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Merck Reports a Solid Start to 2018

On May 15, 2018 Merck reported a decline in sales in the first quarter of 2018 despite organic growth (Press release, Merck KGaA, MAY 15, 2018, View Source [SID1234526792]).

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This was due to negative foreign exchange effects. EBITDA pre declined after having benefited from favorable one-time effects in the previous year. Merck confirmed its full-year forecast with respect to organic business performance. However, the company expects slightly higher negative foreign exchange effects.

"When we presented our financial results for 2017, we indicated that 2018 would be a transition year for Merck. The figures for the first quarter confirm this," said Stefan Oschmann, Chairman of the Executive Board and CEO of Merck. "The organic sales growth that we achieved in all regions was more than offset by negative exchange rate effects. For Performance Materials, the market environment in the Liquid Crystals business continues to be difficult. Our focus on moving ahead in all three of our business sectors through innovation remains unchanged."
Net sales of Merck decreased in the first quarter of 2018 by -4.4% to € 3.7 billion (Q1 2017: € 3.9 billion). Organically, Group sales increased by 3.5%, driven by the Healthcare and Life Science business sectors. Merck generated organic growth in all reporting regions. In particular, the U.S. dollar, which was considerably weaker in comparison with the year-earlier period, led to negative exchange rate effects of -7.9%.

EBITDA pre, the company’s most important earnings indicator, declined by -18.2% to € 1.0 billion in the first quarter (Q1 2017: € 1.2 billion). In the year-earlier quarter, favorable one-time effects in the Healthcare business sector led to a higher comparative basis. Group EBIT fell by -31.4% to € 518 million (Q1 2017: € 755 million).

Owing to lower EBIT, net income decreased in the first quarter by -34.8% to € 341 million (Q1 2017: € 523 million). Earnings per share declined from € 1.20 to € 0.78. Earnings per share pre decreased by -21.7% to € 1.41 (Q1 2017: € 1.80).

In the first quarter, Merck lowered its net financial debt by € 170 million compared with December 31, 2017. Consequently, for the first time since the Sigma-Aldrich acquisition, the figure was just under the € 10 billion mark (December 31, 2017: € 10.1 billion). Merck had 53,358 employees worldwide on March 31, 2018.

Healthcare: Bavencio and Mavenclad contribute to organic growth
The Healthcare business sector generated organic sales growth of 1.8% in the first quarter of 2018. The overall development was characterized by negative exchange rate effects of -7.2%. At € 1.6 billion, net sales of Healthcare were thus -5.5% below the level of the year-earlier quarter (Q1 2017: € 1.7 billion).

A driver of organic growth was the performance of the Fertility franchise. Moreover, sales generated by the two new medicines Mavenclad and Bavencio also contributed to organic growth. Sales of Mavenclad, an oral drug for the treatment of multiple sclerosis, were € 13 million. Sales of Bavencio, an immuno-oncology drug, were € 12 million.
In the first quarter, sales of Rebif, which is used to treat relapsing forms of multiple sclerosis, declined organically by -6.7% particularly as a result of the challenging competitive environment in North America and Europe. Taking into account currency headwinds of -9.4%, Rebif sales amounted to € 348 million (Q1 2017: € 415 million). The organic decline of -2.9% in sales of the oncology drug Erbitux as well as exchange rate effects of -5.4% resulted in sales of € 200 million (Q1 2017: € 218 million). Sales of Gonal-f, the leading recombinant hormone for the treatment of infertility, grew organically by 5.7%. Including exchange rate effects of -8.6%, sales amounted to € 166 million (Q1 2017: € 171 million).
At € 430 million, EBITDA pre was -32.0% below the year-earlier quarter (Q1 2017: € 633 million). However, the year-earlier quarter was positively impacted by one-time effects, which created a high comparative basis. This related primarily to income owing to a one-time payment of € 116 million as compensation for future license payments. The foreign exchange environment also weighed on EBITDA pre of Healthcare.
Life Science again generates strong organic sales growth
In the first quarter, Life Science generated strong organic sales growth of 8.8%, which was however almost canceled out by a negative foreign exchange impact of -8.4%. Accordingly, net sales grew slightly by 0.4% over the year-earlier quarter and amounted to € 1.5 billion (Q1 2017: € 1.5 billion). All three business units contributed to organic growth. The largest contribution came from Process Solutions.

The Process Solutions business unit, which markets products and services for the entire pharmaceutical production value chain, generated organic sales growth of 14.1%. Despite an unfavorable foreign exchange effect of -8.8%, net sales totaled € 583 million in the first quarter.
The Research Solutions business unit, which provides products and services to support life science research for pharmaceutical, biotechnological and academic research laboratories, generated moderate organic sales growth of 4.3%. However, owing to negative foreign exchange effects of -8.1%, reported net sales declined to € 509 million.
Applied Solutions generated strong organic sales growth of 7.3% with its broad range of products for clinical and diagnostic testing laboratories as well as the food and beverage industry. Owing to negative foreign exchange effects of -8.2%, net sales declined slightly to € 395 million.
EBITDA pre of Life Science rose by 2.1% to € 455 million (Q1 2017: € 445 million). This was attributable to the good organic sales performance and the synergies from the Sigma-Aldrich acquisition, partly offset however by negative foreign exchange effects.
Semiconducting materials counteract decline in liquid crystals
In the first quarter, net sales of the Performance Materials business sector declined by -12.5% to € 564 million (Q1 2017: € 645 million). This resulted mainly from negative foreign exchange effects of -8.5%. This decrease was amplified by the -4.0% organic decline in sales.

Since April 1, 2018, Performance Materials has been organized into the three business units Display Solutions, Semiconductor Solutions and Surface Solutions. The integrated innovation unit Early Research & Business Development is supporting the business units to identify projects with growth potential and to capture new markets.
The Display Solutions business unit saw an organic decrease in sales in the first quarter, but continued to defend its market leadership position despite stronger competition. The sales decline in Display Solutions stemmed from the decrease in the unusually high market shares in recent years of established liquid crystal technologies. An exception here were OLED materials as well as the energy-saving UB-FFS technology, which each recorded double-digit organic growth. The Semiconductor Solutions business unit, which comprises the business with materials used in integrated circuit production, for instance in the microchip industry, delivered very strong organic growth. The Surface Solutions business unit, which combines the businesses with pigments and functional fillers as well as optoelectronic materials, recorded a slight decline in net sales in the first quarter, which was mainly due to the exceptionally strong year-earlier quarter.
EBITDA pre of Performance Materials fell in the first quarter by -25.7% to € 196 million (Q1 2017: € 263 million). This was due not only to the organic decrease, but also to considerably negative foreign exchange effects.
Merck confirms and specifies outlook
Following the first quarter, Merck continues to expect for the full year 2018 a moderate organic net sales increase of between 3% and 5% over the previous year. Overall, Merck forecasts 2018 Group net sales of € 15.0 billion to € 15.5 billion based on an unchanged portfolio. The planned divestment of the Consumer Health business, which Merck announced on April 19, 2018 and would like to complete in the fourth quarter, is likely to reduce full-year net sales of the Group by between € 0.9 billion and € 1.0 billion. Taking into account the planned Consumer Health divestment, Merck forecasts 2018 Group net sales of € 14.0 billion to € 14.5 billion from continuing operations. The planned divestment does not change the underlying forecasts regarding organic sales growth and the foreign exchange impact.

The company expects that Group EBITDA pre will be in a corridor between € 3.95 billion and € 4.15 billion in 2018. The expected decline in comparison with the previous year primarily reflects negative exchange rate effects on EBITDA pre which the company now sees in a range of -5% to -7% (previously -4% to -6%) versus the previous year owing to the latest exchange rate developments.
In the company’s estimation, the divestment of the Consumer Health business will lower EBITDA pre of the Merck Group by between € 170 million and € 200 million, leading to EBITDA pre from continuing operations in a range of between € 3.75 billion and € 4.0 billion. The planned divestment of the Consumer Health business does not change the company’s assumptions for organic EBITDA pre development and exchange rate effects.

Celyad Announces First Quarter 2018

Business Update

On May 15, 2018 Celyad (Euronext Brussels and Paris, and NASDAQ: CYAD) a clinical-stage biopharmaceutical company focused on the development of specialized CAR-T cell based therapies, reported on key clinical and operational developments for the first quarter ended March 31, 2018 (Press release, Celyad, MAY 15, 2018, View Source [SID1234526684]).

FIRST QUARTER 2018 AND RECENT HIGHLIGHTS

Robust clinical development plan is foundation for new trials focusing on AML and CRC

Steady progress related to ongoing THINK, SHRINK and LINK trials

Good safety profile of CYAD-01 confirmed

Lead publication Haematologica publishes THINK Study Case Report
Dr. Christian Homsy, CEO of Celyad commented: "We had a productive first quarter, further defining our strategy that will guide CYAD-01 in becoming the foundation for cancer therapies. Not only have we progressed in the THINK trial, we have also treated our first patients in the SHRINK and LINK trial. The absence of any observed critical on target/off tumor toxicity in our trials is an important signal validating our technology. The next months will be exciting for our company and we look forward communicating results on our clinical trials in scientific congresses."

FIRST QUARTER 2017 OPERATIONAL AND FINANCIAL REVIEW

In February 2018, Celyad provided a detailed clinical update summarizing the promising results achieved in 2017: the THINK trial resulted in signs of clinical activity ranging from Stable Disease (SD) to Complete Response (CR), despite the absence of preconditioning therapy and the lower doses used at that stage of the trial. The company also announced that it will further evaluate CYAD-01 in a series of additional Phase 1 clinical trials in patients with AML and CRC.

Also in February 2018, Celyad organized a Key Opinion Leader meeting on CAR-T therapy in New York, USA. The meeting featured a presentation by Marco Davila, MD, PhD (Moffitt Cancer Center). The numerous attendants received information on the unmet medical need in blood cancers as well as details on Celyad’s clinical strategy.

1 THerapeutic Immunotherapy with CAR-T NKG2D
2 Standard CHemotherapy Regimen and Immunotherapy with NKG2D
3 Loco-regional Immunotherapy with NKG2D

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On the operation side, during this first quarter, Celyad progressed well in the THINK trial as well as the in LINK trial:

– The company dosed the three CRC patients in the third dose cohort in the solid arm of the THINK trial, and the two last AML patients in the second dose. Celyad plans to initiate the third dose in the AML arm in May 2018, and complete the recruitement of three additional CRC patients at the higher dose by mid-2018. In 2018, all patients were dosed with the our new production process adopted in December 2017.

– The company also treated its first CRC patient in the LINK trial. This patient received three planned injections at the first Dose level (3×108). LINK adopts a loco-regional approach in treating CRC by administering CYAD-01 through multiple hepatic transarterial injections.

The company ended the quarter with €25.1 million in cash, cash equivalents and short-term investrments. Use of cash over the first quarter of 2018 amounted to €8.8 million, in line with expectations. The company confirms that existing cash and cash equivalents and short term investments are sufficient to fund operating expenses and capital expenditure requirements, based on the current scope of activities, until the end of Q1 2019.

EVENTS SUBSEQUENT TO QUARTER-END:

In April 2018, Celyad’s world’s first reported complete response by a CAR-T cell therapy in a patient with refractory and relapsed AML was published as a case report in the leading scientific publication Haematologica. The publication detailed the first objective response related to this patient that is still in remission, more than 9 months after study enrollment.

In May 2018, Celyad achieved an important milestone in its CYAD-01 clinical strategy by dosing the first metastatic CRC patients in the LINK and SHRINK trials. No drug related toxicity was observed in the first patients of both SHRINK and LINK trials.

Generally, Celyad’s progress is the result of the company’s clinical development plan aiming at defining the best of three approaches for CYAD-01 in patients with AML and CRC:

1) CYAD-01 as a stand-alone investigational therapy, currently being evaluated in the THINK trial with relapsed refractory AML and CRC patients. Promising results have already been reported including a complete response and stable diseases.

Based on data as of April 5, 2018, the date of Celyad’s most recent interim safety report for the THINK trial, Celyad had collected safety data from 20 patients treated with CYAD-01 in the THINK trial. Of the 20 patients included in the interim safety report of the THINK trial (11 solid and nine hematologic cancer patients), Celyad reported the following serious adverse events:

– Grade 4 serious adverse events occurred in two patients: one patient in the hematologic cohort experienced respiratory failure and other Grade 4

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adverse events after administration of dose level one of CYAD-01. The other patient, who was in the solid tumor cohort, experienced cytokine release syndrome and other Grade 4 adverse events after administration of dose level three of CYAD-01, which was adjudicated as a dose limiting toxicity (DLT).

– Those two patients each experienced a Grade 5 event that was deemed unrelated to administration of CYAD-01.

2) CYAD-01 administered concurrently with standard of care treatments. The SHRINK trial was recently initiated with the dosage of one CRC patient in April 2018. No Grade 4 or higher adverse event has been reported so far. This trial evaluates the concurrent administration of CYAD-01 with the standard chemotherapy FOLFOX. We expect that another similar trial aimed at AML patients, EPITHINK trial, will be initiated soon.

3) CYAD-01 administered after preconditioning of the patients using lymphodepletion. We expect trials in AML (DEPLETHINK AML) and CRC (DEPLETHINK CRC) patients to be initiated in the coming weeks.

Astellas Appoints Bernhardt Zeiher, M.D., as New Chief Medical Officer

On May 15, 2018 Astellas reported that Bernhardt G. Zeiher, M.D., F.C.C.P., F.A.C.P., ("Bernie"), was promoted to Chief Medical Officer (CMO), effective April 1, 2018 (Press release, Astellas Pharma US, MAY 15, 2018, View Source [SID1234526669]). Zeiher will continue serving as president of Development, while now also overseeing all other functions of Astellas’ Medical and Development (M&D) organization, including Clinical and Research Quality Assurance, Medical Affairs, Pharmacovigilance, Planning & Administration, and Regulatory Affairs.

Reporting directly to Astellas president and CEO, Kenji Yasukawa, Ph.D., Zeiher will join the company’s top executive leadership team. He will continue to lead the organization from Northbrook, Ill., Astellas’ headquarters for M&D and its Americas operations.

In his new role, Zeiher will focus on further integrating and enhancing Astellas’ delivery of its global innovative pipeline and driving support for the appropriate use of its products.

"I am honored to lead the Astellas M&D organization during this critical time," said Zeiher. "As we embark upon a new Corporate Strategic Plan, it is my goal to continue and further implement the corporate vision of turning innovative science into value for patients."

Zeiher started his career at Astellas in 2010 as vice president and Therapeutic Area leader for Inflammation, Immunology and Infectious Diseases. He was promoted to senior vice president and Therapeutic Area Head for Immunology, Infectious Diseases and Transplant in 2012. Zeiher was later named executive vice president and Therapeutic Area Head when his organization was expanded to include the company’s CNS and Pain programs. Most recently, Zeiher was promoted to president of Development in 2015. Prior to joining Astellas, Zeiher served as the vice president of the Inflammation/Immunology therapeutic area at Pfizer.

He earned his Doctor of Medicine at the Case Western Reserve University School of Medicine, and completed an internal medicine residency at University Hospitals of Cleveland as well as a fellowship in Pulmonary and Critical Care Medicine at University of Iowa Hospitals and Clinics. Zeiher is a Fellow in the American College of Physicians and the American College of Chest Physicians. He has worked in the pharmaceutical industry since 1998

Savara to Present at Bank of America Merrill Lynch 2018 Healthcare Conference on May 15th

On May 15, 2018 Savara Inc. (NASDAQ:SVRA), an orphan lung disease company, reported that the Company’s Chief Executive Officer, Rob Neville, will present at the Bank of America Merrill Lynch 2018 Healthcare Conference on Tuesday May 15th, 2018 at 1:55 p.m. Pacific Time at the Encore Hotel in Las Vegas (Press release, Savara, MAY 15, 2018, View Source [SID1234526660]).

Interested parties can access a live audio webcast on the Savara website at www.savarapharma.com. An archived presentation will be available on the website for 30 days.

Akebia Therapeutics to Present at Upcoming Investor Conference

On May 15, 2018 Akebia Therapeutics, Inc. (NASDAQ:AKBA), a biopharmaceutical company focused on delivering innovative therapies to patients with kidney disease through the biology of hypoxia-inducible factor (HIF), reported that its President and Chief Executive Officer, John P. Butler, will present at the UBS Global Healthcare Conference on Tuesday, May 22, 2018, at 4:00 p.m. Eastern Time, at the Grand Hyatt New York in New York City (Press release, Akebia, MAY 15, 2018, View Source [SID1234526659]).

A live webcast of the presentation will be available on the company’s website at www.akebia.com. To access the webcast, please log onto the Akebia website at least 15 minutes prior to the webcast to ensure adequate time for any software downloads that may be required. A replay of the webcast will be available on Akebia’s website following the conference.