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Baxter Reports First-Quarter 2018 Results and Increases Financial Outlook for Full-Year 2018

On April 26, 2018 Baxter International Inc. (NYSE: BAX) reported results for the first quarter of 2018 and increased its full-year 2018 guidance (Press release, Baxter International, APR 26, 2018, View Source [SID1234525763]).

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"Baxter is off to a strong start in 2018," said José (Joe) E. Almeida, chairman and chief executive officer. "Solid top-line performance coupled with a relentless focus on increasing operational efficiency were key drivers of earnings growth in the quarter. We look forward to building on this momentum and sharing the next chapter in Baxter’s ongoing transformation at our upcoming investor conference on May 21st. At the conference, we will highlight the strategic roadmaps for our six global businesses and provide investors an opportunity to learn more about Baxter’s promising innovation pipeline that will help fuel the company’s growth going forward."

First-Quarter Financial Results

In the first quarter, worldwide sales totaled approximately $2.7 billion, an increase of 8 percent on a reported basis, 4 percent on a constant currency basis and 3 percent on an operational basis compared to the prior-year period. Operational sales in the first quarter adjust for the impact of foreign exchange, generic competition for U.S. cyclophosphamide, and the Claris Injectables (Claris) acquisition.

Sales in the U.S. totaled $1.1 billion, increasing 4 percent on a reported basis and 2 percent on an operational basis. International sales of $1.5 billion increased 12 percent on a reported basis, 4 percent on a constant currency basis and 3 percent on an operational basis. Drivers of growth included strong demand for the company’s continuous renal replacement therapies due to an intense flu season, and increased sales of injectable pharmaceuticals and advanced surgery products as well as U.S. IV solutions and peritoneal dialysis therapies.

In line with the financial outlook shared on February 1, 2018, first quarter sales were negatively impacted by approximately $25 million due to the temporary manufacturing disruptions in Puerto Rico caused by Hurricane Maria. All manufacturing facilities in Puerto Rico are operating at pre-hurricane production levels, and the company does not expect any further revenue impact related to recovery efforts. In addition, the company continues to import select products from Baxter facilities under temporary special importation FDA grants, and is grateful to FDA for its continued support in the recovery efforts.

In March, Baxter completed the acquisition of two surgical products from Mallinckrodt plc: RECOTHROM Thrombin topical (Recombinant), the first and only stand-alone recombinant thrombin, and PREVELEAK Surgical Sealant, which is used in vascular reconstruction. Both products complement and broaden Baxter’s surgical portfolio of hemostats and sealants. Sales of these products in the quarter were immaterial and going forward will be reported in the company’s Advanced Surgery business.

As previously disclosed, Baxter now reports its operating results based on three reportable geographic segments: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific). Net sales are reported based on these reportable segments, as well as by the company’s new Global Business Units (GBUs). Please see the schedules accompanying this press release for more details on sales performance in the quarter.

Baxter reported income from continuing operations of $389 million, or $0.71 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis for the first quarter. These results included special items totaling $16 million ($(1) million net after-tax), primarily related to business optimization, intangible amortization and a settlement agreement related to the Claris acquisition. On an adjusted basis, Baxter’s first quarter income from continuing operations totaled $388 million, or $0.70 per diluted share. Adjusted earnings per share growth of 21 percent in the quarter was driven by solid top-line performance and the ongoing benefit from the company’s business transformation initiatives as well as a favorable tax rate.

During the quarter, Baxter’s Board of Directors approved a $1.5 billion increase in authorization for the company’s existing share repurchase plan. After accounting for repurchases during the first quarter of $522 million or approximately 8 million shares, the company had approximately $2.1 billion remaining under the authorization as of March 31, 2018. Baxter anticipates that it will continue to repurchase shares in the open market or through private transactions at times and amounts determined by the company based on its evaluation of market conditions and other factors.

In the first quarter of 2018, Baxter generated $447 million in operating cash flow, an increase of $241 million driven by improved operational performance, the ongoing impact of programs focused on enhancing the company’s working capital and a benefit from the settlement of certain claims related to the acquisition of Claris. As a result, the company generated an increase of approximately $210 million in free cash flow to $292 million (operating cash flow less capital expenditures of $155 million) as compared to the prior-year period.

2018 Financial Outlook

For full-year 2018: Based on the company’s strong first quarter, Baxter is raising its financial outlook for the year. The company now expects sales growth of approximately 7 to 8 percent on a reported basis, approximately 5 percent on a constant currency basis and 4 to 5 percent on an operational basis*. Baxter expects adjusted earnings from continuing operations, before special items, of $2.85 to $2.93 per diluted share for the full year.
For the second quarter: The company expects sales growth of approximately 9 percent on a reported basis, approximately 5 percent on a constant currency basis and 3 to 4 percent on an operational basis*. The company expects adjusted earnings from continuing operations, before special items, of $0.69 to $0.71 per diluted share.
*Full-year and second quarter operational sales have been adjusted for the impact of foreign exchange, generic competition for U.S. cyclophosphamide and the benefit from the acquisitions of Claris and the two Mallinckrodt assets.

Please see the schedules accompanying this press release for a reconciliation between the projected 2018 adjusted earnings per diluted share and projected GAAP earnings per diluted share.

A webcast of Baxter’s first quarter 2018 conference call for investors can be accessed live from a link on the company’s website at www.baxter.com beginning at 7:30 a.m. CDT on April 26, 2018. Baxter will be hosting an investor conference on Monday, May 21, 2018, in New York City. The investor conference will feature an innovation hall displaying product and therapy advancements from Baxter’s pipeline beginning at 7:00 a.m. EDT and presentations by members of the Baxter management team will begin at 8:00 a.m. EDT. To register for the conference and for more information, click here. Please see www.baxter.com for more information regarding this and future investor events and webcasts.

CANbridge Receives China Food and Drug Administration Approval for CAN002 as Cancer Adjuvant Therapy

On April 26, 2018 CANbridge Life Sciences, a biopharmaceutical company focused on developing Western drug candidates in China and North Asia, reported that it received an Import Medical Device Market Approval from the China Food and Drug Administration (CFDA) for CAN002 as a cancer adjuvant therapy, on April 2, 2018. CAN002, marketed as Caphosol in 47 countries, is an oral rinse for the treatment of oral mucositis, the inflammation and ulceration of the mucous membranes lining the mouth that occurs frequently in cancer patients undergoing high-dose chemotherapy, radiation and hematopoietic stem cell transplants (Press release, CANbridge Life Sciences, APR 26, 2018, View Source [SID1234525762]). CAN002 is CANbridge’s first commercialized product.

In 2014, CANbridge entered into an exclusive partnership with EUSA Pharma for the right to commercialize Caphosol in China. EUSA Pharma is a specialty pharmaceutical company with a focus on oncology and oncology supportive care, with commercial operations in the US and Europe, and a wider distribution network in approximately 40 countries around the world.

"We are delighted with the approval by the CFDA of CAN002, which marks our transition into a commercial stage company," said James Xue PhD, Chairman and CEO, CANbridge Life Sciences. "There is currently no standard-of-care in China for this painful and often debilitating condition that affects so many patients undergoing cancer treatment, as well as those dealing with other diseases. We are particularly proud to be able to bring this proven treatment to patients in mainland China, as we continue in our mission to shorten the runway between Western approval and availability in China. With CAN030 (Nerlynx) queued up as the next product closest to market, we anticipate CANbridge’s accelerated growth as a commercial company."

About CAN002 (Caphosol)

Caphosol is a supersaturated calcium phosphate oral rinse solution to treat oral mucositis (OM)—inflammation and ulcers in the mouth— caused by radiation, high-dose chemotherapy, and bone-marrow transplants to treat blood cancers. Approved in 48 countries, it has demonstrated robust clinical efficacy in preventing and treating OM, and has an excellent safety profile. The incidence of oral mucositis varies across cancer patient populations. However, according to the Oncology Nursing Society, it affects almost all patients undergoing radiation therapy for head and neck cancers; 80% of patients under going a stem cell transplant to treat blood cancer; and nearly half (40%) of patients receiving standard chemotherapy.

Novocure Reports First Quarter 2018 Financial Results and Provides Company Update

On April 26, 2018 Novocure (NASDAQ: NVCR) reported financial results for the quarter and year ended March 31, 2018, highlighting year-over-year growth in active patients and net revenues (Press release, NovoCure, APR 26, 2018, View Source [SID1234525761]). Novocure is a global oncology company developing a proprietary platform called Tumor Treating Fields for the treatment of solid tumor cancers. Tumor Treating Fields is a cancer therapy that uses electric fields tuned to specific frequencies to disrupt cell division, inhibiting tumor growth and causing affected cancer cells to die.

An "active patient" is a patient who is on Optune under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days.

(2) A "prescription received" is a commercial order for Optune that is received from a physician certified to treat patients with Optune for a patient not previously on Optune. Orders to renew or extend treatment are not included in this total.

"We are pleased with our continued commercial momentum during the first quarter 2018. Our ongoing sales and marketing efforts, the December 2017 publication of final EF-14 analysis in JAMA and our strong presence at SNO in November 2017 all contributed to growing awareness and confidence in Optune," said Asaf Danziger, Novocure’s Chief Executive Officer. "We had more than 2,000 patients on therapy at quarter end, representing thirteen consecutive quarters of active patient growth since the initial presentation of our EF-14 data in newly diagnosed glioblastoma. We delivered $52.1 million in first quarter 2018 revenues and approached $200 million in trailing twelve-month revenues, further establishing our position as a global oncology company with increasing commercial scale."

"In March 2018, the National Comprehensive Cancer Network (NCCN) updated its globally recognized Clinical Practice Guidelines in Oncology (NCCN Guidelines) for Central Nervous System Cancers to include alternating electric field therapy as a category 1 treatment for newly diagnosed glioblastoma in combination with temozolomide after maximal safe resection and completion of radiation therapy in March 2018," continued Mr. Danziger. "We believe the updated NCCN guidelines will further increase physician awareness, especially in the radiation oncology and medical oncology communities, helping us to reach patients earlier in the course of this aggressive disease."

"I am very pleased to announce that last week we reported positive top-line results from our STELLAR phase 2 pilot trial in mesothelioma. These results exceeded the results of the interim analysis for all efficacy endpoints and demonstrated clinically meaningful improvements in overall survival and progression free survival," added William Doyle, Novocure’s Executive Chairman. "Mesothelioma is the first indication outside of the brain for which Novocure will pursue FDA approval."

"We believe a significant opportunity remains to increase penetration and reimbursement in our active GBM markets and to expand into additional geographic markets. In parallel, we will advance our clinical pipeline in additional indications with high unmet needs," noted Mr. Doyle. "With more than $216 million cash on hand at the end of the quarter, we believe we are in a position of strength to continue to execute our two-pronged strategy."

First quarter 2018 operating statistics and financial update

There were 2,009 active patients on Optune at March 31, 2018, representing 59 percent growth versus March 31, 2017, and 10 percent growth versus December 31, 2017. The increase in active patients was driven primarily by prescription growth and by an increase in the percentage of active patients with a newly diagnosed GBM diagnosis who typically have a longer duration of treatment with Optune. In the first quarter 2018, approximately two-thirds of Optune prescriptions were written for newly diagnosed GBM.

In the United States, there were 1,445 active patients on Optune at March 31, 2018, representing 55 percent growth versus March 31, 2017.
In Germany and other EMEA markets, there were 544 active patients on Optune at March 31, 2018, representing 64 percent growth versus March 31, 2017.
In Japan, there were 20 active patients on Optune at March 31, 2018, representing 900 percent growth versus March 31, 2017.
Additionally, 1,258 prescriptions were received in the three months ended March 31, 2018, representing 41 percent growth compared to the same period in 2017, and 15 percent growth versus the three months ended December 31, 2017. The increase in prescriptions was driven primarily by commercial activities in our currently active markets.

In the United States, 946 prescriptions were received in the three months ended March 31, 2018, representing 38 percent growth compared to the same period in 2017.
In Germany and other EMEA markets, 282 prescriptions were received in the three months ended March 31, 2018, representing 37 percent growth compared to the same period in 2017.
In Japan, 30 prescriptions were received in the three months ended March 31, 2018, representing 900 percent growth compared to the same period in 2017.
For the three months ended March 31, 2018, net revenues were $52.1 million, representing 49 percent growth versus the same period in 2017. Revenue growth was primarily driven by increased Optune adoption in the United States and Germany and initial launch efforts Japan, partially offset by the absence of one-time benefits from the 2017 cash to accrual revenue recognition transition.

For the three months ended March 31, 2018, cost of revenues was $18.2 million compared to $11.7 million for the same period in 2017, representing an increase of 56 percent. The increase was primarily driven by the cost of shipping transducer arrays to a higher volume of commercial patients, as well as an increase in field equipment depreciation.

Research, development and clinical trials expenses for the three months ended March 31, 2018, were $11.1 million compared to $9.4 million for the same period in 2017, representing an increase of 18 percent. This was primarily due to an increase in clinical trial and personnel expenses for our LUNAR, METIS, and PANOVA trials and an increase in investigator sponsored trial costs.

Sales and marketing expenses for the three months ended March 31, 2018, were $18.1 million compared to $14.8 million for the same period in 2017, representing an increase of 23 percent. This was primarily due to increased marketing expenses, increased personnel and facility expenses to support our geographical expansion in Japan and Austria and an increase in share-based compensation.

General and administrative expenses for the three months ended March 31, 2018, were $17.3 million compared to $12.4 million for the same period in 2017, representing an increase of 39 percent. This was primarily due to increase in share-based compensation.

Personnel costs for the three months ended March 31, 2018, included $8.5 million in non-cash share-based compensation expenses, comprised of $0.2 million in cost of revenues; $0.9 million in research, development and clinical trials; $1.4 million in sales and marketing; and $6.0 million in general and administrative expenses. Total non-cash share-based compensation expenses for the first quarter 2017 were $4.6 million.

Net loss for the three months ended March 31, 2018, was $20.7 million compared to net loss of $18.0 million for the same period in 2017, representing a decline of 15 percent.

At March 31, 2018, we had $111.6 million in cash and cash equivalents and $104.7 million in short-term investments, for a total balance of $216.3 million in cash, cash equivalents and short-term investments.

Anticipated clinical trial milestones

Phase 2 pilot STELLAR trial in mesothelioma data presentation (2H 2018)
Initiation of phase 3 pivotal trial in recurrent ovarian cancer (2H 2018)
Data collection from phase 3 pivotal METIS trial in brain metastases (2020)
Data collection from phase 3 pivotal LUNAR trial in non-small cell lung cancer (2021)
Data collection from phase 3 pivotal PANOVA 3 trial in locally advanced pancreatic cancer (2022)
Conference call details

Novocure will host a conference call and webcast to discuss first quarter 2018 financial results today, Thursday, April 26, 2018, at 8 a.m. EDT. Analysts and investors can participate in the conference call by dialing 855-442-6895 for domestic callers and 509-960-9037 for international callers, using the conference ID 2384187.

The webcast, earnings slides presented during the webcast and the corporate presentation can be accessed live from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for at least 14 days following the call.

Upcoming investor events

Novocure will be participating in two investor conferences in May. Dr. Eilon Kirson, Novocure’s Chief Scientific Officer and Head of Research and Development, will participate in a fireside chat at the Deutsche Bank 43rd Annual Healthcare Conference on May 9, 2018, in Boston. Dr. Kirson’s presentation will begin at 8:40 a.m. EDT and will be followed by a Q&A session.

Additionally, William Doyle, Novocure’s Executive Chairman, will participate in the UBS 2018 Global Healthcare Conference on May 22, 2018, in New York. Mr. Doyle’s presentation will begin at 8:30 a.m. EDT and will be followed by a Q&A session.

Live audio webcasts of these presentations can be accessed from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for replay for at least 14 days following the relevant presentation.

COLOGUARD® REVENUE AND COMPLETED TESTS INCREASED 87 PERCENT TO $90.3 MILLION AND 186,000

On April 26, 2018 Exact Sciences Corp. (Nasdaq: EXAS) reported that the company generated revenue of $90.3 million and completed approximately 186,000 Cologuard tests during the quarter ended Mar. 31, 2018 (Press release, Exact Sciences, APR 26, 2018, View Source [SID1234525759]). First-quarter 2018 revenue and Cologuard test volume both grew 87 percent from 2017.

Exact Sciences Corporation Logo (PRNewsfoto/EXACT SCIENCES CORP)

"The Exact Sciences team delivered strong growth to start the year by remaining relentlessly focused on our core priorities. By increasing awareness and adoption of Cologuard, we are making strides toward our mission of playing a role in the eradication of colon cancer," said Kevin Conroy, chairman and CEO of Exact Sciences. "The success of Cologuard also positions us to develop tests that facilitate the early, accurate detection of other forms of cancer."

First-Quarter 2018 Financial Results

For the three-month period ended Mar. 31, 2018, as compared to the same period of 2017 (where applicable):

Revenue was $90.3 million, an increase of 87 percent, and test volume was 186,000, an increase of 87 percent
Average recognized revenue per test was unchanged at $485; note that the prior period included approximately $4.3 million, or $43 per test, related to the one-time impact of certain payers meeting the company’s revenue recognition criteria for accrual-basis revenue accounting
Average cost per test was $123, an improvement of 28 percent
Gross margin was 75 percent, an increase of 970 basis points
Operating expenses were $103.9 million, an increase of 55 percent
Net loss was $39.4 million or $0.33 per share, compared to $34.9 million or $0.32 per share
Non-cash interest expense related to convertible debt was $5.1 million, or $0.04 per share
Cash utilization was $53.7 million, compared to $36.4 million
Cash, cash equivalents and marketable securities were $1.0 billion at the end of the quarter
Nearly 9,000 healthcare providers ordered their first Cologuard test during the first quarter, and 110,000 (rounded) have ordered since the test was launched
2018 Outlook

The company continues to anticipate revenue of $420-$430 million and completed Cologuard test volume of 900,000-920,000 tests during 2018
For the second quarter, the company anticipates completing 220,000-230,000 Cologuard tests
The company’s guidance for revenue and completed tests are forward-looking statements. They are subject to various risks and uncertainties that could cause the company’s actual results to differ materially from the anticipated targets. There can be no assurance the company will meet these financial projections. See the cautionary information about forward-looking statements in the "Safe Harbor Statement" section of this press release.

First-Quarter Conference Call & Webcast

Company management will host a conference call and webcast on Thursday, Apr. 26, 2018, at 5 p.m. ET to discuss first-quarter 2018 results. The webcast will be available at www.exactsciences.com. Domestic callers should dial 877-201-0168 and international callers should dial +1-647-788-4901.

An archive of the webcast will be available at www.exactsciences.com. A replay of the conference call will be available by calling 800-585-8367 domestically or 416-621-4642 internationally. The access code for the replay of the call is 8289286. The webcast, conference call and replay are open to all interested parties.

About Cologuard

Cologuard was approved by the FDA in August 2014 and results from Exact Sciences’ prospective 90-site, point-in-time, 10,000-patient pivotal trial were published in the New England Journal of Medicine in March 2014. Cologuard is included in the American Cancer Society’s (2014) colorectal cancer screening guidelines and the recommendations of the U.S. Preventive Services Task Force (2016) and National Comprehensive Cancer Network (2016). Cologuard is indicated to screen adults of either sex, 50 years or older, who are at average risk for colorectal cancer. Cologuard is not for everyone and is not a replacement for diagnostic colonoscopy or surveillance colonoscopy in high-risk individuals. False positives and false negatives do occur. Any positive test result should be followed by a diagnostic colonoscopy. Following a negative result, patients should continue participating in a screening program at an interval and with a method appropriate for the individual patient. Cologuard performance when used for repeat testing has not been evaluated or established. For more information about Cologuard, visit www.cologuardtest.com. Rx Only.

Vical Announces News Release and Conference Call Schedule for First Quarter 2018 Financial Results

On April 26, 2018 Vical Incorporated (Nasdaq:VICL) reported that the company will report financial results for the three months ended March 31, 2018, before the opening of trading on Thursday, May 3, and conduct a conference call and webcast to discuss the financial results and provide a company update at noon Eastern Time on Thursday, May 3 (Press release, Vical, APR 26, 2018, View Source [SID1234525758]). The call will be open on a listen-only basis to any interested parties. The company will also provide a business update, including details on development programs in the conference call and webcast.

Conference Call
To listen to the conference call, dial in approximately ten minutes before the scheduled call to (323) 794-2567 (preferred), or (888) 278-8469 (toll-free), and reference confirmation code 1443635. A replay of the call will be available for 48 hours beginning about two hours after the call. To listen to the replay, dial (719) 457-0820 (preferred) or (888) 203-1112 (toll-free) and enter replay passcode 1443635. The call also will be available live and archived through the events page at www.vical.com.

Invited participants may ask questions during the conference call. Others may submit questions before the call by e-mail addressed to [email protected] or by fax to (858) 646-1150. Submitted questions will be screened for appropriateness and general interest. Selected questions received with sufficient notice before the call will be answered as time permits at the end of the call. For further information, contact Vical’s Investor Relations department by phone at (858) 646-1127 or by email at [email protected].