China Biologic Reports Financial Results for the Second Quarter of 2020

On August 17, 2020 China Biologic Products Holdings, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, reported its unaudited financial results for the second quarter of 2020 (Press release, China Biologic Products, AUG 17, 2020, View Source [SID1234563728]).

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Second Quarter 2020 Financial Highlights

Total sales in the second quarter of 2020 decreased by 14.9% in RMB terms and 18.1% in USD terms to $111.1 million from $135.7 million in the same quarter of 2019.
Gross profit decreased by 16.0% to $76.4 million from $90.9 million in the same quarter of 2019. Gross margin increased to 68.8% from 67.0% in the same quarter of 2019.
Income from operations decreased by 11.4% to $42.7 million from $48.2 million in the same quarter of 2019. Operating margin increased to 38.4% from 35.5% in the same quarter of 2019.
Non-GAAP adjusted income from operations decreased by 5.8% in RMB terms and 9.3% in USD terms to $51.4 million from $56.7 million in the same quarter of 2019.
Net income attributable to the Company decreased by 14.2% to $35.7 million from $41.6 million in the same quarter of 2019. Diluted earnings per share decreased to $0.91 compared to $1.06 in the same quarter of 2019.
Non-GAAP adjusted net income attributable to the Company decreased by 7.2% in RMB terms and 10.9% in USD terms to $43.4 million from $48.7 million in the same quarter of 2019. Non-GAAP adjusted earnings per diluted share decreased to $1.11 from $1.24 in the same quarter of 2019.
NOTE: Detailed financial statements and information are available through this link: View Source

"In line with our previous estimates, our revenue and net income declined during the second quarter reflecting the combined impact of the ongoing COVID-19 pandemic and our adjusted sales focus," said Joseph Chow, Chairman and CEO of China Biologic. "Although a decline in demand and an increase in supply have led to increased competition in our core markets, and while many hospitals are maintaining strict precautionary measures against the pandemic which limits our promotional activities, we have gained market share across most of our major products within direct sales channels. For certain major products in our distribution channels, we are taking a conservative approach in order to better align inventory with market demand for the second half of 2020. "

"We continue to focus on optimizing the efficiency of our distribution network and lowering our credit exposure by eliminating smaller non-performing distributors, evidenced by our continued improvement in accounts receivable turnover, which is quite important during this difficult time amid COVID-19. We are also implementing online enterprise management and logistics systems as we adjust our operational strategies to adapt to the challenging new environment. These measures together with our efforts to reduce operating costs have helped us to further improve our operating margin. We are also exploring more channels to improve overall plasma supply and fill the gap in both internal collection and outsourced plasma volumes. We will continue to make every effort to maintain our track record of providing high-quality products to our patients, investing in new product development, and bringing better healthcare to society."

Recent Updates

Obtained Approval to Build a New Collection Station

In April 2020, China Biologic received approval from the Health Commission of Shandong Province to build a new plasma collection station in Yangxin County, Binzhou City of Shandong Province.

Coagulation Factor IX Approved for Manufacturing

In July 2020, China Biologic received the certificate of approval for manufacturing coagulation factor IX. The Company began the clinical trial in 2017 for this first-to-market plasma-based product in China, which will further improve China Biologic’s plasma fractionation utilization and contribute to its long-term financial growth. China Biologic has begun manufacturing coagulation factor IX and expects to launch the product in the third quarter of 2020.

Huitian’s Manufacturing Permit Revoked

In July 2020, Xi’an Huitian Blood Products Co., Ltd. ("Huitian"), a PRC company in which China Biologic holds an indirect minority equity interest, received an administrative order from the Shaanxi Medical Products Administration revoking Huitian’s pharmaceutical manufacturing permit due to its failure to meet certain good manufacturing practice standards in its production of pharmaceutical products.

Huitian is a plasma products company based in Xi’an, Shaanxi Province, and China Biologic indirectly holds 35% of its equity interest. The Company records its equity investment in Huitian as equity in income of equity method investee in the Company’s consolidated statements of comprehensive income. In 2017, 2018 and 2019, such equity in income of equity method investee was $3.5 million, $2.4 million and $1.6 million, respectively, accounting for 5.2%, 1.8% and 1.1%, respectively, of the total net income attributable to China Biologic.

Conference Call

The Company will host a conference call at 7:30 am Eastern Time on Tuesday, August 18, which is 7:30 p.m. Beijing Time on August 18, 2020, to discuss its second quarter 2020 results and answer questions from investors. Listeners may access the call by dialing:

A telephone replay will be available one hour after the conclusion of the conference all through August 25, 2020. The dial-in details are:

A live and archived webcast of the conference call will be available through the Company’s investor relations website at View Source

Oita Chuo Pacific Management Comments on Sanofi as They Agree to Acquire U.S. Biotech Firm Principia Biopharma

On August 17, 2020 Oita Chuo Pacific Management have commented on Sanofi S.A. reported that agreeing to acquire U.S. biotech firm Principia Biopharma Inc. in a deal worth $3.4 billion, as the French drug manufacturer shifts towards innovative treatments to boost growth under latest Chief Executive Officer Paul Hudson (Press release, Principia Biopharma, AUG 17, 2020, View Source [SID1234563724]).

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According to data collected by Oita Chuo Pacific Management, the all-cash-deal will see Sanofi take full ownership of the company, which focuses on therapies for multiple sclerosis and a host of autoimmune conditions.

"Sanofi has agreed to pay $100 per share, which represents a 10% premium over Principia’s closing price on Friday, which this year climbed almost 66%. The cumulative equity value of the deal is estimated at $3.7 billion," commented Head of Wealth Management at Oita Chuo Pacific Management, Jonathan Marshall. "Shares in Sanofi were up 0.5% early Monday in Paris," he added.

The acquisition is this year’s second-largest pharmaceutical deal following Gilead Sciences Inc agreeing to purchase cancer therapy maker Forty Seven Inc. for $4.9 billion in March, and will provide Sanofi with a pipeline of drugs known as BTK inhibitors which are produced to treat autoimmune conditions. Hudson is aiming to reshape the Paris-based company by focusing on rapidly-expanding areas with which innovative medicines are commanding higher prices.

The move follows the pharmaceutical giants promise in December to purchase Synthorx Inc. for $2.5 billion. Hudson revealed a new strategy for the company late last year, announcing it would conclude its search for new diabetes and heart disease medicines, helping save over $2 billion, and concentrate on innovation-ready areas such as cancer.

With this deal, Sanofi will secure drugs, including the BTK inhibitor SAR442168 for multiple sclerosis and other diseases of the central nervous system. In February, patients with multiple sclerosis were found to have benefited in Phase 2 trials, which led Hudson to say the therapy could target half of the $20 billion market for incurable disease therapies.

Headquartered in San Francisco, Principia is producing a therapy called Rilzabrutinib for the treatment of immune-system conditions and is evaluating the use of the medicine in patients with pemphigus, a group of rare diseases that cause skin and mucous membrane blistering.

"Through this acquisition, Sanofi will be able to grow and intensify the development of BTK inhibitors across multiple indications. Principia is a perfect match for Sanofi," commented Michael Knight, Head of Corporate Equities at Oita Chuo Pacific Management.

After announcing the disposal of its stake in Regeneron Pharmaceuticals Inc., Sanofi could potentially spend up to $50 billion on further acquisitions, including targeted cancer and gene therapy technologies.

Deciphera Announces Publication of QINLOCK™ (ripretinib) Phase 1 Study Results in Patients with Gastrointestinal Stromal Tumor in Journal of Clinical Oncology

On August 17, 2020 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), reported that the Journal of Clinical Oncology has published results from its Phase 1 study of QINLOCK, the Company’s switch-control tyrosine kinase inhibitor, in patients with second-line through fourth-line plus gastrointestinal stromal tumor (GIST) (Press release, Deciphera Pharmaceuticals, AUG 17, 2020, View Source [SID1234563723]). The article, entitled "Switch control inhibition of KIT and PDGFRA in patients with advanced gastrointestinal stromal tumor (GIST): a phase 1 study of ripretinib," is now available online and will be published in a future print issue of Journal of Clinical Oncology.

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"QINLOCK continues to demonstrate encouraging clinical benefit in earlier lines of treatment following imatinib therapy," said Matthew L. Sherman, MD, Executive Vice President and Chief Medical Officer of Deciphera. "We believe that these positive results strongly support the ongoing INTRIGUE pivotal Phase 3 study, which is our registration-enabling study in patients with second-line GIST. We are committed to unlocking the full potential of QINLOCK to benefit patients and look forward to completion of enrollment in the INTRIGUE study, expected later this year."

The publication highlighted results from the Company’s ongoing Phase 1 study of ripretinib in patients with second-line through fourth-line plus GIST. These published results are from 142 GIST patients receiving 150 mg of ripretinib once daily (QD) as the starting dose, which is the dose utilized in both of the Company’s registration-enabling trials, INVICTUS and the ongoing INTRIGUE study, as of an August 31, 2019 data cutoff date. Results were consistent with those previously presented at the 2019 AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper).

The table below includes local, investigator-assessed objective response rate (ORR) by best response as determined by Response Evaluation Criteria in Solid Tumors (RECIST) version 1.1, median duration of response, and median progression free survival (mPFS).

Line of Therapy

2nd Line
(n=31)

3rd Line
(n=28)

≥4th Line
(n=83)

ORR (confirmed responses only)

19.4%

14.3%

7.2%

Median Duration of Response

18.4 months

NE(1)

17.5 months

mPFS

10.7 months

8.3 months

5.5 months

(1) NE = not estimable.

Ripretinib was generally well tolerated with adverse events consistent with previously presented Phase 1 data in patients with GIST. Grade 3 or 4 treatment-emergent adverse events (TEAEs) in >5% of patients were increase in lipase level (n=25; 18%), anemia (n=10; 7%), hypertension (n=8; 6%) and abdominal pain (n=13; 9%).

About QINLOCK (ripretinib)

QINLOCK is a switch-control tyrosine kinase inhibitor that was engineered to broadly inhibit KIT and PDGFRα mutated kinases by using a unique dual mechanism of action that regulates the kinase switch pocket and activation loop. QINLOCK inhibits primary and secondary KIT mutations in exons 9, 11, 13, 14, 17, and 18 involved in GIST, as well as the primary exon 17 D816V mutation involved in systemic mastocytosis, or SM. QINLOCK also inhibits primary PDGFRα mutations in exons 12, 14, and 18, including the exon 18 D842V mutation, involved in a subset of GIST.

QINLOCK is approved by the U.S. FDA for the treatment of adult patients with advanced GIST who have received prior treatment with 3 or more kinase inhibitors, including imatinib. It is also approved by Health Canada for the treatment of adult patients with advanced GIST who have received prior treatment with imatinib, sunitinib, and regorafenib and by the Australian Therapeutic Goods Administration for the treatment of adult patients with advanced GIST who have received prior treatment with 3 or more kinase inhibitors, including imatinib.

Deciphera Pharmaceuticals is developing QINLOCK for the treatment of KIT and/or PDGFRα-driven cancers, including GIST, SM, and other cancers. Deciphera Pharmaceuticals has an exclusive license agreement with Zai Lab (Shanghai) Co., Ltd. for the development and commercialization of QINLOCK in Greater China (Mainland China, Hong Kong, Macau, and Taiwan). Deciphera Pharmaceuticals retains development and commercial rights for QINLOCK in the rest of the world.

U.S. Indication and Important Safety Information About QINLOCK

Indications and Usage

QINLOCK (ripretinib) is a kinase inhibitor indicated for the treatment of adult patients with advanced gastrointestinal stromal tumor (GIST) who have received prior treatment with 3 or more kinase inhibitors, including imatinib. For more information visit QINLOCK.com.

Important Safety Information

There are no contraindications for QINLOCK.

Palmar-plantar erythrodysesthesia syndrome (PPES): In INVICTUS, Grade 1-2 PPES occurred in 21% of the 85 patients who received QINLOCK. PPES led to dose discontinuation in 1.2% of patients, dose interruption in 2.4% of patients, and dose reduction in 1.2% of patients. Based on severity, withhold QINLOCK and then resume at same or reduced dose.

New Primary Cutaneous Malignancies: In INVICTUS, cutaneous squamous cell carcinoma (cuSCC) occurred in 4.7% of the 85 patients who received QINLOCK with a median time to event of 4.6 months (range 3.8 to 6 months). In the pooled safety population, cuSCC and keratoacanthoma occurred in 7% and 1.9% of 351 patients, respectively. In INVICTUS, melanoma occurred in 2.4% of the 85 patients who received QINLOCK. In the pooled safety population, melanoma occurred in 0.9% of 351 patients. Perform dermatologic evaluations when initiating QINLOCK and routinely during treatment. Manage suspicious skin lesions with excision and dermatopathologic evaluation. Continue QINLOCK at the same dose.

Hypertension: In INVICTUS, Grade 1-3 hypertension occurred in 14% of the 85 patients who received QINLOCK, including Grade 3 hypertension in 7% of patients. Do not initiate QINLOCK in patients with uncontrolled hypertension. Monitor blood pressure as clinically indicated. Based on severity, withhold QINLOCK and then resume at same or reduced dose or permanently discontinue.

Cardiac Dysfunction: In INVICTUS, cardiac failure occurred in 1.2% of the 85 patients who received QINLOCK. In the pooled safety population, cardiac dysfunction (including cardiac failure, acute left ventricular failure, diastolic dysfunction, and ventricular hypertrophy) occurred in 1.7% of 351 patients, including Grade 3 adverse reactions in 1.1% of patients.

In INVICTUS, Grade 3 decreased ejection fraction occurred in 2.6% of the 77 patients who received QINLOCK and who had a baseline and at least one post-baseline echocardiogram. Grade 3 decreased ejection fraction occurred in 3.4% of the 263 patients in the pooled safety population who received QINLOCK and who had a baseline and at least one post-baseline echocardiogram.

In INVICTUS, cardiac dysfunction led to dose discontinuation in 1.2% of the 85 patients who received QINLOCK. The safety of QINLOCK has not been assessed in patients with a baseline ejection fraction below 50%. Assess ejection fraction by echocardiogram or MUGA scan prior to initiating QINLOCK and during treatment, as clinically indicated. Permanently discontinue QINLOCK for Grade 3 or 4 left ventricular systolic dysfunction.

Risk of Impaired Wound Healing: QINLOCK has the potential to adversely affect wound healing. Withhold QINLOCK for at least 1 week prior to elective surgery. Do not administer for at least 2 weeks following major surgery and until adequate wound healing. The safety of resumption of QINLOCK after resolution of wound healing complications has not been established.

Embryo-Fetal Toxicity: QINLOCK can cause fetal harm when administered to a pregnant woman. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential and males with female partners of reproductive potential to use effective contraception during treatment and for at least 1 week after the final dose. Because of the potential for serious adverse reactions in the breastfed child, advise women not to breastfeed during treatment and for at least 1 week after the final dose. QINLOCK may impair fertility in males of reproductive potential.

Adverse Reactions: The most common adverse reactions (≥20%) were alopecia, fatigue, nausea, abdominal pain, constipation, myalgia, diarrhea, decreased appetite, PPES, and vomiting. The most common Grade 3 or 4 laboratory abnormalities (≥4%) were increased lipase and decreased phosphate.

The safety and effectiveness of QINLOCK in pediatric patients have not been established.

Administer strong CYP3A inhibitors with caution. Monitor patients who are administered strong CYP3A inhibitors more frequently for adverse reactions. Avoid concomitant use with strong CYP3A inducers.

Please click here to see the full U.S. Prescribing Information for QINLOCK.

About the INVICTUS Phase 3 Study

INVICTUS is a Phase 3 randomized, double-blind, placebo-controlled, international, multicenter clinical study evaluating the safety, tolerability, and efficacy of QINLOCK compared to placebo in patients with advanced GIST whose previous therapies have included imatinib, sunitinib, and regorafenib. Patients were randomized 2:1 to either 150 mg of QINLOCK or placebo once daily. The primary efficacy endpoint is progression-free survival (PFS) as determined by independent radiologic review using modified Response Evaluation Criteria in Solid Tumors (RECIST). The median PFS in the study was 6.3 months compared to 1.0 month in the placebo arm and significantly reduced the risk of disease progression or death by 85% (hazard ratio of 0.15, p<0.0001). Secondary endpoints as determined by independent radiologic review using modified RECIST include Objective Response Rate (ORR) and Overall Survival (OS). QINLOCK demonstrated an ORR of 9.4% compared with 0% for placebo (p =0.0504). QINLOCK also demonstrated a median OS of 15.1 months compared to 6.6 months in the placebo arm and reduced the risk of death by 64% (hazard ratio of 0.36).

About GIST

Gastrointestinal stromal tumor (GIST) is a cancer affecting the digestive tract or nearby structures within the abdomen, most often presenting in the stomach or small intestine. GIST is the most common sarcoma of the gastrointestinal tract, with approximately 4,000 to 6,000 new GIST cases each year in the United States and a similar incidence rate in European and other countries. Most cases of GIST are driven by a spectrum of mutations. The most common primary mutations are in KIT kinase, representing approximately 80% of cases, or in PDGFRα kinase, representing approximately 6% of cases. Current therapies are unable to inhibit the full spectrum of primary and secondary mutations, which drives resistance and disease progression. Estimates for 5-year survival range from 48% to 90%, depending on the stage of the disease at diagnosis.

Gilead Sciences and Tango Therapeutics to Expand Strategic Oncology Collaboration

On August 17, 2020 Gilead Sciences, Inc. (Nasdaq: GILD) and Tango Therapeutics reported an expanded strategic collaboration focused on the discovery, development and commercialization of innovative targeted immune evasion therapies for patients with cancer (Press release, Gilead Sciences, AUG 17, 2020, View Source [SID1234563722]).

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Under the expanded multi-year collaboration, which builds on an agreement signed in 2018, Tango will continue to leverage its proprietary, CRISPR-enabled functional genomics target discovery platform to identify novel immune evasion targets. The number of targets covered will expand from five to 15. Gilead will have options to worldwide rights for programs directed at these targets over the next seven years. Gilead will also have the right to pay option extension fees for Tango to lead activities through early clinical development, to which Gilead will retain its option rights. Tango will have the option to co-develop and co-promote the lead products for up to five programs in the United States.

"Since we signed the original agreement two years ago, we have been very pleased with the productivity of the collaboration and with the quality of scientific discovery that has come from this partnership," said William A. Lee, PhD, Executive Vice President of Research at Gilead Sciences. "We are looking forward to working with Tango to run additional cancer context dependent screens to identify a broader set of targets based on our immuno-oncology strategy."

"Gilead has been a valuable strategic partner and strong scientific collaborator and we look forward to advancing programs beyond target validation under this expanded collaboration," said Barbara Weber, MD, President and Chief Executive Officer of Tango Therapeutics. "The productivity of our platform allows us to generate multiple targets for the collaboration while continuing to discover and develop targets independently, with the shared goal of bringing transformational therapies to patients."

The collaboration excludes Tango’s lead programs, including one program that is expected to be in investigational new drug (IND) applicatation-enabling studies next year. Tango also retains the rights to identify targets outside the immune evasion space as it continues to build its wholly owned pipeline.

Under the terms of the collaboration, Gilead will make a $125 million upfront payment to Tango and a $20 million equity investment in the company. In addition, Gilead will have the right to option up to 15 programs over the seven-year collaboration for up to $410 million per program in opt-in, extension and milestone payments. Tango will also be eligible to receive up to low double-digit tiered royalties on net sales. For those products that Tango opts to co-develop and co-promote, the parties will equally split profits and losses, as well as development costs, in the U.S., and Tango will be eligible to receive milestone payments and royalties on ex-U.S. sales.

Boundless Bio Announces Publication in Nature Genetics Detailing the Association Between Extrachromosomal DNA-Based Oncogene Amplification and Poor Cancer Outcomes

On August 17, 2020 Boundless Bio, a company developing innovative new therapies directed to extrachromosomal DNA (ecDNA) in aggressive cancers, reported research published in the journal Nature Genetics that demonstrates that ecDNA-based oncogene amplification drives poor outcomes for patients across many cancer types (Press release, Boundless Bio, AUG 17, 2020, View Source [SID1234563721]).

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The manuscript, Frequent extrachromosomal oncogene amplification drives aggressive tumors, was co-authored by Boundless Bio scientists Nam-phuong Nguyen, Ph.D., and Kristen Turner, Ph.D., and scientific founders Paul Mischel, M.D., Distinguished Professor at the University of California San Diego (UC San Diego) School of Medicine and a member of the Ludwig Institute for Cancer Research; Vineet Bafna, Ph.D., Professor of Computer Science & Engineering, UC San Diego; Howard Chang, M.D., Ph.D., Virginia and D.K. Ludwig Professor of Cancer Genomics and Genetics, Stanford University; and Roel Verhaak, Ph.D., Professor and Associate Director of Computational Biology, The Jackson Laboratory.

The researchers used intensive computational analysis of whole-genome sequencing data from more than 3200 tumor samples in The Cancer Genome Atlas (TCGA) and the Pan-Cancer Analysis of Whole Genomes (PCAWG), totaling over 400 TB of raw sequencing data, to observe the impact of ecDNA amplification on patient outcomes. The researchers observed that ecDNA amplification occurs in many types of cancers, but not in normal tissue or in whole blood, and that the most common recurrent oncogene amplifications frequently arise on ecDNA. Notably, ecDNA-based circular amplicons were found in 25 of 29 cancer types analyzed, and at high frequency in many cancers that are considered to be amongst the most aggressive histological types, such as glioblastoma, sarcoma, and esophageal carcinoma. In addition, patients whose cancers carried ecDNA had significantly shorter survival, even when controlled for tissue type, than patients whose cancers were not driven by ecDNA-based oncogene amplification.

The findings demonstrate that ecDNA play a critical role in cancer, providing a mechanism for achieving and maintaining high copy number oncogene amplification and genetic heterogeneity while driving enhanced chromatin accessibility and elevating oncogene transcription. ecDNA amplifications are associated with aggressive cancer behavior, potentially by providing tumors with additional routes to circumvent current treatments and other evolutionary bottlenecks. The shorter overall survival, even when stratified by tumor type, raises the possibility that cancer patients whose tumors are driven by ecDNA may not be as responsive to current therapies and may be in need of new forms of treatment.

"This important study builds on our rapidly expanding knowledge about ecDNA, showing, for the first time, that ecDNA amplifications are present in a broad range of cancer tumor types," said Jason Christiansen, Ph.D., Chief Technology Officer of Boundless Bio. "These results point to the urgent need for therapies that can target ecDNA and interfere with their ability to drive aggressive cancer growth, resistance, and recurrence."

"By detecting and characterizing the role that ecDNA play in driving hard-to-treat cancers, we are drawing a more accurate map of the cancer genome," said Dr. Mischel. "It is our goal to take these findings and apply them to the development of powerful anti-cancer therapies for individuals with ecDNA-driven cancers."

About ecDNA

Extrachromosomal DNA, or ecDNA, are distinct circular units of DNA containing functional genes that are located outside cells’ chromosomes and can make many copies of themselves. ecDNA rapidly replicate within cancer cells, causing high numbers of oncogene copies, a trait that can be passed to daughter cells in asymmetric ways during cell division. Cancer cells have the ability to upregulate or downregulate oncogenes located on ecDNA to ensure survival under selective pressures, including chemotherapy, targeted therapy, immunotherapy, or radiation, making ecDNA one of cancer cells’ primary mechanisms of recurrence and treatment resistance. ecDNA are rarely seen in healthy cells but are found in many solid tumor cancers. They are a key driver of the most aggressive and difficult-to-treat cancers, specifically those characterized by high copy number amplification of oncogenes.