On August 2, 2018 Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), the leading RNAi therapeutics company, reported its consolidated financial results for the second quarter 2018 and highlighted recent progress in advancing its pipeline (Press release, Alnylam, AUG 2, 2018, View Source [SID1234528348]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The second quarter and recent period mark a milepost in the history of Alnylam that has been 16 years in the making – the recommendation from the EU Committee for Medicinal Products for Human Use (CHMP) that the European Medicines Agency approve the first-ever RNAi therapeutic, ONPATTRO. We believe the positive CHMP opinion in the EU signals the potential for a new therapeutic paradigm in medicine, raising hope for patients and caregivers impacted by hATTR amyloidosis. With this achievement, the expected FDA action by our August 11 PDUFA date, and plans to file our JNDA in Japan later this year, we believe we are poised to deliver on the promise of ONPATTRO on a truly global scale," said John Maraganore, Ph.D., Chief Executive Officer of Alnylam.

"In parallel, we have advanced our three other wholly owned late-stage programs. We achieved robust enrollment in our ENVISION Phase 3 study of givosiran and are on track for an interim analysis by the end of September in support of a potential accelerated approval. In addition, with our recent alignment with the FDA on a Phase 3 trial design for lumasiran, we are gearing up to initiate a pivotal study for this program in the coming weeks. Finally, we’re pleased to announce today that we have reached alignment with the FDA on a Phase 3 trial design for ALN-TTRsc02 in hATTR amyloidosis patients, where we’re on track to start the study by year’s end. All together, we believe our efforts position us to achieve our Alnylam 2020 strategy of building a multi-product, global, commercial-stage company with a deep and sustainable clinical pipeline by the end of 2020."

Second Quarter 2018 and Recent Significant Corporate Highlights

Received a positive opinion from CHMP recommending marketing authorization of ONPATTRO (patisiran) – a first-of-its-kind RNAi therapeutic – for the treatment of hATTR amyloidosis in adult patients with stage 1 or stage 2 polyneuropathy.
The European Commission (EC) decision on approval of ONPATTRO is now expected in September, and the recommended Summary of Product Characteristics (SmPC) includes data from secondary and exploratory study endpoints in the APOLLO Phase 3 trial, including cardiac results.
The Company is on track in the U.S. with an August 11 PDUFA date for ONPATTRO with the FDA.
Published APOLLO study results for patisiran in the July 5, 2018 issue of The New England Journal of Medicine.
Presented additional data from the APOLLO Phase 3 study at the 4th Congress of the European Academy of Neurology (EAN) and the Peripheral Nerve Society (PNS) 2018 Annual Meeting.
To date the Company has fulfilled over 200 requests by physicians for eligible patients to begin treatment in the early access or compassionate use programs for patisiran in the U.S. and EU.
Advanced givosiran, an investigational RNAi therapeutic in development for the treatment of acute hepatic porphyrias (AHPs).
Completed enrollment of the cohort of patients in the ENVISION Phase 3 study that will comprise the planned interim analysis in support of a potential accelerated approval.
The Company remains on track to report topline results of the interim analysis by the end of September and, pending Company and FDA review of the program at the time of interim analysis and assuming positive results and acceptable safety, the Company expects to submit an NDA at or around year-end 2018 seeking an accelerated approval.
The interim analysis is based on lowering of urinary aminolevulinic acid (ALA) levels at three months of treatment as a surrogate biomarker that is reasonably likely to predict clinical benefit.
Alnylam announced today that it has achieved robust enrollment in ENVISION and expects to complete full patient accrual by the end of September, ahead of schedule.
As a result, the Company now expects to report topline results on the primary endpoint of annualized attack rate in early 2019.
Advanced lumasiran, an investigational RNAi therapeutic in development for the treatment of primary hyperoxaluria type 1 (PH1), with new positive data from the Phase 1/2 study presented at the OxalEurope European Hyperoxaluria Consortium.
The Company is on track to initiate a Phase 3 pivotal trial in mid-2018, with results expected in late 2019 supporting a potential NDA filing in early 2020.
Advanced ALN-TTRsc02, a subcutaneously administered investigational RNAi therapeutic in development for the treatment of ATTR amyloidosis.
Alnylam announced today that it has reached alignment with the FDA on the design of a pivotal Phase 3 study for ALN-TTRsc02 in patients with hATTR amyloidosis.
The Phase 3 pivotal trial will be an open-label study with co-primary endpoints of mNIS+7 and Norfolk-QOL at nine months comparing the effects of ALN-TTRsc02 in approximately 120 patients with hATTR amyloidosis to results from the placebo arm from the APOLLO Phase 3 study of patisiran. In addition, certain cardiac parameters will be included as endpoints.
An additional reference arm of approximately 30 patients receiving patisiran will be included.
The Company is on track to start the Phase 3 study in late 2018 and plans to start additional Phase 3 studies of ALN-TTRsc02, including in wild-type ATTR amyloidosis, in 2019.
Alnylam announces today that, due to slower than anticipated enrollment, it expects that initial data from the Phase 2 trial of cemdisiran in atypical hemolytic-uremic syndrome (aHUS) will be reported in 2019. The Company had previously guided for initial data to be reported in late 2018.
Alnylam’s partner, The Medicines Company, announced in June that the Independent Data Monitoring Committee for the ongoing inclisiran Phase 3 clinical trials (ORION 9, 10, and 11) conducted its third, planned review of safety and efficacy data from the ORION trials and recommended that they continue without modification.
At the time of review, substantially all patients in the trials had received two doses of inclisiran or placebo.
The Company has accumulated more than 1,550 patient-years of safety data for inclisiran.
Enrollment in the fitusiran Phase 3 ATLAS program is ongoing.
Announced successful delivery of novel siRNA conjugates to the central nervous system (CNS) in rats and plans to advance a pipeline of CNS-targeted investigational RNAi therapeutics into clinical development.
Upcoming Events

In mid-2018, Alnylam intends to:

Achieve FDA approval and launch ONPATTRO in the U.S.
Gain regulatory approval for ONPATTRO from the EC; the Company expects to launch ONPATTRO in certain European markets shortly thereafter.
File a Japanese NDA for ONPATTRO with the Pharmaceuticals and Medical Device Agency.
Report topline interim analysis results from the ENVISION Phase 3 trial of givosiran in support of a potential accelerated approval.
Initiate the lumasiran Phase 3 study.
In late 2018, Alnylam intends to:

File for regulatory approval for ONPATTRO in additional global markets.
File an NDA for givosiran with the FDA for accelerated approval, assuming positive results and acceptable safety from the interim analysis of the ENVISION Phase 3 study and pending FDA review.
Present 12-month safety and efficacy results from the Global Open-Label Extension (OLE) study of ONPATTRO at the annual meeting of the American Association of Neuromuscular and Electrodiagnostic Medicine (AANEM) on October 10th in Washington, D.C.
Present updated data from the Phase 1/2 and OLE studies of lumasiran, at the European Society for Pediatric Nephrology (ESPN) Annual Meeting in Antalya, Turkey and at the American Society of Nephrology (ASN) Kidney Week Meeting in San Diego, CA., respectively, in October.
Initiate the Phase 3 study for ALN-TTRsc02 in hATTR amyloidosis.
File new Investigational New Drug (IND) or Clinical Trial Applications (CTA), including ALN-AAT02, in development for the treatment of alpha-1 antitrypsin deficiency-associated liver disease, and ALN-HBV02 (also known as VIR-2218), in development in partnership with Vir Biotechnology for the treatment of chronic hepatitis B virus infection.
Complete selection of its first CNS-targeted development candidate (DC).
Financial results for the quarter ended June 30, 2018

"Alnylam’s strong balance sheet with approximately $1.48 billion in cash and investments allows us to execute on preparations for our anticipated product launches for patisiran in 2018 and givosiran in 2019, assuming regulatory approvals," said Manmeet Soni, Chief Financial Officer of Alnylam.

Cash and Investments
At June 30, 2018, Alnylam had cash, cash equivalents and marketable debt securities, and restricted investments, excluding equity securities, of $1.48 billion, as compared to $1.73 billion at December 31, 2017.

GAAP and Non-GAAP Net Loss
The net loss according to accounting principles generally accepted in the U.S. (GAAP) for the second quarter of 2018 was $163.6 million, or $1.63 per share on both a basic and diluted basis, as compared to a net loss of $118.4 million, or $1.34 per share on both a basic and diluted basis, for the same period in the previous year.

The non-GAAP net loss for the second quarter of 2018 was $161.9 million, or $1.61 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $94.4 million, or $1.07 per share on both a basic and diluted basis for the same period in the previous year.

The non-GAAP net loss excludes stock-based compensation expense and gain on litigation settlement. See "Use of Non-GAAP Financial Measures" below for a description of non-GAAP financial measures and a reconciliation between GAAP and non-GAAP net loss appearing later in this press release.

Revenues
Revenues were $29.9 million in the second quarter of 2018, as compared to $15.9 million in the second quarter of 2017. Revenues for the second quarter of 2018 included $23.1 million from the Company’s alliance with Sanofi Genzyme and $6.8 million from other sources.

GAAP and Non-GAAP Research and Development Expenses
GAAP research and development (R&D) expenses were $137.6 million in the second quarter of 2018 as compared to $90.6 million in the second quarter of 2017.

Non-GAAP R&D expenses were $126.0 million in the second quarter of 2018 as compared to $77.4 million in the second quarter of 2017. Non-GAAP R&D expenses exclude stock-based compensation expense. A reconciliation between GAAP and non-GAAP R&D expenses appears later in this press release.

GAAP and Non-GAAP General and Administrative Expenses
GAAP general and administrative (G&A) expenses were $84.7 million in the second quarter of 2018 as compared to $45.8 million in the second quarter of 2017.

Non-GAAP G&A expenses were $74.1 million in the second quarter of 2018 as compared to $35.0 million in the second quarter of 2017. Non-GAAP G&A expenses exclude stock-based compensation expense. A reconciliation between GAAP and non-GAAP G&A expenses appears later in this press release.

Gain on Litigation Settlement
In April 2018, we and Dicerna Pharmaceuticals, Inc. entered into a settlement agreement and general release resolving all ongoing litigation between the companies. As a result, during the second quarter of 2018, we recorded $20.6 million as a gain on litigation settlement that includes the $10.0 million valuation of Dicerna common stock received at the settlement date, the $2.0 million upfront cash payment received in the second quarter of 2018, and $8.6 million, which represents the discounted present value as of the settlement date of the $13.0 million cash payment due from Dicerna by April 18, 2022 under the terms of the settlement agreement. The non-GAAP net loss for the second quarter of 2018 excludes the gain on litigation settlement.

2018 Financial Guidance
Alnylam reiterates its expectations to end 2018 with approximately $1.0 billion of cash, cash equivalents and marketable debt securities, restricted cash and restricted investments, excluding equity securities.

The Company reiterates its expectations for its 2018 annual non-GAAP R&D expenses to be in the range of $420 million to $460 million and non-GAAP selling, general and administrative (SG&A) expenses to be in the range of $280 million to $320 million. Both non-GAAP R&D and SG&A expenses exclude stock-based compensation expenses.

Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including expenses adjusted to exclude certain non-cash expenses and non-recurring gains outside the ordinary course of the Company’s business. These measures are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP financial measures used by other companies.

The items included in GAAP presentations but excluded for purposes of determining non-GAAP financial measures for the periods presented in the press release are stock-based compensation expense and the gain on litigation settlement. The Company has excluded the impact of stock-based compensation expense, which may fluctuate from period to period based on factors including the variability associated with performance-based grants for stock options and restricted stock units and changes in the Company’s stock price, which impacts the fair value of these awards. The Company has excluded the impact of the gain on litigation settlement because the Company believes this item is a one-time event occurring outside the ordinary course of the Company’s business.

The Company believes the presentation of non-GAAP financial measures provides useful information to management and investors regarding the Company’s financial condition and results of operations. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance and are better able to compare the Company’s performance between periods. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating performance, allocating resources and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. A reconciliation between GAAP and non-GAAP measures is provided later in this press release.

Conference Call Information
Management will provide an update on the Company and discuss second quarter 2018 results as well as expectations for the future via conference call on Thursday, August 2, 2018 at 8:30 am ET. To access the call, please dial 877-312-7507 (domestic) or 631-813-4828 (international) five minutes prior to the start time and refer to conference ID 1365915. A replay of the call will be available beginning at 11:30 am ET on the day of the call. To access the replay, please dial 855-859-2056 (domestic) or 404-537-3406 (international) and refer to conference ID 1365915.

On August 2, 2018 OncoMed Pharmaceuticals, Inc. (NASDAQ:OMED), a clinical-stage biopharmaceutical company focused on discovering and developing novel anti-cancer therapeutics, reported second quarter 2018 financial results and provided a corporate update (Press release, OncoMed, AUG 2, 2018, View Source [SID1234528346]). As of June 30, 2018, cash, cash equivalents, and short-term investments totaled $79.9 million.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The first half of the year has been focused on effective execution in the development of our pipeline of oncology candidates, including navicixizumab, etigilimab (anti-TIGIT) and GITRL-Fc which are being investigated in ongoing clinical trials," said John Lewicki, Ph.D., President and Chief Executive Officer of OncoMed. "These activities will culminate in important data announcements later this year. We are particularly encouraged by the potential of navicixizumab, our lead product candidate, in the treatment of late-stage ovarian cancer and look forward to sharing single-agent and chemotherapy combination data by the end of the year. We also plan to report first-in-human dose escalation Phase 1a data from our etigilimab program in the fourth quarter of 2018, while early clinical data from our GITRL-Fc program will likely be available in the first half of 2019."

Pipeline Highlights

Navicixizumab (anti-DLL4/VEGF bispecific; OMP-305B83)

An abstract summarizing interim Phase 1b clinical trial data of navicixizumab in combination with paclitaxel for the treatment of heavily pretreated, platinum-resistant ovarian cancer patients has been accepted as a poster presentation on October 20, 2018 at the European Society for Medical Oncology meeting in Munich, Germany. In addition, the company expects to publish the final results of the Phase 1a single-agent

navicixizumab study in all-comers solid tumor patients, which included several late-stage ovarian cancer patients, by the end of 2018.

The company has decided to prioritize navicixizumab development resources in platinum-resistant ovarian cancer, where it believes navicixizumab offers promise and potential as a meaningful therapeutic for patients who lack effective later-line therapeutic alternatives. Consequently, OncoMed has decided to discontinue enrollment of additional patients in its Phase 1b trial of navicixizumab in combination with FOLFIRI or FOLFOX in second-line colorectal cancer as it pursues expanded development in ovarian cancer. The Phase 1b ovarian cancer trial was recently expanded from 30 patients to enroll up to 60 patients.

Etigilimab (Anti-TIGIT; OMP-313M32)

In the second quarter, OncoMed initiated the Phase 1b portion of the Phase 1a/b study of etigilimab in combination with anti-PD1 (nivolumab) in patients with advanced or metastatic solid tumors. The company also completed dose-escalation in the Phase 1a portion of the trial and is now enrolling patients in the single-agent expansion phase of this study. The company expects to report data from the Phase 1a dose-escalation portion of the trial, designed to assess safety and tolerability of escalating doses of etigilimab monotherapy, in the fourth quarter of 2018.

GITRL-Fc (OMP-336B11)

Enrollment continues in the Phase 1a single-agent study of OncoMed’s wholly-owned GITRL-Fc in patients with advanced or metastatic solid tumors. GITRL-Fc is a fusion protein with an Fc-linked fully human trimer ligand and is designed to activate the co-stimulatory receptor GITR (glucocorticoid-induced tumor necrosis factor receptor-related protein) to enhance T-cell modulated immune responses. Data from the Phase 1a trial are expected to be presented in 2019.

Second Quarter 2018 Financial Results

Cash, cash equivalents and short-term investments totaled $79.9 million as of June 30, 2018, compared to $103.1 million as of December 31, 2017.

Revenues were $6.9 million for the second quarter of 2018, an increase of $0.7 million, compared to $6.2 million for the same period in 2017. The change in revenue was a result of the new revenue recognition standard adopted in the first quarter of 2018.

Research and development (R&D) expenses were $8.1 million for the second quarter of 2018, a decrease of $7.0 million, compared to $15.1 million for the same period in 2017. The decrease in R&D expenses was due to decreases in clinical development costs and reduced headcount as a result of the restructuring actions in April 2017.

General and administrative (G&A) expenses were $3.7 million for the second quarter of 2018, a decrease of $0.4 million, compared to $4.1 million for the same period in 2017. The decrease in G&A expenses was primarily due to a decrease in personnel cost, including stock-based compensation.

Net loss was $4.0 million ($0.10 per share) for the second quarter of 2018, compared to $15.2 million ($0.40 per share) for the same period of 2017. The change in year-over-year net loss was primarily due to lower operating expenses in the second quarter of 2018.

2018 Financial Guidance

With resource reprioritization and additional cash management measures, OncoMed’s current cash runway has been extended by one quarter and is now estimated to fund operations through at least the fourth quarter of 2019, without taking into account future potential milestone or opt-in payments from its partners. OncoMed estimates 2018 operating cash burn to be less than $55 million, before considering potential milestone or opt-in payments

On August 2, 2018 Cerus Corporation (Nasdaq: CERS) reported its financial results for the second quarter ended June 30, 2018, and raised its full year guidance for product revenue (Press release, Cerus, AUG 2, 2018, View Source [SID1234528344]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Second Quarter Highlights and Recent Events

Second quarter product revenue of $15.4 million, a 62% increase compared to the second quarter of 2017
Year-over-year worldwide disposable kit volumes increased over 70% in the second quarter of 2018
Cash, cash equivalents and short-term investments of $111.9 million at June 30, 2018
Amended agreement with the Biomedical Advanced Research and Development Authority (BARDA) for an additional $15 million in funding bringing the total potential contract value to over $200 million
Expanded cryoprecipitate manufacturing collaborations with the addition of The Blood Center of New Orleans
"The commercial momentum we experienced at the beginning of the year continued throughout the second quarter with product revenue totaling $15.4 million, exceeding our expectations," said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. "Given the first half outperformance and based on current visibility into our commercial pipeline, we are raising our full year product revenue outlook to a range of $56 million to $58 million compared to our previous guidance range of $53 million to $55 million."

"We believe strong sales performances in France and with the American Red Cross are setting the stage for further market expansion and revenue growth," continued Greenman. "Furthermore, we think that awareness of the benefits of pathogen-reduction is increasing, as evidenced by the discussions during the recent U.S. Food and Drug Administration’s Blood Products Advisory Committee Meeting."

During the quarter, the Company’s development programs continued to progress, and the Company anticipates submitting for CE Mark approval of the INTERCEPT red blood cell system later in 2018. In addition, the Company expanded its cryoprecipitate manufacturing collaborations with the addition of The Blood Center of New Orleans.

Revenue

Product revenue during the second quarter of 2018 was $15.4 million, compared to $9.5 million during the same period in 2017. The increased product revenue was driven by quarter-over-quarter increases across all major product categories led by global platelet kit demand. Year-to-date product revenue totaled $29.0 million, an increase of 75% compared to the same period of the prior year.

Government contract revenue from the Company’s BARDA agreement was $4.0 million during the second quarter of 2018 compared to $1.7 million during the same period in 2017, as a result of increasing INTERCEPT red cell clinical and development activities. Year-to-date government contract revenue totaled $7.5 million compared to $3.1 million in the first half of 2017. BARDA is part of the Office of the Assistant Secretary for Preparedness and Response within the U.S. Department of Health and Human Services.

Gross Margins

Gross margins on product revenue during the second quarter of 2018 were 50%, compared to 54% for the second quarter of 2017. The change in gross margin was primarily attributable to lower selling prices associated with high volume customers. Gross margins through the first half of 2018 were 48% compared to 51% during the first half of 2017.

Operating Expenses

Total operating expenses were $24.3 million for the quarter ended June 30, 2018, compared to $23.0 million for the quarter ended June 30, 2017. Year-to-date, operating expenses totaled $47.4 million compared to $45.9 million in the same period in the prior year.

Selling, general, and administrative (SG&A) expenses for the second quarter of 2018 remained relatively flat at $14.4 million, compared to $14.1 million for the second quarter of 2017, as the Company continued to realize leverage from its existing commercial and back-office investments. Year-to-date SG&A expenses totaled $28.0 million compared to $27.8 million during the first half of 2017.

Research and development (R&D) expenses for the second quarter of 2018 were $9.9 million compared to $8.9 million for the second quarter of 2017. The increase in year-over-year R&D expenses were primarily due to increased activities and costs tied to the development of INTERCEPT red blood cells, including preparation for the planned CE Mark submission, and pursuing expanded usage claims for INTERCEPT platelets and plasma. Year-to-date R&D expenses through the second quarter of 2018 totaled $19.3 million compared to $18.0 million during the first half of 2017.

Operating and Net Loss

Operating loss during the second quarter of 2018 was $12.6 million, compared to $16.2 million during the second quarter of 2017. Year-to-date operating loss was $25.9 million compared to an operating loss of $34.3 million in the same period of the prior year.

Net loss for the second quarter of 2018 was $13.3 million, or $0.10 per diluted share, compared to a net loss of $17.1 million, or $0.16 per diluted share, for the second quarter of 2017. Year-to-date net loss was $27.2 million, or $0.21 per diluted share, compared to a net loss of $35.7 million, or $0.34 per diluted share, in the first half of 2017.

Cash, Cash Equivalents and Investments

At June 30, 2018, the Company had cash, cash equivalents and short-term investments of $111.9 million, compared to $60.7 million at December 31, 2017.

At June 30, 2018 and December 31, 2017, the Company had approximately $29.8 million in outstanding debt under its loan agreement with Oxford Finance.

QUARTERLY CONFERENCE CALL

The Company will host a conference call and webcast at 4:15 P.M. EDT this afternoon, during which management will discuss the Company’s financial results and provide a general business overview and outlook. To access the live webcast, please visit the Investor Relations page of the Cerus website at View Source Alternatively, you may access the live conference call by dialing (866) 235-9006 (U.S.) or (631) 291-4549 (international).

A replay will be available on the Company’s website, or by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and entering conference ID number 8278017. The replay will be available approximately three hours after the call through August 16, 2018.

On August 2, 2018 Portola Pharmaceuticals, Inc. (NASDAQ: PTLA) reported that it will host a webcast and conference call to discuss the Company’s financial results for the quarter ended June 30, 2018, and provide a general business overview on Thursday, August 9, 2018, at 8:30 a.m. ET (5:30 a.m. PT) (Press release, Portola Pharmaceuticals, AUG 2, 2018, View Source;p=RssLanding&cat=news&id=2361732 [SID1234528343]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Conference Call Details
The live conference call on Thursday, August 9, 2018, at 8:30 a.m. ET, can be accessed by phone by calling (844) 452-6828 from the United States and Canada or 1 (765) 507-2588 internationally and using the passcode 6650817. The webcast can be accessed live on the Investor Relations section of the Company’s website at View Source It will be archived for 30 days following the call.

On August 2, 2018 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA, TASE: TEVA) reported results for the quarter ended June 30, 2018 (Press release, Teva, AUG 2, 2018, View Source [SID1234528342]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Mr. Kåre Schultz, Teva’s President and CEO, said, "I am satisfied with our progress in the second quarter. The restructuring program is on schedule, we have already achieved a significant cost base reduction towards our target for the year and we continue to reduce our net debt. COPAXONE maintained its market share and AUSTEDO continued to show solid growth. Given the second quarter results, we have decided to raise our 2018 full year guidance." Mr. Schultz continued, "Our PDUFA action date for fremanezumab is set for mid-September and we are preparing to launch this important product once approved."

Second Quarter 2018 Consolidated Results

Revenues in the second quarter of 2018 were $4.7 billion, a decrease of 18%, or 19% in local currency terms, compared to the second quarter of 2017, mainly due to continued price erosion in our U.S. generics business, generic competition to COPAXONE and loss of revenues following the divestment of certain products and discontinuation of certain activities.

Exchange rate differences between the second quarter of 2018 and the second quarter of 2017 positively impacted our revenues by $92 million, our GAAP operating income by $14 million and our non-GAAP operating income by $19 million.

GAAP gross profit was $2.1 billion in the second quarter of 2018, a decrease of 28% compared to the second quarter of 2017. GAAP gross profit margin was 43.8% in the second quarter of 2018, compared to 49.9% in the second quarter of 2017.

Non-GAAP gross profit was $2.4 billion in the second quarter of 2018, a decline of 27% from the second quarter of 2017. Non-GAAP gross profit margin was 50.4% in the second quarter of 2018, compared to 57.0% in the second quarter of 2017. The decrease in gross profit margin, on both a GAAP and a non-GAAP basis, resulted primarily from price erosion in our U.S. generics business and a decline in COPAXONE revenues due to generic competition, as well as the loss of revenue following the sale of our women’s health business.

Research and Development (R&D) expenses for the second quarter of 2018 were $290 million, a decrease of 38% compared to the second quarter of 2017. R&D expenses excluding equity compensation expenses and other R&D expenses were $281 million, or 6.0% of quarterly revenues in the second quarter of 2018, compared to $433 million, or 7.6%, in the second quarter of 2017. The decrease in R&D expenses resulted primarily from pipeline optimization, phase 3 studies that ended and related headcount reduction.

Selling and Marketing (S&M) expenses in the second quarter of 2018 were $710 million, a decrease of 25% compared to the second quarter of 2017. S&M expenses excluding amortization of purchased intangible assets, equity compensation expenses and other expenses were $662 million, or 14.1% of revenues, in the second quarter of 2018, compared to $891 million, or 15.6% of revenues, in the second quarter of 2017. The decrease was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

General and Administrative (G&A) expenses in the second quarter of 2018 were $316 million, a decrease of 12.9% compared to the second quarter of 2017. G&A expenses, excluding equity compensation expenses and other items, were $292 million in the second quarter of 2018, or 6.2% of quarterly revenues, compared to $365 million, or 6.4% in the second quarter of 2017. The decrease was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

GAAP other income in the second quarter of 2018 was $96 million compared to $24 million in the second quarter of 2017. Non-GAAP other income in the second quarter of 2018 was $106 million, an increase of 324% compared to $25 million in the second quarter of 2017. The increase in other income was mainly due to legal recovery of lost profits, where U.S. patent infringement litigation previously prevented a product’s sales.

GAAP operating loss in the second quarter of 2018 was $14 million, compared to $5.7 billion in the second quarter of 2017. Non-GAAP operating income in the second quarter of 2018 was $1.2 billion, a decrease of 22% compared to the second quarter of 2017. Non-GAAP operating margin was 26.3% in the second quarter of 2018 compared to 27.9% in the second quarter of 2017.

EBITDA (non-GAAP operating income, which excludes amortization and certain other items, as well as excluding depreciation expenses) was $1.4 billion in the second quarter of 2018, down 20% compared to $1.7 billion in the second quarter of 2017.

GAAP financial expenses for the second quarter of 2018 were $236 million, compared to $238 million in the second quarter of 2017. Non-GAAP financial expenses were $238 million in the second quarter of 2018, compared to $235 million in the second quarter of 2017. In the second quarter of 2018, we recognized a tax benefit of $76 million, or 30%, on pre-tax loss of $250 million. In the second quarter of 2017, we recognized a tax benefit of $22 million, on pre-tax loss of $6 billion. Non-GAAP income taxes for the second quarter of 2018 were $127 million, or 13%, on pre-tax non-GAAP income of $1.0 billion. Non-GAAP income taxes in the second quarter of 2017 were $230 million, or 17%, on pre-tax non-GAAP income of $1.4 billion. Our tax rate for the second quarter of 2018 on both GAAP and non-GAAP basis was mainly affected by the mix of products sold in different geographies.

We expect our annual non-GAAP tax rate for 2018 to be 15%, lower than our previous estimates. This is due to changes in the geographical mix of income we expect to earn this year. Our non-GAAP tax rate for 2017 was 15%.

GAAP net loss attributable to ordinary shareholders and GAAP diluted loss per share in the second quarter of 2018 were $241 million and $0.24, respectively, compared to $6.0 billion and $5.94, respectively, in the second quarter of 2017.

Non-GAAP net income attributable to ordinary shareholders and non-GAAP diluted EPS in the second quarter of 2018 were $794 million and $0.78, respectively, compared to $1,035 million and $1.02 in the second quarter of 2017.

For the second quarter of 2018, the weighted average outstanding shares for the fully diluted EPS calculation on a GAAP basis was 1,018 million, compared to 1,017 million for the second quarter of 2017. The weighted average outstanding shares for the fully diluted EPS calculation on a non-GAAP basis was 1,021 million, compared to 1,017 million for the second quarter of 2017. Additionally, no account was taken of the potential dilution by the mandatory convertible preferred shares, amounting to 63 million shares (including shares that may be issued due to unpaid dividends to date) for the three months ended June 30, 2018 and 59 million shares for the three months ended June 30 2017, as well as for the convertible senior debentures for the respective periods, since both had an anti-dilutive effect on loss per share.

Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2018 were negative $1,035 million. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:

Impairment of long-lived assets and goodwill of $668 million, comprised mainly of impairment of intangible assets of product rights and IPR&D assets related to the Actavis Generics acquisition, goodwill impairment related to Mexico reporting unit and impairment related to the closure of manufacturing sites and other fixed assets.
Amortization of purchased intangible assets totaling $302 million, of which $261 million is included in cost of goods sold and the remaining $41 million in S&M expenses;
Restructuring expenses of $107 million;
Equity compensation expenses of $47 million;
Contingent consideration of $47 million mainly related to a court decision regarding the status of Bendeka as an exclusive orphan drug;
Legal settlements and loss contingencies of $20 million;
Other non-GAAP items of $47 million; and
Tax benefit of $203 million.
Teva believes that excluding such items facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operations during the second quarter of 2018 was $162 million, compared to $435 million in the second quarter of 2017. The decrease was mainly due to higher beneficial interest collected in exchange for securitized trade receivables and higher payments related to the restructuring plan during the second quarter of 2018.

Free cash flow, excluding net capital expenditures, was $0.6 billion in the second quarter of 2018 flat compared to $0.6 billion in the second quarter of 2017.

As of June 30, 2018, our debt was $30.2 billion, compared to $30.8 billion as of March 31, 2018. The decrease was mainly due to exchange rate fluctuations.

The portion of total debt classified as short-term as of June 30, 2018 was 4%, unchanged compared to March 31, 2018.

Segment Results for the Second Quarter 2018

Due to the organizational changes announced in November 2017, we began reporting our financial results under a new structure in the first quarter of 2018, consisting of the following segments:

a) North America segment, which includes the United States and Canada.

b) Europe segment, which includes the European Union and certain other European countries.

c) International Markets segment (previously named "Growth Markets" segment), which includes all countries other than those in our North America and Europe segments.

In addition to these three segments, we have other activities, primarily the sale of API to third parties and certain contract manufacturing services.

Segment profit is comprised of gross profit for the segment, less R&D, S&M, G&A expenses and other income related to each segment. Segment profit does not include amortization and certain other items.

North America Segment

Our North America segment includes the United States and Canada.

Revenues from our North America segment in the second quarter of 2018 were $2.3 billion, a decrease of $906 million, or 29%, compared to the second quarter of 2017, mainly due to a decline in revenues of COPAXONE as well as an equally significant decline in revenues in our U.S. generics business and the loss of revenues from the sale of our women’s health business, partially offset by higher revenues from AUSTEDO and our distribution business.

Revenues in the United States, our largest market, were $2.1 billion in the second quarter of 2018, a decrease of $899 million, or 30%, compared to the second quarter of 2017.

Generic products revenues in our North America segment in the second quarter of 2018 decreased by 29% to $947 million, compared to the second quarter of 2017, mainly due to continued price erosion in our U.S. generics business, additional competition to methylphenidate extended-release tablets (Concerta authorized generic) and portfolio optimization.

In the second quarter of 2018, we led the U.S. generics market in total prescriptions and new prescriptions, with approximately 576 million total prescriptions, representing 15% of total U.S. generic prescriptions according to IQVIA data.

COPAXONE revenues in our North America segment in the second quarter of 2018 decreased by 46% to $464 million, of which $448 million were generated in the United States, compared to the second quarter of 2017, mainly due to generic competition in the United States.

BENDEKA and TREANDA combined revenues in our North America segment in the second quarter of 2018 decreased by 2% to $160 million, compared to the second quarter of 2017, mainly due to lower volumes, partially offset by a higher pricing.

ProAir revenues in our North America segment in the second quarter of 2018 decreased by 7% to $115 million, compared to the second quarter of 2017, mainly due to lower net pricing.

QVAR revenues in our North America segment in the second quarter of 2018 decreased by 69% to $30 million, compared to the second quarter of 2017. The decrease in sales was mainly due to lower volumes in this quarter following wholesaler stocking in the first quarter of 2018 in connection with the launch of QVAR RediHaler. QVAR maintained its second-place position in the inhaled corticosteroids category in the United States.

AUSTEDO revenues in our North America segment in the second quarter of 2018 were $44 million. AUSTEDO was approved by the FDA for the treatment of chorea associated with Huntington disease and was launched in the United States in April 2017. In August 2017, the FDA also approved AUSTEDO for the treatment of tardive dyskinesia.

Distribution revenues in our North America segment in the second quarter of 2018 generated by Anda increased by 16% to $320 million, compared to the second quarter of 2017.

North America Gross Profit

Gross profit from our North America segment in the second quarter of 2018 was $1.2 billion, a decrease of 42% compared to $2.1 billion in the second quarter of 2017. The decrease was mainly due to lower revenues from COPAXONE and generic products.

Gross profit margin for our North America segment in the second quarter of 2018 decreased to 53.2%, compared to 64.9% in the second quarter of 2017. This decrease was mainly due to lower COPAXONE revenues and continued price erosion of generic products.

North America Profit

Profit from our North America segment in the second quarter of 2018 was $722 million, a decrease of 42% compared to $1.3 billion in the second quarter of 2017. The decrease was mainly due to lower revenues from COPAXONE and generic products, partially offset by cost reductions and efficiency measures as part of the restructuring plan and higher other income.

Europe Segment

Our Europe segment includes the European Union and certain other European countries.

neric products revenues in our Europe segment in the second quarter of 2018, including OTC products, increased by 10% to $907 million, compared to the second quarter of 2017. In local currency terms, revenues increased by 3%, mainly due to new product launches, partially offset by price reductions.

COPAXONE revenues in our Europe segment in the second quarter of 2018 increased by 1% to $140 million, compared to the second quarter of 2017. In local currency terms, revenues decreased by 7%, mainly due to price reductions resulting from the entry of generic competition.

Respiratory products revenues in our Europe segment in the second quarter of 2018 increased by 26% to $106 million, compared to the second quarter of 2017. In local currency terms, revenues increased by 18%, mainly due to the launch of BRALTUS in 2017.

Europe Gross Profit

Gross profit from our Europe segment in the second quarter of 2018 was $731 million, an increase of 6% compared to $692 million in the second quarter of 2017. The increase was mainly due to the positive impact of currency fluctuations, partially offset by the loss of revenues from the sale of our women’s health business.

Gross profit margin for our Europe segment in the second quarter of 2018 increased to 55.0%, compared to 53.4% in the second quarter of 2017. This increase was mainly due to the closure of our distribution business in Hungary.

Europe Profit

Profit from our Europe segment in the second quarter of 2018 was $346 million, an increase of 58% compared to $219 million in the second quarter of 2017. The increase was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

International Markets Segment

Our International Markets segment includes all countries other than those in our North America and Europe segments. The key markets in this segment are Japan, Israel and Russia.

Generic products revenues in our International Markets segment in the second quarter of 2018, which include OTC products, decreased by 11% to $537 million, compared to the second quarter of 2017. In local currency terms, revenues decreased by 9%, mainly due to lower sales in Russia and the effect of the deconsolidation of our subsidiaries in Venezuela.

COPAXONE revenues in our International Markets segment in the second quarter of 2018 decreased by 15% to $22 million, compared to the second quarter of 2017. In local currency terms, revenues decreased by 4%.

Distribution revenues in our International Markets segment in the second quarter of 2018 increased by 14% to $154 million, compared to the second quarter of 2017. In local currency terms, revenues increased by 14%, mainly due to higher sales in Israel.

International Markets Gross Profit

Gross profit from our International Markets segment in the second quarter of 2018 was $328 million, a decrease of 18% compared to $400 million in the second quarter of 2017. This decrease was mainly due to lower gross profit in Japan and Russia and the deconsolidation of our subsidiaries in Venezuela, partially offset by higher gross profit in Israel and certain Latin American markets.

Gross profit margin for our International Markets segment in the second quarter of 2018 decreased to 41.6%, compared to 45.2% in the second quarter of 2017.

International Markets Profit

Profit from our International Markets segment in the second quarter of 2018 was $139 million, compared to $121 million in the second quarter of 2017. The increase was mainly due to cost reductions and efficiency measures as part of the restructuring plan.

Profit as a percentage of International Markets revenues in the second quarter of 2018 was 18%, compared to 14% in the second quarter of 2017. This increase was mainly due to lower operating expenses as part of the restructuring plan.

During the fourth quarter of 2017, we deconsolidated our subsidiaries in Venezuela from our financial results. Consequently, results of operations of our subsidiaries in Venezuela are not included in the second quarter of 2018.

Other Activities

We have other sources of revenues, primarily the sale of API to third parties and certain contract manufacturing services. These other activities are not included in our North America, Europe or International Markets segments.

Our revenues from other activities in the second quarter of 2018 decreased by 13.5% to $321 million, compared to the second quarter of 2017. In local currency terms, revenues decreased by 16%, mainly due to lower API sales to third parties.

API sales to third parties in the second quarter of 2018 decreased by 9% to $186 million, compared to the second quarter of 2017. In local currency terms, revenues decreased by 9%.

These estimates reflect management’s current expectations for Teva’s performance in 2018. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP measures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.

See "Non-GAAP Financial Measures" below.

Conference Call

Teva will host a conference call and live webcast along with a slide presentation on Thursday, August 2, 2018 at 8:00 a.m. ET to discuss its second quarter 2018 results and overall business environment. A question & answer session will follow.

United States 1-877-391-1148

International +44 (0) 1452 580733

For a list of other international toll-free numbers, click here.

Passcode: 6984104

A live webcast of the call will also be available on Teva’s website at: ir.tevapharm.com. Please log in at least 10 minutes prior to the conference call in order to download the applicable software.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on the Company’s website. The replay can also be accessed until August 30, 2018, 9:00 a.m. ET by calling United States 1 (866) 331-1332 or International +44 (0) 3333009785; passcode: 698410