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Zimmer Biomet Announces Third Quarter 2019 Financial Results

On November 5, 2019 Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) reported financial results for the quarter ended September 30, 2019 (Press release, Zimmer Holdings, NOV 5, 2019, View Source [SID1234550375]). The Company reported third quarter net sales of $1.892 billion, an increase of 3.0% over the prior year period, and an increase of 3.9% on a constant currency basis. Diluted earnings per share for the third quarter were $2.08, an increase of 163% over the prior year period. Third quarter adjusted diluted earnings per share were $1.77, an increase of 8.6% over the prior year period. Net earnings for the third quarter were $431 million and $366 million on an adjusted basis.

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"Our global team delivered strong results this quarter, fueled by a clear focus on our strategic priorities and key new product introductions," said Bryan Hanson, President and CEO of Zimmer Biomet. "I’m excited by the momentum across the organization and am grateful for the commitment and winning spirit from our team members around the world."

Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three and nine month periods ended September 30, 2019, as well as the percentage change compared to the prior year periods, on both a reported basis and a constant currency basis.

NET SALES – THREE MONTHS ENDED SEPTEMBER 30, 2019

* Surgical, Sports Medicine, Extremities and Trauma

** Craniomaxillofacial

Cash Flow and Balance Sheet

Operating cash flow for the third quarter was $578 million and free cash flow was $425 million. In the third quarter, the Company paid down $330 million of debt, paid $49 million in dividends and declared a dividend of $0.24 per share.

Guidance

The Company’s prior guidance remains unchanged.

Conference Call

The Company will conduct its third quarter 2019 investor conference call today, November 5, 2019, at 8:30 a.m. Eastern Time. The audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at https://investor.zimmerbiomet.com. It will be archived for replay following the conference call.

Zymeworks Reports 2019 Third Quarter Financial Results

On November 5, 2019 Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing multifunctional therapeutics, reported financial results for the third quarter ended September 30, 2019 (Press release, Zymeworks, NOV 5, 2019, View Source [SID1234550374]).

"We recently presented data on our lead asset, ZW25, at two major medical conferences that pave the way for registration-enabling trials in second-line biliary tract cancer (BTC) with single agent ZW25 and in first-line gastroesophageal adenocarcinoma (GEA) with ZW25 in combination with chemotherapy," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "These clinical plans support our evaluation of ZW25’s broad potential in earlier lines of therapy with the goal of establishing ZW25 as a therapeutic option for a greater number of people with HER2‑expressing cancers."

Third Quarter 2019 Business Highlights and Recent Developments

Single Agent Data for ZW25 Presented at European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress
Updated Phase 1 clinical data continued to show that ZW25 monotherapy provides anti-tumor activity and durable disease control across multiple tumor types in heavily pretreated patients. Encouraging response rates in BTC support the initiation of a registration-enabling Phase 2 trial evaluating single agent ZW25 as a second-line treatment for patients with HER2‑expressing BTC.
ZW25 Chemotherapy Combination Data Presented at AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper)
Phase 1 clinical data demonstrated that the addition of chemotherapy to ZW25 treatment may enhance anti-tumor activity vs. ZW25 alone, and the combination therapy was tolerated in heavily pretreated HER2‑expressing GEA patients. These data further support the ongoing Phase 2 trial of ZW25 in combination with standard of care chemotherapy in first-line GEA.
Celgene Advances First Azymetric Bispecific Towards the Clinic
Celgene selected its first lead bispecific antibody candidate built using Zymeworks’ Azymetric platform and exercised its option to a commercial license for which Zymeworks received a US$7.5 million payment.
Financial Results for the Quarter Ended September 30, 2019

Revenue for the three months ended September 30, 2019 was $7.9 million as compared to $2.1 million in the same period of 2018. Revenue for the third quarter of 2019 includes $7.5 million recognized upon Celgene’s exercise of its commercial license option and $0.4 million in research and support payments from our partners. Revenue in the same period in 2018 was primarily due to a $2.0 million development milestone upon Lilly’s submission of an IND application under a licensing agreement with Lilly.

For the three months ended September 30, 2019, research and development expenses were $29.3 million as compared to $14.2 million in the same period of the prior year. The change was primarily due to an increase in clinical trial activity and associated manufacturing costs for ZW25, as well as an increase in other research and discovery activities compared to the same period in 2018. Research and development expenses included non-cash stock-based compensation expense of $1.7 million from equity-classified stock options and a $0.9 million expense related to the non-cash mark-to-market revaluation of certain historical liability-classified stock options.

For the three months ended September 30, 2019, general and administrative expenses were $12.2 million as compared to $7.5 million in the same period in 2018, primarily due to an increase in employee compensation expenses relating to non-cash stock-based compensation, as well as increased head count in 2019 over 2018. General and administrative expenses in 2019 included non-cash stock-based compensation expense of $1.7 million from equity-classified stock options and $2.8 million related to the non-cash mark-to-market revaluation of certain historical liability-classified stock options.

The net loss for the three months ended September 30, 2019, was $30.5 million as compared to $18.8 million in the same period of 2018. This was primarily due to an increase in research and development expenses associated with our lead therapeutic candidates and other programs, as well as an increase in general and administrative expenses in 2019. This increase was partially offset by increased revenue from research and development collaborations, interest and other income in 2019.

Zymeworks expects research and development expenditures to increase over time in line with the advancement and expansion of clinical development of our product candidates, as well as our ongoing preclinical research activities. Additionally, Zymeworks anticipates continuing to receive revenue from our existing and future strategic partnerships, including technology access fees, milestone-based payments and research support payments. However, Zymeworks’ ability to receive these payments is dependent upon either Zymeworks or our collaborators successfully completing specified research and development activities.

As of September 30, 2019, Zymeworks had $335.1 million in cash and cash equivalents and short-term investments.

QIAGEN Expands Portfolio of Immuno-Oncology Assets for Future Companion Diagnostics and Biomarkers

On November 5, 2019 QIAGEN (NYSE:QGEN; Frankfurt Prime Standard:QIA) reported a series of agreements that expand its immuno-oncology assets for future commercialization of novel companion diagnostics for precision medicine in immuno-oncology, in particular based on the powerful next-generation sequencing (NGS) technology (Press release, Qiagen, NOV 5, 2019, View Source [SID1234550373]).

The agreements include a new collaboration with the Japanese company Repertoire Genesis Inc., which will provide access to novel technologies for the development of T-cell / B-cell receptor repertoire assays for use on NGS systems. QIAGEN intends to highlight these new agreements and other elements of its oncology portfolio at the Association for Molecular Pathology (AMP) Annual Meeting, which is being held from November 7-9 in Baltimore, Maryland.

Additionally, QIAGEN has entered into a new licensing agreement with researchers at the University of Bonn in Germany for novel epigenomic biomarkers based on immune checkpoint gene methylation, including CTLA4, PD-L1 and PD1, with rights to co-develop predictive companion diagnostics. In a second licensing agreement, QIAGEN has gained exclusive access to biomarker intellectual property held by the German diagnostic company STRATIFYER Molecular Pathology GmbH that is intended to provide guidance for treatment decisions in bladder cancer.

This series of agreements comes after QIAGEN recently entered into an agreement with Illumina Inc. to accelerate the adoption of NGS in clinical decision-making. QIAGEN has non-exclusive rights to develop and globally commercialize companion diagnostics and other IVD kits to be used together with Illumina’s MiSeq Dx and NextSeq 550Dx Systems. The agreement also includes rights for expansion of the partnership on future Illumina diagnostic (Dx) systems. The partnership will initially focus on commercializing oncology IVD kits to support patient management and may expand in the future to include additional clinical diagnostic fields, such as cardiology, hereditary diseases, infectious diseases, as well as inflammatory and autoimmune diseases.

Biodesix Appoints Scott Hutton as Chief Executive Officer

On November 5, 2019 Biodesix, Inc., the leader in lung cancer diagnostic solutions, reported that current Chief Operating Officer Scott Hutton will become Chief Executive Officer on January 1, 2020 (Press release, Biodesix, NOV 5, 2019, View Source [SID1234550372]). Current CEO David Brunel will assume the role of Chairman. Brunel is the co-founder of Biodesix and has led the company for more than 13 years. He will continue in a day-to-day advisory capacity assisting with strategic direction and key partnerships. Mr. Brunel and Mr. Hutton will continue to work together to ensure a smooth transition and to further the Biodesix mission to improve every patient’s lung cancer care by empowering physicians with swift, comprehensive, and actionable insights.

Hutton currently serves as Chief Operating Officer with more than 20 years of experience in the medical device, medical technology, and diagnostics industries. As COO, Hutton has been responsible for overseeing the corporate strategy, including the acquisition of Integrated Diagnostics and Oncimmune USA, execution of the commercial operations for the Biodesix portfolio of leading lung cancer diagnostics, and the launch of the Nodify XL2 test to improve the assessment of incidental lung nodules. Prior to Biodesix, Hutton was the Sr. Vice President and General Manager, Vascular Interventions at Spectranetics, and Vice President and General Manager, Neurosurgery at Medtronic.

"Scott’s experience building and growing commercial organizations and proven leadership make him the ideal CEO to guide Biodesix into its next level of growth," said Robert Cawthorn, co-founder and current Chairman of the Biodesix Board, who will remain on the Board following the transition. "The Board is grateful to David for his dedication, loyalty, and leadership in taking Biodesix from a concept to a company improving the lives of patients with lung cancer on a daily basis."

"I’m proud and honored to be a part of this talented team working to achieve a worthy mission," stated Hutton. "With our growing portfolio of genomic and proteomic blood tests steadily gaining recognition as valuable non-invasive options to help with more accurate diagnosis and treatment decisions, I believe the Biodesix team is poised to positively impact the lives of patients for many years to come. I look forward to continued collaboration with David and am eager to build upon the legacy that David created."

"Biodesix is growing rapidly and this strategic change in our executive leadership reflects that growth as well as the substantial opportunities we have before us," said Brunel. "Scott has been a tremendous asset to the company as our chief operating officer, he is perfectly suited to lead Biodesix’s continued commercial growth, research and development efforts, which have built, and continue to expand our deep product portfolio in lung cancer diagnostics. I look forward to continuing to work closely with Scott in our new roles, and want to thank our employees, physicians, and partners for their commitment, hard work, and dedication to improving lung cancer care."

Precision for Medicine and Akoya Partner to Develop Advanced Liquid Biopsy and Tissue Biomarker Tests

On November 5, 2019 Akoya Biosciences, The Spatial Biology Company reported a strategic alliance with Precision for Medicine (formerly ApoCell), a pioneer in customized biomarker solutions, to develop proprietary liquid biopsy and tissue biomarker tests using Akoya’s Vectra Polaris System (Press release, Akoya Biosciences, NOV 5, 2019, View Source [SID1234550371]). By combining the Vectra Polaris system with Precision for Medicine’s ApoStream technology, the collaboration is designed to advance immuno-oncology candidates in clinical trials using both tumor biopsies and liquid biopsies to generate data required for assessing drug efficacy and validation of companion diagnostics (CDx).

"We are very excited to be the first commercial laboratory to launch the Vectra Polaris system for image analysis of circulating tumor cells following ApoStream’s isolation and enrichment functionality," said Darren Davis, PhD, Precision for Medicine Senior Vice President. "Together, these technologies will enable accelerated drug development through detection of biomarkers in liquid biopsies. These tools have enabled our scientists to better understand the biological correlation of circulating metastatic cancer cells with cancer cells present in the tumor tissue."

Circulating tumor cells (CTCs) have long been known to exist in cancer patients’ blood. However, the promise of clinical application of CTCs as a liquid biopsy has not born fruit because these cells are difficult to detect using current molecular biology techniques. Precision for Medicine’s proprietary ApoStream technology captures significant quantities of rare circulating cancer cells from whole blood for characterization using Akoya’s Opal technology and Vectra Polaris imaging platform. ApoStream has been used in more than 80 clinical trials, including several ongoing phase III studies for CDx development.

Akoya’s Vectra Polaris Automated Quantitative Pathology System, part of the company’s Phenoptics 2.0 next-generation biomarker multiplexing platform, enables researchers to gain a deeper level of understanding of disease mechanisms related to new cancer immunotherapy approaches. The Vectra Polaris system integrates high throughput, seven-color multispectral imaging with whole-slide scanning in a simplified digital pathology workflow to support the quantification and analysis of tissue sections discernible with Opal detection kits. A recent meta-analysis of several studies showed that incorporating spatial information using Akoya’s multiplexed immunofluorescence technology is important for improving the predictive accuracy of immuno-oncology biomarkers.

The Phenoptics portfolio is capable of interrogating multiple protein markers on any tissue or cytology slide preparation. Precision for Medicine has validated several immune biomarker panels across various therapeutic applications using both types of preparation. These immune panels are currently being used to monitor immune cell infiltration including cancer, psoriasis, lupus and atomic dermatitis.

"The Vectra Polaris imaging system offers an innovative approach to assessing immunotherapy candidates in translational and clinical research," said Dr. Cliff Hoyt, Akoya Vice President of Translational and Scientific Affairs. "We are pleased to see this technology paired with ApoStream for a comprehensive method of imaging CTCs and improving our understanding of disease mechanisms in cancer."