On May 7, 2020 Aldeyra Therapeutics, Inc. (Nasdaq: ALDX) (Aldeyra), a clinical-stage biotechnology company focused on the development of novel therapies with the potential to improve the lives of patients with immune-mediated diseases, reported financial results for the first quarter ended March 31, 2020, announced new clinical trials in systemic inflammatory diseases, and provided an update on ocular disease programs (Press release, Aldeyra Therapeutics, MAY 7, 2020, View Source [SID1234557354]).

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"Based on the success of the novel RASP inhibitor ADX-629 in Phase 1 clinical testing, we are pleased to announce a new comprehensive clinical initiative in systemic inflammatory diseases, complementing our late-stage pipeline in ocular disease," said Todd C. Brady, M.D., Ph.D., President and CEO of Aldeyra. "Although the COVID-19 pandemic has affected clinical trial enrollment timelines, our cash position remains strong, and we are extending our projected cash runway guidance into 2022."

New Clinical Programs in Systemic Inflammatory Diseases

Aldeyra plans to assess the activity of ADX-629 in three types of severe inflammation: cytokine release syndrome, autoimmune disease, and allergy. In preclinical models, ADX-629 treatment reduced levels of TH1, TH2, and TH17-related cytokines, suggesting potential activity across a broad array of inflammatory diseases. The timing of clinical trial initiation depends, in part, on restrictions related to COVID-19, the availability of clinical research facilities and staffing, and the ability to recruit patients.

COVID-19 Respiratory Compromise: A Phase 2 clinical trial of ADX-629 is expected in subjects with COVID-19-associated respiratory compromise, defined as hypoxia and pulmonary radiographic involvement, immediately following admission to the hospital. Severe inflammation, characterized in part by cytokine release syndrome, leads to acute respiratory distress syndrome and other conditions that require mechanical ventilation. The clinical trial, contingent on FDA review of information submitted via the Coronavirus Treatment Acceleration Program (CTAP), is expected to begin in the third quarter of 2020.
Autoimmune Disease: A Phase 2a clinical trial of ADX-629 in patients with psoriasis, an autoimmune condition associated with TH1 cytokines, is expected to begin in the second half of 2020.
Allergy: A Phase 2a allergen-challenge clinical trial of ADX-629 in patients with atopic asthma, an allergic inflammatory disease associated with TH2 cytokines, is expected to begin in the second half of 2020.
Late-Stage Ocular Disease Programs

Reproxalap, a first-in-class RASP inhibitor for topical ocular administration, continues to advance towards a new drug application (NDA) filing in allergic conjunctivitis and dry eye disease. The Phase 3 GUARD Trial of ADX-2191, a novel formulation of methotrexate for intravitreal administration, in patients with proliferative vitreoretinopathy currently remains active, although enrollment has been significantly delayed due to the COVID-19 pandemic.

Dry Eye Disease: A Type C meeting with the U.S. Food and Drug Administration (FDA) is scheduled for mid-2020 to discuss remaining NDA requirements for reproxalap in dry eye disease. Reproxalap has demonstrated clinically relevant improvement from baseline in two well-controlled clinical trials: Part 1 of the Phase 3 RENEW Trial announced late last year and a Phase 2 formulation trial announced earlier this year. Dry eye disease remains poorly served by available therapies, and represents one of the largest markets in ophthalmology, affecting an estimated 34 million patients in the United States. Aldeyra plans to provide an update on dry eye disease clinical development plans following receipt and review of FDA feedback.
Allergic Conjunctivitis: Based on delays primarily associated with an extended allergy season, results from the Phase 3 INVIGORATE Trial of reproxalap are currently expected in the first half of 2021. Based on the successful Phase 3 ALLEVIATE Trial announced in 2019, and assuming continued clinical success and positive regulatory review, reproxalap has the potential to be the first new mechanistic approach in decades for the treatment of allergic conjunctivitis. The current therapeutic landscape of allergic conjunctivitis is generally limited to antihistamines, which do not lead to satisfactory activity in up to one-third of patients, and corticosteroids, which cannot be used chronically due to potentially serious adverse events. Allergic conjunctivitis is one of most common ocular surface diseases, affecting an estimated 66 million patients in the United States, and is often associated with dry eye disease.
Proliferative Vitreoretinopathy (PVR): Patient enrollment in Part 1 of the adaptive the Phase 3 GUARD Trial of ADX-2191 for the prevention of PVR has been significantly delayed due to lack of clinical site availability and staffing resulting from the COVID-19 pandemic. PVR is a rare but vision-threatening retinal disease associated with recurrent retinal detachments. There is no approved therapy for PVR. Aldeyra expects to update the enrollment and completion timeline by year-end, and is also exploring additional indications for ADX-2191, including primary intraocular lymphoma, a rare but serious ocular cancer that can affect the retina, uvea, optic nerve, and other ocular structures.
Financial Review for the Quarter Ended March 31, 2020

For the quarter ended March 31, 2020, Aldeyra reported a net loss of $9.9 million, compared with a net loss of $15.6 million for the quarter ended March 31, 2019. Net loss per share was $0.34 for the quarter ended March 31, 2020, compared with $0.58 for the same period in 2019. Losses have resulted from the costs of Aldeyra’s clinical trials and research and development programs, as well as from general and administrative expenses.

Research and development expenses were $6.6 million for the quarter ended March 31, 2020, compared with $7.8 million for the same period in 2019. The decrease of $1.2 million is primarily related to the decreases in clinical and preclinical development and manufacturing costs. Expenses for the 2019 period also included $6.6 million of in-process research and development expenses incurred in connection with the acquisition of Helio Vision.

General and administrative expenses were $3.0 million for each of the quarters ended March 31, 2020 and 2019. Increases in personnel related costs, including stock-based compensation, were offset by a decrease in legal and other miscellaneous administrative costs.

For the quarter ended March 31, 2020, total operating expenses were $9.6 million, compared with total operating expenses of $17.4 million for the same period in 2019.

Cash, cash equivalents, and marketable securities were $61.4 million as of March 31, 2020. Based on current operating plans, Aldeyra believes that its cash, cash equivalents, and marketable securities as of March 31, 2020 will be sufficient to fund currently anticipated operating expenses into 2022, including the completion of the Phase 3 INVIGORATE Trial for reproxalap, as well as the Phase 2 clinical trials of ADX-629 in COVID-19-associated respiratory compromise, atopic asthma, and psoriasis; the commencement of one or more additional clinical trials in dry eye disease, subject to the outcome of the FDA meeting scheduled for mid-year 2020; and the continuation of Part 1 of the adaptive Phase 3 clinical trial in PVR contingent on patient enrollment.

Conference Call & Webcast Information

Aldeyra will host a conference call today at 8:00 a.m. ET to announce new clinical trials in systemic inflammatory diseases, provide an update on ocular disease programs, and report first-quarter 2020 financial results. The dial-in numbers are (866) 211-4098 for domestic callers and (647) 689-6613 for international callers. The Conference ID number is 6982314. Due to the expected high demand on our conference provider, please plan to dial in to the call at least 30 minutes prior to the start time.

A live webcast of the conference call will also be available on the investor relations page of the company’s corporate website at View Source After the live webcast, the event will remain archived on the Aldeyra Therapeutics website for 90 days.

On May 7, 2020 Seres Therapeutics, Inc. (Nasdaq: MCRB) reported financial results from the first quarter ended March 31, 2020 and provided an operational update (Press release, Seres Therapeutics, MAY 7, 2020, View Source [SID1234557353]).

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"We were pleased to have recently achieved the important milestone of completing enrollment of our SER-109 Phase 3 ECOSPOR III clinical study in recurrent C. difficile infection, and we look forward to topline results from this study mid-year. In preparation for successful SER-109 clinical data, we are working to prepare for a potential FDA regulatory submission and executing commercial readiness activities," said Eric D. Shaff, President and Chief Executive Officer at Seres. "During the last several months, the COVID-19 pandemic has presented unprecedented challenges around the world. Amidst the complexity of the current environment, we are very pleased to be advancing toward our Phase 3 data on plan and on time. We continue to monitor the impact on Company operations and are carefully reviewing our development plans, including for our ongoing SER-287 and SER-401 studies. Our objective is to advance these programs toward meaningful, clinically interpretable data readouts as rapidly as possible."

Program Updates and Corporate Highlights

Corporate impact of COVID-19: Seres is closely monitoring how the COVID-19 pandemic is affecting the Company and a number of actions have been implemented to protect employee safety and continuation of business operations. Administrative employees continue their work from home, while laboratory research and development activity remains ongoing, with modifications made to prioritize employee safety.

SER-109 Phase 3 ECOSPOR III study in recurrent C. difficile infection: SER-109 is an orally-administered, biologically-derived, live microbiome therapeutic candidate designed to restore the depleted, or dysbiotic, gastrointestinal microbiome of patients with recurrent C. difficile infection (CDI).

This first-in-field microbiome therapeutic candidate has been granted Orphan Drug and Breakthrough Therapy designations by the U.S. Food and Drug Administration (FDA).

On March 30, Seres reported the completion of enrollment in the Phase 3 ECOSPOR III study (ClinicalTrials.gov identifier: NCT03183128), a multicenter, randomized 1:1, placebo-controlled study in patients with multiply recurrent CDI. ECOSPOR III has enrolled 182 patients.

All enrolled patients are required to undergo a rigorous C. difficile cytotoxin diagnostic test to confirm active CDI, both at entry into the study and to confirm recurrence of C. difficile infection during the study. The primary endpoint of ECOSPOR III is the reduction of CDI recurrence at up to eight weeks following SER-109 administration.

The FDA has issued several safety alerts related to fecal microbiota transplantation (FMT) and the risk of pathogen transmission including warnings related to multi-drug resistant organisms (MDROs) and SARS-CoV-2, the virus linked to COVID-19 (including: June 18, 2019 Alert; March 12, 2020 Alert; and March 23, 2020 Alert; April 9, 2020 Alert). Unapproved FMT is widely used under an FDA Enforcement Discretion policy for the treatment of recurrent CDI that is not responsive to standard therapies.

SER-109 is fundamentally distinct from FMT and is comprised of a highly purified consortia of spore-based commensal bacteria and manufactured under Good Manufacturing Practices (GMP) conditions using stringent standards to ensure product quality and consistency. To maximize product safety, Seres utilizes a unique manufacturing process that inactivates numerous potential pathogens, including species of non-spore bacteria, such as Escherichia coli, and viruses such as SARS-CoV-2.

Seres expects to report top-line results from ECOSPOR III in mid-2020. Based on prior discussions with the FDA, Seres believes that ECOSPOR III has the potential to be the single pivotal study supporting product registration; however, this will depend on the strength of the data, and additional safety data may be required.

SER-287 Phase 2b ECO-RESET study in ulcerative colitis: SER-287 is an oral, biologically-derived microbiome therapeutic candidate designed to normalize the gastrointestinal microbiome of individuals with ulcerative colitis.

The SER-287 Phase 2b ECO-RESET induction study in patients with active mild-to-moderate ulcerative colitis remains ongoing. COVID-19 has impacted clinical operations and slowed enrollment. Seres has implemented a number of mitigation strategies to continue operational progress, including providing increased clinical support to clinical sites and additional flexibility regarding data capture. The Company is also evaluating various options consistent with the goal of obtaining a high-quality, clinically meaningful dataset.

SER-301 clinical candidate for ulcerative colitis: Seres has nominated SER-301, a rationally designed, fermented microbiome therapeutic as a clinical candidate for ulcerative colitis. Innovative, novel manufacturing methods have been utilized to produce SER-301. The composition includes strains delivered in spore form, as well as strains fermented in non-spore, vegetative form and delivered using enterically-protected technology designed to release in the colon. The consortia of bacteria in SER-301 is designed to modify the microbiome and microbe-associated metabolites in the gastrointestinal tract to modulate anti-inflammatory immune pathways, and improve epithelial barrier integrity in patients with ulcerative colitis.

The Company has initiated clinical development and continues to execute on activities for a SER-301 Phase 1 study in patients with ulcerative colitis. The study is planned to enroll subjects in Australia and New Zealand later this year. Seres is entitled to receive a $10 million milestone payment associated with the Phase 1 SER-301 clinical study initiation from Nestlé Health Science, the Company’s collaborative partner for this program.

SER-401 Phase 1b study in metastatic melanoma: SER-401 is an orally-administered, biologically-derived, live microbiome therapeutic candidate comprising bacteria that reflect the bacterial signature in the gastrointestinal microbiome associated with patient response to checkpoint inhibitor immunotherapy.

The ongoing placebo-controlled Phase 1b study, which is supported by the Parker Institute for Cancer Immunotherapy and The University of Texas MD Anderson Cancer Center, is evaluating the potential of SER-401 to improve clinical response to nivolumab, an approved anti-PD-1 checkpoint inhibitor therapy, and will evaluate tumor biopsies and various biomarkers.

SER-155 composition selected: Seres has advanced SER-155, a rationally designed, fermented microbiome therapeutic toward clinical development. SER-155 is designed to prevent mortality due to gastrointestinal infections, bacteremia and graft versus host disease (GvHD) in immunocompromised patients, including in patients receiving allogeneic hematopoietic stem cell transplantation. SER-155 is a consortium of bacterial species that incorporates biomarkers from human clinical data and preclinical assessment using human cell-based assays and in vivo disease models. The composition is designed to decrease infection and translocation of antibiotic resistant bacteria in the gastrointestinal tract, and modulate host immune responses to decrease GvHD.

The SER-155 program is supported by a CARB-X grant that provides financial and operational support through Phase 1b clinical development. The Company intends to move SER-155 into a Phase 1b study later this year in collaboration with Memorial Sloan Kettering Cancer Center.

Chief Medical Officer appointment: In April, Series announced that Lisa von Moltke, M.D., FCP, was appointed as Executive Vice President and Chief Medical Officer. Dr. von Moltke joins Seres with an extensive career that includes senior leadership positions at Alkermes, Sanofi Genzyme and Millennium Pharmaceuticals/Takeda Oncology.

Board of Directors appointment: In March, Seres announced that Paul Biondi, Executive Partner at Flagship Pioneering, was appointed to its Board of Directors.

Upcoming investor events: Seres plans to hold a webcast conference call on May 27, 2020 with a focus on the SER-109 program ahead of the Phase 3 ECOSPOR III study readout. Further details will be provided closer to the event. The Company also plans to participate in the Jefferies 2020 Healthcare Conference in early June.

Financial Results

Seres reported a net loss of $19.9 million for the first quarter of 2020, as compared with a net loss of $24.3 million for the same period in 2019. The first quarter net loss was driven primarily by clinical and development expenses, personnel expenses and ongoing development of the Company’s microbiome therapeutics platform. The first quarter net loss was inclusive of $8.2 million in recognized revenue associated primarily with the Company’s collaborations with Nestlé Health Science and AstraZeneca.

Research and development expenses for the first quarter of 2020 were $21.7 million, compared with $22.9 million for the same period in 2019. The research and development expenses were primarily related to Seres’ late stage SER-109 and SER-287 clinical development programs.

General and administrative expenses for the first quarter of 2020 were $6.1 million, compared with $7.5 million for the same period in 2019. General and administrative expenses were primarily due to headcount, professional fees and facility costs.

Seres ended the first quarter with approximately $75.1 million in cash, cash equivalents and investments compared with $94.8 million at December 31, 2019. Cash resources are expected to fund operating expenses and capital expenditure requirements, excluding net cash flows from future business development activities or potential incoming milestone payments, into the second quarter of 2021.

Conference Call Information
Seres’ management will host a conference call today, May 7, 2020 at 8:30 a.m. ET. To access the conference call, please dial 844-277-9450 (domestic) or 336-525-7139 (international) and reference the conference ID number 9143286. To join the live webcast, please visit the "Investors and Media" section of the Seres website at www.serestherapeutics.com.

A webcast replay will be available on the Seres website beginning approximately two hours after the event and will be archived for approximately 21 days.

Seres also plans to hold a webcast conference call on May 27, 2020 with a focus on the SER-109 program. Further details will be provided closer to the event.

On May 7, 2020 Aldeyra Therapeutics, Inc. (Nasdaq: ALDX) (Aldeyra), a clinical-stage biotechnology company focused on the development of novel therapies with the potential to improve the lives of patients with immune-mediated diseases, reported financial results for the first quarter ended March 31, 2020, announced new clinical trials in systemic inflammatory diseases, and provided an update on ocular disease programs (Press release, Aldeyra Therapeutics, MAY 7, 2020, View Source [SID1234557352]).

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"Based on the success of the novel RASP inhibitor ADX-629 in Phase 1 clinical testing, we are pleased to announce a new comprehensive clinical initiative in systemic inflammatory diseases, complementing our late-stage pipeline in ocular disease," said Todd C. Brady, M.D., Ph.D., President and CEO of Aldeyra. "Although the COVID-19 pandemic has affected clinical trial enrollment timelines, our cash position remains strong, and we are extending our projected cash runway guidance into 2022."

New Clinical Programs in Systemic Inflammatory Diseases

Aldeyra plans to assess the activity of ADX-629 in three types of severe inflammation: cytokine release syndrome, autoimmune disease, and allergy. In preclinical models, ADX-629 treatment reduced levels of TH1, TH2, and TH17-related cytokines, suggesting potential activity across a broad array of inflammatory diseases. The timing of clinical trial initiation depends, in part, on restrictions related to COVID-19, the availability of clinical research facilities and staffing, and the ability to recruit patients.

COVID-19 Respiratory Compromise: A Phase 2 clinical trial of ADX-629 is expected in subjects with COVID-19-associated respiratory compromise, defined as hypoxia and pulmonary radiographic involvement, immediately following admission to the hospital. Severe inflammation, characterized in part by cytokine release syndrome, leads to acute respiratory distress syndrome and other conditions that require mechanical ventilation. The clinical trial, contingent on FDA review of information submitted via the Coronavirus Treatment Acceleration Program (CTAP), is expected to begin in the third quarter of 2020.
Autoimmune Disease: A Phase 2a clinical trial of ADX-629 in patients with psoriasis, an autoimmune condition associated with TH1 cytokines, is expected to begin in the second half of 2020.
Allergy: A Phase 2a allergen-challenge clinical trial of ADX-629 in patients with atopic asthma, an allergic inflammatory disease associated with TH2 cytokines, is expected to begin in the second half of 2020.
Late-Stage Ocular Disease Programs

Reproxalap, a first-in-class RASP inhibitor for topical ocular administration, continues to advance towards a new drug application (NDA) filing in allergic conjunctivitis and dry eye disease. The Phase 3 GUARD Trial of ADX-2191, a novel formulation of methotrexate for intravitreal administration, in patients with proliferative vitreoretinopathy currently remains active, although enrollment has been significantly delayed due to the COVID-19 pandemic.

Dry Eye Disease: A Type C meeting with the U.S. Food and Drug Administration (FDA) is scheduled for mid-2020 to discuss remaining NDA requirements for reproxalap in dry eye disease. Reproxalap has demonstrated clinically relevant improvement from baseline in two well-controlled clinical trials: Part 1 of the Phase 3 RENEW Trial announced late last year and a Phase 2 formulation trial announced earlier this year. Dry eye disease remains poorly served by available therapies, and represents one of the largest markets in ophthalmology, affecting an estimated 34 million patients in the United States. Aldeyra plans to provide an update on dry eye disease clinical development plans following receipt and review of FDA feedback.
Allergic Conjunctivitis: Based on delays primarily associated with an extended allergy season, results from the Phase 3 INVIGORATE Trial of reproxalap are currently expected in the first half of 2021. Based on the successful Phase 3 ALLEVIATE Trial announced in 2019, and assuming continued clinical success and positive regulatory review, reproxalap has the potential to be the first new mechanistic approach in decades for the treatment of allergic conjunctivitis. The current therapeutic landscape of allergic conjunctivitis is generally limited to antihistamines, which do not lead to satisfactory activity in up to one-third of patients, and corticosteroids, which cannot be used chronically due to potentially serious adverse events. Allergic conjunctivitis is one of most common ocular surface diseases, affecting an estimated 66 million patients in the United States, and is often associated with dry eye disease.
Proliferative Vitreoretinopathy (PVR): Patient enrollment in Part 1 of the adaptive the Phase 3 GUARD Trial of ADX-2191 for the prevention of PVR has been significantly delayed due to lack of clinical site availability and staffing resulting from the COVID-19 pandemic. PVR is a rare but vision-threatening retinal disease associated with recurrent retinal detachments. There is no approved therapy for PVR. Aldeyra expects to update the enrollment and completion timeline by year-end, and is also exploring additional indications for ADX-2191, including primary intraocular lymphoma, a rare but serious ocular cancer that can affect the retina, uvea, optic nerve, and other ocular structures.
Financial Review for the Quarter Ended March 31, 2020

For the quarter ended March 31, 2020, Aldeyra reported a net loss of $9.9 million, compared with a net loss of $15.6 million for the quarter ended March 31, 2019. Net loss per share was $0.34 for the quarter ended March 31, 2020, compared with $0.58 for the same period in 2019. Losses have resulted from the costs of Aldeyra’s clinical trials and research and development programs, as well as from general and administrative expenses.

Research and development expenses were $6.6 million for the quarter ended March 31, 2020, compared with $7.8 million for the same period in 2019. The decrease of $1.2 million is primarily related to the decreases in clinical and preclinical development and manufacturing costs. Expenses for the 2019 period also included $6.6 million of in-process research and development expenses incurred in connection with the acquisition of Helio Vision.

General and administrative expenses were $3.0 million for each of the quarters ended March 31, 2020 and 2019. Increases in personnel related costs, including stock-based compensation, were offset by a decrease in legal and other miscellaneous administrative costs.

For the quarter ended March 31, 2020, total operating expenses were $9.6 million, compared with total operating expenses of $17.4 million for the same period in 2019.

Cash, cash equivalents, and marketable securities were $61.4 million as of March 31, 2020. Based on current operating plans, Aldeyra believes that its cash, cash equivalents, and marketable securities as of March 31, 2020 will be sufficient to fund currently anticipated operating expenses into 2022, including the completion of the Phase 3 INVIGORATE Trial for reproxalap, as well as the Phase 2 clinical trials of ADX-629 in COVID-19-associated respiratory compromise, atopic asthma, and psoriasis; the commencement of one or more additional clinical trials in dry eye disease, subject to the outcome of the FDA meeting scheduled for mid-year 2020; and the continuation of Part 1 of the adaptive Phase 3 clinical trial in PVR contingent on patient enrollment.

Conference Call & Webcast Information

Aldeyra will host a conference call today at 8:00 a.m. ET to announce new clinical trials in systemic inflammatory diseases, provide an update on ocular disease programs, and report first-quarter 2020 financial results. The dial-in numbers are (866) 211-4098 for domestic callers and (647) 689-6613 for international callers. The Conference ID number is 6982314. Due to the expected high demand on our conference provider, please plan to dial in to the call at least 30 minutes prior to the start time.

A live webcast of the conference call will also be available on the investor relations page of the company’s corporate website at View Source After the live webcast, the event will remain archived on the Aldeyra Therapeutics website for 90 days.

On May 7, 2020 AmerisourceBergen Corporation (NYSE:ABC) reported that in its fiscal year 2020 second quarter ended March 31, 2020, revenue increased 9.5 percent to $47.4 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $4.64 for the March quarter of fiscal 2020, compared to $0.13 in the prior year quarter (Press release, AmerisourceBergen, MAY 7, 2020, View Source [SID1234557351]). Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 13.7 percent to $2.40 in the fiscal second quarter.

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The Company revised its adjusted diluted EPS guidance for fiscal 2020 to a range of $7.35 to $7.65, from $7.55 to $7.80 previously. The Company does not provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal Year 2020 Expectations.

"While we are pleased to report another quarter of strong revenue and adjusted diluted EPS growth in the second quarter of fiscal 2020, we are even prouder of the impressive work being done across our company to ensure continued patient access to pharmaceuticals in the midst of the COVID-19 pandemic," said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.

AmerisourceBergen’s protocols to protect and support the health and wellness of its associates have been enhanced during the COVID-19 pandemic and the Company has business continuity plans in place that are designed to help ensure the continued operation of critical business functions.

"I have been inspired by the actions of our associates to be innovative and solution-oriented to meet the complex needs of our upstream and downstream partners," Mr. Collis continued. "AmerisourceBergen’s diligence, actions and thoughtfulness in navigating this pandemic have been guided by our purpose of being united in our responsibility to create healthier futures and have proven vital for all our stakeholders."

Second Quarter Fiscal Year 2020 Summary Results

GAAP

Adjusted (Non-GAAP)

Revenue

$47.4B

$47.4B

Gross Profit

$1.4B

$1.4B

Operating Expenses

$1,079M

$745M

Operating Income

$310M

$672M

Interest Expense, Net

$34M

$34M

Effective Tax Rate

(251.6)%

21.5%

Net Income Attributable to ABC

$960M

$497M

Diluted Earnings Per Share

$4.64

$2.40

Diluted Shares Outstanding

207M

207M

Below, AmerisourceBergen presents descriptive summaries of the Company’s GAAP and adjusted (non-GAAP) quarterly results. In the tables that follow, GAAP results and GAAP to non-GAAP reconciliations are presented. For more information related to non-GAAP financial measures, including adjustments made in the periods presented, please refer to the Supplemental Information Regarding non-GAAP Financial Measures following the tables.

Second Quarter GAAP Results

Revenue: In the second quarter of fiscal 2020, revenue was $47.4 billion, up 9.5 percent compared to the same quarter in the previous fiscal year, reflecting a 9.3 percent increase in Pharmaceutical Distribution Services revenue and a 12.7 percent increase in revenue within Other.
Gross Profit: Gross profit in the fiscal 2020 second quarter was $1.4 billion, a 2.6 percent decrease compared to the same period in the previous fiscal year. Gross profit in the current year quarter was unfavorably impacted by LIFO expense in comparison to a LIFO credit in the prior year period and significantly lower gains from antitrust litigation settlements, offset in part by increases in gross profit in Pharmaceutical Distribution Services and Other. Gross profit as a percentage of revenue was 2.93 percent, a decrease of 36 basis points from the prior year quarter.
Operating Expenses: In the second quarter of fiscal 2020, operating expenses were $1,078.6 million, compared to $1,377.2 million in the same period last fiscal year. The decrease in operating expenses was primarily due to the $223.7 million impairment of PharMEDium’s assets compared to a $570.0 million impairment of PharMEDium’s assets in the same period in the previous fiscal year. Operating expenses as a percentage of revenue in the fiscal 2020 second quarter was 2.27 percent, compared to 3.18 percent for the same period in the previous fiscal year.
Operating Income: In the fiscal 2020 second quarter, operating income increased to $309.5 million from $47.6 million in the prior year quarter due to the decrease in operating expenses. Operating income as a percentage of revenue was 0.65 percent in the second quarter of fiscal 2020, compared to 0.11 percent for the same period in the previous fiscal year.
Interest Expense, Net: In the fiscal 2020 second quarter, net interest expense of $34.4 million was down 20.5 percent versus the prior year quarter primarily due to certain build-to-suit leases now being accounted for as operating leases, resulting from the adoption of the new lease accounting standard.
Effective Tax Rate: The effective tax rate was (251.6) percent for the second quarter of fiscal 2020. The effective tax rate in the quarter was primarily impacted by tax benefits associated with the Company’s decision to permanently exit the PharMEDium compounding business. The prior year’s second quarter effective tax rate of (49.5) percent was favorably impacted by the $570.0 million impairment of PharMEDium’s assets.
Diluted Earnings Per Share: Diluted earnings per share was $4.64 in the second quarter of fiscal 2020 compared to $0.13 in the previous fiscal year’s second quarter. This increase was primarily due to the discrete income tax benefits recognized in the current year period.
Diluted Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal 2020 were 207.1 million, a 2.6 percent decline versus the prior fiscal year second quarter primarily due to share repurchases.
Second Quarter Adjusted (non-GAAP) Results

The comments below compare adjusted results, which exclude: gain from antitrust litigation settlements; LIFO expense/credit; PharMEDium remediation and shutdown costs; New York State Opioid Stewardship Act; contingent consideration adjustment; acquisition-related intangibles amortization; employee severance, litigation, and other; impairment of PharMEDium’s assets; certain discrete tax benefits; and a gain on the sale of an equity investment.

Revenue: No adjustments were made to the GAAP presentation of revenue. In the second quarter of fiscal 2020, revenue was $47.4 billion, up 9.5 percent compared to the same quarter in the previous fiscal year, reflecting a 9.3 percent increase in Pharmaceutical Distribution Services revenue and a 12.7 percent increase in revenue within Other.
Adjusted Gross Profit: Adjusted gross profit in the fiscal 2020 second quarter was $1.4 billion, which was up 7.5 percent compared to the same period in the previous year, due to the increases in gross profit in Pharmaceutical Distribution Services and Other. Adjusted gross profit as a percentage of revenue was 2.99 percent in the fiscal 2020 second quarter, a decrease of 5 basis points from the prior year quarter.
Adjusted Operating Expenses: In the second quarter of fiscal 2020, adjusted operating expenses were $745.2 million, an increase of 6.2 percent compared to the same period in the previous fiscal year primarily due to an increase in costs to support revenue growth primarily in Other, offset in part by lower depreciation due to the completion of the integration of H. D. Smith. Adjusted operating expenses as a percentage of revenue in the fiscal 2020 second quarter was 1.57 percent, compared to 1.62 percent for the same period in the previous fiscal year.
Adjusted Operating Income: In the fiscal 2020 second quarter, adjusted operating income of $671.7 million increased 8.9 percent from the prior year period due to an 8.9 percent increase in operating income within Pharmaceutical Distribution Services and an 8.4 percent increase in operating income within Other. Adjusted operating income as a percentage of revenue was 1.42 percent in the fiscal 2020 second quarter, unchanged from the previous fiscal year’s second quarter.
Interest Expense, Net: No adjustments were made to the GAAP presentation of net interest expense. In the fiscal 2020 second quarter, net interest expense of $34.4 million was down 20.5 percent versus the prior year quarter primarily due to certain build-to-suit leases now being accounted for as operating leases, resulting from the adoption of the new lease accounting standard.
Adjusted Effective Tax Rate: The adjusted effective tax rate was 21.5 percent for the second quarter of fiscal 2020, same as the previous fiscal year’s second quarter.
Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was up 13.7 percent to $2.40 in the second quarter of fiscal 2020 compared to $2.11 in the previous fiscal year’s second quarter, driven primarily by the increase in adjusted operating income and a lower number of diluted shares outstanding.
Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the second quarter of fiscal 2020 were 207.1 million, a 2.6 percent decline versus the prior fiscal year second quarter primarily due to share repurchases.
Segment Discussion

The Company’s operations are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure and, therefore, have been included in Other for the purpose of reportable segment presentation. Other consists of operating segments that focus on global commercialization services and animal health and includes AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Animal Health (MWI).

Pharmaceutical Distribution Services Segment

Pharmaceutical Distribution Services revenue was $45.6 billion, an increase of 9.3 percent compared to the same quarter in the prior fiscal year primarily due to organic growth of some of its largest customers, increased specialty product sales and overall market growth. Segment operating income of $563.1 million in the second quarter of fiscal 2020 was up 8.9 percent compared to the same period in the previous fiscal year, primarily due to the increase in gross profit resulting from the growth in revenue.

Other

Revenue in Other was $1.9 billion in the second quarter of fiscal 2020, an increase of 12.7 percent compared to the same period in the prior fiscal year, due to growth at all three operating segments: MWI, ABCS and World Courier. Operating income in Other increased 8.4 percent to $108.3 million in the second quarter of fiscal 2020. This increase was primarily due to the performance of MWI and World Courier.

Recent Company Highlights & Milestones

AmerisourceBergen published its 2019 Corporate Citizenship Report, detailing the impact of its robust sustainability and community efforts across 150 campuses in 50 countries and its focus on sustainable operations, inspired associates and healthy communities. For the second year in a row, selected information within the 2019 Report was assured by ERM Certification and Verification Services.
The AmerisourceBergen Foundation has made grant donations that will be deployed to regional, national and global organizations focused on combating the economic, psychosocial and health challenges resulting from the COVID-19 pandemic.
MWI Animal Health announced a series of technology tools that will enable veterinarian practices to virtually engage with their clients, which has become critically important during the COVID-19 pandemic.
AmerisourceBergen launched additional offerings to specialty physician practices through IPN Solutions. Now, practices will have access to an expanded suite of solutions, which include enhanced business insights, revenue cycle management services, valuable clinical research opportunities and more offerings that integrate with existing practice technologies.
AmerisourceBergen announced that it is continuing its strategic relationship with the American Oncology Network, LLC (AON), a high-growth medical oncology provider with a focus on supporting the long-term viability of oncology treatment in community-based settings. AmerisourceBergen will support AON in its effort to accelerate key strategic priorities to scale its integrated value-based care delivery model nationwide.
Fiscal Year 2020 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available or cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.

Fiscal Year 2020 Expectations on an Adjusted (non-GAAP) Basis

AmerisourceBergen has updated its fiscal year 2020 financial guidance to reflect the Company’s continued strong performance and opportunistic share repurchases in the second quarter and incorporate potential impacts of COVID-19 in the second half of the fiscal year. The Company now expects:

Revenue growth in the low- to mid-single digit percent range, down from the mid- to high- single digit percent range; and
Adjusted Diluted EPS to be in the range of $7.35 to $7.65, down from the previous range of $7.55 to $7.80.
Additional expectations now include:

Adjusted operating expenses to increase in the low-single digit percent range, down from the mid-single digit percent range;
Adjusted operating income growth in the low- to mid-single digit percent range, widened from the mid-single digit percent range;
Pharmaceutical Distribution Services segment operating income growth in the low- to mid-single digit percent range, widened from mid-single digit percent range;
Other, which is comprised of businesses focused on Global Commercialization Services & Animal Health, operating income decline in the low-single digit percent range, revised from growth in the high-single digit percent range; and
Weighted average diluted shares are now expected to be between 206 million to 207 million, down from the previous expectation of approximately 208 million for the fiscal year.
All other previously communicated aspects of the Company’s fiscal year 2020 financial guidance and assumptions remain the same.

Dividend Declaration

The Company’s Board of Directors declared a quarterly cash dividend of $0.42 per common share, payable June 1, 2020, to stockholders of record at the close of business on May 18, 2020.

New Share Repurchase Authorization

In May 2020, AmerisourceBergen’s Board of Directors authorized a new share repurchase program allowing the Company to purchase up to $500 million of its outstanding shares of common stock, subject to market conditions. As of March 31, 2020, the Company had $68.8 million remaining under the share repurchase program authorized in October 2018.

Conference Call & Slide Presentation

The Company will host a conference call to discuss the results at 8:30 a.m. ET on May 7, 2020. A slide presentation for investors has also been posted on the Company’s website at investor.amerisourcebergen.com. Participating in the conference call will be:

Steven H. Collis, Chairman, President & Chief Executive Officer
James F. Cleary, Executive Vice President & Chief Financial Officer
The dial-in number for the live call will be (866) 270-1533. From outside the United States, dial (412) 317-0797. No access code is required. The live call will also be webcast via the Company’s website at investor.amerisourcebergen.com. Users are encouraged to log on to the webcast approximately 10 minutes in advance of the scheduled start time of the call.

Replays of the call will be made available via telephone and webcast. A replay of the webcast will be posted on investor.amerisourcebergen.com approximately one hour after the completion of the call and will remain available for one year. The telephone replay will also be available approximately one hour after the completion of the call and will remain available for seven days. To access the telephone replay from within the U.S., dial (877) 344-7529. From Canada, dial (855) 669-9658. From outside the United States and Canada, dial (412) 317-0088. The access code for the replay is 10142230.

Upcoming Investor Events

AmerisourceBergen management will be participating in the following investor conference in the coming months:

Goldman Sachs 41st Annual Global Healthcare Conference, June 9-11.
Please check the website for updates regarding the timing of the live presentation webcasts, if any, and for replay information.

On May 7, 2020 Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY) reported that it will announce results for the fourth quarter and full year ended March 31, 2020 on Wednesday, May 20, 2020 after the Board Meeting (Press release, Dr Reddy’s, MAY 7, 2020, View Source [SID1234557350]).

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Summary of Events

Event

Date and Time

Medium

Release of financial results

May 20th, after the Board Meeting

Stock Exchange, Media, Company website, Business wire, Email

Press meet presentation

Will be available on the Company’s website

Company’s website www.drreddys.com

Earnings Call

May 20th, 5:15 PM IST / 7:45 AM EDT

Hosted by the Company (Details below)

Playback of Earnings Call

After the earnings call till May 27th, 2020

Details below

Transcript of the Earnings call

Will be available on the Company’s website

URL available on Company’s website, www.drreddys.com

Earnings Call

Following the release, the management of the Company will host an earnings call to discuss the Company’s financial performance. (Dial In and other details given below)

Play Back

The play back will be available after the earnings call, till May 27th, 2020. For play back dial in phone No: +91 22 7194 5757 | +91 22 6663 5757, and Playback Code is 74886.

No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call.