On August 12, 2020 Kuraray reported Business Results for the Second Quarter of the Fiscal Year Ending December 31, 2020 (Press release, Kuraray, AUG 12, 2020, https://pdf.irpocket.com/C3405/PLDE/Hf1v/r28N.pdf [SID1234563464])

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1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2020 (January 1, 2020 to June 30, 2020)
(1) Consolidated Operating Results
(Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of the parent are comparisons with the corresponding period of the previous fiscal year.)

(2) Consolidated Financial Position

2. Dividends
1. Qualitative Information regarding Business Results
(1) Overview of Consolidated Business Results

In the second quarter of fiscal 2020 (January 1, 2020–June 30, 2020), the world economy saw a much clearer retraction as efforts to contain the spread of COVID-19 have failed to gain traction. Even amid this kind of environment, our Group maintained its business activities while thoroughly ensuring safety and working to prevent infection with the aim of
supporting industrial supply chains. Consequently, consolidated operating results for the second quarter of fiscal 2020 are as follows: net sales fell ¥25,412 million, or 8.8%, compared with the previous fiscal year to ¥262,006 million; operating income decreased ¥8,310 million, or 29.8%, to ¥19,611 million; ordinary income decreased ¥7,047 million,
or 28.5%, to ¥17,638 million; and net income attributable to owners of the parent fell ¥4,093 million, or 30.9%, to ¥9,160 million.

The Group’s long-term vision, Kuraray Vision 2026, is to become a "Specialty Chemical Company, growing sustainably by incorporating new foundational platforms into its own technologies." As we continue working to realize this vision, we will steadily take specific measures in line with the key management strategies underlined in the medium-term
management plan "PROUD 2020" from a medium- to long-term perspective. Through these efforts, we will also continue working to establish a new business portfolio.

Results by Business Segment
Vinyl Acetate
Sales in this segment decreased 9.6% year on year to ¥121,809 million, and segment income fell 26.7% year on year to ¥16,924 million.

(1) The volume of PVA resin declined due to stagnant global demand. Although LCD panel manufacturers reduced inventory adjustments, shipments of optical-use poval film stayed level with the previous year due to effects from COVID-19 crisis. The sales of PVB film were weak for construction and automotive applications. However, sales
of water-soluble PVA film continued to expand for use in unit dose detergent packets.

(2) The sales volume of EVAL ethylene vinyl alcohol copolymer (EVOH resin) increased for food packaging applications but sales for gas tank applications were heavily impacted by a decline in the number of vehicles produced.

Isoprene
Sales in this segment decreased 9.9% year on year to ¥24,720 million, and segment income
fell 38.6% year on year to ¥2,116 million.
(1) Sales of isoprene chemicals and SEPTON thermoplastic elastomer were affected by slowing demand, mainly in China and the rest of Asia.
(2) Although sales of GENESTAR heat-resistant polyamide resin remained steady for electric and electronic device applications, sales for automotive applications were affected by the decline in vehicle production.

Functional Materials
Sales in this segment decreased 5.5% year on year to ¥59,143 million, and segment income fell 52.4% year on year to ¥1,054 million.
(1) The overall methacrylate business was affected by worsening market conditions despite an increase in demand for spatter-blocking barrier panels.

(2) In the medical business, the dental materials business struggled, especially in the United States and Europe, as a result of an increase in dental clinic closures in response to spreading infections.

(3) As for Calgon Carbon, sales were steady even during COVID-19 crisis, this business’s products underpin people’s daily lives. In addition, in the Carbon Materials business, sales of high value-added products increased. Moreover, with expanding demand for high-performance activated carbon, we decided in this second quarter to expand the facilities at the U.S. plant of Calgon Carbon Corporation.

Fibers and Textiles
Sales in this segment fell 14.7% year on year to ¥28,224 million while segment income decreased 44.1% year on year to ¥1,656 million.

(1) The sales volume of CLARINO man-made leather decreased due to receding demand in Asia and Europe.
(2) In fibers and industrial materials, the performance of KURALON for cement reinforcement use remained weak. Sales of products used in reinforcing rubber were negatively affected by a decline in the number of vehicles produced.
(3) In consumer goods and materials, sales of KURAFLEX were weak as demand for cosmetic and automotive applications stagnated despite an increase in the sales for mask-related applications.

Trading
In fiber-related businesses, sales of sewn products remained steady. However, sales of resins and chemicals were affected by lower demand in Japan and Asia. As a result, segment sales decreased 7.3% year on year to ¥60,037 million, and segment income rose 1.2% to ¥2,078 million.

Others
In other business, due to weak sales of domestic affiliates, segment sales declined 14.9% year on year to ¥22,155 million, and segment income fell 44.0% to ¥206 million.

(2) Overview of Financial Position
Total assets increased ¥92,640 million from the end of the previous fiscal year to ¥1,083,789 million mainly because of a ¥117,450 million increase in cash and cash deposits (due to an increase in liquidity undertaken in response to COVID-19 pandemic), a ¥10,686 million decrease in notes and accounts receivable—trade, and a ¥15,413 million decrease in
short-term investment securities. Total liabilities increased ¥98,903 million to ¥551,507 million due to factors that included the issuance of bonds payable totaling ¥30,000 million, a ¥36,000 million increase in commercial paper, and a ¥79,099 million increase in long-term loans payable, despite a ¥30,157 million decrease in accrued expenses.
Net assets fell ¥6,262 million to ¥532,282 million. Equity attributable to owners of the parent amounted to ¥517,189 million, for an equity ratio of 47.7%.

(3) Basis for the Revision in Forecasts, Including Consolidated Operating Results
Forecasts
The economy has receded significantly due to COVID-19 pandemic, and we assume that the effects will last into 2021 and beyond. We expect that demand will continue to stagnate for our operations in the third quarter onward accompanied by production adjustments.

The forecast of consolidated operating results for the fiscal year ending December 31, 2020 (January 1, 2020 to December 31, 2020) is as shown below.

(4) Notes regarding Quarterly Consolidated Financial Statements

1. The "Other Business" category incorporates operations not included in business segment reporting, including the environmental business and engineering business.
2. Adjustment is as follows: Included within segment loss of ¥6,214 million is the elimination of intersegment transactions of ¥776 million and corporate expenses of ¥6,991million. Corporate expenses mainly comprise the submitting company’s basic research expenses.
3. Segment income is adjusted to agree with operating income in the consolidated statements of income.
2. Information related to goodwill or impairment loss of fixed assets for each reportable segment
Important impairment losses related to fixed assets
In the vinyl acetate segment, Kuraray recorded an impairment loss. Furthermore, the amount recorded for said impairment loss was ¥3,387 million in the second quarter of the fiscal year.

II. Second Quarter of Fiscal 2020 (January 1, 2020 to June 30, 2020)
1. Net sales, income and loss by reporting segment

1. The "Other Business" category incorporates operations not included in business segment eporting, including the environmental business and engineering business.
2. Adjustment is as follows: Included within segment loss of ¥4,425 million is the elimination of intersegment transactions of ¥1,044 million and corporate expenses of ¥5,470 million.
Corporate expenses mainly comprise the submitting company’s basic research expenses.
3. Segment income is adjusted to agree with operating income in the consolidated statements of income.

On August 12, 2020 KAHR Medical, a cancer immunotherapy company developing novel bi-functional fusion proteins, reported that the U.S. Food and Drug Administration has cleared its investigational new drug (IND) application for the Company’s lead product, DSP107, a second generation CD47x41BB targeting compound that simultaneously target cancer cells, weaken their innate defenses and activate an effective, local response of both innate and adaptive immunity (Press release, KAHR Medical, AUG 12, 2020, View Source [SID1234563454]).

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Under this IND, the Company intends to initiate a Phase I/II clinical trial to evaluate the safety, pharmacokinetics (PK) and pharmacodynamics (PD) of DSP107 as a monotherapy and in combination with Roche’s PD-L1-blocking checkpoint inhibitor (CPI) atezolizumab (Tecentriq) in patients with advanced solid tumors. The study will be conducted at multiple centers in the United States and site activation activities are currently underway.

"Receiving clearance from the FDA to advance our lead immuno-oncology program to the clinic marks a significant milestone for KAHR as we transform into a clinical-stage company," said Yaron Pereg, PhD, CEO, KAHR Medical. "DSP107, with its unique dual mechanism of action and its excellent safety profile with no hematological toxicities has the potential to become a best-in-class CD47 therapy. We are proud of our significant progress in recent years and look forward to initiating the Phase I/II study in the upcoming weeks for the benefit of patients suffering from challenging to treat cancers," added Dr. Pereg.

The planned Phase I/II study will evaluate the safety, pharmacokinetics (PK) and pharmacodynamics (PD) of DSP107 in advanced solid tumors. The preliminary efficacy of both DSP107 monotherapy and combination therapy with atezolizumab will also be evaluated in patients with advanced non-small-cell lung carcinoma (NSCLC) who progressed after treatment with PD-1/PD-L1 inhibitors. The study will be conducted under a clinical collaboration with Roche.

About DSP107

DSP107 targets CD47-overexpressing tumors, simultaneously blocking macrophage inhibitory signals and delivering an immune costimulatory signal to tumor antigen-specific, activated T-cells. CD47 is overexpressed on many cancer cells and binds SIRPα on immune phagocytic cells to produce a "don’t eat me" signal. DSP107 binds CD47 on cancer cells, blocking interaction with SIRPα and thus, blocking the "don’t eat me signal". Simultaneously, DSP107 binds 41BB on T-cells, stimulating their activation. These activities lead to targeted immune activation through both macrophage and T-cell mediated tumor destruction.

On August 12, 2020 Innovent Biologics, Inc. ("Innovent") (HKEX: 01801), a world-class biopharmaceutical company that develops, manufactures and commercializes high quality medicines for the treatment of oncology, metabolic, autoimmune and other major diseases, reported with Eli Lilly and Company ("Lilly",NYSE: LLY) that the National Medical Products Administration (NMPA) of China has accepted the supplemental New Drug Application (sNDA) for TYVYT (sintilimab injection) in combination with Gemzar (gemcitabine) and platinum as first-line therapy in squamous non-small cell lung cancer (squamous NSCLC) (Press release, Innovent Biologics, AUG 12, 2020, View Source [SID1234563453]). Recently, the NMPA accepted sNDA for TYVYT (sintilimab injection) as first-line therapy in non-squamous NSCLC on Apr 23, 2020.

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The sNDA was based on the analysis of a randomized, double-blind, Phase 3 clinical study (ORIENT-12)—TYVYT (sintilimab injection) or placebo in combination with Gemzar (gemcitabine) and platinum as first-line therapy for advanced or metastatic squamous NSCLC. Based on the analysis conducted by the Independent Data Monitoring Committee (IDMC), TYVYT (sintilimab injection) in combination with Gemzar (gemcitabine) and platinum demonstrated a statistically significant improvement in progression-free survival (PFS) compared with placebo in combination with Gemzar (gemcitabine) and platinum, which met the pre-defined efficacy criteria. The safety profile is consistent with previously reported sintilimab studies, and no new safety signals were identified. Detailed data will be released in an upcoming international academic conference and journal.

Professor Caicun Zhou, Head of Department of Oncology, Shanghai Pulmonary Hospital, stated: "We are pleased to see that sintilimab in combination with chemotherapy has met predefined primary endpoint in ORIENT-12 study. There still exists large unmet medical needs in squamous NSCLC patients. Globally, ORIENT-12 has demonstrated for the first time survival benefit by treatment with PD-1 inhibitor in combination with gemcitabine and platinum in first-line squamous NSCLC. The result of this study has great clinical value."

Dr. Hui ZHOU, Vice President of Medical Science and Strategy Oncology of Innovent, stated: "For Innovent, this is the second double-blind, randomized Phase 3 study of NSCLC that met primary endpoint following ORIENT-11, a randomized Phase 3 study of 1L non-squamous NSCLC (NCT03607539). This is also the second sNDA of TYVYT (sintilimab injection) for first-line NSCLC indication. The acceptance of the sNDA by NMPA represents further progress in covering first-line NSCLC disease area. We will actively cooperate with the regulatory authority to bring the high quality therapy to more patients with advanced squamous NSCLC as soon as possible."

"Lilly and Innovent are committed to bring new anti-tumor treatments, developed with global standards, to patients in China. TYVYT (sintilimab injection) is the first success of this partnership. After being included in the NRDL for relapsed or refractory classical Hodgkin’s lymphoma, the acceptance of the sNDA for new indication of NSCLC is another important milestone of TYVYT (sintilimab injection) in the field of oncology therapy," said Dr. Li WANG, Senior Vice-President of Lilly China and Head of Lilly China Drug Development and Medical Affairs. "ORIENT-12 provides new combination option of chemotherapy for squamous NSCLC patients and we look forward to bringing this new treatment solution to lung cancer patients in China as soon as possible. In the future, we will continue to strengthen cooperation with Innovent to further explore TYVYT (sintilimab injection)’s potential in the field of immuno-oncology therapy and the potential benefits TYVYT (sintilimab injection) may bring to more patients."

About squamous NSCLC

Lung cancer is a malignancy with the highest morbidity and mortality in China. NSCLC accounts for approximately 80-85% of all lung cancer diagnosis. About 70% of NSCLC are locally advanced or metastatic at initial diagnosis, rendering the patients with no chance of radical resection. Meanwhile, even after radical surgery the patients still have a high chance of recurrence and eventually die from disease progression. About 35% of patients with NSCLC in China are of squamous subtype without driver genes. There are limited treatment options available to them.

About ORIENT-12 Study

ORIENT-12 is a randomized, double-blind, Phase 3 clinical study to evaluate the efficacy and safety of TYVYT (sintilimab injection) or placebo in combination with Gemzar (gemcitabine) and platinum as first-line therapy for advanced or metastatic squamous NSCLC (ClinicalTrials.gov, NCT03629925). The primary endpoint is progression-free survival (PFS) assessed by Independent Radiographic Review Committee based on RECIST v1.1. The key secondary endpoints include overall survival (OS) and safety profiles.

A total of 357 subjects have been enrolled in ORIENT-12 study and randomized at a 1:1 ratio to receive either sintilimab 200mg or placebo in combination with Gemzar (gemcitabine) and platinum every 3 weeks for up to 4 or 6 cycles, followed by either sintilimab or placebo maintenance therapy. The subjects will receive treatment until radiographic disease progression, unacceptable toxicity or any other conditions that require treatment discontinuation. Conditional crossover is permitted.

About ORIENT-11 Study

ORIENT-11 is a randomized, double-blind, Phase 3 clinical study to evaluate the efficacy and safety of TYVYT (sintilimab injection) or placebo in combination with ALIMTA (pemetrexed) and platinum as first-line therapy for advanced or recurrent non-squamous NSCLC without sensitizing EGFR mutation or ALK rearrangement (ClinicalTrials.gov, NCT03607539). The primary endpoint is progression-free survival (PFS) assessed by Independent Radiographic Review Committee based on RECIST v1.1. The key secondary endpoints include overall survival (OS) and safety profile.

A total of 397 subjects have been enrolled in ORIENT-11 study and randomized in a 2:1 ratio to receive either sintilimab 200mg or placebo in combination with ALIMTA (pemetrexed) and platinum every 3 weeks for up to 4 cycles, followed by either sintilimab or placebo plus ALIMTA maintenance therapy. The subjects will receive treatment until radiographic disease progression, unacceptable toxicity or any other conditions that require treatment discontinuation. Conditional crossover is permitted.

This study has met primary endpoint and NMPA accepted the sNDA for TYVYT (sintilimab injection) as first-line therapy in non-squamous NSCLC on Apr 23, 2020.

About TYVYT (Sintilimab Injection)

TYVYT (sintilimab injection), an innovative drug developed with global quality standards jointly developed in China by Lilly and Innovent, has been granted marketing approval by the NMPA for relapsed or refractory classic Hodgkin’s lymphoma after at least two lines of systemic chemotherapy, and included in the 2019 Guidelines of Chinese Society of Clinical Oncology for Lymphoid Malignancies. TYVYT (sintilimab injection) is the only PD-1 inhibitor that has been included in the new Catalogue of the National Reimbursement Drug List (NRDL) in November 2019.

In April 2020, the NMPA accepted the sNDA for TYVYT (sintilimab injection) in combination with ALIMTA (pemetrexed) and platinum as first-line therapy in non-squamous non-small cell lung cancer (NSCLC). In May 2020, TYVYT (sintilimab injection) combined with Gemzar (gemcitabine for injection) and platinum chemotherapy met the predefined primary endpoint in the Phase 3 ORIENT-12 study as first-line therapy in patients with locally advanced or metastatic squamous NSCLC, and TYVYT (sintilimab injection) monotherapy met the primary endpoint in the ORIENT-2 study as second-line therapy in patients with advanced or metastatic esophageal squamous cell carcinoma as well. In August, the NMPA accepted the sNDA for TYVYT (sintilimab injection) in combination with Gemzar (gemcitabine for injection) and platinum chemotherapy as first-line therapy in patients with locally advanced or metastatic squamous NSCLC.

TYVYT (sintilimab injection) is a type of immunoglobulin G4 monoclonal antibody, which binds to PD-1 molecules on the surface of T-cells, blocks the PD-1/ PD-Ligand 1 (PD-L1) pathway and reactivates T-cells to kill cancer cells. Innovent is currently conducting more than 20 clinical studies for sintilimab injection to evaluate its safety and efficacy in a wide variety of cancer indications, including more than 10 registration or pivotal clinical studies. Meanwhile, we are actively developing TYVYT globally.

On August 12, 2020 Personalis, Inc. (Nasdaq: PSNL), a leader in advanced genomics for population sequencing and cancer, reported the pricing of its previously announced underwritten public offering of 6,578,947 shares of its common stock at a price to the public of $19.00 per share (Press release, Personalis, AUG 12, 2020, View Source [SID1234563452]). Gross proceeds to Personalis from the offering are expected to be $125 million, before deducting underwriting discounts and commissions and estimated offering expenses.

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In addition, the underwriters have been granted a 30-day option to purchase up to an additional 986,842 shares of common stock from a selling stockholder on the same terms and conditions. Personalis will not receive any proceeds from any sale of shares by the selling stockholder.

BofA Securities, Citigroup and Cowen are acting as joint book-running managers. BTIG, Needham & Company and Oppenheimer & Co. are acting as co-managers.

A shelf registration statement relating to the shares being sold in this offering was filed with the U.S. Securities and Exchange Commission on July 2, 2020, and was declared effective on July 10, 2020. A preliminary prospectus supplement and accompanying prospectus relating to the offering was filed with the SEC and are available for free on the SEC’s website located at View Source When available, electronic copies of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained from BofA Securities, Inc., Attention: Prospectus Department, NC1‐004‐03‐43, 200 North College Street, 3rd floor, Charlotte, NC 28255‐0001, or by emailing [email protected]; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at 1-800-831-9146; or Cowen and Company, LLC, c/o Broadridge Financial Solutions, Attention: Prospectus Department, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 631‐274‐2806.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

On August 12, 2020 Atomwise Inc., which uses artificial intelligence to help academic and commercial scientists discover new medicines, reported that it has raised $123 million to expand and build its own pipeline of experimental drugs (Press release, Atomwise, AUG 12, 2020, View Source [SID1234563442]).

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Based in San Francisco, Atomwise is one of several startups seeking to use AI to speed drug development and uncover medicines that would be difficult to discover through other means. Others include Deep Genomics Inc., which in January said it had raised $40 million to develop treatments for conditions such as the rare disorder.