 million; accrued expenses, down ¥1,669 million; accrued bonuses, down ¥1,531 million; and income taxes payable, down ¥1,524 million. Total equity came to ¥285,982 million, up ¥7,634 million from March 31, 2020. Among principal reasons, retained earnings rose ¥5,136 million, while other components of equity increased ¥1,732 million. Equity attributable to owners of the parent to total assets rose 3.6 percentage points, from 71.3% on March 31, 2020 to 74.9% on September 30, 2020.

(2) Cash flows As of September 30, 2020, cash and cash equivalents amounted to ¥55,213 million, down ¥1,378 million from March 31, 2020. Cash flows from various activities during the first six months of the fiscal year are described in more detail below. (Cash flows from operating activities) Net cash provided by operating activities was ¥23,820 million (down ¥3,088 million).

As principal factors, profit before tax provided ¥18,090 million (down ¥6,984 million), depreciation and amortization provided ¥12,537 million (up ¥1,027 million), a decrease in trade receivables provided ¥8,469 million (up ¥4,805 million), an increase in inventories used ¥1,586 million (down ¥4,264 million), a decrease in trade payables used ¥6,441 million (up ¥5,373 million), and a decrease in consumption taxes receivable provided ¥3,014 million (up ¥956 million). (Cash flows from investing activities) Net cash used in investing activities was ¥15,104 million (up ¥6,046 million).

Among major factors, purchases of property plant and equipment used ¥4,065 million (down ¥3,393 million), purchases of intangible assets used ¥8,387 million (up ¥2,273 million), payments resulting in an-5-increase in long-term prepaid expenses used ¥2,057 million (up ¥1,109 million), and proceeds from withdrawal of time deposits provided ¥579 million (down ¥6,642 million). (Cash flows from financing activities) Net cash used in financing activities was ¥10,494 million (up ¥298 million). This was mainly due to dividends paid of ¥7,517 million (up ¥4 million) and repayment of lease liabilities, which used ¥3,364 million (up ¥563 million).

3) Consolidated financial forecast For the Company’s consolidated financial forecast for the full fiscal year, please refer to the announcement regarding financial forecast for the fiscal year ending March 31, 2021, announced today (November 5, 2020).6) Notes to the condensed quarterly consolidated financial statements 1. Notes related to the going concern assumption Not applicable

2. Segment information

1) Overview of reportable segments The Group’s reportable segments are the constituent business units of the Group for which separate financial data are available and that are examined on a regular basis for the purpose of enabling the Managing Board to allocate managerial resources and evaluate results of operations. The Group is primarily engaged in the manufacture and sale of diagnostic instruments and reagents. These businesses are conducted in Japan by the Company, and in the Americas, EMEA, China and the Asia Pacific by regional headquarters established in those regions. These companies formulate overarching strategies tailored to regional characteristics and conduct business activities accordingly. Regional headquarters and other domestic and overseas subsidiaries are independent management units that handle production and sales for each region.

Accordingly, the Group has five reportable segments comprising geographical segments based on manufacturing and sales systems. These are "Japan," the "Americas," "EMEA," "China," and the "Asia Pacific." 2) Segment profit and operating results Profit and operating results from continuing operations by reportable segment of the Group are as follows; Intersegment sales are determined based on market prices or costs of goods manufactured. Accounting policies of reporting segments are consistent with the Group’s accounting policies indicated in the consolidated financial statements for the previous fiscal year.

1. Segment profit adjustments of negative ¥624 million include negative ¥741 million for the unrealized gains on inventories and ¥150 million for the unrealized gains on non-current assets.

2. Segment profit is adjusted to coincide with operating profit in the condensed quarterly consolidated statement of income.

1. Segment profit adjustments of ¥898 million include ¥819 million for the unrealized gains on inventories and ¥168 million for the unrealized gains on non-current assets.

2. Segment profit is adjusted to coincide with operating profit in the condensed quarterly consolidated statement of income.

Isotopia Molecular Imaging begins clinical supply collaboration with Y-mAbs Therapeutics, Inc.

On November 5, 2020 Isotopia Molecular Imaging reported that it has begun a collaboration with Y-mAbs Therapeutics, Inc., a late-stage clinical biopharmaceutical company, for the supply of the medical radioisotope no-carrier-added Lutetium-177 (n.c.a. 177Lu) to support clinical development for 177Lu-DTPA-omburtamab for the treatment of B7-H3 positive Central Nervous System ("CNS") and Leptomeningeal Metastasis ("LM") from tumors in adult patients (Press release, Isotopia Molecular Imaging, NOV 5, 2020, View Source [SID1234570248]).

Y-mAbs is a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer.

177Lu-DTPA-omburtamab embodies Y-mAbs naked omburtamab antibody radiolabeled with lutetium-177, using DTPA to chelate the lutetium radioisotope to the antibody.

Lutetium-177 is a radiopharmaceutical precursor beta-emitter with a half-life of 6.7 days and a maximum energy of 0.5 MeV, corresponding to a maximum soft-tissue penetration of approximately 1 mm from the binding site. 177Lu is used in Targeted Radionuclide Therapy in the field of Precision Oncology. Radiolabeled to disease-specific targeting molecules, the tumor tissue is precisely destroyed. Isotopia has developed a GMP unique stable consistent and reliable method to produce a highly pure form of Lu-177. n.c.a Lu-177 contains no metastable Lu-177m, therefore there is no need for cost intensive clinical waste management.

Isotopia’s Business Development manager, Keren Moshkoviz stated, "Isotopia, Like Y-mAbs aims to improve quality of life of cancer patients with Targeted Radionuclide Therapies. We are very pleased to establish this alliance making significant contribution to innovative and promising therapies for cancer patients worldwide. Isotopia is focusing on supporting clinical studies also for the next generation of radio isotope Tb161 that will be launched soon. We are confident that our growing development platform will make a big contribution to targeted therapies worldwide."

Cigna Reports Third Quarter 2020 Performance, Raises Revenue Guidance

On November 5, 2020 Cigna Corporation (NYSE: CI) reported solid third quarter 2020 performance led by strong execution by its Evernorth segment (Press release, Cigna , NOV 5, 2020, View Source [SID1234570247]).

"In these dynamic and challenging times, we at Cigna continue to act as champions for our customers, clients, and communities as we deliver on our promises to make health care more affordable, predictable and simple," said David M. Cordani, President and Chief Executive Officer. "We delivered attractive revenue growth and strong earnings, while further improving our capital position, driving strategic flexibility. Additionally, our launch of Evernorth accelerates our strategy, broadens our reach and expands our opportunities for growth, further enhancing the value we deliver to the marketplace each and every day."

Total revenues for third quarter 2020 were $41.0 billion. Adjusted revenues1 were $40.8 billion and reflect strong contributions from each of Cigna’s ongoing businesses.

Shareholders’ net income for third quarter 2020 was $1.4 billion, or $3.78 per share, compared with $1.4 billion, or $3.57 per share, for third quarter 2019.

Cigna’s adjusted income from operations2 for third quarter 2020 was $1.6 billion, or $4.41 per share, compared with $1.7 billion, or $4.54 per share, for third quarter 2019 reflecting strong fundamental performance across our businesses as well as the return of medical utilization to more typical levels and COVID-19 related impacts.

Reconciliations of total revenues to adjusted revenues1 and of shareholders’ net income to adjusted income from operations2 are provided on the following page and on Exhibit 1 of this earnings release.

Cigna’s third quarter results reflect revenue growth driven by strong fundamental performance across our businesses led by our Evernorth segment. Third quarter earnings reflect the return of medical utilization to more typical levels and COVID-19 related impacts, as well as focused execution in our businesses.
Year to date through November 4, 2020, the Company repurchased 16.0 million shares of common stock for approximately $2.9 billion.
The debt to capitalization ratio decreased to 42.8% at September 30, 2020 from 45.2% at December 31, 2019.
The SG&A expense ratio4 was 8.1% for third quarter 2020, a decrease from 9.2% for third quarter 2019, driven by significant revenue growth and continued expense efficiency.
The pharmacy customer base5 at third quarter 2020 grew to 86.6 million, an organic increase of 10.7 million customers year to date, driven by strong new health plan sales.
The total medical customer base5 at third quarter 2020 was 17.0 million, a decrease of 163,000 customers year to date, driven by a decline in National Accounts, partially offset by growth in the Select and International Markets segments and in Medicare Advantage.
HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income (loss) from operations2 to shareholders’ net income.

Evernorth6

This segment includes a broad range of coordinated and point solution health services, including pharmacy services, benefits management, care solutions and data and analytics, which are provided to health plans, employers, government organizations, and health care providers.

Third quarter 2020 adjusted revenues1 increased 20% relative to third quarter 2019 driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth, including growth in retail network and specialty pharmacy services.
Third quarter adjusted income from operations, pre-tax2 increased 3% relative to third quarter 2019, reflecting customer growth, higher adjusted pharmacy scripts volumes, benefits from the effective management of the supply chain, and continued strong performance in specialty pharmacy services, partially offset by increased operating expenses to support growth.
Evernorth fulfilled 381 million adjusted pharmacy scripts9 in third quarter 2020, an increase of 22% over third quarter 2019 driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth.
U.S. Medical6

This segment includes Cigna’s U.S. Commercial and U.S. Government businesses that provide comprehensive medical and coordinated solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and self-insured customers. U.S. Government solutions include Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, Medicaid plans, and individual health insurance plans both on and off the public exchanges.

Third quarter 2020 adjusted revenues1 grew 5% over third quarter 2019, reflecting customer growth in the Select segment and Medicare Advantage, as well as premium increases.
Third quarter 2020 adjusted income from operations, pre-tax² and adjusted margin, pre-tax8 reflect unfavorable prior period development primarily related to second quarter 2020, COVID-19 related impacts, and the return of the health insurance tax. COVID-19 related impacts include the net impact of the return of medical utilization to more typical levels and direct COVID-19 costs as well as the costs of actions we have taken to support customers and providers, decreased specialty contributions, and lower net investment income.
The medical care ratio4 ("MCR") of 82.6% for third quarter 2020 reflects continued effective execution in our U.S. Commercial and U.S. Government segments. The third quarter 2020 MCR increased relative to third quarter 2019 due to unfavorable prior period development primarily related to second quarter 2020 and COVID-19 related impacts, partially offset by the pricing effect of the health insurance tax.
U.S. Medical net medical costs payable10 was $2.97 billion at September 30, 2020, $2.73 billion at September 30, 2019, and $2.59 billion at December 31, 2019. Favorable prior year reserve development on a gross pre-tax basis was $126 million and $159 million through third quarter 2020 and 2019, respectively.
International Markets

This segment includes supplemental health, life and accident insurance products and health care coverage in Cigna’s international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

Third quarter 2020 adjusted revenues1,7 grew 3% over third quarter 2019, reflecting continued business growth.
Third quarter 2020 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect continued operational efficiency, lower claim levels driven by the effects of the COVID-19 pandemic, and business growth.
Group Disability and Other Operations

This segment includes Cigna’s Group Disability and Life business which offers group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and services. Additionally, this segment includes Corporate Owned Life Insurance ("COLI") and the Company’s run-off operations.

Third quarter 2020 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect elevated claims in Cigna’s Life business primarily related to the COVID-19 pandemic.
On December 18, 2019, Cigna announced a definitive agreement whereby New York Life will acquire Cigna’s Group Disability and Life business for $6.3 billion. Cigna continues to expect the transaction to close in the fourth quarter of 2020, subject to applicable regulatory approvals and other customary closing conditions.
Corporate

Corporate reflects interest expense, as well as amounts not allocated to operating segments and includes intersegment eliminations.

2020 OUTLOOK

Cigna’s outlook for full year 2020 adjusted revenues1,3 is approximately $158 billion. Cigna’s outlook for full year 2020 consolidated adjusted income from operations2,3 on a per share basis is in the range of $18.30 to $18.60 per share. Cigna’s outlook excludes potential effects of any future share repurchase3. Also, while Cigna continues to expect to close the sale of Cigna’s Group Disability and Life business in the fourth quarter of 2020, Cigna’s outlook assumes a full year of contributions from the Group Disability and Life business.

The foregoing statements represent the Company’s current estimates of Cigna’s 2020 consolidated adjusted revenues1,3 and adjusted income from operations2,3 on a per share basis as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna’s website in the Investor Relations section (View Source). Management will be hosting a conference call to review third quarter 2020 results and discuss full year 2020 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of Cigna’s website located at View Source/events/index.page.

Bio-Techne Releases First Quarter Fiscal 2021 Results

On November 5, 2020 Bio-Techne Corporation (NASDAQ:TECH) reported its financial results for the first quarter ended September 30, 2020 (Press release, Bio-Techne, NOV 5, 2020, View Source [SID1234570246]).

First Quarter FY2021 Snapshot

First quarter organic revenue increased by 10% (11% reported) to $204.2 million.
GAAP EPS was $0.83 versus $0.37 one year ago. Delivered adjusted earnings per share (EPS) of $1.43, an increase of 35% over the prior year.
Diagnostics and Genomics segment delivered 17% organic growth (18% reported), highlighted by growth in RNAscope products.
Adjusted operating margin increased to 38.2% in the first quarter of fiscal 2021 compared to 31.8% in the prior year.
The Company opened its new state-of-the-art GMP (Good Manufacturing Practices) manufacturing facility, which is dedicated to supporting large-scale production of GMP-grade proteins and reagents.
The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted EPS, adjusted earnings, adjusted gross margin, adjusted operating income, and adjusted operating margin are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of non-GAAP Adjusted Financial Measures." A reconciliation of GAAP to non-GAAP financial measures is included in this press release.

"I am very pleased with our team and the results they produced for the first fiscal quarter of 2021," said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. "Achieving over 10% organic growth, including strong results from our key growth platforms, shows the strength of our diverse portfolio of tools that researchers are turning to in all aspects of life sciences research."

Kummeth added, "We have laid a foundation of COVID-19 related tools and diagnostics to enable researchers and clinicians in the near-term battle against the virus and provide continued insights over the long-term. This quarter was highlighted by the opening of our GMP manufacturing facility in Minnesota to accelerate the ramp and access to the world’s highest quality GMP proteins and reagents to support the growing cell and gene therapy markets."

COVID-19 Business Update

During the first quarter of fiscal year 2021, we experienced a significant increase in the number of customer sites that were either fully or partially opened when compared to prior periods during the COVID-19 pandemic. The reopening of customer sites and demand for our portfolio of life science tools and diagnostic reagents enabled the Company to return to sales volumes experienced prior to the onset of the pandemic. However, we are unable to forecast if any customer sites may reclose given rising COVID-19 cases occurring in certain regions. We are anticipating a positive long-term outlook for sales growth resulting from expected future funding increases within life-science research in response to the current pandemic.

The Company has responded to the pandemic by leveraging our deep product portfolio and scientific expertise to develop a robust COVID-19 product and service offering that provides critical support for both clinical care and therapeutic development. The Company’s ongoing efforts to utilize and expand upon our portfolio of products and services to enable solutions for this evolving pandemic may partially offset the impacts of any future customer site closures.

Adjusted EPS was favorably impacted in the current quarter when compared to prior periods during the COVID-19 pandemic due to increased sales volumes as described above. We anticipate the short- and long-term impacts of COVID-19 on adjusted EPS to be similar to that of sales growth.

The Company remains in a strong financial position with sufficient available cash as well as access to additional funding, if necessary, through our long-term debt agreement. We did not experience any material changes to our September 30, 2020 Balance Sheet resulting from COVID-19 for items such as additional reserves or asset impairments.

The Company remains fully operational as we abide by local COVID-19 safety regulations across the world. To achieve this, certain employees are working remotely and the Company has adopted significant protective measures for our employees on site, including staggered shifts, social distancing and hygiene best practices recommended by the Centers for Disease Control (CDC). In addition, the Company has taken additional steps to monitor and strengthen our supply chain to maintain an uninterrupted supply of our critical products and services.

First Quarter Fiscal 2021

Revenue

Net sales for the first quarter increased 11% to $204.2 million. Organic growth was 10% compared to the prior year, with foreign currency exchange having a favorable impact of 1%.

GAAP Earnings Results

GAAP EPS increased to $0.83 per diluted share, versus $0.37 in the same quarter last year, primarily due to sales growth and operating margin expansion. GAAP operating income for the first quarter of fiscal 2021 increased 47.3% to $49.1 million, compared to $33.3 million in the first quarter of fiscal 2020. GAAP operating margin was 24.0%, compared to 18.2% in the first quarter of fiscal 2020. GAAP operating margin compared to prior year was positively impacted by volume leverage and cost management.

Non-GAAP Earnings Results

Adjusted EPS increased to $1.43 per diluted share, versus $1.06 in the same quarter last year, an increase of 35% resulting from sales growth and operating margin expansion. Adjusted operating income for the first quarter of fiscal 2021 increased 33.8% compared to the first quarter of fiscal 2020. Adjusted operating margin was 38.2%, compared to 31.8% in the first quarter of fiscal 2020. Adjusted operating margin compared to the prior year was positively impacted by volume leverage and cost management.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the Company’s business segments, as highlighted below. Since these results are used for this purpose, they are also considered to be prepared in accordance with GAAP.

Protein Sciences Segment

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s first quarter fiscal 2021 net sales were $154.4 million, an increase of 10% from $141.0 million for the first quarter of fiscal 2020. Organic growth for the segment was 8%, with foreign currency exchange having a favorable impact of 2% on revenue growth. Protein Sciences segment’s operating margin was 45.6% in the first quarter of fiscal 2021 compared to 42.2% in the first quarter of fiscal 2020. The segment’s operating margin compared to the prior year was positively impacted by volume leverage and cost management.

Diagnostics and Genomics Segment

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, diagnostic immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides in situ hybridization products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s first quarter fiscal 2021 net sales were $50.1 million, an increase of 18% compared to $42.6 million for the first quarter of fiscal 2020. Organic growth for the segment was 17%, with foreign currency exchange having a favorable impact of 1%. The Diagnostics and Genomics segment’s operating margin was 17.3% in the first quarter of fiscal 2021 compared to 2.1% in the first quarter of fiscal 2020. The segment’s operating margin was positively impacted volume leverage.

Conference Call

Bio-Techne will host an earnings conference call today, November 5, 2020 at 8:00 a.m. CST. To listen, please dial 1-855-327-6837 or 1-631-891-4304 (for international callers), and reference conference ID 10011451. The earnings call can also be accessed via webcast through the following link View Source

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512-2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 10011451.The replay will be available from 11:00 a.m. CST on Thursday, November 5, 2020 until 11:00 p.m. CST on Saturday, December 5, 2020.

Use of non-GAAP Adjusted Financial Measures:

This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:

Organic growth
Adjusted diluted earnings per share
Adjusted net earnings
Adjusted gross margin
Adjusted operating income
Adjusted operating margin
We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceding 12 months as well as the impact of foreign currency. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period.

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including non-recurring costs and gains. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity.

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes stock-based compensation expense, which is inclusive of the employer portion of payroll taxes on those stock awards, restructuring, impairments of equity method investments, gain and losses from investments, and certain adjustments to income tax expense. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjective assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. Impairments of equity investments are excluded as they are not part of our day-to-day operating decisions. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded. Costs related to restructuring activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release.