Arvinas Presents a Platform Update, Including Initial Data from the First Two Clinical Trials of PROTAC® Targeted Protein Degraders

On October 23, 2019 Arvinas, Inc., (Nasdaq: ARVN), a biotechnology company creating a new class of drugs based on targeted protein degradation, reported a platform data update that includes initial safety, tolerability, and pharmacokinetic data from the company’s ongoing Phase 1 clinical trials of ARV-110 and ARV-471 (Press release, Arvinas, OCT 23, 2019, View Source [SID1234542433]). The data, which show dose-proportional exposures of ARV-110 and that both ARV-110 and ARV-471 have been well tolerated, will be presented by Ian Taylor, Ph.D., Chief Scientific Officer at Arvinas, at the 2nd Targeted Protein Degradation Summit in Boston, MA. Dr. Taylor’s presentation will be available on Arvinas’ website this morning.

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"This is the first look at clinical data from our PROTAC platform and is an exciting milestone for both Arvinas and for the field of targeted protein degradation. We are seeing a favorable overall safety profile for both clinical programs to date, and dose-proportional exposures of ARV-110," said John Houston, Ph.D., Chief Executive Officer at Arvinas. "We are encouraged by these initial results as we work to create well tolerated therapies to treat serious diseases."

Phase 1 Study Designs and Clinical Data
Both ARV-110 and ARV-471 are being evaluated in Phase 1, open-label, dose-escalation clinical trials designed to assess safety, tolerability, and pharmacokinetics (PK).

The ARV-110 clinical trial is of 28 to 36 patients with metastatic castration-resistant prostate cancer (mCRPC) who have progressed on at least two prior systemic therapies. The ARV-471 clinical trial is of 24 to 36 patients with estrogen receptor positive (ER+) / human epidermal growth factor receptor-2 negative (HER2-) locally advanced or metastatic breast cancer who have received prior hormonal therapy and chemotherapy.

Both ARV-110 and ARV-471 are oral therapies dosed once per day.

The presentation today will show that Arvinas’ PROTAC protein degraders have been well tolerated by patients at the doses tested to date. The initial data for ARV-110 are from the first three dose-escalation cohorts (35 mg, 3 patients; 70 mg, 4 patients; and 140 mg, 3 patients), while the initial data presented for ARV-471 are from three patients enrolled in the first dose cohort (30 mg). Both ARV-110 (35, 70, and 140 mg) and ARV-471 (30 mg) were well tolerated, with no dose-limiting toxicities (DLTs) and no grade 2, 3, or 4 related adverse events observed.

The presentation today will also show dose proportionality for ARV-110 and that exposures of both ARV-110 and ARV-471 have reached levels associated with tumor growth inhibition in preclinical studies. For both programs and at each dose level tested to date, PK data were evaluated at days 1 and 15 following initial dosing. The third (140 mg) cohort of ARV-110 and the first (30 mg) cohort of ARV-471 reached average plasma exposures and average maximum concentrations that were above the lower ends of the ranges that were associated with tumor growth inhibition in preclinical studies. In addition, increases in exposure and average maximum concentration of ARV-110 were dose-proportional across all three doses tested to date.

For the next cohorts of each of ARV-110 and ARV-471, the dose is being increased by 100% (to 280 mg for ARV-110, and to 60 mg for ARV-471). Aside from continuing to investigate safety and PK, the Phase 1 clinical trial of ARV-110 will also evaluate biochemical and clinical activity by assessing prostate specific antigen (PSA) levels and RECIST response in patients with baseline measurable disease, androgen receptor (AR) degradation, and other exploratory biomarkers. The Phase 1 clinical trial of ARV-471 will continue to evaluate safety and PK, as well as evaluate estrogen receptor (ER) degradation, RECIST response in patients with baseline measurable disease, and other exploratory biomarkers.

Arvinas expects to next share clinical data from the Phase 1 dose escalation trial of ARV-110 in the first half of 2020 and from the Phase 1 dose escalation trial of ARV-471 in the second half of 2020.

Conference Call:
The company will host a conference call and webcast at 8:30 AM ET today to discuss these initial data. Participants are invited to listen by dialing (844) 467-7654 (domestic) or (602) 563-8497 (international) five minutes prior to the start of the call and providing the passcode access code 9096099. A listen-only webcast of the conference call can also be accessed through the "Investors" tab on the Arvinas website, www.arvinas.com, and a replay will be available for six weeks following the call.

Alkermes Plc Reports Third Quarter 2019 Financial Results and Implementation of Restructuring

On October 23, 2019 Alkermes plc (Nasdaq: ALKS) reported financial results for the third quarter of 2019 and the implementation of a restructuring plan following a review of the company’s operations, cost structure and growth opportunities (Press release, Alkermes, OCT 23, 2019, View Source [SID1234542432]).

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"As the profile of Alkermes changes, our executional priorities are clear: maximize the value of our commercial products and development candidates, streamline our cost structure and position the company for sustained future profitability. The restructuring is designed to further focus our R&D efforts on specific high-potential programs within CNS and oncology, improve financial efficiencies in our SG&A organization and drive growth," commented Richard Pops, Chief Executive Officer of Alkermes. "VIVITROL and ARISTADA provide a strong and growing foundation for our commercial business and the anticipated commercial launch of VUMERITYTM will provide a profitable new source of royalty revenues. We also continue to advance our pipeline programs, with the planned submission of the ALKS 3831 New Drug Application for both schizophrenia and bipolar I disorder this quarter, and the planned presentation of new data from ALKS 4230, our phase 1/2 immuno-oncology asset, at an upcoming medical meeting."

Quarter Ended Sept. 30, 2019 Financial Highlights

Total revenues for the quarter were $255.2 million, compared to $248.7 million for the same period in the prior year, primarily driven by approximately 20% growth in net sales of our proprietary products, partially offset by a decrease in AMPYRAi revenues resulting from generic entry in 2018.

Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $52.9 million for the quarter, or a basic and diluted GAAP net loss per share of $0.34. This compared to GAAP net loss of $34.4 million, or a basic and diluted GAAP net loss per share of $0.22, for the same period in the prior year.

Non-GAAP net loss was $7.0 million for the quarter, or a non-GAAP basic and diluted net loss per share of $0.04. This compared to non-GAAP net income of $11.6 million, or a non-GAAP basic and diluted net earnings per share of $0.07, for the same period in the prior year.

Quarter Ended Sept. 30, 2019 Financial Results

Revenues

Net sales of VIVITROL were $85.2 million, compared to $79.9 million for the same period in the prior year, representing an increase of approximately 7%.

Net sales of ARISTADAii were $53.6 million, compared to $36.1 million for the same period in the prior year, representing an increase of approximately 48%.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $76.7 million, compared to $77.2 million for the same period in the prior year, reflecting lower manufacturing revenues from RISPERDAL CONSTA.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA were $7.7 million, compared to $20.3 million for the same period in the prior year, due to generic competition to AMPYRA entering the market in 2018 in the U.S.

Research and development revenues were $12.7 million, compared to $16.3 million for the same period in the prior year. These revenues were primarily related to the collaboration with Biogen for VUMERITY.

Costs and Expenses

Operating expenses were $308.9 million, compared to $285.9 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA and in the development of ALKS 4230.

"Our third quarter results reflect solid year-over-year growth of VIVITROL and ARISTADA. We are committed to further improving our financial efficiency and focusing the investments we are making to support our future growth," commented James Frates, Chief Financial Officer of Alkermes. "As we approach the end of the year, we are refining our financial expectations for 2019, including an increase in our expectations for non-GAAP net income, to reflect our results year-to-date, expectations for the fourth quarter and the impact of the restructuring announced today."

Restructuring

In October 2019, Alkermes completed a review of the company’s operations, cost structure and growth opportunities and implemented a restructuring plan. The restructuring included the elimination of approximately 160 current positions across the organization, a decrease in the company’s expected near-term hiring plans and implementation of cost-saving measures related to external spend. These efforts are expected to result in cost savings of approximately $150 million. The company expects to record a charge of approximately $15 million in the fourth quarter of 2019 as a result of the restructuring, consisting of one-time termination benefits for employee severance, benefits and related costs.

Financial Expectations for 2019

The following outlines the company’s updated financial expectations for 2019, which include the impact of the restructuring announced today:

Revenues: The company continues to expect total revenues to range from $1.14 billion to $1.19 billion.

Included in this total revenue expectation is the $150 million milestone payment that will be triggered by final approval of VUMERITY by the U.S. Food and Drug Administration (FDA).

The company now expects VIVITROL net sales to range from $330 million to $340 million, revised from the prior expectation of $330 million to $350 million.

The company now expects ARISTADA net sales to range from $185 million to $190 million, revised from the prior expectation of $200 million to $210 million.

Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from $180 million to $190 million.

Research and Development (R&D) Expenses: The company now expects R&D expenses to range from $430 million to $450 million, revised from the prior expectation of $450 million to $480 million.

Selling, General and Administrative (SG&A) Expenses: The company now expects SG&A expenses to range from $590 million to $610 million, revised from the prior expectation of $590 million to $620 million.

Amortization of Intangible Assets: The company continues to expect amortization of intangible assets to be approximately $40 million.

Restructuring: The company expects a restructuring charge of approximately $15 million.

Net Interest Expense: The company now expects net interest expense to range from $0 to $5 million, revised from the prior expectation of $5 million to $10 million.

Other Income/Expense, Net: The company expects a net other expense of approximately $30 million related to the change in fair value of its contingent consideration.

Income Tax Expense: The company now expects income tax expense to range from $0 to $5 million, revised from the prior expectation of $10 million to $15 million.

GAAP Net Loss: The company continues to expect GAAP net loss to range from $135 million to $165 million, or a basic and diluted loss per share of $0.86 to $1.05, based on a weighted average basic and diluted share count of approximately 156 million shares outstanding.

Non-GAAP Net Income: The company now expects non-GAAP net income to range from $70 million to $90 million, or a non-GAAP basic earnings per share of $0.45 to $0.57, based on a weighted average basic share count of approximately 157 million shares outstanding and a non-GAAP diluted earnings per share of $0.44 to $0.57, based on a weighted average diluted share count of approximately 159 million shares outstanding. This compares to the previous expectation of non-GAAP net income in the range of $40 million to $70 million, or a non-GAAP basic earnings per share of $0.26 to $0.45, based on a weighted average basic share count of approximately 156 million shares outstanding and a non-GAAP diluted earnings per share of $0.25 to $0.43, based on a weighted average diluted share count of approximately 161 million shares outstanding.

Share-Based Compensation: The company now expects share-based compensation of approximately $100 million, revised from the prior expectation of approximately $120 million.

Capital Expenditures: The company now expects capital expenditures to range from $80 million to $90 million, revised from the prior expectation of $90 million to $100 million.

Recent Events:

Entered into clinical collaboration with Fred Hutchinson Cancer Research Center for a planned phase 2 multi-site trial to evaluate ALKS 4230 in combination with pembrolizumab in patients with advanced or recurrent head and neck squamous cell cancer.

Received tentative approval from FDA for VUMERITY (diroximel fumarate), a novel oral fumarate with a distinct chemical structure, for the treatment of relapsing forms of MS.

Presented new health economics and outcomes research at the 32nd Annual Psych Congress that highlighted the unmet needs of individuals living with schizophrenia and bipolar I disorder in real-world settings.

Announced the appointment of Richard Gaynor, M.D. and Andy Wilson to the company’s Board of Directors. Dr. Gaynor brings to the Board 18 years of experience in oncology-focused drug development, and Mr. Wilson brings to the Board 30 years of financial expertise and experience in strategic planning and business development. The company also announced the retirement of Floyd Bloom, M.D., a founder of Alkermes, Inc., from the Board.

Announced positive topline results from EVOLVE-MS-2, a phase 3 study designed to evaluate the gastrointestinal (GI) tolerability of VUMERITY compared to TECFIDERA in patients with relapsing-remitting multiple sclerosis.

Entered into a settlement and license agreement with Amneal Pharmaceuticals LLC (Amneal) to resolve Amneal’s inter partes review petition challenging U.S. Patent Number 7,919,499, an Orange Book-listed patent for VIVITROL.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. BST) on Wednesday, Oct. 23, 2019, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. BST) on Wednesday, Oct. 23, 2019, through Wednesday, Oct. 30, 2019, and may be accessed by visiting Alkermes’ website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay access code is 13694597.

Alexion Reports Third Quarter 2019 Results

On October 23, 2019 Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) reported financial results for the third quarter of 2019 (Press release, Alexion, OCT 23, 2019, View Source [SID1234542431]). Total revenues in the third quarter were $1,263.1 million, a 23 percent increase compared to the same period in 2018. The negative impact of foreign currency on total revenues year-over-year was less than 1 percent, or $2.5 million, inclusive of hedging activities. On a GAAP basis, diluted EPS in the quarter was $2.08, a 41 percent increase versus the prior year. Non-GAAP diluted EPS for the third quarter of 2019 was $2.79, a 38 percent increase versus the third quarter of 2018.

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"With consistent and strong execution, we have delivered another record performance in the third quarter, building on our momentum from the first half of 2019. Our teams continued to demonstrate launch excellence across the globe, with very rapid starts to the German and Japanese ULTOMIRIS PNH launches, where conversion is progressing ahead of the best-in-class U.S. launch at the same time points, as well as a strong start to the SOLIRIS NMOSD launch in the U.S.," said Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion. "We also continued to expand our portfolio with two additional approvals – ULTOMIRIS for atypical HUS in the U.S. and SOLIRIS for NMOSD in the EU – and three new business development transactions that further diversify our pipeline, including an agreement to acquire Achillion. By continuing to deliver on the ambitious transformation plan we laid out two-and-a-half years ago, we have successfully established a strong foundation for the future and look forward to building on this progress as we advance our mission of delivering life-changing therapies to people with rare diseases."

Third Quarter 2019 Financial Highlights

Total net product sales were $1,263.1 million in the third quarter of 2019, compared to $1,026.5 million in the third quarter of 2018.
SOLIRIS (eculizumab) net product sales were $990.5 million, compared to $888.0 million in the third quarter of 2018, representing a 12 percent increase. SOLIRIS volume increased 11 percent year-over-year.
ULTOMIRIS (ravulizumab-cwvz) net product sales were $89.9 million in the third quarter of 2019.
STRENSIQ (asfotase alfa) net product sales were $154.3 million, compared to $113.2 million in the third quarter of 2018, representing a 36 percent increase. STRENSIQ volume increased 36 percent year-over-year.
KANUMA (sebelipase alfa) net product sales were $28.4 million, compared to $25.3 million in the third quarter of 2018, representing a 12 percent increase. KANUMA volume increased 16 percent year-over-year.
GAAP cost of sales was $95.2 million, compared to $90.6 million in the third quarter of 2018. Non-GAAP cost of sales was $91.8 million, compared to $87.3 million in the third quarter of 2018.
GAAP R&D expense was $232.9 million, compared to $174.8 million in the third quarter of 2018. Non-GAAP R&D expense was $186.1 million, compared to $162.3 million in the third quarter of 2018.
GAAP SG&A expense was $299.3 million, compared to $258.7 million in the third quarter of 2018. Non-GAAP SG&A expense was $260.4 million, compared to $224.5 million in the third quarter of 2018.
GAAP income tax expense was $67.9 million, compared to $11.2 million in the third quarter of 2018. Non-GAAP income tax expense was $82.5 million, compared to $75.8 million in the third quarter of 2018.
GAAP diluted EPS was $2.08, compared to $1.47 in the third quarter of 2018. Non-GAAP diluted EPS was $2.79, compared to $2.02 in the third quarter of 2018.
Research and Development

PHASE 3

SOLIRIS – Neuromyelitis Optica Spectrum Disorder (NMOSD): In August 2019, the European Commission approved SOLIRIS for adults with anti-aquaporin-4 (AQP4) auto antibody-positive NMOSD. An application for approval in Japan is under review. Alexion plans to initiate a Phase 3 study in children and adolescents with NMOSD by the end of 2019.
SOLIRIS – Generalized Myasthenia Gravis (gMG): A Phase 3 study of SOLIRIS in children and adolescents with gMG is underway.
ULTOMIRIS – Paroxysmal Nocturnal Hemoglobinuria (PNH): A Phase 3 study of ULTOMIRIS in children and adolescents with PNH is underway.
ULTOMIRIS – Atypical Hemolytic Uremic Syndrome (aHUS): In October 2019, the U.S. Food and Drug Administration (FDA) approved ULTOMIRIS for the treatment of aHUS to inhibit complement-mediated thrombotic microangiopathy (TMA) for adults and children one month and older. Applications for approval in the EU and Japan are under review. A Phase 3 study of ULTOMIRIS in children and adolescents with aHUS is underway.
ULTOMIRIS – Subcutaneous: A single, PK-based Phase 3 study of ULTOMIRIS delivered subcutaneously once per week is underway to support registration in PNH and aHUS. Data are expected in the first half of 2020.
ULTOMIRIS – gMG: A Phase 3 study of ULTOMIRIS in adults with gMG is underway.
ULTOMIRIS – NMOSD: Alexion plans to initiate a Phase 3 study of ULTOMIRIS in NMOSD by the end of 2019.
ULTOMIRIS – Hematopoietic Stem Cell Transplant-Associated Thrombotic Microangiopathy (HSCT-TMA): Alexion plans to initiate a Phase 3 study of ULTOMIRIS in HSCT-TMA in the first half of 2020, pending regulatory feedback.
ULTOMIRIS – Amyotrophic Lateral Sclerosis (ALS): Alexion plans to initiate a Phase 2/3 study for ULTOMIRIS in ALS in early 2020, pending regulatory feedback.
ALXN1840 (WTX101) – Wilson Disease: A Phase 3 study of ALXN1840 (WTX101) in Wilson disease is underway. Enrollment is expected to complete in early 2020.
CAEL-101 – Caelum Biosciences: Alexion is collaborating with Caelum Biosciences to develop CAEL-101 for light chain (AL) amyloidosis, a rare systemic disorder that causes misfolded immunoglobulin light chain protein to build up in and around tissues, resulting in progressive and widespread organ damage. A pivotal Phase 2/3 study investigating CAEL-101 as an add-on to current standard-of-care therapy is planned to begin in the first half of 2020. In October 2019, the European Commission granted orphan drug designation to CAEL-101 for the treatment of AL amyloidosis.
AG10 – Eidos: In September 2019, Alexion announced an agreement with Eidos for an exclusive license to develop and commercialize AG10 in Japan. AG10 is a small molecule designed to treat the root cause of transthyretin amyloidosis (ATTR) – destabilized and misfolded transthyretin (TTR) protein – by binding and stabilizing TTR in the blood. Eidos is currently evaluating AG10 in a Phase 3 study in the U.S. and Europe for ATTR cardiomyopathy (ATTR-CM) – a progressive, fatal disease caused by the accumulation of misfolded TTR amyloid in the heart – and plans to begin a Phase 3 study in ATTR polyneuropathy (ATTR-PN) – a progressive, fatal disease caused by the accumulation of misfolded TTR amyloid in the peripheral nervous system. Alexion plans to expand the AG10 program into Japan in 2020, pending regulatory feedback.
Elamipretide – Stealth: In October 2019, Alexion announced an agreement with Stealth BioTherapeutics for an option to co-develop and commercialize elamipretide for mitochondrial diseases. Currently being evaluated in a Phase 3 study in people with primary mitochondrial myopathy (PMM) – a genetic mitochondrial disease – elamipretide is a novel, potential first-in-class therapy that targets mitochondrial dysfunction. Alexion will have the opportunity to exercise the option following the delivery of results from the Phase 3 PMM study, which are expected in the first quarter of 2020. If exercised, the option also provides for co-development and commercialization of elamipretide in Barth syndrome, Leber’s hereditary optic neuropathy (LHON) and geographic atrophy associated with dry age-related macular degeneration (GA).
PHASE 1/2

ALXN1830 (SYNT001): Alexion plans to initiate a Phase 2 study of ALXN1830 (SYNT001) in warm autoimmune hemolytic anemia (WAIHA) in early 2020. In addition, Alexion plans to initiate a Phase 1 study of a subcutaneous formulation of ALXN1830 in healthy volunteers in early 2020. Pending results from the Phase 1 study, Alexion plans to initiate a Phase 2 study of subcutaneous ALXN1830 in gMG in the second half of 2020.
Danicopan (ACH-4471) & ACH-5228 – Achillion: In October 2019, Alexion announced an agreement to acquire Achillion. Pending approval of Achillion shareholders, satisfaction of customary closing conditions and approval from relevant regulatory agencies, including clearance under the HSR Act, the acquisition is expected to close in the first half of 2020. The acquisition will add two oral Factor D inhibitors to treat rare diseases associated with the complement alternative pathway to Alexion’s clinical-stage pipeline – danicopan (ACH-4471) and ACH-5228. Danicopan is currently in Phase 2 development as an add-on therapy to eculizumab for PNH in patients with clinical extravascular hemolysis (EVH) and for C3 glomerulopathy, and ACH-5228 is currently in Phase 1 development.
ULTOMIRIS – Primary Progressive Multiple Sclerosis (PPMS): Alexion plans to initiate an exploratory clinical study of ULTOMIRIS in PPMS.
ALXN1810 – Subcutaneous: Alexion has completed a Phase 1 study of subcutaneous ALXN1210 co-administered with Halozyme’s ENHANZE drug-delivery technology, recombinant human hyaluronidase enzyme (rHuPH20), a next-generation subcutaneous formulation called ALXN1810. Strategic planning for the best development path for ALXN1810 is ongoing.
Affibody AB – ABY-039: Alexion is partnering with Affibody AB to co-develop ABY-039 for rare Immunoglobulin G (IgG)-mediated autoimmune diseases. Currently in Phase 1 development, ABY-039 is a bivalent antibody-mimetic that targets the neonatal Fc receptor (FcRn).
ALXN1720: In September 2019, Alexion began a Phase 1 study of ALXN1720, a novel anti-C5 albumin-binding bi-specific mini-body that binds and prevents activation of human C5, in healthy volunteers.
PRE-CLINICAL

Zealand Pharma A/S: Alexion is collaborating with Zealand Pharma A/S to discover and develop novel peptide therapies for up to four targets in the complement pathway. Peptides offer a number of advantages, including being highly selective and potent, allowing low dosage volumes for ease of administration, and having the potential to treat a broad range of complement-mediated diseases.
Dicerna – GalXCTM: Alexion is collaborating with Dicerna Pharmaceuticals to jointly discover and develop up to four subcutaneously delivered GalXCTM RNA interference (RNAi) candidates, currently in pre-clinical development, for the treatment of complement-mediated diseases.
Complement Pharma – CP010: Alexion is collaborating with Complement Pharma to co-develop CP010, a pre-clinical C6 inhibitor that has the potential to treat multiple neurological disorders.
Immune Pharma – anti-eotaxin-1 antibody: Alexion has entered into an asset purchase agreement with Immune Pharma to acquire an anti-eotaxin-1 antibody for potential development in inflammatory diseases. The agreement is pending completion of bankruptcy proceedings, which are expected to conclude by the first quarter of 2020.
Share Repurchase Authorization

In October 2019, the Board of Directors approved a new share repurchase authorization of $1 billion. The repurchase program does not have an expiration date and we are not obligated to acquire a particular number of shares of common stock.

Updated 2019 financial guidance assumes a GAAP effective tax rate of 5 to 6 percent and a non-GAAP effective tax rate of 13 to 14 percent for the year.

Updated guidance excludes the financial impact of the recently announced agreement to acquire Achillion as it is anticipated to close in the first half of 2020.

Alexion’s financial guidance is based on current foreign exchange rates net of hedging activities and does not include the effect of acquisitions, license and collaboration agreements, intangible asset impairments, litigation charges, changes in fair value of contingent consideration or restructuring and related activity outside of the previously announced activities that may occur after the issuance of this press release.

Conference Call/Webcast Information:

Alexion will host a conference call/audio webcast to discuss the third quarter 2019 results today at 8:00 a.m. Eastern Time. To participate in the call, dial 866-762-3111 (USA) or 210-874-7712 (International), conference ID 6281803 shortly before 8:00 a.m. Eastern Time. A replay of the call will be available for a limited period following the call. The audio webcast can be accessed on the Investor page of Alexion’s website at: View Source

Thermo Fisher Scientific Reports Third Quarter 2019 Results

On October 23, 2019 Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported its financial results for the third quarter ended September 28, 2019 (Press release, Thermo Fisher Scientific, OCT 23, 2019, View Source [SID1234542429]).

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Third Quarter 2019 Highlights

Third quarter revenue increased 6% to $6.27 billion.
Third quarter GAAP diluted earnings per share (EPS) increased 7% to $1.88.
Third quarter adjusted EPS increased 12% to $2.94.
Launched innovative new products for clinical, life sciences and bioproduction applications, highlighted by the FDA-cleared Thermo Scientific TSQ Altis and Quantis MD mass spectrometers and the Vanquish MD HPLC for clinical diagnostic laboratories, a new Real-time PCR solution for respiratory pathogen detection, the Thermo Scientific Krios G4 compact electron microscope for structural biology and the Thermo Scientific TruBio Discovery bioproduction automation system.
Strengthened global capabilities to enhance our unique customer value proposition, including opening a new Center of Excellence for transplant diagnostics near Los Angeles and, in China, establishing a new Biosciences Customer Exploration Center in Shanghai and expanding our clinical trials logistics facility in Suzhou.
Completed acquisition of active pharmaceutical ingredient (API) manufacturing facility in Cork, Ireland, from GlaxoSmithKline (GSK) on September 30 to expand global capacity for API development and manufacturing services.
After quarter end, repurchased $750 million worth of shares and completed refinancing of $5.6 billion of debt.
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 pleased to continue our strong momentum in the third quarter, with excellent performance on the top and bottom line," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "Our team executed very well and captured opportunities to gain share and drive growth.

"We continued to enhance our value proposition to be an even stronger partner for our customers. Among the highlights, we launched innovative new products across our analytical instrument, bioproduction and genetic sciences businesses. We further strengthened our global capabilities to support growth, opening new facilities in the U.S. and China. We were also pleased to close our acquisition of the GSK site in Ireland, significantly expanding our API manufacturing network to meet customer demand for our pharma services."

Casper added, "With a strong nine months behind us, we are in a great position to deliver another excellent year."

Third Quarter 2019

Revenue for the quarter grew 6% to $6.27 billion in 2019, versus $5.92 billion in 2018. Organic revenue growth was 7% and currency translation decreased revenue by 1%.

GAAP Earnings Results

GAAP diluted EPS in the third quarter of 2019 increased 7% to $1.88, versus $1.75 in the same quarter last year. GAAP operating income for the third quarter of 2019 grew to $0.95 billion, compared with $0.91 billion in the year-ago quarter. GAAP operating margin was 15.1%, compared with 15.4% in the third quarter of 2018.

Non-GAAP Earnings Results

Adjusted EPS in the third quarter of 2019 increased 12% to $2.94, versus $2.62 in the third quarter of 2018. Adjusted operating income for the third quarter of 2019 grew 9% compared with the year-ago quarter. Adjusted operating margin increased to 22.7%, compared with 22.1% in the third quarter of 2018.

2019 Guidance Update

Thermo Fisher is raising its 2019 revenue and earnings guidance primarily to reflect stronger operational performance and the benefits of refinancing activities, partially offset by a more adverse foreign exchange environment. The company is raising its revenue guidance to a new range of $25.34 to $25.50 billion versus its previous guidance of $25.30 to $25.50 billion. This would result in 4 to 5% revenue growth over 2018. The company is also raising its adjusted EPS guidance to a new range of $12.28 to $12.34, versus its previous guidance of $12.16 to $12.26, for 10 to 11% growth year over year.

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 third quarter of 2019, Life Sciences Solutions Segment revenue grew 13% to $1.70 billion, compared with revenue of $1.50 billion in the third quarter of 2018. Segment adjusted operating margin increased to 34.5%, versus 32.9% in the 2018 quarter.

Analytical Instruments Segment

Analytical Instruments Segment revenue grew 2% to $1.36 billion in the third quarter of 2019, compared with revenue of $1.33 billion in the third quarter of 2018. Segment adjusted operating margin increased to 23.0%, versus 22.0% in the 2018 quarter.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue was $0.88 billion in the third quarter of 2019, compared with revenue of $0.89 billion in the third quarter of 2018, reflecting the divestiture of the Anatomical Pathology business in June 2019. Segment adjusted operating margin increased to 25.3%, versus 25.0% in the 2018 quarter.

Laboratory Products and Services Segment

In the third quarter of 2019, Laboratory Products and Services Segment revenue grew 6% to $2.62 billion, compared with revenue of $2.47 billion in the third quarter of 2018. Segment adjusted operating margin was 11.6%, versus 12.1% in the 2018 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, the impact of significant tax audits or events and the results of discontinued operations. 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, and also excludes operating cash flows from discontinued operations 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 third quarter of 2019, adjusted EPS for full year 2019 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, the early retirement of debt and discontinued operations.

We also report free cash flow, which is operating cash flow, excluding net capital expenditures, and also excludes operating cash flows from discontinued operations 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, October 23, 2019, 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, November 8, 2019.

A-Alpha Bio Closes a $2.8M Seed Round to Launch AlphaSeq for Drug Discovery

On October 22, 2019 A-Alpha Bio, a biotechnology startup that helps pharmaceutical companies characterize protein interactions for accelerated drug development, reported that it has raised $2.8M from leading science-focused venture capital firms and angel investors (Press release, A-Alpha Bio, OCT 22, 2019, View Source [SID1234636897]). The round was led by OS Fund and also includes AME Cloud Ventures, Boom Capital, Madrona Venture Group, Sahsen Ventures, Washington Research Foundation, and leading biotech angel investors. Since 2017, A-Alpha Bio has been supported by CoMotion, the University of Washington’s collaborative innovation hub, the National Science Foundation, and the Bill and Melinda Gates Foundation.

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A-Alpha Bio has developed a genetically engineered platform technology, called AlphaSeq, for measuring interactions between proteins that can be used to discover and optimize life-saving drugs. AlphaSeq was invented and developed by A-Alpha Bio’s founders Drs. David Younger and Randolph Lopez, and Scientific Advisors, Drs. David Baker and Eric Klavins, at the University of Washington (UW). AlphaSeq enables the measurement of millions of interactions between proteins with high quantitative accuracy.

"While there are many methods available for screening large biomolecular libraries for a particular binding activity, there are few approaches for assessing in parallel the very large number of possible interactions between biomolecules in two large libraries," said David Baker, who serves as Head of the Institute for Protein Design at the University of Washington and Scientific Advisor to A-Alpha Bio. "A-Alpha Bio’s exciting technology now provides a way to not only quantitatively measure the interactions between all pairs of molecules in two libraries, but also the effect of small molecules and other perturbations on these interactions."

Pharmaceutical companies are pursuing increasingly challenging targets, which often require binding to multiple proteins or specificity between closely related proteins. Drug development currently requires iterative screening against one target at a time. This approach is slow, costly, and often ineffective at producing successful therapeutics. AlphaSeq will allow drug developers and researchers to radically accelerate their screening against thousands of disease targets in a single experimental step.

"A-Alpha Bio’s platform is plug-and-play for partners, facilitating read-outs on drug potency and effectiveness in a much shorter time-frame, solving an important challenge for pharma companies," said Jeff Klunzinger, Co-Founder and General Partner of OS Fund. "We are confident David Younger, Randolph Lopez and the A-Alpha Bio team will be able to accelerate discovery of multi-target protein drugs, such as multi-target antibodies, and small-molecule protein interaction modulators."

The seed financing announced today will support research operations to validate AlphaSeq with many high-impact disease targets, including those for oncology and infectious diseases, and allow A-Alpha Bio to begin drug discovery and optimization partnerships with pharmaceutical companies.

"We are thrilled to have the backing of synthetic biology experts, pharmaceutical industry veterans, and seasoned company builders who will add a tremendous amount of value," said Dr. David Younger, Co-Founder and CEO of A-Alpha Bio. "We have assembled a powerful group of investors, led by OS Fund, who share our passion for disrupting the pharmaceutical industry with breakthrough innovations in synthetic biology."

This funding comes following an announcement earlier this year that A-Alpha Bio was awarded a Bill & Melinda Gates Foundation grant to support a feasibility study for the discovery and optimization of therapeutics to protect developing world infants from intestinal pathogens.