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Takeda Reports Second Quarter FY2018 Results

On October 31, 2018 Takeda Pharmaceutical Company Limited (TOKYO:4502) (Press release, Takeda, OCT 31, 2018, View Source [SID1234530432]):

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Underlying Revenue +4.2%, led by Growth Drivers, with growth in every region

Underlying Revenue was solid at +4.2%, with continued strong momentum from Takeda’s Growth Drivers (Gastroenterology, Oncology, Neuroscience and Emerging Markets), which grew +9.8%.
Key growth products Entyvio (+33.1%) and Ninlaro (+38.0%) were important contributors to revenue, as were the products acquired from Ariad in 2017. Every region achieved positive growth versus prior year (U.S. +9.2%, Japan +4.1%, Europe & Canada +4.3%, Emerging Markets +2.4%).
Reported revenue decreased -0.1%. Although our Growth Drivers remained strong, there was a negative impact from foreign exchange rates (-1.0pp) and divestitures (-3.2pp). The divestiture impact included the sale of additional products to the Teva JV in FY2017, and Multilab and Techpool in FY2018.
Underlying Core Earnings +31.8% with margin +5.1pp driven by strict OPEX discipline

Underlying Core Earnings grew +31.8%, reflecting revenue growth and a margin step-up of 5.1pp, of which two-thirds (3.3pp) was driven by OPEX improvements. This was a result of the Global OPEX Initiative being fully integrated into ways of working at Takeda.
Reported operating profit declined -26.6%. This was impacted by two large one-time gains booked in FY2017: the sale of Wako shares for 106.3 billion yen, and the sale of additional products to the Teva JV. Furthermore, Takeda booked one-time expenses in FY2018 related to the proposed acquisition of Shire. Excluding these major one-time items, Operating Profit grew +64.5%.
Underlying Core EPS was up +32.7%, and reported EPS declined -26.9% to 162 yen per share, impacted by divestitures and Shire related costs.
Several important pipeline milestones achieved in first half of FY2018

Ninlaro post-stem cell transplant multiple myeloma maintenance (TOURMALINE-MM3 study), Alunbrig first line ALK+ non small cell lung cancer (ALTA-1L study), Adcetris frontline CD30+ peripheral T-cell lymphoma (ECHELON-2 study), and Entyvio subcutaneous formulation in ulcerative colitis (VISIBLE 1 study) all met their primary endpoints.
7 New Molecular Entities have entered the Phase 1 pipeline since April 2018.
On track with plan to divest non-core assets

Year-to-date Operating Free Cash Flow decreased -29.7% mainly due to the impact of the sale of additional products to the Teva JV in FY2017.
Sale of real estate and marketable securities generated an additional 44.2 billion yen of cash, and sale of non-core businesses Techpool and Multilab generated a further 27.2 billion yen.
Net debt / EBITDA ratio is 1.7x, improved from 1.8x in FY2017 Q4 and 2.7x in FY2016 Q4.
Christophe Weber, Chief Executive Officer, commented:

"Strategic focus and superior execution has driven a robust performance in the first half of fiscal 2018, as we continue to deliver against our key priorities to grow the portfolio, strengthen the pipeline, and boost profitability. Our Growth Drivers continue to contribute significantly to both revenue and profit, and I am pleased to report that two thirds of the 510 basis points of underlying Core Earnings margin improvement was driven by cost discipline as a result of the Global OPEX Initiative.
In the first half of the year we have also achieved several important regulatory and financial milestones towards the proposed acquisition of Shire plc. I want to emphasize that Takeda’s current strategy is working, and that the Takeda Board, Takeda Executive Team and I are confident that the acquisition of Shire will enable Takeda to significantly accelerate its transformational journey to become a global, values-based, R&D-driven, biopharmaceutical leader headquartered in Japan."

Core Earnings represents net profit adjusted to exclude income tax expenses, our share of profit or loss of investments accounted for using the equity method, finance expenses and income, other operating expenses and income, amortization and impairment losses on intangible assets associated with products and other items that management believes are unrelated to our core operations, such as purchase accounting effects and transaction related costs.

Underlying Growth compares two periods (quarters or years) of financial results under a common basis and is used by management to assess the business. These financial results are calculated on a constant currency basis and excluding the impacts of divestitures and other amounts that are unusual, non-recurring items or unrelated to our ongoing operations.

Attributable to the owners of the company.

Takeda raises its full-year outlook based on Velcade upside, Growth Driver momentum and OPEX discipline

Upward revisions to both Underlying Guidance and Reported Forecast.

FY2018 Underlying Guidance: Raising underlying profit guidance

Guidance assumes one additional therapeutically non-equivalent competitor to Velcade with intravenous and subcutaneous administration launching in the U.S. in March 2019, an upside of 35.5 billion yen from the previous guidance (Global revenue in FY2017: 129.6 billion yen, FY2018: 111.0 billion yen)*
Underlying Core Earnings margin expansion projected at the higher end of +100-200bps range.
This underlying guidance excludes the full fiscal year 2018 estimated financial impact related to the proposed acquisition of Shire plc by Takeda.
*(applying constant currency based on FY2018 plan rate)

The revised forecast in the table above includes the costs incurred in the first half of fiscal 2018 related to the proposed acquisition of Shire plc by Takeda (Profit before tax impact: 19.8 billion yen, Net profit for the year impact: 16.5 billion yen); however, it does not include any Shire-related costs anticipated to be incurred in the second half of the fiscal year. Furthermore, the forecast does not include any projected earnings from Shire should the closing of the acquisition occur within fiscal 2018.
Takeda estimates the portion of the Shire-related costs to be incurred in fiscal 2018 to be between 40.0 billion yen and 60.0 billion yen. This does not include integration costs, debt interest and other financial expenses as the magnitude of the FY2018 impact from these items will be dependent on the timing of deal closing.
(Reference)

A revised financial forecast that excludes the costs incurred in the first half of fiscal 2018 related to the proposed acquisition of Shire plc by Takeda is shown below. The previous forecast of May 14, 2018 also does not include any Shire-related expenses.

A full year forecast that does include the estimated financial impact of the proposed acquisition of Shire will be announced by Takeda once a reasonable assumption has been confirmed.
For more details on Takeda’s FY2018 first half results and other financial information, please visit View Source

Affimed Announces Third Quarter 2018 Financial Results and Corporate Update Conference Call on November 7, 2018

On October 31, 2018 Affimed N.V. (Nasdaq: AFMD), a clinical stage biopharmaceutical company focused on discovering and developing highly targeted cancer immunotherapies, reported that it will host a conference call on Wednesday, November 7, 2018 at 8:30 a.m. ET to discuss its third quarter financial results and recent corporate developments (Press release, Affimed, OCT 31, 2018, View Source [SID1234530417]).

The conference call will be available via phone and webcast. To access the call, please dial (323) 794-2588 for U.S. callers, or +44 (0)330 336 9125 for international callers, and reference conference ID 6650897 approximately 15 minutes prior to the call.

An audio webcast of the conference call can be accessed in the "Events" section on the "Investors & Media" page of the Affimed website at View Source A replay of the webcast will be available on Affimed’s website shortly after the conclusion of the call and will be archived on the Affimed website for 30 days following the call

Ophthotech Reports Third Quarter 2018 Financial and Operating Results

On October 31, 2018 Ophthotech Corporation (Nasdaq:OPHT) reported financial and operating results for the third quarter ended September 30, 2018 and provided a business update (Press release, Ophthotech, OCT 31, 2018, View Source [SID1234530416]).

"During 2018 Ophthotech made significant progress in bringing together a diversified pipeline of therapeutic and gene therapy programs for the treatment of retinal diseases," stated Glenn P. Sblendorio, Chief Executive Officer and President of Ophthotech. "Today, we announced two transactions that add compelling opportunities to our existing pipeline of retinal programs, and through the acquisition of Inception 4, Inc. we are excited to welcome Versant Ventures as a major shareholder of Ophthotech. We are on track to provide topline data from our Zimura program in wet age-related macular degeneration by the end of this year, followed by topline data in geographic atrophy secondary to dry AMD in the second half of 2019 and in Stargardt disease in 2020. We look forward to advancing and expanding our pipeline of age-related and orphan retinal diseases and creating value for our shareholders."

Corporate Highlights

The following announcements will be discussed during today’s conference call/webcast (see full detailed press releases issued earlier today and call in information below).

As announced today, Ophthotech has acquired Inception 4, Inc., a privately held company backed by Versant Ventures, expanding Ophthotech’s therapeutic pipeline in age-related retinal indications. Through this acquisition, Ophthotech gains worldwide development and commercialization rights to Inception 4’s small molecule inhibitors of HtrA1 (high temperature requirement A serine peptidase 1 protein). As a major new investor with substantial geographic reach, Versant Ventures has agreed to help Ophthotech identify exceptional opportunities to expand the pipeline. As a result of the closing of the acquisition, Ophthotech obtained approximately $6.1 million in cash through Inception 4. As upfront consideration in the transaction, Ophthotech agreed to issue approximately 5.2 million shares to the shareholders of Inception 4. After giving effect to the transaction, Versant Ventures, through its affiliated investment funds, owns approximately 12.5% of the outstanding shares of Ophthotech’s common stock. In addition, Inception 4 equity holders will be entitled to receive post-closing payments upon the achievement of certain clinical and marketing approval milestones in certain AMD indications.
Ophthotech also announced today that it expanded its gene therapy pipeline with a novel product candidate to treat Best vitelliform macular dystrophy, also known as Best disease. The Company entered into its second series of gene therapy agreements with the University of Pennsylvania and the University of Florida, including an exclusive option agreement for rights to negotiate to acquire an exclusive global license to develop and commercialize novel adeno-associated virus (AAV) gene therapy product candidates for the treatment of Best disease.
Therapeutic Program Highlights

Complement Factor C5 Inhibitor Program: Zimura

Wet Age-related Macular Degeneration: The Company expects initial top-line data by the end of this year from its randomized, dose-ranging, open-label, uncontrolled, multi-center Phase 2a clinical trial of Zimura (avacincaptad pegol) in combination with the anti-vascular endothelial growth factor (anti-VEGF) agent Lucentis (ranibizumab) in patients with wet AMD who have not been previously treated with anti-VEGF therapies. This trial is designed to assess the safety of Zimura combination therapy at different dosages and to detect a potential efficacy signal at month six. The Company completed patient recruitment for this trial in April 2018.
Geographic Atrophy, an Advanced Form of Dry Age-related Macular Degeneration: In October 2018, the Company completed patient enrollment for its ongoing randomized, double-masked, sham controlled, multi-center Phase 2b clinical trial of Zimura for the treatment of geographic atrophy secondary to dry AMD. The Company expects initial top-line data for this trial to be available in the fourth quarter of 2019.
Autosomal Recessive Stargardt Disease: Patient enrollment in the Phase 2b randomized, double-masked, sham-controlled, multi-center clinical trial assessing the efficacy and safety of Zimura in patients with autosomal recessive Stargardt disease (STGD1) is currently on-going. Initial top-line data is expected to be available in 2020.
Gene Therapy Program Highlights

Rhodopsin-mediated Autosomal Dominant Retinitis Pigmentosa: In August 2018, Ophthotech announced that proof-of-concept study results of its adeno-associated virus (AAV) gene therapy product candidate for the treatment of rhodopsin-mediated autosomal dominant retinitis pigmentosa (RHO-adRP) in a naturally occurring canine model were published in the journal Proceedings of the National Academy of Sciences of the USA (PNAS). Ophthotech obtained a license for rights to develop and commercialize this AAV gene therapy product candidate in June 2018. This publication entitled: "Mutation-independent Rhodopsin Gene Therapy by Knockdown and Replacement with a Single AAV vector" was published by scientists at the University of Pennsylvania and University of Florida. Based on current timelines and subject to regulatory review, Ophthotech expects to initiate a Phase 1/2 clinical trial in RHO-adRP in 2020.
2018 Operational Update

As of September 30, 2018, the Company had $135.2 million in cash and cash equivalents. The Company increased its year end 2018 cash and cash equivalents estimate to range between $125 million and $130 million, an increase from the Company’s prior estimate of between $112 million and $117 million, reflecting the impact of the acquisition of Inception 4, expansion of the Company’s gene therapy research and development programs and the continuation of the Company’s development programs for Zimuraas currently planned. This estimate does not reflect any additional expenditures resulting from the potential in-licensing or acquisition of additional product candidates or technologies or associated development that the Company may pursue.

2018 Financial Highlights

Revenues: The Company did not have any collaboration revenue for the quarter and nine months ended September 30, 2018, compared to $206.7 million and $210.0 million for the same periods in 2017. Collaboration revenue decreased due to the completion of the Company’s licensing and commercialization agreement with Novartis Pharma AG and the recognition of all associated deferred revenue during the third quarter of 2017.
R&D Expenses: Research and development expenses were $9.4 million for the quarter ended September 30, 2018, compared to $10.7 million for the same period in 2017. For the nine months ended September 30, 2018, research and development expenses were $25.6 million compared to $58.3 million for 2017. The Company continues to pursue its ongoing Zimura development programs and gene therapy research and development programs. Research and development expenses decreased primarily due to decreases in expenses related to the discontinuation of the Company’s FovistaPhase 3 clinical program and decreases in costs associated with the Company’s 2017 reduction in personnel.
G&A Expenses: General and administrative expenses were $6 million for the quarter ended September 30, 2018, compared to $7.1 million for the same period in 2017. For the nine months ended September 30, 2018, general and administrative expenses were $17.9 million compared to $28.8 million for 2017. General and administrative expenses decreased primarily due to decreases in costs to support the Company’s reduced operations and infrastructure and decreases in costs associated with its 2017 reduction in personnel, which included facilities lease termination expenses incurred during the first quarter of 2017.
Net Income: The Company reported a net loss for the quarter ended September 30, 2018 of $14.7 million, or ($.41) per diluted share, compared to net income of $189.1 million, or $5.25 per diluted share, for the same period in 2017. For the nine months ended September 30, 2018, the Company reported a net loss of $41 million, or ($1.13) per diluted share, compared to net income of $123.7 million, or $3.44 per diluted share, for the same period in 2017.
Conference Call/Web Cast Information

Ophthotech will host a conference call/webcast to discuss the Company’s financial and operating results for the third quarter of 2018 and to provide a business update. The call is scheduled for October 31, 2018 at 8:00 a.m. Eastern Time. To participate in this conference call, dial 888-204-4368 (USA) or 323-994-2082 (International), passcode 3714524. A live, listen-only audio webcast of the conference call can be accessed on the Investor Relations section of the Ophthotech website at: www.ophthotech.com. A replay will be available approximately two hours following the live call for two weeks. The replay number is 888-203-1112 (USA Toll Free), passcode 3714524.

ArQule Reports Third Quarter 2018 Financial Results

On October 31, 2018 ArQule, Inc. (Nasdaq: ARQL) reported its financial results for the third quarter of 2018 (Press release, ArQule, OCT 31, 2018, View Source [SID1234530415]).

For the quarter ended September 30, 2018, the Company reported a net loss of $5,619,000 or $0.05 per share, compared with a net loss of $6,666,000 or $0.09 per share, for the third quarter of 2017. For the nine-month period ended September 30, 2018, the Company reported a net loss of $6,995,000 or $0.07 per share, compared with a net loss of $21,443,000 or $0.30 per share, for the nine-month period ended September 30, 2017.

At September 30, 2018, the Company had a total of approximately $105,088,000 in cash, equivalents and marketable securities.

Key Highlights

In July 2018, the Company raised approximately $70 million of gross proceeds in a public offering of common stock
In August 2018, extensive preclinical data on ARQ 531, our reversible BTK inhibitor, was published in the scientific journal, Cancer Discovery, highlighting the profile of this potential first and best-in-class molecule
In September 2018, miransertib (ARQ 092) was granted Fast Track Designation for the treatment of PROS (PIK3CA-Related Overgrowth Spectrum), opening the way for enhanced interactions with regulators
In October 2018, three clinical presentations for miransertib were given at the American Society of Human Genetics, confirming its potential for treating patients with Proteus syndrome and PROS
"We continue to execute on our strategy to develop rapidly ARQ 531 in hematological malignancies, miransertib in PROS and Proteus syndrome, as well as miransertib and ARQ 751 in hormone sensitive solid tumors," said Paolo Pucci, Chief Execute Officer of ArQule. "Each of our drug candidates holds tremendous promise and each candidate is being increasingly validated by the data that we are placing in the public domain."

Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer of ArQule said, "We are pleased with the Cancer Discovery publication for ARQ 531 and how the pre-clinical data highlighted in that paper is beginning to be validated in the on-going Phase 1 trial." "I am also proud of the work that we continue to perform with miransertib in PROS and Proteus syndrome and am encouraged by the accumulating clinical data that supports the potential utility of miransertib to fulfill the serious unmet medical need in these diseases, particularly in children."

Revenues and Expenses

Revenues for the quarter ended September 30, 2018, were $4,979,000 compared with revenues of zero for the quarter ended September 30, 2017. Research and development revenue in the quarter ended September 30, 2018 consisted of $2,852,000 from our February 2018 Sinovant licensing agreement, $1,996,000 from our April 2018 Basilea licensing agreement and $131,000 from a non-exclusive license agreement for certain of our library compounds.

Revenues for the nine months ended September 30, 2018, were $22,823,000 compared with revenues of zero for the nine months ended September 30, 2017. Research and development revenue in the nine months ended September 30, 2018 consisted of $5,852,000 from our February 2018 Sinovant licensing agreement $15,702,000 million from our April 2018 Basilea licensing agreement and $1,269,000 from a non-exclusive license agreement for certain of our library compounds.

Research and development expense in the third quarter of 2018 was $7,261,000 compared with $4,570,000 for the third quarter of 2017. The $2.7 million increase in research and development expense in the third quarter of 2018 was primarily due to higher outsourced preclinical, clinical and product development costs.

Research and development expense in the nine months ended September 30, 2018 was $19,860,000 compared with $14,747,000 in the nine months ended September 30, 2017. The $5.1 million increase in research and development expense in the nine months ended September 30, 2018 was primarily due to higher outsourced preclinical, clinical and product development costs.

General and administrative expense was $3,429,000 in the third quarter of 2018 compared with $1,762,000 in the third quarter 2017. The $1.7 million increase in general and administrative expense in the third quarter of 2018 was primarily due to higher consulting and professional fees of $1.4 million and labor and related costs of $0.2 million.

General and administrative expense was $8,014,000 in the nine months ended September 30, 2018 compared with $5,702,000 in the nine months ended September 30, 2017. The $2.3 million increase in general and administrative expense in the nine months ended September 30, 2018 was principally due to higher consulting and professional fees of $1.8 million and labor and related costs of $0.5 million.

2018 Updated Financial Guidance

As a result of our advancing development programs and collaborations and the likely timing of cash receipts and disbursements, we have updated our 2018 guidance. Net use of cash is expected to be approximately $34 million for the year, which is slightly higher than our previous guidance due primarily to an acceleration of the clinical development costs associated with proprietary and partnered clinical programs. Net loss is expected to range between $14 and $17 million for the year, and net loss per share to range between $(0.14) and $(0.17). We are also adjusting our revenue guidance upward to between $24 and $25 million primarily in connection with services provided to our derazantinib partners.

ArQule expects to end 2018 with approximately $100 million in cash and marketable securities, which we believe will be sufficient to finance our operations into 2021.

Conference Call and Webcast

The live webcast can be accessed in the "Investors and Media" section of our website, www.arqule.com, under "Events & Presentations." You may also listen to the call by dialing (877) 868-1831 within the U.S. or (914) 495-8595 outside the U.S. A replay will be available two hours after the completion of the call and can be accessed in the "Investors & Media" section of our website, www.arqule.com, under "Events and Presentations."

Due to Patient Survival, Top Line Results of the Namodenoson Phase II Advanced Liver Cancer Trial Expected Q1/19

On October 31, 2018 Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE:CFBI), a biotechnology company advancing a pipeline of proprietary small molecule drugs that address cancer, liver, and inflammatory diseases, reported an update on its Phase II clinical trial of drug candidate Namodenoson (CF102) for the treatment of advanced hepatocellular carcinoma (HCC) in patients with Child Pugh B whose disease has progressed on sorafenib therapy (Press release, Can-Fite BioPharma, OCT 31, 2018, View Source [SID1234530414]). Due to patient survival, top line efficacy results are expected during the first quarter of 2019.

Enrollment of 78 patients was completed in August 2017 and the trial continues treating subjects in a blinded fashion (either Namodenoson 25 mg BID or matching placebo).

The statistical plan for this trial requires that the primary efficacy analysis occurs when no more than 3 of the original 78 patients survive. At the outset of the trial, it was assumed that patients with advanced HCC with Child-Pugh B had a relatively poor prognosis, and that within approximately a year of enrollment of the last subject, primary efficacy analysis could be conducted. In order to maintain the statistical integrity of the trial as well as adhere to the principles of Good Clinical Practice, the Company estimates that it will un-blind the data during Q1/19.

Can-Fite’s CEO, Dr. Pnina Fishman, commented, "This unexpectedly prolonged longevity is unquestionably beneficial for the individual patients, and gives us hope that Namodenoson may eventually prove its value in this patient population."

Can-Fite received Orphan Drug Designation for Namodenoson in Europe and the U.S., as well as Fast Track Status in the U.S. as a second line treatment for HCC.

About Namodenoson

Namodenoson is a small orally bioavailable drug that binds with high affinity and selectivity to the A3 adenosine receptor (A3AR). Namodenoson is being evaluated in Phase II trials for two indications, as a second line treatment for hepatocellular carcinoma, and as a treatment for non-alcoholic fatty liver disease (NAFLD) and non-alcoholic steatohepatitis (NASH). A3AR is highly expressed in diseased cells whereas low expression is found in normal cells. This differential effect accounts for the excellent safety profile of the drug.