1stOncology™: Cancer Intelligence Service – Page 15653 – 1stOncology is recognized as a Top 10 Global Pharma Analytic Provider

Puma Biotechnology Provides Update on Review of Marketing Authorisation Application for PB272

On March 1, 2017 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported that based on its recent meeting with the Rapporteur, Co-Rapporteur and review team members, as well as the European Medicines Agency (EMA), the Company plans to modify the summary of product characteristics (SmPC), sometimes referred to as the European product label, in its Marketing Authorisation Application (MAA) to restrict the intended population to patients initiating neratinib treatment within one year after completion of adjuvant trastuzumab therapy (Press release, Puma Biotechnology, MAR 1, 2017, View Source [SID1234517957]). The proposed SmPC will continue to include both hormone receptor positive and hormone receptor negative patients.

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!

Puma recently conducted a meeting with the Rapporteur, Co-rapporteur and members of the review team as well as EMA to discuss the responses to the 120-day list of questions received in connection with the Company’s MAA for neratinib that was submitted in the summer of 2016. The initially proposed indication was for the "extended adjuvant treatment of adult patients with early-stage HER2-overexpressed/amplified breast cancer who have received prior adjuvant trastuzumab based therapy." During this meeting it was discussed that neratinib would likely be sequenced immediately after adjuvant trastuzumab and more benefit was observed in the subgroup of patients who received neratinib within 1 year from prior trastuzumab completion when compared with those patients receiving neratinib after 1 year from the completion of prior trastuzumab treatment. In addition, data from the pivotal adjuvant trastuzumab trials suggest that patients are at higher risk of recurrence closer to completion of adjuvant trastuzumab, and the risk of recurrence may decrease over time.

Based on this meeting, Puma will be revising the proposed SmPC in its MAA for neratinib to restrict the intended population to those patients initiating neratinib treatment within one year after completion of adjuvant trastuzumab therapy. The Committee for Medicinal Products for Human Use (CHMP) is continuing to review Puma’s MAA and has not yet made a final decision to recommend approval of the drug for the updated or any other indication and there is no guarantee when, if ever, the MAA will be approved. The tables below, based on the interim 5 year analysis announced in July 2016, show results for the invasive disease free survival (DFS) of the initially proposed intent to treat population and the intent to treat population (both hormone receptor positive and hormone receptor negative) in the subgroup of patients who initiated neratinib treatment within one year after completion of adjuvant trastuzumab therapy.

DFS for Initially Proposed Intent to Treat (ITT) Population
2-Year DFS 3-Year DFS 4-Year DFS 5-Year Interim DFS
Neratinib 94.3% 92.5% 91.4% 90.4%
Placebo 91.9% 90.3% 89.2% 87.9%
Absolute invasive DFS Difference 2.4% 2.2% 2.2% 2.5%

DFS for Intent to Treat (ITT) Population in Patients Initiating Neratinib Treatment Less Than One Year After the Completion of Adjuvant Trastuzumab
2-Year DFS 3-Year DFS 4-Year DFS 5-Year Interim DFS
Neratinib 93.8% 92.0% 90.8% 89.9%
Placebo 91.0% 89.5% 88.3% 86.8%
Absolute invasive DFS Difference 2.8% 2.5% 2.5% 3.1%

Puma plans to file a Current Report on Form 8-K with the Securities and Exchange Commission containing the updated Kaplan-Meier curves for the subgroup of patients randomized within one year after completion of adjuvant trastuzumab therapy for: (i) the intent to treat population; (ii) the subgroup of patients with centrally confirmed HER2 positive disease; (iii) the hormone receptor positive subgroup of patients and (iv) the hormone receptor negative subgroup of patients.

About Puma Biotechnology

PDL BioPharma Announces Fourth Quarter and Year End 2016 Financial Results

On March 1, 2017 PDL BioPharma, Inc. (PDL or the Company) (NASDAQ: PDLI) reported financial results for the fourth quarter and year ended December 31, 2016 including(Press release, PDL BioPharma, MAR 1, 2017, View Source [SID1234517953]) .

Total revenues of $66.5 million and $244.3 million for the three and twelve months ended December 31, 2016, respectively.

GAAP diluted EPS of ($0.06) and $0.39 for the three and twelve months ended December 31, 2016, respectively.
GAAP net loss attributable to PDL’s shareholders of $10.3 million and net income of $63.6 million for the three and twelve months ended December 31, 2016, respectively.

Non-GAAP net loss attributable to PDL’s shareholders of $8.6 million and net income of $108.1 million for the three and twelve months ended December 31, 2016, respectively. A full reconciliation of all components of the GAAP to non-GAAP financial results can be found in Table 4 at the end of the release.

The loss attributable to the three months ended December 31, 2016 was a result of a $51.1 million impairment charge relating to our Direct Flow Medical note receivable investment.

"2016 was a transformational year for PDL; one in which we took advantage of opportunities in the specialty pharma space as another tool to increase shareholder value," said John P. McLaughlin, president and chief executive officer of PDL. "As we look to 2017, we will focus our efforts on Noden product commercialization, along with acquiring additional specialty pharma assets, to drive value creation for PDL and our shareholders."

Recent Developments
PDL announced today that the company’s board of directors has authorized the repurchase of up to $30 million of the company’s common stock through March 2018.
As a result of ARIAD Pharmaceuticals, Inc. being acquired by Takeda Pharmaceuticals Company Limited on February 16, 2017, PDL exercised its put option with ARIAD and will be repaid an estimated $110 million, which is 1.2 times the original investment less any sums paid to date. We received $9.3 million of royalty payments through December 31, 2016. The cash repayment is expected in late March or early April of 2017.
PDL received a royalty payment for the first quarter of 2017 in the amount of $14.2 million for royalties earned on sales of Tysabri. The duration of this royalty payment is based on the sales of product manufactured prior to patent expiry, the amount of which is uncertain.
In January 2017 PDL monetized $7.0 million of certain assets of Direct Flow Medical acquired through its foreclosure.
Revenue Highlights
Total revenues of $66.5 million for the three months ended December 31, 2016 included:
Royalties from PDL’s licensees to the Queen et al. patents of $15.5 million, which consisted of royalties earned on sales of Tysabri under a license agreement;
Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $28.1 million, which consisted of the change in estimated fair value of our royalty right assets, primarily related to the Depomed, Inc., University of Michigan, ARIAD and AcelRx Pharmaceuticals, Inc.;
Interest revenue from notes receivable financings to kaléo and CareView Communications of $5.5 million; and
Product revenues of $17.5 million from sales of Tekturna and Tekturna HCT in the United States and Rasilez and Rasilez HCT in the rest of the world (collectively, the Noden Products).
Total revenues decreased by 63 percent for the three months ended December 31, 2016, when compared to the same period in 2015.
The decrease in royalties from PDL’s licensees to the Queen et al. patents is due to the expiration of the patent license agreement with Genentech, Inc.
The decrease in royalty rights – change in fair value was primarily due to the $27.8 million decrease in fair value of the University of Michigan Cerdelga royalty right asset and the decrease in fair value of the AcelRx Zalviso royalty rights asset, partially offset by an increase in the fair value of the ARIAD Pharmaceuticals, Inc. royalty right asset.
PDL received $25.3 million in net cash royalty and milestone payments from its royalty rights in the fourth quarter of 2016, compared to $34.4 million for the same period of 2015.
The decrease in interest revenues was primarily due to the early repayment of the Paradigm Spine, LLC notes receivable investment.
Product revenues were derived from sales of the Noden Products.
Total revenues decreased by 59 percent for the twelve months ended December 31, 2016, when compared to the same period in 2015.
The decrease in royalties from PDL’s licensees to the Queen et al. patents is due to the expiration of the patent license agreement with Genentech, Inc.
The decrease in royalty rights – change in fair value was primarily driven by a $36.6 million decrease in the fair value of the University of Michigan royalty rights Cerdelga asset, a $23.1 million decrease in the fair value of the Depomed royalty rights asset and a $3.0 million decrease in the fair value of the Viscogliosi Brothers, LLC royalty right asset, partially offset by a $14.8 million increase in the fair value of the ARIAD Pharmaceuticals, Inc. royalty right asset.
PDL received $72.6 million in net cash royalty payments and milestone payments from its acquired royalty rights in the twelve months ended December 31, 2016, compared to $43.4 million for the same period of 2015.
Product revenues and interest revenue variances were the same as the three months ended December 31, 2016.
Operating Expense Highlights
Operating expenses were $74.2 million for the three months ended December 31, 2016, compared to $16.5 million for the same period of 2015. The increase in operating expenses for the three months ended December 31, 2016, as compared to the same period in 2015, was primarily a result of a $51.1 million impairment charge relating to our Direct Flow Medical note receivable investment and $11.4 million in expenses related to the Noden operations.
Operating expenses were $114.9 million for the twelve months ended December 31, 2016, compared to $40.1 million for the same period of 2015. The increase in operating expenses for the twelve months ended December 31, 2016, as compared to the same period in 2015, was the result of the Direct Flow Medical impairment and $25.6 million in expenses related to the acquisition of the Noden Products and its operations.
Other Financial Highlights
PDL had cash, cash equivalents, and investments of $242.1 million at December 31, 2016, compared to $220.4 million at December 31, 2015.
Net cash provided by operating activities in the twelve months ended December 31, 2016 was $101.7 million, compared with $301.5 million in the same period in 2015.

Nektar Therapeutics Reports Fourth Quarter and Year-End 2016 Financial Results

March 1, 2017 Nektar Therapeutics (Nasdaq: NKTR) reported its financial results for the fourth quarter and year ended December 31, 2016 (Press release, Nektar Therapeutics, MAR 1, 2017, View Source [SID1234517942]).

Cash and investments in marketable securities at December 31, 2016 were $389.1 million as compared to $308.9 million at December 31, 2015.

"Nektar begins 2017 in a strong position with highly promising wholly-owned immuno-oncology and immunology clinical programs and several important data readouts expected throughout this year," said Howard W. Robin, President and Chief Executive Officer of Nektar. "Our Phase 1/2 study evaluating NKTR-214 as a potential combination treatment regimen with Opdivo in collaboration with Bristol-Myers Squibb is proceeding nicely. We plan to report initial data from the dose-escalation part of the study in the middle of this year. Later this month, we will have data from our Phase 3 efficacy study of NKTR-181 in patients with chronic low back pain. Finally, we are pleased that we will initiate a first-in-human trial shortly for NKTR-358, our proprietary T regulatory cell stimulator, which has the potential to become a first-in-class resolution therapeutic for a wide range of immune disorders."

Summary of Financial Results

Revenue for the fourth quarter of 2016 was $37.5 million as compared to $39.4 million in the fourth quarter of 2015.

Revenue for the year ended December 31, 2016 was $165.4 million as compared to $230.8 million in 2015. Revenue in 2016 included recognition of $31.0 million from AstraZeneca as a result of its sublicense of MOVENTIG (naloxegol) to Kyowa Kirin in Europe. In addition, product sales, royalty revenue, and non-cash royalty revenue increased in 2016 compared to 2015. Revenue in 2015 included recognition of a total of $130.0 million of milestone payments from AstraZeneca following the first commercial sale of MOVANTIK in the U.S. in Q1 2015 and the first commercial sale of MOVENTIG in the EU in Q3 2015.

Total operating costs and expenses in the fourth quarter of 2016 were $69.6 million as compared to $68.7 million in the fourth quarter of 2015. Total operating costs and expenses increased primarily as a result of higher research and development (R&D) expense. Total operating costs and expenses for the year ended December 31, 2016 were $278.3 million as compared to $260.2 million in 2015.

R&D expense in the fourth quarter of 2016 was $50.2 million as compared to $47.1 million for the fourth quarter of 2015. R&D expense for the year ended December 31, 2016 was $203.8 million as compared to $182.8 million in 2015. R&D expense increased primarily due to expenses for our NKTR-214 and NKTR-358 programs.

General and administrative (G&A) expense was $12.8 million in the fourth quarter of 2016 as compared to $13.2 million in the fourth quarter of 2015. G&A expense for the year ended December 31, 2016 was $44.3 million as compared to $43.3 million in 2015.

Net loss for the fourth quarter of 2016 was $42.2 million or $0.28 loss per share as compared to a net loss of $54.1 million or $0.40 loss per share in the fourth quarter of 2015. Net loss for the year ended December 31, 2016 was $153.5 million or $1.10 loss per share as compared to a net loss of $81.2 million or $0.61 loss per share in 2015.

2016 and Year-to-Date Business Highlights

Nektar Wholly-Owned Programs

In February 2017, Nektar submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for NKTR-358, a new biologic designed to treat autoimmune disease. Clinical trials are planned for NKTR-358 in patients with systemic lupus erythematous (SLE) and other indications.
In February 2017, Nektar announced positive data from the Phase 1 dose-escalation study of single-agent NKTR-214 in patients with renal cell carcinoma at the ASCO (Free ASCO Whitepaper) 2017 Genitourinary Cancers Symposium. Clinical benefit and safety data presented included 40% of RCC patients experiencing tumor reductions including one patient with a partial response and a favorable safety and tolerability profile.
In January 2017, Nektar announced a new immuno-oncology candidate, NKTR-262, a small molecule agonist that targets toll-like receptors (TLRs) found on innate immune cells in the body. NKTR-262 is being developed as a single intra-tumoral injection to be administered at the start of therapy with NKTR-214. The company plans to file an IND for NKTR-262 by the end of 2017.
In December 2016, Nektar initiated a pivotal human abuse liability (HAL) trial for its novel opioid molecule NKTR-181, which is expected to complete in the middle of 2017.
In November 2016, Nektar announced positive data from the Phase 1 dose-escalation study of single-agent NKTR-214 at the Society of Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting. Results showed encouraging anti-tumor activity including one patient with a partial response and a favorable safety and tolerability profile.
In September 2016, Nektar and Bristol-Myers Squibb entered into a clinical collaboration to develop NKTR-214 as a potential combination treatment regimen with Bristol-Myers Squibb’s Opdivo (nivolumab) in five tumor types and eight potential indications. The dose-escalation part of the trial is underway with initial data expected in the middle of 2017.
Additional Pipeline and Partner Developments

In December 2016, Shire announced that the U.S. Food and Drug Administration (FDA) approved ADYNOVATE ([Antihemophilic Factor (Recombinant), PEGylated], an extended circulating half-life recombinant Factor VIII (rFVIII) treatment for hemophilia A, in pediatric patients under 12 years of age. The FDA also approved ADYNOVATE for use in surgical settings for both adult and pediatric patients. ADYNOVATE is under regulatory review in Europe, Switzerland and Canada.
In September 2016, Bayer presented positive Phase 3 data for Ciprofloxacin DPI at the 26th International Congress of European Respiratory Society. The RESPIRE 1 study assessed the safety and efficacy of Cipro DPI in NCFB patients and met both primary endpoints for the every 14-day dosing arm. The second Phase 3 trial (RESPIRE 2) completed recruitment in September 2016 and data are expected to be released by our partner Bayer in 2017.
In June 2016, Nektar entered into a partnership with Daiichi Sankyo Europe for Nektar’s investigational drug therapy, ONZEALD (etirinotecan pegol, NKTR-102), which has completed a Phase 3 clinical trial (the BEACON study) in patients with advanced breast cancer. The agreement grants Daiichi Sankyo Europe exclusive rights to market ONZEALD in Europe (EEA), Switzerland and Turkey. Nektar Therapeutics retained rights to ONZEALD in the United States and the rest of the world. Under the terms of the agreement, Nektar is entitled to milestones and significant double-digit royalties on net sales in Europe.
In June 2016, Nektar submitted a filing for a Marketing Authorization Agreement (MAA) with the European Medicines Agency for conditional approval for ONZEALD in patients with advanced breast cancer and brain metastases. An opinion from the European CHMP on conditional approval of ONZEALD is expected in the first half of 2017.
Amikacin Inhale, our second anti-infective Phase 3 program partnered with Bayer, which is being developed for gram-negative pneumonia, is expected to complete in Q2 of 2017. Nektar and Bayer expect to report topline results from this program in the middle of 2017.

NanoString Technologies Releases Fourth Quarter and Full Year 2016 Operating Results and Provides 2017 Outlook

On March 1, 2017 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the fourth quarter and year ended December 31, 2016 (Press release, NanoString Technologies, MAR 1, 2017, View Source [SID1234517941]).

Fourth Quarter Financial Highlights

Total revenue of $25.2 million, 13% year-over-year growth
Total product and service revenue of $20.3 million, 5% year-over-year growth
Consumables revenue of $12.0 million, including $1.0 million of Prosigna IVD kits, 12% year-over-year growth
Instrument revenue of $7.5 million, 6% year-over-year decline
Collaboration revenue of $4.9 million, 68% year-over-year growth
Full Year 2016 Financial Highlights

Total revenue of $86.5 million, 38% year-over-year growth
Total product and service revenue of $69.1 million, 22% year-over-year growth
Consumables revenue of $41.7 million, including $4.2 million of Prosigna IVD kits, 26% year-over-year growth
Instrument revenue of $24.2 million, 16% year-over-year growth
Collaboration revenue of $17.4 million, nearly tripling versus the prior year
"In 2016 we grew our revenue by 38%, and entered into two landmark companion diagnostic collaborations," stated Brad Gray, NanoString president and chief executive officer. "In 2017, we will be investing in our commercial channel to improve our productivity, hiring new commercial leadership and launching a number of products that will build on the unique value proposition of the nCounter platform. We’re also investing in the future, preparing for the launch of companion diagnostic tests as well as a portfolio of breakthrough instruments to enhance our long-term growth prospects."

Recent Business Highlights

Grew installed base to approximately 480 nCounter Analysis Systems at December 31, 2016, with approximately 140 systems sold during the year, including approximately 60 nCounter SPRINT Profilers
Maintained consumable pull through above $100,000 per system for the full year 2016
Surpassed 1,500 cumulative peer-reviewed publications of studies utilizing nCounter technology
Received positive coverage decision from Humana and positive assessment from Blue Cross Blue Shield Association Evidence Street for Prosigna
Launched a Technology Access Program for Digital Spatial Profiling technology and presented first customer data at ASCO (Free ASCO Whitepaper)-SITC 2017
nCounter Vantage 3D assays, enabling simultaneous analysis of DNA, RNA, and protein, were recognized by The Scientist as a Top 10 Innovation of 2016
Highlighted progress with Hyb & Seq single molecule sequencing chemistry at Advances in Genome Biology and Technology (AGBT) meeting, including sequencing of oncogenes from FFPE samples with high accuracy and simple workflow free of library, enzymes and amplification
Fourth Quarter Financial Results

Revenue for the three months ended December 31, 2016 increased by 13% to $25.2 million, as compared to $22.3 million for the fourth quarter of 2015. Instrument revenue was $7.5 million, down 6% versus the prior year period, with nCounter SPRINT systems representing approximately one-third of systems sold. Consumables revenue, excluding Prosigna, was $11.0 million for the fourth quarter of 2016, 11% higher than in the comparable 2015 quarter. Prosigna IVD kit revenue was $1.0 million for the quarter, an increase of 25% over the fourth quarter of 2015. Collaboration revenue totaled $4.9 million, compared to $2.9 million for the fourth quarter of 2015. Gross margin on product and service revenue was 59% for the fourth quarter of 2016, up from 56% for the prior year period.

Research and development expense increased by 41% to $10.0 million for the fourth quarter of 2016 versus $7.1 million for the fourth quarter of 2015, reflecting increased costs associated with biopharma collaborations announced in 2016 and investments in new products and technologies under development for the life science research market. Selling, general and administrative expense increased by 17% to $16.7 million for the fourth quarter of 2016 compared to $14.2 million for the prior year period.

Net loss for the three months ended December 31, 2016 increased to $11.6 million, or a loss of $0.55 per share, compared with $8.8 million, or a loss of $0.44 per share, for the fourth quarter of 2015.

Full Year 2016 Financial Results

Revenue for 2016 increased by 38% to $86.5 million, as compared to $62.7 million for 2015. Instrument revenue was $24.2 million, up 16% versus the prior year. Consumables revenue, excluding Prosigna, was $37.5 million for 2016, 23% higher than in 2015. Prosigna IVD kit revenue was $4.2 million, an increase of 70% over 2015. Collaboration revenue totaled $17.4 million, compared to $6.0 million for 2015. Gross margin on product and service revenue was 56% for 2016, up from 54% for the prior year.

Research and development expense increased by 41% to $34.7 million for 2016 versus $24.6 million for 2015. Selling, general and administrative expense increased by 18% to $62.7 million for 2016 compared to $53.2 million for the prior year.

Net loss for 2016 was $47.1 million, or $2.34 per share, compared with $45.6 million, or a loss of $2.40 per share, for 2015.

The company ended 2016 with approximately $74.0 million of cash, cash equivalents, and short-term investments.

Outlook for 2017

Total revenue in the range of $100 million to $105 million
Gross margin on product and service revenues in the range of 57% to 58%
Operating expenses in the range of $117 million to $120 million
Operating loss in the range of $49 million to $53 million
Net loss per share in the range of $2.51 to $2.69

Mylan Reports Fourth Quarter and Full Year 2016 Results and Provides 2017 Guidance

On March 1, 2017 Mylan N.V. (NASDAQ, TASE: MYL) reported its financial results for the quarter and year ended December 31, 2016 and provided 2017 guidance (Press release, Mylan, MAR 1, 2017, View Source [SID1234517940]).

Fourth Quarter 2016 Financial Highlights

Total revenues of $3.27 billion, up 31% compared to the prior year period
North America segment third party net sales of $1.57 billion, up 22%
Europe segment third party net sales of $927.4 million, up 50%
Rest of World segment third party net sales of $729.2 million, up 28%
U.S. GAAP diluted earnings per ordinary share ("U.S. GAAP EPS") of $0.78, up 105% compared to U.S. GAAP EPS of $0.38 in the prior year period
Adjusted diluted earnings per ordinary share ("adjusted EPS") of $1.57, up 29% compared to $1.22 in the prior year period
Full Year 2016 Financial Highlights

Total revenues of $11.08 billion, up 18% compared to the prior year
U.S. GAAP EPS of $0.92, down 46% compared to $1.70 in the prior year
Adjusted EPS of $4.89, up 14% compared to $4.30 in the prior year
U.S. GAAP cash provided by operating activities of $2.05 billion, up 2% compared to the prior year
Mylan CEO Heather Bresch commented, "Our strong 2016 results were highlighted by year-over-year constant-currency total revenue growth of 18% and adjusted EPS growth of 14%. The fourth quarter capped off the year with impressive revenue growth of 31% and adjusted EPS growth of 29%. Again, we saw all of our regions contribute to our results for the year, with double-digit revenue increases in North America, Europe and Rest of World, reflecting the resilience, differentiation and diversity of our global platform and our unwavering focus on execution. The diversity of our business was further demonstrated by our six global therapeutic franchises that delivered approximately $1 billion or more in revenue: Respiratory and Allergy, CNS and Anesthesia, Infectious Disease, Cardiovascular, Gastrointestinal, and Diabetes and Metabolism.

"We look forward in 2017 to delivering yet another strong year of performance, with anticipated 2017 revenues of $12.25 billion to $13.75 billion and adjusted EPS of $5.15 to $5.55. We also continue to advance toward our long-stated 2018 adjusted EPS target of $6.00."

Mylan President Rajiv Malik said, "In addition to executing on our core business, we completed during the year our acquisitions of Meda and the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, which further built our scale and breadth from a product and geographic perspective. We continued the successful integration of Mylan, bringing these transactions into our One Mylan platform. Further, we continued executing on the many drivers of our organic growth, as evidenced, for instance, by the U.S. Food and Drug Administration’s acceptance of our abbreviated new drug application for Generic Advair Diskus and our submissions for biosimilars Pegfilgrastim and Trastuzumab. With regard to the pricing environment, we continued to see erosion both globally and in U.S. generics in the mid-single digits which was in line with our expectations, and we continue to expect a comparable environment in 2017 given the breadth and make-up of our global portfolio."

Mylan CFO Ken Parks added, "In 2016, Mylan once again benefited from the depth and breadth of our portfolio which drove significant cash flow generation. Our adjusted free cash flow increased by more than 15% to $2.1 billion. We are positioned well to reduce debt levels, while also allowing for financial flexibility for future growth opportunities and maintaining our commitment to our investment grade credit rating."

Total Revenues

Three Months Ended

Year Ended

December 31,

December 31,
(Unaudited; in millions)
2016

2015

Percent
Change

2016

2015

Percent
Change
Total Revenues (1)
$
3,267.8

$
2,490.7

31%

$
11,076.9

$
9,429.3

18%
North America (2)
1,565.0

1,287.9

22%

5,629.5

5,100.4

10%
Europe (1) (2)
927.4

616.4

50%

2,953.8

2,205.6

34%
Rest of World (2)
729.2

570.5

28%

2,383.8

2,056.6

16%
Other Revenues
46.2

15.9

191%

109.8

66.7

65%

(1)
For the year ended December 31, 2015, adjusted third party net sales from Europe totaled $2.22 billion and adjusted total revenues were $9.45 billion. Adjusted third party net sales from Europe and adjusted total revenues are non-GAAP financial measures.
(2)
As a result of our acquisition of Meda on August 5, 2016 and the integration of our portfolio across our branded, generics and over-the-counter platforms in all of our regions, effective October 1, 2016, we expanded our reportable segments as follows: North America, Europe and Rest of World. As a result, the amounts previously reported under the Specialty segment have been recast to North America and amounts related to Brazil are included in Rest of World for all periods presented. Segment amounts represent third party net sales.
Fourth Quarter 2016 Financial Results

Total Revenues

Total revenues were $3.27 billion in 2016, compared to $2.49 billion in the prior year period. Third party net sales for the current quarter were $3.22 billion compared to $2.47 billion for the prior year period, representing an increase of $746.8 million, or 30%. Other third party revenues for the current quarter were $46.2 million compared to $15.9 million in the prior year period, an increase of $30.3 million as a result of an increase in royalty income, including the impact of current year acquisitions. Below is a summary of third party net sales in each of our segments for the three months ended December 31, 2016:

Third party net sales from North America were $1.57 billion for the quarter, an increase of 22% when compared to the prior year period. This increase was principally due to net sales from the acquisitions of Meda AB ("Meda") and the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, LLC (the "Topicals Business"), and to a lesser extent, net sales from new products. Partially offsetting this increase was lower pricing and volumes on existing products. The impact of foreign currency translation was insignificant within North America.
Third party net sales from Europe were $927.4 million for the quarter, an increase of 50% when compared to the prior year period. This increase was primarily the result of net sales from the acquisition of Meda, and to a lesser extent, net sales from new products and higher volumes on existing products, partially offset by lower pricing. The unfavorable impact of foreign currency translation on current period third party net sales was approximately $19.5 million, or 4% within Europe.
Third party net sales from Rest of World were $729.2 million for the quarter, an increase of 28% when compared to the prior year period. This increase was primarily due to net sales from the acquisition of Meda, and to a lesser extent, net sales from new products. In addition, net sales from existing products increased slightly, as higher volumes offset lower pricing throughout the region, including in our anti-retroviral ("ARV") franchise. The favorable impact of foreign currency translation on current period third party net sales was approximately $17.2 million, or 3% within Rest of World.
Total Gross Profit

Gross profit was $1.34 billion and $1.06 billion for the fourth quarter of 2016 and 2015, respectively. Gross margins were 41% and 43% in the fourth quarter of 2016 and 2015, respectively. Gross margins were negatively impacted in the current quarter due to increased amortization of intangible assets, the amortization of acquisition-related inventory fair value adjustments and intangible asset impairment charges. This negative impact was partially offset by the positive impact of net sales from new products. Adjusted gross profit was $1.85 billion and adjusted gross margins were 57% for the quarter compared to adjusted gross profit of $1.40 billion and adjusted gross margins of 56% in the prior year period. Adjusted gross margins were positively impacted in the current quarter as a result of net sales from new products and the net impact of acquisitions.

Total Profitability

Earnings from operations decreased $108.1 million from the comparable prior year period primarily due to the Modafinil antitrust litigation settlement of $165 million, higher amortization expense and operating expenses related to recent acquisitions.

R&D expense increased from the comparable prior year period due to the inclusion of Meda and the Topicals Business, expenses incurred related to the Company’s collaboration with Momenta Pharmaceuticals, Inc. ("Momenta") and the continued development of our respiratory, insulin and biologics programs. SG&A expense increased from the comparable prior year period primarily due to the additional expense related to the acquisitions of Meda and the Topicals Business as well as restructuring charges incurred in the current quarter.

U.S. GAAP net earnings attributable to Mylan N.V. ordinary shareholders ("U.S. GAAP net earnings") increased by $222.9 million to $417.5 million for the quarter ended December 31, 2016, compared to $194.6 million for the prior year period. Fourth quarter 2016 U.S. GAAP net earnings were negatively impacted by the reduction of earnings from operations and increased non-operating expenses including higher interest expense. Partially offsetting these decreases were fair value gains recorded on certain acquisition related contingent consideration and the recognition of an income tax benefit of $192.6 million in the fourth quarter primarily due to the mix of earnings between our U.S. and non-U.S. subsidiaries. U.S. GAAP EPS increased from $0.38 to $0.78 in the current quarter. Adjusted net earnings increased by $222.0 million to $842.2 million compared to $620.2 million for the prior year period. Adjusted EPS increased 29% to $1.57 compared to $1.22 in the prior year period.

EBITDA, which is defined as net earnings (excluding the non-controlling interest and losses from equity method investees) plus income taxes, interest expense, depreciation and amortization, was $878.5 million for the quarter ended December 31, 2016, and $657.5 million for the comparable prior year quarter. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $1.21 billion for the quarter ended December 31, 2016 and $827.2 million for the comparable prior year quarter.

Year Ended December 31, 2016 Financial Results

Total Revenues

Total revenues were $11.08 billion in 2016, compared to $9.43 billion in the prior year. Third party net sales for the current year were $10.97 billion compared to $9.36 billion for the prior year, representing an increase of $1.60 billion, or 17%. Other third party revenues for the current year were $109.8 million compared to $66.7 million in the prior year, an increase of $43.1 million which is consistent with the fourth quarter increase. Below is a summary of third party net sales in each of our segments for the year ended December 31, 2016:

Third party net sales from North America were $5.63 billion for the year ended December 31, 2016, an increase of 10% when compared to the prior year. The increase was principally due to net sales from the acquisitions of Meda, the Topicals Business and the incremental sales from the EPD Business, and to a lesser extent, net sales from new products. These increases were partially offset by lower volume and pricing on existing products. As anticipated, the U.S. generics products experienced price erosion in the mid-single digits. The unfavorable impact of foreign currency translation on current year third party net sales was approximately $7 million, or less than 1% within North America.
Third party net sales from Europe were $2.95 billion for the year ended December 31, 2016, an increase of 34% when compared to the prior year. This increase was primarily the result of net sales from the acquisition of Meda and the incremental sales from the EPD Business, and to a lesser extent, net sales from new products. In addition, higher volumes on existing products were partially offset by lower pricing throughout Europe. The unfavorable impact of foreign currency translation on current year third party net sales was approximately $30 million, or 1% within Europe.
Third party net sales from Rest of World were $2.38 billion for the year ended December 31, 2016, an increase of 16% when compared to the prior year. This increase was primarily driven by the acquisition of Meda, the incremental sales from the EPD Business, and to a lesser extent, new products. In addition, higher sales volumes in Japan, India, Australia and emerging markets positively contributed to the sales growth in this segment. These increases were partially offset by lower pricing throughout the segment, including the ARV franchise. However, sales within our ARV franchise increased progressively throughout 2016. The favorable impact of foreign currency translation on third party net sales was approximately $21 million, or 1%.
Total Gross Profit

Gross profit was $4.70 billion and $4.22 billion for the year ended December 31, 2016 and 2015, respectively. Gross margins were 42% and 45% for the year ended December 31, 2016 and 2015, respectively. Gross margins were negatively impacted in the current year due to increased amortization of intangible assets and purchase accounting related items consistent with the fourth quarter. This negative impact was partially offset by the positive impact of net sales from new products. Adjusted gross profit was $6.21 billion and $5.25 billion for the year ended December 31, 2016 and 2015, respectively. Adjusted gross margins were 56% in both 2016 and 2015. Adjusted gross margins were positively impacted in the current year as a result of net sales from new products and the net impact of acquisitions.

Total Profitability

Earnings from operations were $701.6 million for the year ended December 31, 2016, a decrease of 52% from the comparable prior year. This decrease was primarily due to an increase in litigation settlements, higher amortization expense and operating expenses related to acquisitions completed during 2016.

R&D expense for the year ended December 31, 2016 increased from the comparable prior year consistent with the fourth quarter drivers.

SG&A expense increased from the comparable prior year period principally due to the additional expense related to the acquisition of Meda and the additional two months of expense from the EPD Business. In addition, we incurred approximately $113.1 million of restructuring charges which were offset by lower acquisition related costs in the current year, including consulting and legal costs.

U.S. GAAP net earnings decreased by $367.6 million to $480.0 million for the year ended December 31, 2016, compared to $847.6 million for the prior year. U.S. GAAP EPS decreased from $1.70 to $0.92 as a result of the reduction of earnings from operations and higher non-operating expenses including higher interest expense as a result of recent acquisition related borrowings and a higher average share count. Partially offsetting these items was the recognition of an income tax benefit of $358.3 million in the current year. Adjusted net earnings increased by $409.9 million to $2.55 billion for the year ended December 31, 2016 compared to $2.14 billion for the prior year period. Adjusted EPS increased 14% to $4.89 for the year ended December 31, 2016 compared to $4.30 in the prior year period.

EBITDA was $2.21 billion for the year ended December 31, 2016, and $2.39 billion for the comparable prior year period. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $3.68 billion for the year ended December 31, 2016 and $3.01 billion for the comparable prior year period.

Cash Flow

Net cash provided by operating activities was $2.05 billion for the year ended December 31, 2016 compared to $2.01 billion for the prior year. Capital expenditures were approximately $390.4 million for the year ended December 31, 2016 compared to approximately $362.9 million for the comparable prior year. Adjusted cash provided by operating activities was $2.52 billion for the year ended December 31, 2016 compared to $2.22 billion for the prior year. Adjusted free cash flow, defined as adjusted cash provided by operating activities less capital expenditures, was $2.13 billion for the year ended December 31, 2016, compared to $1.85 billion in the prior year.

Guidance

Mylan expects 2017 total revenues in the range of $12.25 billion to $13.75 billion, the midpoint of which represents an increase of 17% versus 2016. As discussed in the "Non-GAAP Financial Measures" section below, Mylan is not otherwise providing forward looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure. Adjusted EPS is expected to be in the range of $5.15 to $5.55, the midpoint of which represents an increase of 9% versus 2016.

The following table provides a summary of Mylan’s 2017 full year guidance ranges, along with significant exchange rates used in preparing the guidance.

Full Year 2017 Financial Guidance

(In millions, except for EPS and %s)

2017 Guidance
Total Revenues

$12,250 – $13,750
Gross Margin*

54.5% – 56.5%
R&D as % of Total Revenues*

5.5% – 6.5%
SG&A as % of Total Revenues*

18.5% – 20.5%
EBITDA*

$4,350 – $4,750
Net Earnings*

$2,800 – $3,000
Diluted EPS*

$5.15 – $5.55
Cash Provided by Operating Activities*

$2,500 – $2,800
Capital Expenditures

$400 – $500
Free Cash Flow*

$2,000 – $2,400
Effective Tax Rate*

16.5% – 18.5%
Average Diluted Shares Outstanding

535 – 540

* Adjusted metrics, see "Non-GAAP Financial Measures" for more information.

Key Exchange Rates Used for 2017 Guidance:

Australian Dollar ($ / AUD)

1.32
British Pound ($ / GBP)

0.76
Canadian Dollar ($ / CAD)

1.30
Euro ($ / EUR)

0.90
Indian Rupee (INR / $)

65.50
Japanese Yen (JPY / $)

110.00