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Boston Scientific Announces Results For Fourth Quarter And Full Year 2019

On February 5, 2020 Boston Scientific Corporation (NYSE: BSX) reported sales of $2.905 billion during the fourth quarter of 2019 (Press release, Boston Scientific, FEB 5, 2020, View Source [SID1234553904]). This represents growth of 13.4 percent on a reported basis, 14.1 percent on an operational1 basis and 7.3 percent on an organic2 basis, all compared to the prior year period. The company reported GAAP earnings of $3.996 billion or $2.83 per share (EPS), compared to GAAP earnings of $386 million or $0.27 per share a year ago and achieved adjusted earnings per share of $0.46 for the period, compared to $0.39 a year ago. Reported GAAP earnings include a significant net income tax benefit explained in the Use of Non-GAAP Financial Measures section below.

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For the full year 2019, the company generated sales of $10.735 billion. This represents growth of 9.3 percent on a reported basis, 11.1 percent on an operational1 basis and 7.3 percent on an organic2 basis, all compared to the prior year period. The company reported GAAP earnings of $3.33 per share, inclusive of the net income tax benefit mentioned above, compared to $1.19 in 2018 and delivered full year adjusted earnings per share of $1.58, compared to $1.47 in 2018. Full year 2018 GAAP and adjusted earnings per share included a $0.07 net tax benefit.3

"We delivered strong revenue and adjusted EPS growth for the quarter and the year by developing innovative products, executing on our category leadership strategy and mitigating challenges," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "We’re confident that we have the pipeline, leadership team and focused execution to deliver on our goals to address unmet clinical needs and work to improve the lives of millions of patients."

Fourth quarter financial results and recent developments:

Reported fourth quarter sales of $2.905 billion, representing an increase of 13.4 percent on a reported basis, compared to the company’s guidance range of 13 to 15 percent; 14.1 percent on an operational basis; and 7.3 percent on an organic basis, compared to the company’s guidance range of 8 to 9 percent, all compared to the prior year period.
Reported fourth quarter GAAP earnings of $2.83 per share, compared to the company’s guidance range of $0.22 to $0.25 per share. Reported GAAP earnings include net litigation charges of $169 million, or $0.12 per share, primarily related to the previously disclosed Channel Medsystems, Inc. matter, and a net income tax benefit of $4.102 billion, or $2.90 per share, explained in the Use of Non-GAAP Financial Measures section below. Achieved adjusted earnings per share of $0.46 per share, compared to the guidance range of $0.42 to $0.45 per share.
Achieved fourth quarter revenue growth in all segments5, compared to the prior year period:
MedSurg: 9.8 percent reported, 10.6 percent operational and organic
Rhythm and Neuro: 3.5 percent reported, 4.1 percent operational and 1.0 percent organic
Cardiovascular: 18.7 percent reported, 19.3 percent operational and 10.0 percent organic
Delivered fourth quarter Medical Device5 revenue growth in all regions, compared to the prior year period:
U.S.: 13.4 percent reported and operational
EMEA (Europe, Middle East and Africa): 7.2 percent reported and 9.7 percent operational
APAC (Asia-Pacific): 11.3 percent reported and 11.5 percent operational
Emerging Markets4: 14.1 percent reported and 16.2 percent operational
Received U.S. Food and Drug Administration (FDA) 510(k) clearance and Breakthrough Device Designation, and CE Mark for the EXALT Model D Duodenoscope, the first and only single-use duodenoscope. Initiated limited market release, including a successful first case in patient undergoing endoscopic retrograde cholangiopancreatography (ERCP), a procedure performed more than 1.5 million times worldwide each year to diagnose and treat pancreatic and biliary conditions.
Positive 12-month data from the investigator-sponsored COMPARE trial, demonstrating non-inferiority of the low-dose paclitaxel-coated Ranger Drug-Coated Balloon (DCB) (2.0 µg/mm2) compared to the higher dose IN.PACT DCB (Medtronic) balloon (3.5 µg/mm2), was presented at the Leipzig Interventional Course (LINC) Congress. COMPARE is the first randomized controlled head-to-head trial comparing two drug-coated balloon technologies.
Presented at the 2020 Gastrointestinal Cancers Symposium positive data on the impact of personalized radiation dosing using TheraSphere Yttrium-90 Glass Microspheres from the investigator-sponsored DOSISPHERE-01 trial. Data demonstrated personalized dosing of radiation increased overall survival of patients with the most common type of liver cancer, when compared to patients who received a standardized dose.
Announced plans to initiate CHAMPION-AF–a randomized head-to-head trial of the WATCHMAN FLX Left Atrial Appendage Closure Device vs. direct oral anticoagulants–in the second half of 2020. The global trial is designed to study stroke risk reduction efficacy and bleeding endpoints in lower-risk patients with non-valvular atrial fibrillation.
Received Japanese Pharmaceuticals and Medical Devices Agency (PMDA) approval and positive reimbursement in Japan for the LOTUS Edge Aortic Valve System, a minimally invasive transcatheter aortic valve replacement (TAVR) technology for patients with severe aortic stenosis.
Received FDA approval for the INGEVITY+ active fixation pacing lead for use with pacemakers and defibrillators. Built on the INGEVITY platform with proven longevity, the new lead is designed to offer a more predictable implant experience for physicians.
Received CE Mark for the POLARx Cryoablation System, which is indicated for the treatment of patients with paroxysmal atrial fibrillation (AF), an intermittent form of AF which causes an irregular and often abnormally fast heart rate.
Announced at the North American Neuromodulation Society (NANS) Annual Meeting results of the COMBO randomized clinical trial showing that Combination Therapy delivered by the Spectra WaveWriter Spinal Cord Stimulator (SCS) System achieved an 88% responder rate in treating chronic pain–much higher than monotherapy alone. Also at NANS, announced an exclusive partnership with IBM Research to develop AI-generated predictive algorithms for highly personalized chronic pain therapy.
Completed a public offering of €900 million aggregate principal amount of 0.625% Senior Notes due 2027, and completed cash tender offer for approximately $1.0 billion aggregate principal amount of certain outstanding senior notes.
Completed the sale of BTG’s royalty revenue stream associated with Zytiga for $256 million in cash, the proceeds from which were used to repay portions of outstanding debt.
1. Operational revenue growth excludes the impact of foreign currency fluctuations.

2. Organic revenue growth excludes the impact of foreign currency fluctuations and sales from the recent acquisitions of NxThera, Inc., Claret Medical, Inc., Augmenix, Inc., Vertiflex, Inc. and BTG plc (BTG), each with no prior year comparable sales. Organic revenue growth also excludes the impact of the divestiture of our global embolic microspheres portfolio, a transaction entered into in connection with obtaining the antitrust clearances required to complete the BTG transaction.

3. The full year 2018 net tax benefit of $0.07 includes our previously disclosed second quarter $0.06 benefit from settling the IRS Stipulation of Settled Issues for the 2001 through 2010 tax years, offset by a fourth quarter $0.05 charge for our previously announced tax reinvestment strategy. In addition, the net benefit includes a $0.06 benefit in the fourth quarter for the settlement with the IRS of our 2011 through 2013 tax years.

4. We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities in our Medical Devices business. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. We have revised prior year amounts to the current year’s presentation. The revision had an immaterial impact on prior year Emerging Markets sales.

5. We have three historical reportable segments comprised of Medical Surgical (MedSurg), Rhythm and Neuro, and Cardiovascular, which represent an aggregation of our operating segments that generate revenues from the sale of medical devices (Medical Devices). As part of our acquisition of BTG on August 19, 2019, we acquired an Interventional Medicine business, which is now included in our Peripheral Interventions operating segment’s 2019 revenues from the date of acquisition.

6. As part of our acquisition of BTG on August 19, 2019, we acquired a specialty pharmaceuticals business (Specialty Pharmaceuticals). Subsequent to acquisition, Specialty Pharmaceuticals is now a stand-alone operating segment presented alongside our Medical Device reportable segments. Specialty Pharmaceuticals net sales are substantially U.S. based. Our chief operating decision maker (CODM) reviews financial information of our globally managed Specialty Pharmaceuticals operating segment at the worldwide level without further disaggregation into regional results. As such, Specialty Pharmaceuticals net sales are presented globally, and our Medical Devices reportable segments regional net sales results do not include Specialty Pharmaceuticals.

Net sales for the fourth quarter by business and region:

Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.

Sales growth rates that exclude the impact of foreign currency fluctuations and/or the impact of recent aforementioned acquisitions / divestitures are not prepared in accordance with U.S. GAAP.

Net sales for the full year by business and region:

Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.

Sales growth rates that exclude the impact of foreign currency fluctuations and/or the impact of recent aforementioned acquisitions / divestitures are not prepared in accordance with U.S. GAAP.

Guidance for Full Year and First Quarter 2020

The company estimates revenue growth for the full year 2020, versus the prior year period, to be in a range of approximately 10 to 12 percent on a reported basis and a growth range of approximately 6.5 to 8.5 percent on an organic basis. Full year organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 350 basis points from the acquisitions of Vertiflex and BTG, each with less than a full year of related net sales in the prior period, as well as the impact of the divestiture of our global embolic microspheres portfolio as part of the acquisition of BTG. The company estimates income on a GAAP basis in a range of $0.95 to $1.00 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $1.74 to $1.79 per share.

The company estimates revenue growth for the first quarter of 2020, versus the prior year period, to be in a range of approximately 10 to 12 percent on a reported basis and a growth range of approximately 5 to 7 percent on an organic basis. First quarter sales guidance contemplates a preliminary negative sales impact estimate of $10 million to $40 million due to the potential effect of the coronavirus on procedure volumes in China and supply chain disruption. First quarter organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 600 basis points from the acquisitions of Vertiflex and BTG, each with no prior year comparable sales, as well as the impact of the divestiture of our global embolic microspheres portfolio as part of the acquisition of BTG. The company estimates earnings on a GAAP basis in a range of $0.16 to $0.19 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $0.37 to $0.40 per share.

Conference Call Information

Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. ET. The company will webcast the call to interested parties through its website: www.bostonscientific.com. Please see the website for details on how to access the webcast. The webcast will be available for approximately one year on the Boston Scientific website.

Centene Corporation Announces Offering of Senior Notes

On February 5, 2020 Centene Corporation (NYSE: CNC) ("Centene" or the "Company") reported that it has commenced an offering to sell $2,000,000,000 of senior notes due 2030 (the "Notes"), subject to market and other conditions (Press release, Centene , FEB 5, 2020, View Source [SID1234553903]).

Centene intends to use the net proceeds from the offering of the Notes, together with available cash on hand, to complete a redemption of all of its outstanding 4.75% Senior Notes due 2022 (the "2022 Notes Redemption") and all of its outstanding 6.125% Senior Notes due 2024 (the "2024 Notes Redemption"), including all premiums, accrued interest and costs and expenses related to the 2022 Notes Redemption and the 2024 Notes Redemption. Pending the application of the net proceeds of the offering for the foregoing purposes, net proceeds may temporarily be used for general corporate purposes.

The Notes will be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-United States persons outside the United States in compliance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.

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

CytoSorb Used Successfully to Help Treat Grade 4 Cytokine Release Syndrome Following CAR T-cell Immunotherapy in First Published Case Report

On February 5, 2020 CytoSorbents Corporation (NASDAQ:CTSO), a critical care immunotherapy leader commercializing its CytoSorb blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients around the world, reported the first published case report detailing the successful use of CytoSorb to help treat cytokine release syndrome (CRS) following the administration of CAR T-cell immunotherapy (Press release, Cytosorbents, FEB 5, 2020, View Source [SID1234553902]). In a recent publication entitled, "Multimodal Therapeutic Approach of Cytokine Release Syndrome Developing in a Child Given Chimeric Antigen Receptor-Modified T Cell Infusion", in the journal, Critical Care Explorations, a publication of the Society of Critical Care Medicine, Bottari and colleagues highlight the use of CytoSorb, in conjunction with continuous renal replacement and tocilizumab, to help treat a 14-year old boy with refractory acute lymphoblastic leukemia (ALL), who developed Grade 4 cytokine release syndrome (CRS) with progressive respiratory failure and severe acute respiratory distress syndrome (ARDS) following the administration of CAR T-cell immunotherapy.

Dr. Joerg Scheier, Senior European Medical Director of CytoSorbents stated, "We are pleased to report the first published use of CytoSorb to assist in the rescue of a patient suffering from life-threatening cytokine release syndrome due to CAR T-cell immunotherapy. The combination of CytoSorb with continuous renal replacement therapy, and tocilizumab, was simple and safe to implement. More importantly, it led to a dramatic reversal of acute respiratory distress syndrome, one of the most deadly forms of lung injury that is a root cause of death in the Wuhan coronavirus outbreak, with a corresponding profound drop in cytokine storm and circulating inflammatory mediators. We believe this successful proof-of-concept treatment supports the consideration of this treatment regimen in future cases of CRS triggered by CAR T-cell immunotherapy."

This patient had previously failed treatment of his ALL with both chemotherapy and immunotherapy, and was enrolled into an academic CAR T-cell immunotherapy trial. However, 7 days after the CAR T-cell therapy infusion, he developed severe cytokine release syndrome (a form of cytokine storm), and the rapid progression of respiratory failure that did not respond to an initial dose of tocilizumab and low dose steroids. The patient was admitted to the pediatric intensive care unit (PICU) and placed on mechanical ventilation for profound ARDS with a PaO2/FiO2 (P/F) ratio of 45 mm Hg, and hemodynamic instability requiring vasopressors. His Grade 4 cytokine release syndrome (CRS) exhibited extremely high cytokine and inflammatory marker levels, including an IL-6 of 4,048 pg/mL and a ferritin of 146,095 ng/mL. The patient underwent five blood purification treatments with CytoSorb, changed every 12 hours for the first day, and then every 24 hours for the next 3 days, in conjunction with continuous renal replacement therapy (CRRT), with tocilizumab administered on the last 2 days of CytoSorb treatment. In the first 3 days of CytoSorb treatment, the ferritin levels dramatically decreased to normal, and the IL-6 dropped to 248 pg/mL. This improvement in control of CRS was mirrored by a gradual and progressive improvement in lung function, as measured by P/F ratio and chest X-rays. On day 12 of admission to the PICU, he was weaned off of mechanical ventilation and was discharged from the ICU a week later.

CAR T-cell immunotherapy (Kymriah – Novartis; Yescarta – Gilead) represents a breakthrough in cancer treatment of acute lymphocytic leukemia (ALL; also called acute lymphocytic leukemia) and Diffuse large B-cell lymphoma (DLBCL) that are refractory to standard biologic therapy and chemotherapy, and has great potential in other blood cancers and solid tumors in the future. The therapy takes a patient’s own immune T-cells, genetically modifies them outside of the body with a chimeric antigen receptor (CAR) to be able to recognize and kill the cancer cells, and reinfuses these CAR T-cells back into the body where they have led to dramatic cures of what were considered irreversibly fatal cancers. However, in doing so the activated cells often trigger an inflammatory response in the patient caused by the production of high levels of inflammatory mediators called cytokines. In some patients, the levels of these cytokines can spiral upwards, creating a "cytokine storm" or cytokine release syndrome (CRS) that can rapidly cause multi-organ failure, inflammation of the brain, and potentially death if left untreated. Tocilizumab (an IL-6 receptor antagonist) and intravenous steroids are the current approved treatments for CRS but are not always successful in controlling CRS or CRES, and have the potential to immune suppress the patient, increasing the risk of serious infection. CytoSorb has the potential to fill this gap. There are currently two approved CAR T-cell immunotherapies in both the United States and European Union. According to Market Research Future, the global CAR T-cell immunotherapy market is expected to approach $9 billion in revenue by 2025.

Lannett Announces Fiscal 2020 Second-Quarter Financial Results

On February 5, 2020 Lannett Company, Inc. (NYSE: LCI) reported financial results for its fiscal 2020 second quarter ended December 31, 2019 (Press release, Lannett, FEB 5, 2020, View Source [SID1234553901]).

"For our fiscal 2020 second quarter, strong sales across multiple product categories drove solid increases to our net sales and net income over our fiscal 2020 first-quarter results," said Tim Crew, chief executive officer of Lannett. "Our improved topline was due in part to the introduction of seven new products in the second quarter of fiscal 2020, as well as a full quarter of sales of Posaconazole. We plan to commence marketing an additional 10 or so products in the second half of the year, including Numbrino, our recently approved, branded topical anesthetic product.

"We remain on track for launching a substantial number of new products in fiscal 2020. At the same time, we are making excellent progress advancing multiple products in our pipeline that have significant upside, as evidenced by the recent human pharmacokinetics and pharmacodynamics clinical trial that met all primary endpoints for our insulin glargine product."

For the fiscal 2020 second quarter on a GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019. Gross profit was $41.3 million, or 30% of net sales, compared with $69.8 million, or 36% of net sales. Net income was $5.1 million, or $0.13 per diluted share, compared with $12.4 million, or $0.32 per diluted share.

For the fiscal 2020 second quarter reported on a Non-GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019. Adjusted gross profit was $50.2 million, or 37% of net sales, compared with $86.0 million, or 44% of net sales, for the prior-year second quarter. Adjusted interest expense was $13.1 million compared with $17.1 million for the second quarter of fiscal 2019. Adjusted net income was $11.7 million, or $0.27 per diluted share, compared with $33.6 million, or $0.86 per diluted share, for the fiscal 2019 second quarter. Adjusted EBITDA for the fiscal 2020 second quarter was $35.8 million.

Guidance for Fiscal 2020
Based on its current outlook, the company revised certain items in its GAAP guidance and adjusted guidance for fiscal year 2020, the net effect of which is not expected to have an impact on adjusted EBITDA. The full guidance is as follows:

**A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the attached financial tables.

Conference Call Information and Forward-Looking Statements
Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for its fiscal 2020 second quarter ended December 31, 2019. The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 49357861. The call will be broadcast via the Internet at www.lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial measures, including Adjusted EBITDA, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. The company also believes that including Adjusted EBITDA, as defined in the company’s existing Credit Agreement, is appropriate to provide additional information to investors to demonstrate the company’s ability to comply with financial debt covenants. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP.

Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included with this release.

Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) restructuring expenses, (3) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature.

*Adjusted EBITDA excludes the same adjustments discussed above, as well as additional adjustments permitted under the company’s existing Credit Agreement.

Centene Corporation Prices Offering of Senior Notes

On February 5, 2020 Centene Corporation (NYSE: CNC) ("Centene" or the "Company") announced today that it has priced its offering of $2,000,000,000 aggregate principal amount of 3.375% of new senior notes due 2030 (the "Notes") (Press release, Centene , FEB 5, 2020, View Source [SID1234553900]).

The Notes priced at 100% of the principal amount thereof, which will result in aggregate gross proceeds of $2,000,000,000. The offering is expected to close on or about February 13, 2020, subject to customary closing conditions.

The Notes will be senior unsecured obligations of the Company and will be equal in right of payment with all of the Company’s existing and future senior indebtedness and will be senior in right of payment to all of the Company’s existing and future subordinated debt. The Notes will not be guaranteed by any of its subsidiaries.