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West Announces Third-Quarter 2020 Results

On October 22, 2020 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the third-quarter 2020 and updated full-year 2020 financial guidance (Press release, West Pharmaceutical Services, OCT 22, 2020, View Source [SID1234568795]).

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Third-Quarter 2020 Summary (comparisons to prior-year period)

Net sales of $548.0 million grew 20.1%; organic sales growth was 18.2%.
Reported-diluted EPS of $1.09 increased 45%.
Adjusted-diluted EPS of $1.15 increased 46%.
Company is raising full-year 2020 net sales guidance to a new range of $2.10 billion and $2.11 billion.
Company is raising full-year 2020 adjusted-diluted EPS guidance to a new range of $4.50 and $4.55.
"Adjusted-diluted EPS" and "organic sales growth" are Non-U.S. GAAP measurements. See discussion under the heading "Non-U.S. GAAP Financial Measures" in this release.

"Third-quarter results were robust across the entire business, led by High-Value Products (HVP) and Biologics. Additionally, we benefited from incremental sales related to the COVID-19 pandemic including components used with treatments and supporting therapies as well as potential vaccines currently in clinical trials," said Eric M. Green, President and Chief Executive Officer. "I am proud of our team members for their relentless passion and sense of urgency to help our customers and the patients we jointly serve. Continued excellence in executing our market-led strategy and our global operations position us well for the remainder of the year and into 2021."

Proprietary Products Segment
Net sales grew by 22.1% to $421.5 million. Organic sales growth was 20.3%, with currency translation increasing sales growth by 180 basis points. HVP components represented over 65% of segment sales and generated double-digit organic sales growth.

Our Biologics market unit had strong double-digit organic sales growth, led by Flurotec, Daikyo and NovaPure film-coated components, as well as Westar and Envision components. Our Generics market unit posted high single-digit organic sales growth, and our Pharma market unit grew organic sales by mid-single digits. Both Generics and Pharma market units were led by sales of film-coated and Westar components.

Contract-Manufactured Products Segment
Net sales grew by 14.0% to $126.6 million. Organic sales growth was 11.7% with currency translation increasing sales growth by 230 basis points. Segment performance was led by strong sales of healthcare-related injection and diagnostic devices.

Financial Highlights (first nine months of 2020)
Operating cash flow was $323.8 million, an increase of 24.2%. Capital expenditures were $116.7 million. Free cash flow (operating cash flow minus capital expenditures) was $207.1 million, an increase of 20.4%.

Full-Year 2020 Financial Guidance
Full-year 2020 net sales guidance is expected to be in a range of $2.10 billion and $2.11 billion, compared to a prior range of $2.035 billion and $2.055 billion.

Organic sales growth is expected to be approximately 14% to 15%, compared to a prior guidance of 12%.
Net sales guidance includes an estimated full-year headwind of $4 million for the full-year 2020 based on current foreign exchange rates, compared to prior guidance of a headwind of $26 million.
Full-year 2020 adjusted-diluted EPS is expected to be in a range of $4.50 and $4.55, compared to a prior range of $4.15 and $4.25.
Full-year adjusted-diluted EPS guidance includes an estimated headwind of approximately $0.02 based on current foreign currency exchange rates, compared to prior guidance of a headwind of $0.07.
The revised guidance includes an $0.18 EPS impact from tax benefits from stock-based compensation in the first nine months of 2020.
For the remainder of the year, our EPS guidance range assumes a tax rate of 24% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first nine months of 2020 would provide a positive adjustment to our full-year EPS guidance.
Third-Quarter 2020 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 7564183.

A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, October 29, 2020, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 7564183.

STORM Therapeutics selects first-in-class clinical candidate targeting METTL3

On October 22, 2020 STORM Therapeutics, the leading biotechnology company focused on the discovery and development of small molecule therapies modulating RNA epigenetics, reported that STC-15, its first-in-class drug candidate targeting METTL3, has been selected for development towards first in human clinical studies (Press release, STORM Therapeutics, OCT 22, 2020, View Source [SID1234568794]). The Company intends to submit an IND application in 2021.

STC-15 is an orally bioavailable, small molecule METTL3 inhibitor targeting an entirely new mechanism of action (modulation of RNA epigenetics) to treat acute myeloid leukaemia (AML) and other solid and haematological cancers.

Clinical candidate selection demonstrates STORM’s ground-breaking work on targeting RNA modifying enzymes for the development of new anti-cancer therapeutics. STORM has used state-of-the-art drug discovery capabilities, combined with unique analytical technologies specifically developed to target RNA epigenetics, to generate highly potent selective and orally bioavailable, small molecule inhibitors of METTL3 and other RNA modifying enzymes.

Keith Blundy, CEO of STORM Therapeutics, said: "STC-15, a highly potent and selective METTL3 inhibitor, is effective in leukaemia cells refractory to chemotherapy treatment. This patient population will be incorporated into the initial clinical trials aiming to accelerate clinical proof of concept for patients with limited other options in addition to exploring combinations with standard of care.

STORM leads the global field of RNA modulation having demonstrated in vivo proof of concept activity of the first RNA methyltransferase inhibitor in relevant animal models for myeloid and solid tumours. METTL3 is one of two programmes from the STORM platform to show in vivo activity, with others to follow."

STORM showcased the activity of first-in-class METTL3 inhibitors in a range of solid tumours, (building on prior POC data in AML from 2019) at two scientific conferences in July 2020.

TARGOVAX ASA – REGISTRATION OF SHARE CAPITAL INCREASE FOLLOWING THE PRIVATE PLACEMENT

On October 22, 2020 Targovax ASA (OSE:TRVX) ("Targovax" or the "Company"), a clinical stage immuno-oncology company developing oncolytic viruses to target hard-to-treat solid tumor, on 14 October 2020, reported a successfully completed private placement of new shares in the Company (the "Private Placement") (Press release, Targovax, OCT 22, 2020, View Source [SID1234568792]).

The NOK 1,034,482.80 share capital increase pertaining to the Private Placement has now been registered with the Norwegian Register of Business Enterprises. The new share capital of the Company is NOK 8,652,059.20, divided into 86,520,592 shares, each with a par value of NOK 0.10.

The new shares issued in the Private Placement will be listed on the Oslo Stock Exchange today.

Chugai Announces 2020 3rd Quarter Results

On October 22, 2020 Chugai Pharmaceutical Co., Ltd. (TOKYO: 4519) reported its financial results for the third quarter of fiscal year 2020 (Press release, Chugai, OCT 22, 2020, View Source [SID1234568791]).

"As in the second quarter, strong growth in exports and royalty revenue far outpaced the decline in domestic product sales, helping Chugai to maintain high growth in the third quarter. The launch of the first recycling antibody Enspryng in Japan and the United States was a major milestone. In terms of research and development, in-house projects that will come after Enspryng are progressing well as crovalimab and SPYK04 have advanced to new development stages. We will continue pursuing innovation based on our unique strength in science and technology to satisfy unmet medical needs and increase corporate value continuously," said Tatsuro Kosaka, Chugai’s Chairman and CEO.

[Third quarter results for 2020]
Despite domestic sales decreased by about 7% affected by the NHI drug price revisions and the market penetration of generic drugs, Chugai reported a double-digit growth year-on-year in both revenues and operating profit for the third quarter (Core-basis), driven by increases in overseas sales, and royalties and other operating income by approximately 40% and 60%, respectively.

Revenues increased by 13.3%. Among sales, domestic sales decreased by 6.5% since sales of mainstay products in the Oncology, Bone and joint diseases, and Renal diseases areas decreased continuously from the second quarter. This resulted from the NHI drug price revisions in April this year and the market penetration of generic drugs. Domestic sales of Enspryng, a neuromyelitis optica spectrum disorder treatment newly launched in August were ¥300 million. On the other hand, overseas sales increased by 39.3% due to an increase in export of Actemra to Roche, including those for clinical trials for COVID-19 pneumonia, and export of Hemlibra, a treatment for hemophilia A, to Roche at a regular shipment price. Royalties and other operating income increased by 63.3% due to a significant increase in royalties for Hemlibra and its profit-sharing income as well as an increase in other operating income resulting from one-time income.

Cost to sales ratio improved by 2.6 percentage points at 43.1% despite the NHI price revisions mainly due to a larger proportion of in-house products including Hemlibra in the total product mix. Operating expenses increased by 5.7% in total. Marketing and distribution expenses and general and administration expenses decreased due to lower business activities caused by the spread of COVID-19. Research and development expenses recorded a double-digit increase with the projects progressing well. Operating profit increased by 35.5% due to the strong increase in revenues and a better cost to sales ratio.

The Company also made good progress in research and development. As the main progress, Chugai submitted a regulatory application in Japan for the SMN2 splicing modifier risdiplam for the treatment of spinal muscular atrophy in October. Progresses in in-house projects included the start of a phase III clinical trial of an anti-C5 recycling antibody crovalimab in paroxysmal nocturnal hemoglobinuria, and the start of clinical development of a small molecule anticancer agent SPYK04. For nemolizumab, an anti-IL-31 receptor A humanized monoclonal antibody created by Chugai, a regulatory application was filed in Japan for the treatment of atopic dermatitis by Maruho Co., Ltd., the licensee in Japan. As for the line extensions of existing products, anti-PD-L1 humanized monoclonal antibody Tecentriq and anti-VEGF humanized monoclonal antibody Avastin have been approved for hepatocellular carcinoma and anti-HER2 antibody-tuberin polymerization inhibitor conjugate Kadcyla has been approved for postoperative adjuvant therapy of HER2-positive early breast cancer.

[Initiatives for COVID-19 and impact on performance]
Regarding the impact of COVID-19 on performance during the nine months under review, there were no major negative impacts on revenues and profits. However, the pandemic has been affecting the progress of certain business activities as described below.

Product supply system maintained stable by taking measures to prevent infection of employees and business partners. No impacts on the product supply have been seen both in Japan and overseas up to now.
Delay of the introduction of new products and those with additional indications, such as Tecentriq and Hemlibra, in the domestic market due to various reasons including restrained sales activities and decrease in the number of hospitalizations and outpatients.
Continuous increase in export of Hemlibra to Roche.
Significant increase in export of Actemra to Roche, including those for clinical trials for COVID-19 pneumonia.
Some expenses were curbed mainly due to cancellation of overseas travels and restrained sales activities in Japan.
No major impacts on the timing of regulatory filing or approval.
Some delays in the initiation and progress of clinical trials for projects under development. These delays are expected to be resolved in time.
No delays in drug discovery activities for high-priority projects.
Construction for Chugai Life Science Park Yokohama temporarily suspended. All construction resumed with limited impacts on the overall construction schedule.
A domestic phase III clinical trial of Actemra for COVID-19 is currently being conducted, and its impact on performance is unclear at this point.

Replimune Announces Pricing of Upsized Public Offering

On October 22, 2020 Replimune Group, Inc. (Nasdaq: REPL), a biotechnology company developing oncolytic immuno-gene therapies derived from its Immulytic platform, reported the pricing of its public offering of 4,687,500 shares of its common stock at a public offering price of $40.00 per share (Press release, Replimune, OCT 22, 2020, View Source [SID1234568790]). In addition, in lieu of common stock to certain investors, Replimune reported the pricing of its public offering of pre-funded warrants to purchase 1,562,500 shares of its common stock at a purchase price of $39.9999 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.0001 per share exercise price of each pre-funded warrant. The aggregate gross proceeds from the offering are expected to be approximately $250 million, before deducting the underwriting discounts and commissions and estimated offering expenses payable by Replimune. All securities in the offering are being offered by Replimune. In addition, Replimune has granted the underwriters a 30-day option to purchase up to an additional 937,500 shares of its common stock from Replimune at the public offering price, less the underwriting discounts and commissions. The offering is expected to close on October 26, 2020, subject to the satisfaction of customary closing conditions.

J.P. Morgan Securities LLC, SVB Leerink LLC and Barclays Capital Inc. are acting as joint book-running managers for the offering. Wedbush Securities Inc. is acting as lead manager for the offering and Roth Capital Partners, LLC is acting as co-manager for the offering.

A preliminary prospectus supplement and a free writing prospectus relating to and describing the terms of the offering were filed with the Securities and Exchange Commission (the "SEC") on October 20, 2020 and October 21, 2020, respectively. The final prospectus supplement relating to the offering will be filed with the SEC. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained, when available, by visiting EDGAR on the SEC website at www.sec.gov or from: J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204, or by e-mail at [email protected]; SVB Leerink LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, MA 02110, by telephone at (800) 808-7525, ext. 6132, or by e-mail at [email protected] or Barclays Capital Inc., Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone: 1-888-603-5847, or by e-mail at [email protected]. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

The shares of common stock and the pre-funded warrants described above are being offered by Replimune pursuant to its shelf registration statement on Form S-3, including a base prospectus, that was previously filed by Replimune with the SEC on August 11, 2020 and declared effective by the SEC on August 26, 2020. 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 an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.