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BIOGEN REPORTS 2016 REVENUES OF $11.4 BILLION

On January 26, 2017 Biogen Inc. (NASDAQ: BIIB) reported full year and fourth quarter 2016 financial results (Filing, Q4/Annual, Biogen, 2016, JAN 26, 2017, View Source [SID1234517572]).
Including:
•
Full year total revenues of $11.4 billion, a 6% increase versus the prior year. On a constant currency basis1, total revenues grew 9%.
◦
Growth was driven by a 9% increase in worldwide TECFIDERA revenues as well as increased revenues from TYSABRI, ELOCTATE, ALPROLIX, and BENEPALI. Revenues were partially offset by a decrease in worldwide interferon sales.
◦
Foreign exchange negatively impacted total revenues by approximately $211 million compared with 2015, primarily driven by changes in hedge results.
•
Full year GAAP net income attributable to Biogen Inc. of $3.7 billion, a 4% increase versus the prior year.
◦
GAAP net income was negatively impacted by $339 million, net of tax, related to the settlement and license agreement with Forward Pharma A/S.
•
Full year GAAP diluted earnings per share (EPS) of $16.93, a 10% increase versus the prior year.
◦
GAAP EPS were negatively impacted by $1.55, net of tax, related to the settlement and license agreement with Forward Pharma.
•
Full year non-GAAP net income attributable to Biogen Inc. of $4.4 billion, a 12% increase versus the prior year.
•
Full year non-GAAP diluted EPS of $20.22, a 19% increase versus the prior year.

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(In millions, except per share amounts)
Q4 ’16

Q3 ’16

Q4 ’15

Q4 ’16 v. Q3 ’16

Q4 ’16 v. Q4 ’15

FY ’16

FY ’15

FY ’16 v. FY ’15
Total revenues
$
2,872

$
2,956

$
2,839

(3%)

$
11,449

$
10,764

GAAP net income*
$
649

$
1,033

$
832

(37%)

(22%)

$
3,703

$
3,547

4%
GAAP diluted EPS
$
2.99

$
4.71

$
3.77

(37%)

(21%)

$
16.93

$
15.34

10%

Non-GAAP net income*
$
1,093

$
1,138

$
995

(4%)

10%

$
4,423

$
3,932

12%
Non-GAAP diluted EPS
$
5.04

$
5.19

$
4.5

(3%)

12%

$
20.22

$
17.01

19%
*Net income attributable to Biogen Inc.

A reconciliation of GAAP to Non-GAAP full year and quarterly financial results can be found in Table 3 at the end of this release.

"Biogen seeks to advance transformational pipeline programs for some of the greatest challenges in medicine, including Alzheimer’s disease, Parkinson’s, and ALS," said Chief Executive Officer Michel Vounatsos. "SPINRAZA for spinal muscular atrophy is a prime example of the type of groundbreaking innovation that we must continue to pursue. As the first treatment for infants and children with this devastating disease, SPINRAZA has the potential to improve and extend the lives of thousands of patients worldwide."

"In 2016 we saw continued growth from our multiple sclerosis portfolio, which includes the market leading therapies amongst the orals, the interferons, and the high efficacy agents," Vounatsos continued. "Together with AbbVie we are launching ZINBRYTA as a new option for MS patients around the world. Our hemophilia products continued to perform well as we prepare to spin off this business in the coming days, and we are pleased with the strong growth of BENEPALI, an etanercept biosimilar we are commercializing in Europe. I am excited to take the helm of a company with such a strong foundation, and my plan is to maintain a disciplined focus on near-term execution while laying the groundwork for Biogen’s long-term sustainability through continued investment in R&D and innovation and business development."

Revenue Highlights
(In millions)
Q4 ’16

Q3 ’16

Q4 ’15

Q4 ’16 v. Q3 ’16

Q4 ’16 v. Q4 ’15

FY ’16

FY ’15

FY ’16 v. FY ’15
Multiple Sclerosis:

TECFIDERA
$
1,002

$
1,034

$
993

(3%)

$
3,968

$
3,638

9%
Total Interferon
$
688

$
708

$
740

(3%)

(7%)

$
2,795

$
2,969

(6%)
AVONEX
$
564

$
580

$
637

(3%)

(12%)

$
2,314

$
2,630

(12%)
PLEGRIDY
$
125

$
128

$
103

(3%)

21%

$
482

$
338

42%
TYSABRI
$
474

$
515

$
481

(8%)

(1%)

$
1,964

$
1,886

4%
FAMPYRATM
$
22

$
21

$
28

(20%)

$
85

$
90

(5%)
ZINBRYTA
$
6

$
2

$
—

201%

NMF

$
8

$
—

NMF

Hemophilia:

ELOCTATE
$
149

$
132

$
101

13%

47%

$
513

$
320

61%
ALPROLIX
$
93

$
85

$
71

31%

$
334

$
234

42%

Other Product Revenues:

FUMADERMTM
$
11

$
11

$
13

(10%)

$
46

$
51

(11%)
Biosimilars
$
53

$
31

$
—

72%

NMF

$
101

$
—

NMF
ZINBRYTA
$
5

$
—

NMF

$
5

$
—

NMF

Total Product Revenues:
$
2,503

$
2,540

$
2,426

(1%)

$
9,818

$
9,188

Anti-CD20 Revenues
$
318

$
318

$
334

(5%)

$
1,315

$
1,339

(2%)
Other Revenues
$
51

$
99

$
79

(48%)

(36%)

$
316

$
237

34%

Total Revenues
$
2,872

$
2,956

$
2,839

(3%)

$
11,449

$
10,764

6%
Note: Numbers may not foot due to rounding.

Expense Highlights

(In millions)
Q4 ’16

Q3 ’16

Q4 ’15

Q4 ’16 v. Q3 ’16

Q4 ’16 v. Q4 ’15

FY ’16

FY ’15

FY ’16 v. FY ’15
GAAP cost of sales
$
378

$
417

$
332

(14%)

$
1,479

$
1,240

(19%)
Non-GAAP cost of sales
$
363

$
396

$
332

(9%)

$
1,426

$
1,240

(15%)

GAAP R&D
$
534

$
529

$
542

(1%)

$
1,973

$
2,013

2%
Non-GAAP R&D
$
531

$
529

$
542

(0%)

$
1,970

$
2,013

GAAP SG&A
$
496

$
463

$
583

(7%)

15%

$
1,948

$
2,113

8%
Non-GAAP SG&A
$
484

$
461

$
583

(5%)

17%

$
1,930

$
2,113

9%
Note: Percent changes represented as favorable & (unfavorable)

•
R&D expense for the fourth quarter of 2016 includes a $50 million milestone to Eisai following the initiation of Phase 3 trials for elenbecestat (E2609), a BACE inhibitor in development for Alzheimer’s disease.
•
Biogen booked a GAAP-only pre-tax charge in Q4 2016 of $455 million related to the recent settlement and license agreement with Forward Pharma. The charge in Q4 2016 represents the portion of the payment attributable to the sales of TECFIDERA during the period April 2014 through December 31, 2016. Upon effectiveness of this agreement, Biogen has agreed to pay Forward Pharma a total of $1.25 billion plus potential royalties.

Other Financial Highlights
•
For 2016, the Company’s full year weighted average diluted shares were 219 million. For the fourth quarter of 2016, the Company’s weighted average diluted shares were 217 million. The Company ended the year with approximately 216 million basic shares outstanding.

•
As of December 31, 2016, Biogen had cash, cash equivalents and marketable securities totaling approximately $7.7 billion, and $6.5 billion in notes payable and other financing arrangements.

•
During the fourth quarter of 2016, Biogen repurchased 2.2 million shares of the Company’s common stock for a total value of $651 million.

2017 Financial Guidance
Biogen also announced its full year 2017 financial guidance. This guidance consists of the following components:

•
Revenue is expected to be approximately $11.1 to $11.4 billion.
•
GAAP and non-GAAP R&D expense is expected to be approximately 16% to 17% of total revenue.
•
GAAP and non-GAAP SG&A expense is expected to be approximately 15% to 16% of total revenue.
•
GAAP diluted EPS is expected to be between $18.00 and $18.80.
•
Non-GAAP diluted EPS is expected to be between $20.45 and $21.25.

Guidance assumptions:
◦
Includes one month of sales for our hemophilia products, ELOCTATE and ALPROLIX, as the spin-off of Bioverativ is expected to complete on February 1, 2017.
◦
GAAP guidance includes the minimum expense we expect to record in 2017 upon the effectiveness of our settlement and license agreement with Forward Pharma. The actual charges recorded will depend on the outcomes of the patent proceedings in the U.S. and E.U.
◦
R&D expense does not include any impact from potential acquisitions or large late-stage business development transactions, as both are hard to predict.
◦
Based on recent rates for foreign exchange.
◦
Does not include any impact from potential U.S. corporate tax reform or changes to the Affordable Care Act.

Biogen may incur charges, realize gains or experience other events in 2017 that could cause actual results to vary from this guidance.

In 2017, the Company plans to provide one update to its annual financial guidance, which is expected to be provided in connection with its second quarter earnings release. This approach is intended to synchronize guidance with internal business planning processes and to ensure a continued focus on long-term value creation.

Recent Events
• In January 2017, Biogen announced that it agreed to enter into a settlement and license agreement with Forward Pharma, subject to the approval of Forward Pharma’s shareholders and other customary conditions. The license agreement will provide Biogen an irrevocable license to all intellectual property owned by Forward Pharma. Upon the effectiveness of the settlement and license agreement, Biogen will provide Forward Pharma a cash payment of $1.25 billion. Under certain circumstances outlined in the agreement, Biogen will pay Forward Pharma royalties on net sales of Biogen products for the treatment of multiple sclerosis that are covered by a Forward Pharma patent and have dimethyl fumarate ("DMF") as an active pharmaceutical ingredient.

• In January 2017, Michel Vounatsos assumed the role of chief executive officer and was appointed as a member of the Board of Directors. Vounatsos previously held the position of executive vice president and chief commercial officer at Biogen.

• In January 2017, Biogen presented new data from the Phase 3 ENDEAR study of SPINRAZA, which demonstrated a statistically significant reduction in the risk of death or permanent ventilation in SPINRAZA-treated infants with spinal muscular atrophy (SMA) compared to untreated infants. The data were presented at the British Paediatric Neurology Association annual conference in Cambridge, UK.

• In December 2016, the U.S. FDA approved Biogen’s SPINRAZA under priority review for the treatment of SMA in pediatric and adult patients. SPINRAZA is the first and only treatment approved in the U.S. for SMA, a leading genetic cause of death in infants and toddlers that is marked by progressive, debilitating muscle weakness. The FDA also issued to Biogen a rare pediatric disease priority review voucher with the approval of SPINRAZA, which confers priority review to a subsequent drug application that would not otherwise qualify for priority review.

• In December 2016, Biogen announced that its board of directors approved the planned spin-off of its hemophilia business, which will be known as Bioverativ Inc., and declared a special dividend distribution of all of the outstanding shares of Bioverativ common stock. Shortly thereafter, the U.S. Securities and Exchange Commission (SEC) declared effective the Registration Statement on Form 10 filed by Bioverativ Inc. Biogen expects to complete the separation of Bioverativ into an independent, global biotechnology company focused on hemophilia and other rare blood disorders on February 1, 2017.

• In December 2016, Biogen presented new data from the Phase 1b study of its investigational Alzheimer’s disease (AD) treatment aducanumab at the 9th Clinical Trials on Alzheimer’s Disease Meeting in San Diego. Data presentations included interim results from the titration cohort of the placebo-controlled period of the Phase 1b study as well as data from the first year of the long-term extension study. The results support the ongoing Phase 3 studies of aducanumab for early AD.

• In December 2016, Biogen and Swedish Orphan Biovitrum AB (publ) (Sobi) presented new data, including updated longitudinal safety and efficacy findings from phase 3 and extension studies, on the companies’ extended half-life therapies, ELOCTATE for hemophilia A and ALPROLIX for hemophilia B, at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting & Exposition in San Diego. The presentations included efficacy data, which show low target joint annual bleeding rates and effective target joint resolution in patients on long-term prophylaxis with ELOCTATE. Biogen also presented preclinical data on recombinant FIXFc-XTEN, a fusion protein being investigated for once-weekly, subcutaneous treatment of hemophilia B. ELOCTATE, ALPROLIX, and the FIXFc-XTEN program are among the hemophilia-related assets included in the spin-off of Bioverativ anticipated to be completed on February 1, 2017.

• In November 2016, Biogen and Ionis Pharmaceuticals announced that SPINRAZA met the primary endpoint at the interim analysis of CHERISH, the Phase 3 study evaluating SPINRAZA in later-onset (consistent with Type 2) SMA. The analysis found that children receiving SPINRAZA experienced a highly statistically significant improvement in motor function compared to those who did not receive treatment. SPINRAZA also demonstrated a favorable benefit-risk profile in the study.

• In November 2016, Biogen announced that its Marketing Authorization Application was validated by the European Medicines Agency (EMA) for SPINRAZA. SPINRAZA had previously been granted Accelerated Assessment status by the EMA’s Committee for Medicinal Products for Human Use (CHMP). The Accelerated Assessment designation can reduce the standard review time.

1 Constant currency measures are non-GAAP measures calculated by translating the current period’s foreign currency values for sales into USD using the average exchange rates from the prior period and comparing them to the prior year values in USD, excluding any gains or losses from hedging.

Bristol-Myers Squibb Reports Fourth Quarter and Full Year 2016 Financial Results

On January 26, 2017 Bristol-Myers Squibb Company (NYSE:BMY) reported results for the fourth quarter and full year of 2016, which were highlighted by strong sales for key products Opdivo and Eliquis, regulatory approvals for Opdivo in the U.S. and Europe, and strategic transactions in oncology and fibrosis that further strengthened the company’s pipeline (Press release, Bristol-Myers Squibb, JAN 26, 2017, View Source [SID1234517569]).

"Bristol-Myers Squibb achieved outstanding operating and financial results in 2016, driven by strong commercial performance across our portfolio," said Giovanni Caforio, M.D., chief executive officer, Bristol-Myers Squibb. "In 2017, we will continue to advance our pipeline, drive strong commercial execution across the business and progress our broad portfolio of Immuno-Oncology medicines."

Fourth Quarter
$ amounts in millions, except per share amounts
2016 2015 Change
Total Revenues $5,243 $4,287 22%
GAAP Diluted EPS 0.53 (0.12) **
Non-GAAP Diluted EPS 0.63 0.38 66%

Full Year
$ amounts in millions, except per share amounts
2016 2015 Change
Total Revenues $19,427 $16,560 17%
GAAP Diluted EPS 2.65 0.93 **
Non-GAAP Diluted EPS 2.83 2.01 41%

** In excess of +/- 100%

FOURTH QUARTER FINANCIAL RESULTS

Bristol-Myers Squibb posted fourth quarter 2016 revenues of $5.2 billion, an increase of 22% compared to the same period a year ago. Global revenues increased 24% adjusted for foreign exchange impact.
U.S. revenues increased 20% to $2.7 billion in the quarter compared to the same period a year ago. International revenues increased 25%. When adjusted for foreign exchange impact, international revenues increased 28%.
Gross margin as a percentage of revenue decreased from 77.8% to 73.6% in the quarter primarily due to product mix.
Marketing, selling and administrative expenses decreased 3% to $1.5 billion in the quarter.
Research and development expenses decreased 27% to $1.4 billion in the quarter due to lower charges resulting from business development transactions and in-process research and development impairments.
The effective tax rate was 17.3% in the quarter, compared to a benefit of 54.1% in the fourth quarter last year. Income taxes in both periods include net tax benefits attributed to specified items.
The company reported net earnings attributable to Bristol-Myers Squibb of $894 million, or $0.53 per share, in the quarter compared to a net loss of $197 million, or $0.12 per share, a year ago. The results in the fourth quarter of 2015 included per share after tax charges of $0.24 from the Five Prime Therapeutics, Inc. and Cardioxyl Pharmaceuticals, Inc. business development transactions and $0.08 for the transfer of the Erbitux business in North America to Eli Lilly and Company.
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.1 billion, or $0.63 per share, in the fourth quarter, compared to $647 million, or $0.38 per share, for the same period in 2015. An overview of specified items is discussed under the "Use of Non-GAAP Financial Information" section.
Cash, cash equivalents and marketable securities were $9.1 billion, with a net cash position of $2.4 billion, as of December 31, 2016.
FOURTH QUARTER PRODUCT AND PIPELINE UPDATE

Product Sales/Business Highlights

Global revenues for the fourth quarter of 2016, compared to the fourth quarter of 2015, were driven by:

Opdivo , which grew by $835 million
Eliquis , which grew by $346 million or 57% increase
Orencia , which grew by 16%
Sprycel , which grew by 15%
Yervoy , which had sales of $264 million
Opdivo

Litigation

In January, the company and Ono Pharmaceutical Company, Ltd. (Ono) announced they signed a global patent license agreement with Merck & Co., Inc. to settle all patent-infringement litigation related to Merck’s PD-1 antibody Keytruda. The agreement will result in the dismissal with prejudice of all patent litigation between the companies pertaining to Keytruda.
Regulatory

In November, the company announced the U.S. Food and Drug Administration (FDA) approved Opdivo for the treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) with disease progression on or after platinum-based therapy.
In November, the company announced the European Commission approved Opdivo for the treatment of patients with relapsed or refractory classical Hodgkin lymphoma (cHL) after autologous stem cell transplant (ASCT) and treatment with brentuximab vedotin.
In December, the company and Ono announced Opdivo was approved in Japan for the treatment of patients with relapsed or refractory cHL.
In December, the company and Ono announced that Ono submitted a supplemental application for Opdivo for the treatment of unresectable advanced or recurrent gastric cancer.
In January, the company announced it decided not to pursue an accelerated regulatory pathway for the regimen of Opdivo plus Yervoy in first-line lung cancer in the U.S. based on a review of data available at this time. Because these are ongoing registrational studies, the company will not be providing additional details.
Clinical

In November, the company announced that ONO-4538-12, a Phase 3, randomized, double-blind clinical trial evaluating the efficacy and safety of Opdivo in patients with unresectable advanced or recurrent gastric cancer refractory to, or intolerant of, standard therapy, met its primary endpoint of overall survival. In January, the company announced the results from the trial.
In November, at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting, the company announced new data and analysis from studies evaluating urelumab, lirilumab, Opdivo and the Opdivo + Yervoy regimen:
Safety and efficacy data from a Phase 1/2 study of urelumab in combination with Opdivo in patients with hematologic and solid tumors, including biomarker analyses by level of PD-L1 expression.
Interim efficacy analysis, announced by the company and Innate Pharma S.A., from a Phase 1/2 study of the combination of lirilumab and Opdivo in the cohort of advanced platinum refractory squamous cell carcinoma of the head and neck, including exploratory biomarker analyses of patient response by level of PD-L1 expression.
CheckMate -032: Results from cohorts of the Phase 1/2 open-label trial investigating two combination schedules of Opdivo plus Yervoy in patients with locally advanced or metastatic urothelial carcinoma previously treated with platinum-based therapy.
In December, at the International Association for the Study of Lung Cancer World Conference on Lung Cancer, the company announced new data from studies evaluating Opdivo and the Opdivo + Yervoy regimen:
Checkmate -012: Updated findings from the Phase 1b trial in chemotherapy-naïve advanced non-small cell lung cancer patients evaluating Opdivo monotherapy, or in combination with Yervoy at different doses and schedules.
CheckMate -032: Updated results for Opdivo monotherapy and in combination with Yervoy in previously treated small cell lung cancer patients, a cohort of the Phase 1/2 open-label trial.
In December, during the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, the company and Seattle Genetics announced the first reported data from an ongoing Phase 1/2 clinical trial evaluating Adcetris (brentuximab vedotin) in combination with Opdivo in relapsed or refractory cHL.
FOURTH QUARTER BUSINESS DEVELOPMENT UPDATE

In November, the company and Enterome announced a collaboration agreement for the discovery and development of microbiome-derived biomarkers, drug targets and bioactive molecules to be developed as potential companion diagnostics and therapeutics for cancer. Additionally, the collaboration will seek to identify novel microbiome-derived biomarkers in an effort to improve clinical outcomes for patients treated with Bristol-Myers Squibb’s Immuno-Oncology portfolio.
In November, the company and Infinity Pharmaceuticals announced a clinical trial collaboration to evaluate Bristol-Myers Squibb’s Opdivo in combination with Infinity’s IPI-549 in patients with advanced solid tumors.
In November, the company and Nitto Denko Corporation (Nitto) announced an agreement granting Bristol-Myers Squibb exclusive worldwide rights for the development and commercialization of Nitto’s investigational siRNA molecules targeting heat shock protein 47 (HSP47) in vitamin A containing formulations, which includes Nitto’s lead asset ND-L02-s0201, currently in Phase 1b study for the treatment of advanced liver fibrosis. The agreement also grants Bristol-Myers Squibb the option to receive exclusive licenses for HSP47 siRNAs in vitamin A containing formulations for the treatment of lung fibrosis and other organ fibrosis.
In November, the company announced a five-year research collaboration with the Johns Hopkins University designed to identify mechanisms of response and resistance in patients whose cancer is being treated with checkpoint inhibitor-based immunotherapies, including Opdivo monotherapy, or Opdivo in combination with Yervoy or other investigational immunotherapies.
In December, the company and PsiOxus Therapeutics, Ltd. announced an agreement granting Bristol-Myers Squibb exclusive worldwide rights to NG-348, a pre-clinical stage, "armed" oncolytic virus with the goal of addressing solid tumors.
In December, the company and Calithera Biosciences announced a clinical collaboration to evaluate Opdivo in combination with CB-839 in clear cell renal cell carcinoma.
In January, the company announced a new clinical research collaboration to evaluate the combination of Opdivo and Janssen’s CD38-directed cytolytic antibody Darzalex in Phase 1b/2 clinical studies in multiple myeloma and solid tumors including non-small cell lung cancer, pancreatic cancer, colorectal cancer, triple negative breast cancer and head and neck cancer.
In January, the company and GeneCentric Diagnostics, Inc. announced a research collaboration to explore whether the application of GeneCentric’s Cancer Subtype Platform (CSP) might be able to identify translational biomarkers for Opdivo. Additionally, GeneCentric announced it had secured equity funding from the company to support the clinical development of its CSP and new research laboratory.
2017 FINANCIAL GUIDANCE

Bristol-Myers Squibb is confirming its 2017 GAAP EPS guidance range of $2.47 – $2.67 and is adjusting its non-GAAP EPS guidance range from $2.85 – $3.05 to $2.70 – $2.90. Both GAAP and non-GAAP guidance assume current exchange rates. 2017 GAAP and non-GAAP line-item guidance assumptions include:

Worldwide revenues increasing in the low-single digits.
Gross margin as a percentage of revenue to be approximately 72% to 73% for both GAAP and non-GAAP.
Marketing, selling and administrative expenses decreasing in the mid- to high-single digit range for both GAAP and non-GAAP.
Research and development expenses increasing in the high-single digit range for both GAAP and non-GAAP.
An effective tax rate of approximately 21% for both GAAP and non-GAAP.
As previously announced in the third quarter of 2016, the company’s operating model is evolving, to drive the company’s continued success in the near- and long-term. The majority of costs are expected to be incurred by 2020. Although GAAP operating expenses may increase initially as restructuring and other charges are incurred relating to this evolution, the company expects non-GAAP operating expenses to be roughly flat with 2016 levels through 2020.

The financial guidance excludes the impact of any potential future strategic acquisitions and divestitures and any specified items that have not yet been identified and quantified. The guidance also assumes no generic entry for Sprycel in Europe following the appeal of the European Patent Office’s decision. The non-GAAP guidance also excludes other specified items as discussed under "Use of Non-GAAP Financial Information." Details reconciling GAAP amounts to non-GAAP amounts, with non-GAAP reflecting specified items are provided in supplemental materials attached to this press release and available on the company’s website.

Erbitux is a trademark of ImClone LLC.
Keytruda is a trademark of Merck & Co., Inc.
Adcetris is a trademark of Seattle Genetics, Inc.
Darzalex is a trademark of Janssen Biotech, Inc.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings and related EPS information, that are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of future operating results. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods including restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, R&D charges in connection with the acquisition or licensing of third party intellectual property rights, divestiture gains or losses, pension, legal and other contractual settlement charges and debt redemption gains or losses, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of our baseline performance before items that are considered by us to not be reflective of our ongoing results. In addition, this information is among the primary indicators we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting for future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted EPS prepared in accordance with GAAP.

Statement on Cautionary Factors

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as "anticipate", "estimates", "should", "expect", "guidance", "project", "intend", "plan", "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, effects of the continuing implementation of governmental laws and regulations related to Medicare, Medicaid, Medicaid managed care organizations and entities under the Public Health Service 340B program, pharmaceutical rebates and reimbursement, market factors, competitive product development and approvals, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions, claims and concerns that may arise regarding the safety and efficacy of in-line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, changes to business or tax planning strategies, difficulties and delays in product development, manufacturing or sales including any potential future recalls, patent positions and the ultimate outcome of any litigation matter. These factors also include the company’s ability to execute successfully its strategic plans, including its business development strategy, the expiration of patents or data protection on certain products, including assumptions about the company’s ability to retain patent exclusivity of certain products, and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the compounds will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company’s periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

X4 Pharmaceuticals Announces Initiation of Clinical Study of X4P-001 in Combination with Opdivo for Patients with Advanced Clear Cell Renal Cell

On January 26, 2017 X4 Pharmaceuticals, a clinical stage biotechnology company developing novel CXCR4 inhibitor drugs to improve immune cell trafficking and increase the ability for T-cells to track and destroy cancer, reported dosing of the first patient in a Phase 1/2 study of X4P-001, the company’s lead CXCR4 inhibitor, in patients with advanced clear cell renal cell carcinoma (ccRCC) (Press release, X4 Pharmaceuticals, JAN 26, 2017, View Source [SID1234517577]). This is the second clinical study of X4P-001 that combines the company’s CXCR4 inhibitor with an approved cancer therapy for the treatment of ccRCC.

The primary objective of the newly-initiated study is to evaluate the safety and tolerability of X4P-001 in combination with Opdivo (nivolumab), an approved immunotherapy for the treatment of advanced RCC after failure of prior anti-angiogenic therapy that blocks a signal preventing T-cells from attacking cancer. The study will enroll patients who have not responded to nivolumab. In addition to safety and tolerability, the trial will evaluate early signs of biological activity using biomarkers, and clinical efficacy as measured by objective response rate and progression free survival over a 12 month time frame. Multiple U.S. cancer centers with leading renal cell carcinoma researchers will participate in the study.

"Enabling the immune system to recognize and attack cancer cells is one of the most promising new approaches to improving outcomes for cancer patients," said Dr. David McDermott, Associate Professor of Harvard Medical School and Director of the Biologic Therapy Kidney Cancer Program at the Beth Israel Deaconness Medical Center and X4 study investigator. "While benefical for some patients, single-agent immuno-therapy treatments have room for significant improvements in the durability and number of responses. The evaluation of combination immuno-therapies is an important next step in cancer reseach. We are hopeful that X4P-001’s complementary mechanism of CXCR4 antagonism with PD-1 inhibition will demonstrate an innovative approach to modulating the immune system that yields improved patient outcomes."

"Initation of this study is an important milestone in our strategy to develop X4P-001 in ccRCC in combination with dual classes of existing approved drugs," said Paula Ragan, PhD, President and CEO of X4. "Approved therapies address certain processes in the tumor microenvironment, but we believe more can be done to address the complex biology of challenging cancers, like ccRCC. By modulating cell trafficking in the microenvironment where cancer hijacks normal immune function, X4P-001 may be synergistic with other cancer therapies to result in enhanced responses."

In addition to this new Phase 1/2 study of X4P-001 in combination with Opdivo, X4 has another Phase 1/2 study ongoing in patients with advanced ccRCC to evaluate X4P-001 in combination with Inlyta (axitinib), a kinase inhibitor approved for the treatment of advanced RCC after failure of one prior systemic therapy, and a Phase 1b biomarker study in patients with advanced melanoma to evaluate X4P-001 in combination with Keytruda (pembrolizumab).

About X4P-001 in Cancer

X4P-001, the company’s lead drug candidate, is currently in Phase 1/2 testing in refractory clear cell renal cell carcinoma (ccRCC) and other solid tumor indications. Based on promising preclinical studies, X4P-001 is being evaluated in clinical studies in combination with approved cancer therapies, including tyrosine kinase inhibitors and checkpoint inhibitors. X4P-001 is an oral, small molecule inhibitor of CXCR4, or C-X-C receptor type 4, the receptor for the chemokine CXCL12. Recent studies demonstrate that CXCR4/CXCL12 is a primary receptor-ligand pair that cancer cells and surrounding stromal cells use to block normal immune function and promote angiogenesis through the trafficking of T-effector and T-regulatory cells, as well as myeloid derived suppressor cells (MDSCs), in the tumor microenvironment.1, 2 X4P-001 was previously tested in over 70 subjects in four prior clinical trials in healthy volunteers and HIV-infected patients and was shown to be safe and well tolerated.

About Renal Cell Carcinoma

Kidney cancer is among the ten most common cancers in both men and women with more than 60,000 new diagnoses each year in the United States.3 Clear cell renal cell carcinoma (ccRCC) is the most common form of kidney cancer, and advanced ccRCC accounts for approximately 20% of the patient population. Therapies for advanced ccRCC include immunotherapies, mammalian target of rapamycin (mTOR) kinase inhibitors, and angiogenesis inhibitors, such as vascular endothelial growth factor (VEGF) inhibitors.4 There continue to be unmet medical needs with advanced ccRCC because durable responses remain a serious clinical challenge for patients with advanced disease.

ImmunoGen Announces First Patient Dosed in FORWARD I Phase 3 Study of Mirvetuximab Soravtansine in Platinum-Resistant Ovarian Cancer

On January 26, 2017 ImmunoGen, Inc. (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reported that the first patient has been dosed in FORWARD I, the Company’s Phase 3 clinical trial evaluating mirvetuximab soravtansine as a single-agent therapy for the treatment of platinum-resistant ovarian cancer (Press release, ImmunoGen, JAN 26, 2017, View Source [SID1234517576]). Mirvetuximab soravtansine is a first-in-class, folate receptor alpha (FRα)-targeting ADC.

"Dosing the first patient in our Phase 3 FORWARD I study marks an important milestone in our efforts to deliver mirvetuximab soravtansine to patients in need and to drive innovation in the field of ADCs. Mirvetuximab soravtansine has the potential to meaningfully improve the lives of patients with platinum-resistant ovarian cancer, and our top priority is advancing this program as quickly as possible," said Anna Berkenblit, M.D., Vice President and Chief Medical Officer of ImmunoGen.

"Given the prognosis for most patients with platinum-resistant ovarian cancer is poor and the benefit of approved agents is modest, we need better therapies that offer improved outcomes in terms of efficacy and tolerability," said Kathleen Moore, M.D., FORWARD I Co-Principal Investigator, and Associate Professor, Stephenson Cancer Center, University of Oklahoma. "We are excited about the potential of mirvetuximab soravtansine and are looking forward to evaluating this promising agent in a pivotal study."

FORWARD I is a Phase 3 trial in which 333 patients will be randomized 2:1 to receive either mirvetuximab soravtansine or the physician’s choice of single-agent chemotherapy (pegylated liposomal doxorubicin, topotecan, or weekly paclitaxel). Eligible patients will have been diagnosed with platinum-resistant ovarian cancer that expresses medium or high levels of FRα and will have been treated with up to three prior regimens. The primary endpoint of this study is progression free survival (PFS), which will be assessed in the entire study population and in the subset of patients with high FRα expression. ImmunoGen estimates that 12,000-14,000 patients per year in the U.S. meet these criteria, with a comparable number in the major markets in Europe.

ImmunoGen is partnering with the GOG Foundation Inc., a leader in clinical research in gynecologic malignancies, on FORWARD I, which is being conducted in North America and Europe. This trial is intended to support full marketing approval of mirvetuximab soravtansine for patients with platinum-resistant ovarian cancer.

About Mirvetuximab Soravtansine
Mirvetuximab soravtansine (IMGN853) is the first FRα-targeting ADC. It uses a FRα-binding antibody to target the ADC specifically to FRα-expressing cancer cells and a potent anti-tumor agent, DM4, to kill the targeted cancer cells.

Mirvetuximab soravtansine is ImmunoGen’s lead program and is now in Phase 3 testing as a single agent for the treatment of platinum-resistant ovarian cancer. The candidate is also being assessed in combination regimens for both platinum-resistant and platinum-sensitive disease in Phase 1b/2 FORWARD II trial.

About Ovarian Cancer and FRα
It is estimated that 23,000 women are diagnosed annually with ovarian cancer in the US. With more than 14,000 deaths each year, ovarian cancer accounts for more deaths than any other cancer of the female reproductive system.1

Standard first-line therapy for ovarian cancer is a platinum-based regimen. Once the cancer becomes platinum-resistant, treatment options include single-agent cytotoxic therapies such as pegylated liposomal doxorubicin, paclitaxel, or topotecan, and combination therapies that include Avastin.

There is a significant need for more effective, better-tolerated therapies for recurrent ovarian cancer. It is estimated that 19,000-24,000 women have platinum-resistant ovarian cancer requiring second-line or later treatment.2 ImmunoGen estimates that 60% of ovarian cancer cases have medium or high FRα expression.

Verastem Announces Dosing of First Patient in Combination Trial of Defactinib and Avelumab in Patients with Ovarian Cancer

On January 26, 2017 Verastem, Inc., (NASDAQ:VSTM) reported dosing of the first patient in a new clinical trial evaluating avelumab*, an investigational fully human anti-PD-L1 IgG1 monoclonal antibody, in combination with Verastem’s defactinib**, an investigational focal adhesion kinase (FAK) inhibitor, in patients with advanced ovarian cancer (Press release, Verastem, JAN 26, 2017, View Source [SID1234517570]). The Phase 1/2 clinical trial is being conducted in collaboration with the alliance between Merck KGaA, Darmstadt, Germany, which in the US and Canada operates as EMD Serono, and Pfizer, and is expected to enroll approximately 100 patients at up to 15 sites across the U.S.

Robert Forrester, President and Chief Exececutive Officer of Verastem, stated, "Initiation of this clinical trial evaluating the combination of avelumab and defactinib represents an important milestone for Verastem, and together with our collaborators at Merck KGaA, Darmstadt, Germany, and Pfizer, we are eager to evaluate the potential of this combination to provide ovarian cancer patients with a new treatment option."

The Phase 1/2 multicenter, open-label, dose-escalation and dose expansion study is designed to assess the safety, pharmacokinetics, pharmacodynamics, and initial observations of clinical activity of the avelumab/defactinib combination in patients with recurrent or refractory stage III-IV ovarian cancer. Additional primary objectives of the study include identification of the recommended Phase 2 dose (RP2D), and assessment of the best overall response according to Response Evaluation Criteria in Solid Tumors (RECIST) version 1.1.

"Our goal, through this collaboration, is to increase our understanding of FAK inhibition, and further demonstrate the alliance’s commitment to exploring a diverse range of novel combinations with avelumab," said Chris Boshoff, M.D., Ph.D., Senior Vice President and Head of Immuno-oncology, Early Development and Translational Oncology, Pfizer Global Product Development.

"Patients with late-stage ovarian cancer are in dire need of effective new treatments. We are eager to review the results of this important study as we continue to investigate the potential of avelumab to address the unmet needs for this hard-to-treat cancer," said Dr. Alise Reicin, Head of Global Clinical Development at Merck KGaA, Darmstadt, Germany’s biopharma business.

FAK is a protein which is often overproduced in tumors, enabling cancer cells to evade attack by the immune system. As reported in Cell, and Nature Medicine, pre-clinical research shows that FAK inhibition can modulate the balance of immune cells in the tumor, increasing the presence of cytotoxic T cells in the tumor and decreasing the presence of immunosuppressive T regulatory cells.1,2

*Avelumab is under clinical investigation and has not been proven to be safe and effective. There is no guarantee any product will be approved in the sought-after indication by any health authority worldwide.
**VS-6063 (defactinib) is under clinical investigation and has not be proven to be safe and effective. There is no guarantee any product will be approved in the sought-after indication by any health authority worldwide.
More About the Phase 1/2 Study

The study is comprised of 2 sequential parts: Part A (Dose Escalation) and Part B (Expansion). In Part A (Dose Escalation), approximately 18 subjects will receive avelumab IV treatment in 28-day cycles (10 mg/kg over approximately 1 hour on Days 1 and 15) and oral defactinib twice-daily (BID) continuously starting on Day 1 of Cycle 1. Subject enrollment will proceed according to a standard 3+3 design. In the absence of dose-limiting toxicity, each subject will receive the study drug regimen for a minimum of 28 days (Cycle 1) and may continue to receive additional cycles of study treatment until disease progression has been documented or unacceptable toxicity or other treatment discontinuation criteria have been met. All subjects in a cohort must have completed at least 1 cycle of dosing before dose escalation involving new subjects entered into the next dose cohort can occur. Based on the safety and PK data obtained in the dose escalation portion of the study, the RP2D of the combination will be determined.

In Part B (Expansion), approximately 80 subjects will be enrolled and will receive avelumab IV treatment in 28-day cycles (10 mg/kg over approximately 1 hour on Days 1 and 15) and oral defactinib at the RP2D dose continuously starting on Day 1 of Cycle 1.

Additional information on the clinical trial can be found at: http://bit.ly/2g6bnXA

About Ovarian Cancer
Globally, ovarian cancer is the seventh most common cancer in women.3 Annually, nearly 239,000 cases are diagnosed worldwide.4 Ovarian cancer may be difficult to diagnose, as symptoms may appear only in the later stages, when the disease has spread beyond the ovaries.4 Outcomes for women with ovarian cancer are generally poor due to most patients presenting with advanced disease.5 The 5-year prevalence of women globally living with ovarian cancer is 22.6 per 100,000.4 Current treatment options for epithelial ovarian cancer may include surgery, radiotherapy, chemotherapy and targeted therapies.6 Women who are unable to undergo treatment with platinum-based chemotherapy, due to resistance or refractory disease, currently have very limited treatment options.

Platinum-resistant ovarian cancer is defined as ovarian cancer that recurs within six months of completing primary chemotherapy with a platinum-based medication.7 Platinum-refractory ovarian cancer is defined as ovarian cancer that progresses during treatment with a platinum-based chemotherapy regimen.7 There is still a clear unmet need in ovarian cancer in relation to general disease awareness,4 improving initial investigations in primary and secondary care and novel therapies with demonstrable efficacy.8

About Avelumab
Avelumab (also known as MSB0010718C) is an investigational fully human anti-PD-L1 IgG1 monoclonal antibody. By inhibiting PD-L1 interactions, avelumab is thought to enable the activation of T-cells and the adaptive immune system. By retaining a native Fc-region, avelumab is thought to potentially engage the innate immune system and induce antibody-dependent cell-mediated cytotoxicity (ADCC). In November 2014, Merck KGaA, Darmstadt, Germany, and Pfizer announced a strategic alliance to co-develop and co-commercialize avelumab.

About Defactinib
Defactinib (VS-6063) is an investigational inhibitor of Focal Adhesion Kinase (FAK), a non-receptor tyrosine kinase encoded by the PTK-2 gene that mediates oncogenic signaling in response to cellular adhesion and growth factors.9 Based on the multi-faceted roles of FAK, defactinib is used to treat cancer through modulation of the tumor microenvironment, enhancement of anti-tumor immunity, and reduction of cancer stem cells.1,2 Defactinib is currently being evaluated in three separate clinical collaborations in combination with immunotherapeutic agents for the treatment of several different cancer types including pancreatic, ovarian, non-small cell lung cancer, and mesothelioma. These studies are combination clinical trials with pembrolizumab and avelumab from Merck & Co. and Pfizer/Merck KGaA, Darmstadt, Germany, respectively.11,12,13 Information about these and additional clinical trials evaluating the safety and efficacy of defactinib can be found on www.clinicaltrials.gov.