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Arrowhead Pharmaceuticals to Webcast Fiscal 2020 Second Quarter Results

On April 22, 2020 Arrowhead Pharmaceuticals Inc. (NASDAQ: ARWR) reported that it will host a webcast and conference call on May 7, 2020, at 4:30 p.m. EDT to discuss its financial results for the fiscal second quarter ended March 31, 2020 (Press release, Arrowhead Pharmaceuticals, APR 22, 2020, View Source [SID1234556506]).

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Conference Call and Webcast Details

Investors may access a live audio webcast on the Company’s website at View Source For analysts that wish to participate in the conference call, please dial 855-215-6159 or 315-625-6887 and provide Conference ID 7566917.

A replay of the webcast will be available on the company’s website approximately two hours after the conclusion of the call and will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be available for 3 days. To access the audio replay, dial 855-859-2056 or 404-537-3406 and provide Conference ID 7566917.

BIOGEN REPORTS Q1 2020 REVENUES OF $3.5 BILLION

On April 22, 2020 Biogen Inc. (Nasdaq: BIIB) reported first quarter 2020 financial results (Press release, Biogen, APR 22, 2020, View Source [SID1234556505]).

"The COVID-19 pandemic has created a challenging situation for people and companies throughout the world, and Biogen personally felt the painful impact of this global crisis. During these challenging and unprecedented times, Biogen has continued to deliver on its mission and purpose," said Michel Vounatsos, Biogen’s Chief Executive Officer. "We have continued to operate our business and deliver our therapies to patients across the world and are especially grateful to our dedicated employees as we continue to execute on our strategy."

Mr. Vounatsos added, "We delivered strong financial results in the first quarter, and we continued to develop and expand our pipeline, including making good progress toward the U.S. regulatory filing for aducanumab, as well as bolstering our efforts in gene therapy through a collaboration with Sangamo. The magnitude and uncertainty surrounding this pandemic clearly introduce unanticipated and potentially unquantifiable risks to our business and results over the near-term. That said, we believe that compelling opportunities exist in the therapeutic areas we are pursuing. This crisis has had a profound impact on our organization and the world at large. We have taken a broad set of actions, and we will remain fully engaged."

Financial Results

• First quarter total revenues were $3,534 million, a 1% increase versus the first quarter of 2019.
o Multiple sclerosis (MS) revenues, including $162 million in royalties on the sales of OCREVUS, increased 9% versus the prior year to $2,280 million.
o SPINRAZA revenues increased 9% versus the prior year to $565 million.
o Biosimilars revenues increased 25% versus the prior year to $219 million.
2 o Other revenues decreased 63% versus the prior year to $109 million primarily due to the sale of approximately $200 million of hemophilia inventory to Bioverativ Inc. in the first quarter of 2019.
o Biogen estimates that its first quarter product revenues benefitted by approximately $100 million attributed to accelerated sales due to the COVID-19 pandemic, primarily in Europe.
o Additionally, Biogen’s MS revenues in the U.S. benefitted by approximately $54 million due to extra shipping days versus the prior year and prior quarter.

• First quarter GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. were $1,399 million and $8.08, respectively, compared to $1,409 million and $7.15, respectively, in the first quarter of 2019.
• First quarter Non-GAAP net income and diluted EPS attributable to Biogen Inc. were $1,582 million and $9.14, respectively, compared to $1,374 million and $6.98, respectively, in the first quarter of 2019.

A reconciliation of GAAP to Non-GAAP quarterly financial results can be found in Table 3 at the end of this news release.

Aducanumab Update Biogen provided the following update regarding aducanumab, an anti-amyloid beta antibody candidate for the potential treatment of Alzheimer’s disease that Biogen is developing in collaboration with Eisai Co., Ltd.:

• Biogen has an open Biological License Application (BLA) with the U.S. Food and Drug Administration (FDA) and has started to submit modules of the filing.
• Biogen has participated in additional formal interactions with the FDA using mechanisms such as Type C meetings and is preparing for a pre-BLA meeting, currently scheduled for the summer of 2020.
• Following the pre-BLA meeting, Biogen expects to complete the U.S. filing in the third quarter of 2020.

In the first quarter of 2020 channel inventory levels in the U.S. decreased by approximately $115 million for TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, and TYSABRI combined. This compares to a decrease in inventory levels of approximately $170 million in the first quarter of 2019 and an increase of approximately $145 million in the fourth quarter of 2019.

• In the first quarter of 2020 SPINRAZA revenues comprised $235 million in sales in the U.S. and $330 million in sales outside the U.S. The number of commercial patients 4 receiving SPINRAZA grew approximately 1% in the U.S. and approximately 10% outside the U.S. versus the fourth quarter of 2019. R&D expense in the first quarter of 2019 included approximately $39 million related to Biogen’s agreement with Skyhawk Therapeutics, Inc. and approximately $45 million in net closeout costs for the Phase 3 studies of aducanumab in Alzheimer’s disease.

• R&D expense in the fourth quarter of 2019 included $63 million related to the transaction with Samsung Bioepis Co., Ltd., $45 million related to the option exercise for BIIB080 (tau ASO), and $30 million related to collaboration agreements with CAMP4 Therapeutics and Catalyst Biosciences, Inc. Other Financial Highlights

• In the first quarter of 2020 Biogen recognized a GAAP-only charge of $75 million related to its acquisition of BIIB118 (previously known as PF-05251749) from Pfizer Inc. (Pfizer).

• For the first quarter of 2020 GAAP and Non-GAAP collaboration profit sharing was $72 million.

• For the first quarter of 2020 GAAP other expense was $120 million, which included $61 million in unrealized losses on investments, principally driven by a decrease in the fair value of Biogen’s equity investment in Ionis Pharmaceuticals, Inc. Non-GAAP other expense for the first quarter of 2020 was $60 million driven by net interest expense, foreign exchange losses, and losses on security sales.

• For the first quarter of 2020 the Company’s effective GAAP tax rate was approximately 17%, a reduction from approximately 23% in the first quarter of 2019 due in part to the planned divestiture of our Hillerød, Denmark manufacturing operations and unrealized gains taxable at higher tax rates, both in Q1 2019. For the first quarter of 2020 the Company’s effective Non-GAAP tax rate was approximately 17%, compared to approximately 18% in the first quarter of 2019.

5 • In the first quarter of 2020 Biogen repurchased approximately 7.3 million shares of the Company’s common stock for a total value of approximately $2,220 million. o As of March 31, 2020, the share repurchase program authorized in March 2019 had been completed, and approximately $4,059 million remained under the share repurchase program authorized in December 2019.

• As of March 31, 2020, Biogen had cash, cash equivalents, and marketable securities totaling approximately $4,830 million and approximately $5,962 million in notes payable.

• In the first quarter of 2020 the Company generated approximately $1,467 million in net cash flows from operations. • For the first quarter of 2020 the Company’s weighted average diluted shares were 173 million. Biogen’s Response to COVID-19 To help ensure the health and safety of all stakeholders and society, Biogen has taken several actions in response to the ongoing COVID-19 pandemic, including:

• Implementing policies and practices to safeguard employees and communities to reduce the spread of COVID-19, including asking almost all employees to work from home.

• Providing medical equipment and supplies to Partners Healthcare in Massachusetts to help diagnose COVID-19 in a greater number of people and donating 3D-printed personal protective equipment in Massachusetts and North Carolina. • Committing $10 million from the Biogen Foundation to support global response efforts and communities around the world.

• Facilitating volunteer efforts by medically trained employees to serve as healthcare workers on the front lines and by other employees to serve the community.

• Engaging with investigators who may want to evaluate the potential of our interferon therapies to treat COVID-19.

• Launching a consortium with the Broad Institute of MIT and Harvard and Partners Healthcare to build and share a COVID-19 biobank and giving Biogen employees who have recovered from COVID-19, as well as their close contacts, the opportunity to donate samples and medical data.

• Pursuing a process development and manufacturing collaboration with Vir Biotechnology, Inc., which is developing potential antibody therapies for COVID-19. 6 Potential Business Impacts of COVID-19 Biogen has continued to operate its business to serve the needs of patients and has been continually monitoring for potential impacts: • Supply chain: Biogen has continued to operate its manufacturing facilities and is working with organizations across its supply chain to maintain continuity, while continuing to closely monitor the evolving situation.

• Regulatory interactions: Biogen is continuing its frequent interactions with regulatory authorities, including for aducanumab.

• Clinical trials: Biogen is working on a case-by-case basis to continue safely advancing as many of its clinical trials as possible. To help mitigate the impact to its clinical trials, the Company is pursuing innovative approaches such as remote monitoring, remote patient visits, and supporting home infusions. While Biogen does expect there will be some impact to timelines for some of its clinical programs, it still expects the vast majority of the 10 remaining near-term readouts to occur before the end of 2021. Recent Events

• In April 2020 Biogen, Broad Institute of MIT and Harvard, and Partners HealthCare announced a consortium that will build and share a COVID-19 biobank. The biobank will help scientists study a large collection of de-identified biological and medical data to advance scientific knowledge and search for potential vaccines and treatments for COVID-19. Biogen will help employees who wish to volunteer connect with the project. The initial volunteers are among the first people in Massachusetts to be diagnosed with and recover from COVID-19, as well as close contacts of those individuals.

• In April 2020 the previously announced collaboration between Biogen and Sangamo Therapeutics, Inc. (Sangamo) to develop gene regulation therapies for Alzheimer’s disease, Parkinson’s disease, neuromuscular disease, and other neurological diseases became effective. The companies will leverage Sangamo’s proprietary zinc finger protein technology delivered via adeno-associated virus to modulate the expression of key genes involved in neurological diseases. Upon closing of this transaction, Biogen paid Sangamo $225 million for the purchase of new Sangamo stock, or approximately 24 million shares at $9.21 per share, and will pay a $125 million license fee in the second quarter of 2020. In addition, Biogen may pay Sangamo up to $2.37 billion in other milestone payments as well as tiered high single digit to sub-teen double-digit royalties.

• In April 2020 Biogen delivered an encore presentation of the Phase 3 topline results for aducanumab at the virtual AAT-AD/PDTM focus meeting. The data in this presentation were previously presented at the Clinical Trials on Alzheimer’s Disease (CTAD) annual congress in December 2019. 7

• In March 2020 the first patient was dosed in the global clinical study, DEVOTE, which is evaluating the safety, tolerability, and potential for even greater efficacy of SPINRAZA when administered at a higher dose than currently approved for the treatment of spinal muscular atrophy (SMA). The Phase 2/3 randomized, controlled, dose-escalating study will be conducted at approximately 50 sites around the world and aims to enroll individuals of all ages with SMA.

• In March 2020 Biogen received the topline data from OPUS, a randomized Phase 2 study exploring the efficacy, safety, and tolerability of natalizumab as an adjunctive therapy in adults with drug-resistant focal epilepsy. Though safety data were in-line with the known safety profile of natalizumab, and target engagement as assessed by alpha-4 integrin saturation was achieved, the primary endpoint was not met. As a result, Biogen has decided to discontinue development of natalizumab in drug-resistant focal epilepsy.

• In March 2020 a study on the efficacy and safety of SPINRAZA in teen and adult patients was published in Lancet Neurology, showing clinically meaningful improvements in motor function in a real-world cohort. This study included 139 teens and adults with later-onset SMA (age 16-65 years) from 10 neuromuscular treatment centers in Germany. Patients were followed for 6-14 months and experienced statistically significant increases in HFMSE (Hammersmith Functional Motor Scale Expanded) scores compared to baseline at 6 months, 10 months, and 14 months. Clinically meaningful improvements (≥3 points increase) in HFMSE scores were seen in 28% of patients at 6 months, 35% of patients at 10 months, and 40% of patients at 14 months. The most frequent adverse events were headache, back pain, and nausea.

• In March 2020 the first patient was dosed in the aducanumab re-dosing study, EMBARK, in line with Biogen’s commitment to offer aducanumab to eligible patients who were previously in aducanumab clinical studies. EMBARK is a global re-dosing clinical study designed to evaluate aducanumab in eligible Alzheimer’s disease patients who were actively enrolled in aducanumab studies (PRIME, EVOLVE, EMERGE, and ENGAGE) in March 2019.

• In March 2020 Biogen completed its acquisition of BIIB118 from Pfizer. BIIB118 is a novel CNS-penetrant small molecule inhibitor of casein kinase 1 (CK1), for the potential treatment of patients with behavioral and neurological symptoms across various psychiatric and neurological diseases. In particular, Biogen plans to develop the Phase 1 asset for the treatment of sundowning in Alzheimer’s disease and irregular sleep wake rhythm disorder in Parkinson’s disease. The purchase included an upfront payment of $75 million with up to $635 million in potential additional development and commercialization milestone payments, as well as tiered royalties in the high single digits to sub-teens.

Conference Call and Webcast

The Company’s earnings conference call for the first quarter will be broadcast via the internet at 8:00 a.m. ET on April 22, 2020, and will be accessible through the Investors section of Biogen’s website, www.biogen.com. Supplemental information in the form of a 8 slide presentation is also accessible at the same location on the internet and will be subsequently available on the website for at least one month.

Alkermes Announces Publication of Preclinical Data for ALKS 4230 in the Journal for ImmunoTherapy of Cancer

On April 22, 2020 Alkermes plc (Nasdaq: ALKS) reported the publication of preclinical data demonstrating the selectivity and anti-tumor efficacy of its investigational, immunotherapy candidate, ALKS 4230, in the Journal for ImmunoTherapy of Cancer (JITC) (Press release, Alkermes, APR 22, 2020, View Source [SID1234556504]). ALKS 4230, a novel cytokine, is an investigational, engineered fusion protein designed to selectively expand tumor-killing immune cells while avoiding the interleukin-2 (IL-2)-induced activation of immunosuppressive cells by preferentially binding to the intermediate-affinity IL-2 receptor complex.

The manuscript, titled "ALKS 4230: a novel engineered IL-2 fusion protein with an improved cellular selectivity profile for cancer immunotherapy," provides an in-depth explanation of the design of ALKS 4230 and includes data from multiple assays that demonstrated that ALKS 4230 selectively activated the intermediate-affinity IL-2 receptor as intended. Additionally, data from a mouse B6F10 lung metastasis model demonstrated that treatment with ALKS 4230 achieved a maximum of 100% inhibition of tumor growth with one of the doses tested, as compared to treatment with recombinant human IL-2 (rhIL-2), which achieved a maximum of 70% inhibition of tumor growth with one of the doses tested. In this model, equivalent anti-tumor activity of ALKS 4230 was observed whether it was administered intravenously or subcutaneously.

"Targeting the IL-2 pathway has shown significant efficacy in renal cell carcinoma and melanoma, however the broader and more prevalent use of this approach in treating cancer has been limited by the toxicity profile and side effects associated with currently available IL-2-based therapy," said Marc Ernstoff, M.D., Roswell Park Comprehensive Cancer Center, and publication co-author. "These preclinical data demonstrated that ALKS 4230 selectively activated and expanded cancer-fighting cells in mice with less toxicity than conventional high-dose IL-2 therapy. These data support further clinical evaluation of ALKS 4230 as a potential novel cytokine-based cancer immunotherapy."

Key findings published in the manuscript include the following:

ALKS 4230 demonstrated a similar potency to rhIL-2 in activating mouse CD8+ T cells and Natural Killer (NK) cells. However, ALKS 4230 was ~ 1000 times less potent than rhIL-2 in activating regulatory T cells (Tregs), which are known to suppress cancer-fighting immune mechanisms.

ALKS 4230 treatment of peripheral blood mononuclear cells (PBMCs) from patients with melanoma or renal cell carcinoma resulted in the selective expansion of CD8+ T cells and NK cells with negligible effects on Treg expansion.

ALKS 4230 showed superior anti-tumor efficacy to rhIL-2 in a mouse B6F10 lung metastasis model and the ability to achieve equivalent anti-tumor efficacy when administered either intravenously or subcutaneously.

In mice, ALKS 4230 treatment induced markedly lower levels of cytokines typically associated with cytokine release syndrome, compared to rhIL-2.
"We leveraged our therapeutic development expertise and protein engineering capabilities to create ALKS 4230, a stable fusion protein. It is designed to minimize toxicity without compromising the proven anti-cancer effects of IL-2-based therapies," said Heather Losey, Ph.D., Director, Program Lead in Immuno-Oncology at Alkermes, and corresponding author of the publication. "We are encouraged by ALKS 4230’s preclinical profile, as discussed in this important peer-reviewed publication, including its selectivity for immune effector cells, pharmacokinetics and preclinical efficacy. We look forward to progressing the ARTISTRY clinical development program and seeing how the data mature for this novel, investigational immunotherapy."

ALKS 4230 is currently being studied in both monotherapy and combination settings as part of the Alkermes-sponsored ARTISTRY clinical development program.

About ALKS 4230
ALKS 4230 is an investigational, novel, engineered fusion protein comprised of modified interleukin-2 (IL-2) and the high-affinity IL-2 alpha receptor chain, designed to selectively expand tumor-killing immune cells while avoiding the activation of immunosuppressive cells by preferentially binding to the intermediate-affinity IL-2 receptor complex. The selectivity of ALKS 4230 is designed to leverage the proven anti-tumor effects of existing IL-2 therapy while mitigating certain limitations.

About the ARTISTRY Clinical Development Program
ARTISTRY is an Alkermes-sponsored clinical development program evaluating ALKS 4230 in patients with advanced solid tumors. ARTISTRY-1 is an ongoing phase 1/2 study in which ALKS 4230 is administered as an intravenous infusion daily for five consecutive days. ARTISTRY-1 has three distinct stages: an ongoing monotherapy dose-escalation stage, an ongoing monotherapy expansion stage, and an ongoing combination therapy stage with the PD-1 inhibitor KEYTRUDA (pembrolizumab) in patients with select advanced solid tumors.

ARTISTRY-2 is an ongoing phase 1/2 study in which ALKS 4230 is administered subcutaneously as monotherapy and in combination with pembrolizumab in patients with advanced solid tumors. ARTISTRY-2 is designed to explore the safety, tolerability and efficacy of ALKS 4230 administered subcutaneously and assess once-weekly and once-every-three-week dosing schedules.

Silverback Therapeutics Announces Appointment of Veteran Executive Laura Shawver, Ph.D. as President and CEO

On April 22, 2020 Silverback Therapeutics ("Silverback") reported that Laura Shawver, Ph.D., was appointed president, chief executive officer and director of Silverback Therapeutics to lead the next phase of growth utilizing ImmunoTAC therapeutics that are administered systemically, tissue-directed, and locally active with a pipeline of programs in oncology, fibrosis and virology (Press release, Silverback Therapeutics, APR 22, 2020, View Source [SID1234556501]). Dr. Shawver brings more than 25 years of demonstrated success as a scientist, biotech leader and patient advocate to the role.

"With her range of strategic expertise, demonstrated success raising capital, scientific acumen, and broad drug development experience, Laura is the perfect fit for Silverback," said Peter Thompson, MD, OrbiMed partner, co-founder and chairman of Silverback Therapeutics. "I, along with Silverback’s entire board, look forward to working with Laura and our exceptional leadership team to advance Silverback’s pipeline and deliver on the promise to dramatically improve the lives of patients."

"It’s an amazing opportunity to lead a team creating a new generation of therapies that can modulate previously impossible to treat pathways. Silverback is on the verge of entering clinical development with SBT6050, which maximizes the potential for an anti-tumor immune response in tumors lacking T cells," said Dr. Shawver. "Marrying the curative potential of IO treatment with the precision of targeted drugs is a major advancement. I look forward to marshalling the necessary resources to maximize the value of the ImmunoTAC platform for all the stakeholders."

Most recently, Dr. Shawver was CEO and director of Synthorx, Inc. from 2017 until its acquisition by Sanofi in January 2020 for $2.5 billion. Previously, she has held positions as CEO and director of Cleave Biosciences; entrepreneur-in-residence for 5AM Ventures; CEO and director of Phenomix Corporation; and president of SUGEN Inc. She is currently a director of Relay Therapeutics, as well as board chair of Cleave Therapeutics. She is an active member of the American Association for Cancer Research (AACR) (Free AACR Whitepaper), serving on the Scientific Advisory Committee for Stand Up to Cancer. Dr. Shawver knows firsthand what it is like to be a cancer patient – having survived ovarian cancer, she founded The Clearity Foundation, a nonprofit organization helping women with ovarian cancer improve their treatment options. Dr. Shawver received her Ph.D. in pharmacology and a B.S. degree in microbiology from the University of Iowa.

Thermo Fisher Scientific Reports First Quarter 2020 Results

On April 22, 2020 Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported its financial results for the first quarter ended March 28, 2020 (Press release, Thermo Fisher Scientific, APR 22, 2020, View Source [SID1234556499]).

First Quarter 2020 Highlights

•First quarter revenue increased 2% to $6.23 billion.
•First quarter GAAP diluted earnings per share (EPS) decreased 2% to $1.97.
•First quarter adjusted EPS increased 5% to $2.94.

•Announced agreement to acquire QIAGEN N.V. for $11.5 billion, expanding our specialty diagnostics portfolio with attractive molecular diagnostics capabilities and enhancing our life sciences offering with innovative sample preparation technologies. Commenced permanent financing by raising $3.5 billion through U.S. and European bond offerings.

•Responded to global demand for COVID-19 diagnostic testing by developing the Applied Biosystems TaqPath COVID-19 Combo Kit, which received Emergency Use Authorization from the U.S. FDA, the CE mark in Europe and subsequent authorizations worldwide. Also introduced the Thermo Scientific AcroMetrix Coronavirus 2019 RNA Control to validate molecular diagnostic tests.

•Launched new products to support a range of customer applications, including the highly automated Thermo Scientific Vanquish Core HPLC system for increased throughput in pharmaceutical, food and industrial testing, and the Thermo Scientific Labtainer Pro bioprocess container to improve drug and vaccine production.

•Repurchased $1.5 billion of stock and increased our dividend by 16 percent.

Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

"We’re clearly living in unprecedented times, and the COVID-19 pandemic has put a spotlight on the importance of the work we do at Thermo Fisher Scientific," said Marc N. Casper, chairman, president and chief executive officer of the company. "Our leading scale and depth of capabilities are key advantages in navigating this environment, and we were pleased to deliver a very good first quarter. Our performance reflects the amazing effort of our teams who continued to meet our customers’ needs and quickly mobilized to provide solutions to analyze, diagnose and protect from the virus globally.

"As you would expect, we’re managing the company appropriately and our guiding principles are to keep our colleagues safe, support our customers’ important work and ensure we come through this period an even stronger industry leader."

Casper added, "We were also very excited to announce our agreement to acquire QIAGEN, which will enhance our customer value proposition in life sciences and specialty diagnostics, including infectious disease testing. QIAGEN’s offerings and expertise are a perfect complement to our capabilities, and we remain on track to complete the transaction in the first half of 2021."

First Quarter 2020

Revenue for the quarter grew 2% to $6.23 billion in 2020, versus $6.12 billion in 2019. Organic revenue growth was 2%; acquisitions, net of a divestiture, increased revenue by 1% and currency translation decreased revenue by 1%.

GAAP Earnings Results

GAAP diluted EPS in the first quarter of 2020 decreased 2% to $1.97, versus $2.02 in the same quarter last year. GAAP operating income for the first quarter of 2020 was $0.91 billion, compared with $0.92 billion in the year-ago quarter. GAAP operating margin was 14.5%, compared with 15.0% in the first quarter of 2019.

Non-GAAP Earnings Results

Adjusted EPS in the first quarter of 2020 increased 5% to $2.94, versus $2.81 in the first quarter of 2019. Adjusted operating income for the first quarter of 2020 grew 1% compared with the year-ago quarter. Adjusted operating margin was 22.1%, compared with 22.4% in the first quarter of 2019.

2020 Guidance

Thermo Fisher announced on April 6, 2020, that it withdrew its 2020 annual guidance due to the evolving COVID-19 pandemic and related customer impact.

Segment Results

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

Life Sciences Solutions Segment

In the first quarter of 2020, Life Sciences Solutions Segment revenue grew 10% to $1.77 billion, compared with revenue of $1.61 billion in the first quarter of 2019. Segment adjusted operating margin increased to 38.0%, versus 34.9% in the 2019 quarter.

Analytical Instruments Segment

Analytical Instruments Segment revenue was $1.10 billion in the first quarter of 2020, compared with revenue of $1.32 billion in the first quarter of 2019. Segment adjusted operating margin was 15.5%, versus 21.3% in the 2019 quarter.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue was flat at $0.96 billion in the first quarter of 2020, compared with the first quarter of 2019, reflecting the divestiture of the Anatomical Pathology business in June 2019. Segment adjusted operating margin was 24.7%, versus 25.3% in the 2019 quarter.

Laboratory Products and Services Segment

In the first quarter of 2020, Laboratory Products and Services Segment revenue grew 9% to $2.73 billion, compared with revenue of $2.51 billion in the first quarter of 2019. Segment adjusted operating margin was 10.8%, versus 11.3% in the 2019 quarter.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs; restructuring and other costs/income; and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and the impact of significant tax audits or events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We also use a non-GAAP measure, free cash flow, which is operating cash flow, excluding net capital expenditures to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts.

For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 3 to 20 years. Based on acquisitions closed through the end of the first quarter of 2020, adjusted EPS will exclude approximately $3.31 of expense for the amortization of acquisition-related intangible assets. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, the impact of significant tax audits or events (such as changes in deferred taxes from enacted tax rate changes or the estimated initial impacts of U.S. tax reform legislation), which are either isolated or cannot be expected to occur again with any predictability and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business or real estate, gains or losses on significant litigation-related matters, gains on curtailments of pension plans and the early retirement of debt.

We also report free cash flow, which is operating cash flow, excluding net capital expenditures to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities.

Thermo Fisher’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company’s core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher’s results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables. Thermo Fisher does not provide GAAP financial measures on a forward-looking basis because we are unable to predict with reasonable certainty and without unreasonable effort items such as the timing and amount of future restructuring actions and acquisition-related charges as well as gains or losses from sales of real estate and businesses, the early retirement of debt and the outcome of legal proceedings. The timing and amount of these items are uncertain and could be material to Thermo Fisher’s results computed in accordance with GAAP.

Conference Call

Thermo Fisher Scientific will hold its earnings conference call today, April 22, 2020, at 8:30 a.m. Eastern time. To listen, dial (877) 273-7122 within the U.S. or (647) 689-5496 outside the U.S. You may also listen to the call live on our website, www.thermofisher.com, by clicking on "Investors."
You will find this press release, including the accompanying reconciliation of non-GAAP financial measures and related information, in that section of our website under "Financial Results." An audio archive of the call will be available under "Webcasts and Presentations" through Friday, May 29, 2020.