1stOncology™: Cancer Intelligence Service – Page 15757 – 1stOncology is recognized as a Top 10 Global Pharma Analytic Provider

United Therapeutics Corporation Reports Third Quarter 2016 Financial Results

On October 27, 2016 United Therapeutics Corporation (NASDAQ: UTHR) reported its financial results for the third quarter ended September 30, 2016 (Press release, United Therapeutics, OCT 27, 2016, View Source [SID1234516036]).

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!

"Our financial performance continues its strength this quarter," said Martine Rothblatt, Ph.D., United Therapeutics’ Chairman and Chief Executive Officer. "Our growth potential is higher than ever, with new programs in our pipeline for pulmonary hypertension associated with emphysema, fibrosis, heart failure and sickle cell disease. In addition we are launching the clinical development of our dinutuximab monoclonal antibody for small cell lung cancer and other high-risk forms of cancer with GD2 expressing cell tumors. Finally, our second generation parenteral drug delivery systems for treprostinil are continuing their march toward anticipated approvals in 2017 for implantable and 2018 for subcutaneous."

Key financial highlights include (dollars in millions, except per share data):

Three Months Ended
September 30,

Percentage

2016

2015

Changes

Revenues

$
408.2

$
386.2

5.7%

Net income

$
161.8

$
464.4

(65.2)%

Non-GAAP earnings(1)

$
201.5

$
174.7

15.3%

Net income, per diluted share

$
3.50

$
9.24

(62.1)%

Non-GAAP earnings, per diluted share(1)

$
4.36

$
3.48

25.3%

____________________

(1)
See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.
Financial Results for the Three Months Ended September 30, 2016

Revenues

The table below summarizes the components of total revenues (dollars in millions):

Three Months Ended
September 30,

Percentage

2016

2015

Change

Net product sales:

Remodulin

$
152.4

$
150.1

1.5%

Tyvaso

101.8

121.7

(16.4)%

Adcirca

96.0

73.8

30.1%

Orenitram

40.7

34.4

18.3%

Unituxin

17.3

4.7

268.1%

Other

—

1.5

(100.0)%

Total revenues

$
408.2

$
386.2

5.7%

Revenues for the three months ended September 30, 2016 increased by $22.0 million, compared to the same period in 2015. The growth in revenues primarily resulted from the following: (1) a $22.2 million increase in Adcirca net product sales; (2) a $12.6 million increase in Unituxin net product sales; (3) a $6.3 million increase in Orenitram net product sales; and (4) a $2.3 million increase in Remodulin net product sales. These increases were partially offset by a $19.9 million decrease in Tyvaso net product sales.

Expenses

Cost of product sales. The table below summarizes cost of product sales by major categories (dollars in millions):

Three Months Ended
September 30,

Percentage

2016

2015

Change

Category:

Cost of product sales

$
20.0

$
15.0

33.3%

Share-based compensation expense (benefit)

3.6

(8.1)

144.4%

Total cost of product sales

$
23.6

$
6.9

242.0%

Cost of product sales. The increase in cost of product sales of $5.0 million for the three months ended September 30, 2016, as compared to the same period in 2015, was attributable to increased sales.

Share-based compensation. The increase in share-based compensation of $11.7 million for the three months ended September 30, 2016, as compared to the same period in 2015, corresponded to an 11 percent increase in the price of our common stock during the three months ended September 30, 2016, compared to a 25 percent decrease in the price of our common stock during the same period in 2015.

Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):

Three Months Ended
September 30,

Percentage

2016

2015

Change

Category:

Research and development expense

$
37.2

$
40.6

(8.4)%

Share-based compensation expense (benefit)

8.7

(31.0)

128.1%

Total research and development expense

$
45.9

$
9.6

378.1%

Share-based compensation. The increase in share-based compensation of $39.7 million for the three months ended September 30, 2016, as compared to the same period in 2015, corresponded to an 11 percent increase in the price of our common stock during the three months ended September 30, 2016, compared to a 25 percent decrease in the price of our common stock during the same period in 2015.

Selling, general and administrative expense. The table below summarizes selling, general and administrative expense by major categories (dollars in millions):

Three Months Ended
September 30,

Percentage

2016

2015

Change

Category:

General and administrative

$
42.4

$
41.0

3.4%

Sales and marketing

20.1

21.5

(6.5)%

Share-based compensation expense (benefit)

37.6

(79.8)

147.1%

Total selling, general and administrative expense

$
100.1

$
(17.3)

678.6%

Share-based compensation. The increase in share-based compensation of $117.4 million for the three months ended September 30, 2016, as compared to the same period in 2015, was primarily attributable to an 11 percent increase in the price of our common stock during the three months ended September 30, 2016, compared to a 25 percent decrease in the price of our common stock during the same period in 2015.

Gain on Sale of Intangible Asset

In September 2015, we sold the Rare Pediatric Priority Review Voucher (PPRV) we received from the FDA in connection with the approval of our Biologics License Application for Unituxin. In exchange for the voucher we received $350.0 million from AbbVie Ireland Unlimited Company. The proceeds from the sale of the PPRV were recognized as a gain on the sale of an intangible asset, as the PPRV did not have a carrying value on our consolidated balance sheet at the time of sale.

Income Tax Expense

Our 2016 effective income tax rate decreased as compared to 2015 primarily due to a decrease in non-deductible share-based compensation, which was driven largely by a decrease in our stock price during 2016 compared to 2015.

Share Repurchases

In the third quarter of 2016, we repurchased approximately 1.1 million shares of our common stock at an aggregate cost of $135.8 million. These purchases were made pursuant to our $500 million stock repurchase program, which is effective during calendar year 2016, with $104.5 million of that amount remaining available for additional share repurchases at September 30, 2016.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) interest expense; (2) license fees; (3) depreciation and amortization; (4) impairment charges; (5) share-based compensation expense (benefit), net (including expenses relating to stock options, share tracking awards, restricted stock units and our employee stock purchase plan); and (6) tax impact on non-GAAP earnings adjustments. For 2015, we also adjusted non-GAAP earnings to eliminate the gain resulting from the sale of the PPRV in September 2015.

A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):

Three Months Ended
September 30,

2016

2015

Net income, as reported

$
161.8

$
464.4

Adjusted for:

Interest expense

0.5

0.8

Depreciation and amortization

8.2

8.2

Share-based compensation expense, net

49.9

(118.9)

Gain on sale of intangible asset

—

(350.0)

Tax (benefit) expense(1)

(18.9)

170.2

Non-GAAP earnings

$
201.5

$
174.7

Non-GAAP earnings per share:

Basic

$
4.66

$
3.84

Diluted

$
4.36

$
3.48

Weighted average number of common shares outstanding:

Basic

43.2

45.5

Diluted

46.2

50.2

______________________

(1)
Represents the total tax impact of the quarterly non-GAAP earnings adjustments based on our actual quarterly effective income tax rates of approximately 32 percent and approximately 37 percent as of September 30, 2016 and 2015, respectively.

Onxeo Announces Promising Results from Preclinical Study of Beleodaq® Combination with Checkpoint Inhibitors

On October 27, 2016 Onxeo S.A. (Euronext Paris, Nasdaq Copenhagen: ONXEO), a biopharmaceutical company specializing in the development of innovative drugs for the treatment of orphan diseases, in particular in oncology, reported promising results from preclinical studies evaluating the potential of its already PTCL (peripheral T-cell lymphoma)-approved Beleodaq (belinostat), in combination with checkpoint inhibitors as a potential treatment option for other tumor indications (Press release, Onxeo, OCT 27, 2016, View Source [SID1234516106]). The studies were conducted as the second step of Onxeo’s ongoing preclinical development program in partnership with leading European research institution the University of Navarra’s University Clinic and Center for Applied Medical Research in Spain under the leadership of Prof. Bruno Sangro and Dr. Pablo Sarobe.

The preclinical studies were performed in an immune-competent mouse syngeneic HCC (hepatocellular carcinoma) model, in which responses to a combination of Beleodaq and checkpoint inhibitors were compared to responses from treatment with checkpoint inhibitors alone. The studies demonstrated a complete cessation of tumor growth in all mice (100%) treated with the combination of Beleodaq and checkpoint inhibitors. The tumor cessation effect continued for approximately one week after the final dose of belinostat was administered. By comparison, checkpoint inhibitors alone inhibited tumor growth in only about 30 percent of mice which received the treatment for the same period.

In addition, mechanistic studies performed on the spleens of the mice demonstrated the generation of an underlying immune response that correlated with the observed therapeutic effect of the combination treatment, showing an increase in production of interleukines (signaling proteins for regulating immune responses) by activated T-cells and a decrease in the number of regulatory T-cells, when compared to mice treated only with checkpoint inhibitors.

Graham Dixon, PhD, Chief Scientific Officer of Onxeo, commented, "These data represent promising findings for the continued evaluation of Beleodaq in cancers beyond peripheral T-cell lymphoma (PTCL) when used as a combination with immuno-oncology agents in various tumor indications such as for example HCC. Approximately 20 percent of cancer patients currently treated with checkpoint inhibitors alone are responding and thus, if translated into the clinic, the positive outcomes from the combination therapy would account for a significant improvement in the number of patients exhibiting high treatment responses. As a next step in our collaboration with Prof. Bruno Sangro and Dr. Pablo Sarobe, we are conducting follow-up studies to fully characterize these preclinical findings demonstrating the potential of Beleodaq in combination with checkpoint inhibitors in various tumor indications, and in particular, are evaluating the immune response in the tumor microenvironment in order to improve the translation of the response into human patients."

amcure Initiates Clinical Study in Patients to Test Novel Approach for Treating Advanced and Metastatic Cancers

On October 27, 2016 amcure, a biopharmaceutical company developing first-in-class cancer therapeutics, reported the initiation and first patient treated in a Phase I/Ib clinical study of their lead program, AMC303, in cancer patients (Press release, amcure, OCT 27, 2016, View Source [SID1234516103]). AMC303 has been developed to target CD44v6, a key molecule in molecular pathways of several receptor-tyrosine-kinases, such as c-MET, VEGFR-2 and RON which are involved in both tumor growth and metastases. This approach provides a potential novel mechanism for the treatment of patients with advanced and solid tumors that have already begun to spread throughout the body.

"The initiation of the Phase I/Ib study is an important step in amcure’s mission to provide a therapeutic option for patients suffering from cancer when other standard of care treatments have not been effective"
Tweet this
The study, which will be initially conducted in Belgium and Spain, is designed to assess the safety, tolerability and pharmacokinetics of multiple and increasing doses of AMC303 as a monotherapy in patients with advanced metastatic malignant solid tumors of epithelial origin, for example pancreatic, head and neck, colorectal, gastric and lung cancer, among others. The trial will also seek to determine whether responses to AMC303 correlate with the expression of CD44v6, a cell surface protein that acts as a co-receptor for the activation of several receptor-tyrosine-kinases.

"The initiation of the Phase I/Ib study is an important step in amcure’s mission to provide a therapeutic option for patients suffering from cancer when other standard of care treatments have not been effective," said Klaus Dembowsky, CEO of amcure GmbH. "We believe AMC303 holds great potential because by targeting one specific co-receptor, three relevant oncological pathways are blocked, thus diminishing the means for tumor growth and metastases in patients. We look forward to seeing the results of this initial trial."

In a February 2016 publication in the peer-reviewed journal Gastroenterology, entitled "Inhibition of Tumor Growth and Metastasis in Pancreatic Cancer Models by interference with CD44v6 Signaling," by the co-founder of amcure, Alexandra Matzke-Ogi et al., the ability of the early lead compound AM001 was clearly demonstrated to reduce the primary tumor and metastases. The data suggest a central role for CD44v6 signaling in tumor growth, metastatic spreading and maintenance of metastases in distant organs as well as the regression of already established metastases, making it a very promising tool for cancer therapy.

About AMC303
amcure’s lead compound, AMC303, has been developed as a potential treatment for patients with advanced and metastatic epithelial tumors, e.g. pancreatic cancer, head and neck cancer, gastric cancer, colorectal cancer, breast cancer and lung cancer. AMC303 has a high specificity for inhibiting CD44v6, a co-receptor required for signaling through multiple cellular pathways (c-Met, VEGFR-2, RON) involved in tumor growth, angiogenesis and the development and regression of metastases. AMC303 has also demonstrated strong effects in various in vitro and in vivo assays.

TESARO Announces Acceptance for Review of Niraparib Marketing Authorization Application by EMA

On October 27, 2016 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported that the Marketing Authorisation Application (MAA) for niraparib has been submitted to and accepted for review by the European Medicines Agency (EMA) for the maintenance treatment of patients with platinum-sensitive, recurrent ovarian cancer who are in response to platinum-based chemotherapy (Press release, TESARO, OCT 27, 2016, View Source [SID1234516083]). With this acceptance, the review of the niraparib marketing authorisation application in the Centralised Procedure will now begin.

"TESARO is committed to improving the lives of patients with cancer by responsible development and commercialization, and the validation of the niraparib MAA represents a significant milestone for the Company," said Mary Lynne Hedley, Ph.D., President and COO of TESARO. "We believe niraparib could become an important new treatment option for patients. We look forward to working with the EMA during the review process and expect to complete our rolling NDA submission to the FDA for niraparib imminently."

The niraparib MAA is supported by data from the ENGOT-OV16/NOVA trial, which is a double-blind, placebo-controlled, international Phase 3 study of niraparib that enrolled 553 patients with recurrent ovarian cancer who were in a response to their most recent platinum-based chemotherapy. The full results of the NOVA trial were presented in detail at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Congress in Copenhagen on October 8, 2016 and were published at the same time in The New England Journal of Medicine.

"The validation of our MAA for niraparib today marks an important step towards globalizing our mission of providing transformative therapies to people bravely facing cancer," said Orlando Oliveira, Senior Vice President and General Manager of TESARO International. "With the MAA for oral rolapitant already under review by the EMA, we are well positioned for two potential product launches in Europe in 2017."

About Niraparib
Niraparib is an oral, once-daily PARP inhibitor that is currently being evaluated in four ongoing pivotal trials. TESARO is building a robust niraparib franchise by assessing activity across multiple tumor types and by evaluating several potential combinations of niraparib with other therapeutics. The ongoing development program for niraparib includes a Phase 3 trial in patients with platinum-sensitive, recurrent ovarian cancer (the NOVA trial); a Phase 3 trial in patients with first-line ovarian cancer (the PRIMA trial); a registrational Phase 2 treatment trial in patients with ovarian cancer (the QUADRA trial); and a Phase 3 trial for the treatment of patients with BRCA-positive breast cancer (the BRAVO trial). Several combination studies are also underway, including trials of niraparib plus pembrolizumab and niraparib plus bevacizumab. Janssen Biotech has licensed rights to develop and commercialize niraparib specifically for patients with prostate cancer worldwide, except in Japan.

Niraparib is an investigational agent and, as such, has not been approved by the U.S. Food and Drug Administration, EMA, or any other regulatory agencies.

About Ovarian Cancer
Approximately 22,000 women are diagnosed each year with ovarian cancer in the United States, and more than 65,000 women are diagnosed annually in Europe. Ovarian cancer is the fifth most frequent cause of cancer death among women. Despite high response rates to platinum-based chemotherapy in the second-line advanced treatment setting, approximately 85% of patients will experience recurrence within two years. If approved, niraparib may address the difficult "watchful waiting" periods experienced by patients with recurrent ovarian cancer in between cycles of platinum-based chemotherapy.

Amgen Reports Third Quarter 2016 Financial Results

On October 27, 2016 Amgen (NASDAQ:AMGN) reported financial results for the third quarter of 2016 (Press release, Amgen, OCT 27, 2016, View Source [SID1234516053]).

Key results include:

Revenues increased 2 percent versus the third quarter of 2015 to $5.8 billion.
Strong unit volume growth from Sensipar (cinacalcet), Prolia (denosumab), Vectibix (panitumumab), XGEVA (denosumab) and Nplate (romiplostim).
GAAP earnings per share (EPS) increased 10 percent to $2.68 driven by higher revenues and higher operating margins.
GAAP operating income increased 8 percent to $2,527 million and GAAP operating margin improved by 3.4 percentage points to 45.8 percent.
Non-GAAP EPS increased 11 percent to $3.02 driven by higher revenues and higher operating margins.
Non-GAAP operating income increased 9 percent to $2,916 million and non-GAAP operating margin improved by 4.2 percentage points to 52.9 percent.
2016 total revenues guidance increased to $22.6-$22.8 billion; EPS guidance increased to $9.94-$10.11 on a GAAP basis and $11.40-$11.55 on a non-GAAP basis.
The Company generated $2.5 billion of free cash flow.
"Our business is performing well and our double-digit earnings per share growth reflects the progress we have made through our transformation efforts," said Robert A. Bradway, chairman and chief executive officer. "We are focused on growing several newly launched products and advancing the pipeline globally."

$Millions, except EPS and percentages

Q3’16

Q3’15

YOY Δ

Total Revenues

$ 5,811

$ 5,723

2%
GAAP Operating Income

$ 2,527

$ 2,339

8%
GAAP Net Income

$ 2,017

$ 1,863

8%
GAAP EPS

$ 2.68

$ 2.44

10%
Non-GAAP Operating Income

$ 2,916

$ 2,686

9%
Non-GAAP Net Income

$ 2,276

$ 2,081

9%
Non-GAAP EPS

$ 3.02

$ 2.72

11%

References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis" and to "free cash flow" (computed by subtracting capital expenditures from operating cash flow) refer to non-GAAP financial measures. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations.

Product Sales Performance

Total product sales were flat for the third quarter of 2016 versus the third quarter of 2015.
Enbrel (etanercept) sales were flat as higher net selling price was offset by the impact of competition and unfavorable changes in inventory levels.
Neulasta (pegfilgrastim) sales decreased 5 percent driven by lower unit demand.
Aranesp (darbepoetin alfa) sales increased 8 percent driven mainly by higher unit demand due to a shift by some U.S. dialysis customers from EPOGEN (epoetin alfa) to Aranesp.
Sensipar/Mimpara sales increased 18 percent driven by net selling price and higher unit demand.
XGEVA sales increased 4 percent driven by higher unit demand.
Prolia sales increased 18 percent driven by higher unit demand.
EPOGEN sales decreased 31 percent driven by the impact of competition, abnormally high purchases by a large end customer in the year ago period and a shift by some U.S. dialysis customers to Aranesp.
KYPROLIS (carfilzomib) sales increased 34 percent driven by higher unit demand.
NEUPOGEN (filgrastim) sales decreased 36 percent driven mainly by the impact of competition in the U.S.
Vectibix sales increased 24 percent driven by higher unit demand.
Nplate sales increased 10 percent driven by higher unit demand and net selling price.
Repatha (evolocumab) sales growth was driven by higher unit demand.
BLINCYTO (blinatumomab) sales increased 26 percent driven by higher unit demand.
Product Sales Detail by Product and Geographic Region

$Millions, except percentages

Q3’16

Q3’15

YOY Δ

US
ROW
TOTAL

TOTAL

TOTAL

Enbrel

$1,388
$64
$1,452

$1,459

0%
Neulasta

1,024
176
1,200

1,267

(5%)
Aranesp

275
256
531

493

8%
Sensipar / Mimpara

329
86
415

353

18%
XGEVA

296
98
394

378

4%
Prolia

249
130
379

320

18%
EPOGEN

335
0
335

489

(31%)
KYPROLIS

140
43
183

137

34%
NEUPOGEN

127
56
183

284

(36%)
Vectibix

64
100
164

132

24%
Nplate

92
59
151

137

10%
Repatha
31
9
40

3

*
BLINCYTO
19
10
29

23

26%
Other**

14
46
60

41

46%

Total product sales

$4,383
$1,133
$5,516

$5,516

0%

* Change in excess of 100%
** Other includes Bergamo, MN Pharma, IMLYGIC and Corlanor

Operating Expense, Operating Margin and Tax Rate Analysis

On a GAAP basis:

Cost of Sales margin improved by 0.1 percentage points driven primarily by manufacturing efficiencies and higher net selling price, offset partially by product mix. Research & Development (R&D) expenses decreased 12 percent driven primarily by lower spending required to support certain later-stage clinical programs and transformation and process improvement efforts. Selling, General & Administrative (SG&A) expenses were flat. Total Operating Expenses decreased 3 percent, with all expense categories reflecting savings from our transformation and process improvement efforts.
Operating Margin improved by 3.4 percentage points to 45.8 percent.
Tax Rate increased by 1.6 percentage points due primarily to changes in the geographic mix of earnings.
On a non-GAAP basis:

Cost of Sales margin improved by 0.5 percentage points driven primarily by manufacturing efficiencies and higher net selling price, offset partially by product mix. R&D expenses decreased 11 percent driven primarily by lower spending required to support certain later-stage clinical programs and transformation and process improvement efforts. SG&A expenses increased 1 percent. Total Operating Expenses decreased 5 percent, with all expense categories reflecting savings from our transformation and process improvement efforts.
Operating Margin improved by 4.2 percentage points to 52.9 percent.
Tax Rate increased by 0.9 percentage points due primarily to changes in the geographic mix of earnings.
$Millions, except percentages

GAAP

Non-GAAP

Q3’16

Q3’15

YOY Δ

Q3’16

Q3’15

YOY Δ

Cost of Sales
$1,027

$1,034

(1%)

$715

$745

(4%)

% of product sales
18.6%

18.7%

(0.1) pts.

13.0%

13.5%

(0.5) pts.
Research & Development
$990

$1,119

(12%)

$963

$1,086

(11%)

% of product sales
17.9%

20.3%

(2.4) pts.

17.5%

19.7%

(2.2) pts.
Selling, General & Administrative
$1,244

$1,244

0%

$1,217

$1,206

1%

% of product sales
22.6%

22.6%

0 pts.

22.1%

21.9%

0.2 pts.
Other
$23

($13)

*

$0

$0

0%
TOTAL Operating Expenses
$3,284

$3,384

(3%)

$2,895

$3,037

(5%)

Operating Margin

operating income as a % of product sales
45.8%

42.4%

3.4 pts.

52.9%

48.7%

4.2 pts.

Tax Rate
16.6%

15.0%

1.6 pts.

18.9%

18.0%

0.9 pts.

* Change in excess of 100%

pts: percentage points

Cash Flow and Balance Sheet

The Company generated $2.5 billion of free cash flow in the third quarter of 2016 versus $2.8 billion in the third quarter of 2015.
The Company’s fourth quarter 2016 dividend of $1.00 per share declared on Oct. 14, 2016, will be paid on Dec. 8, 2016, to all stockholders of record as of Nov. 16, 2016.
During the third quarter, the Company repurchased 4.4 million shares of common stock at a total cost of $747 million. In October 2016, the Company’s Board of Directors approved an increase in the remaining share repurchase authorization for an aggregate authorization of $5 billion.
$Billions, except shares

Q3’16

Q3’15

YOY Δ

Operating Cash Flow
$2.7

$2.9

($0.2)
Capital Expenditures
0.2

0.1

0.0
Free Cash Flow
2.5

2.8

(0.3)
Dividends Paid
0.7

0.6

0.1
Share Repurchase
0.7

0.7

0.0
Avg. Diluted Shares (millions)
753

764

(11)

Cash and Investments
38.0

31.1

6.9
Debt Outstanding
35.3

31.6

3.7
Stockholders’ Equity
30.8

28.0

2.8

Note: Numbers may not add due to rounding

2016 Guidance

For the full year 2016, the Company now expects:

Total revenues in the range of $22.6 billion to $22.8 billion.
Previously, the Company expected total revenues in the range of $22.5 billion to $22.8 billion.
On a GAAP basis, EPS in the range of $9.94 to $10.11 and a tax rate in the range of 16.5 percent to 17.5 percent.
Previously, the Company expected GAAP EPS in the range of $9.55 to $9.90. Tax rate guidance is unchanged.
On a non-GAAP basis, EPS in the range of $11.40 to $11.55 and a tax rate in the range of 19.0 percent to 20.0 percent.
Previously, the Company expected non-GAAP EPS in the range of $11.10 to $11.40. Tax rate guidance is unchanged.
Capital expenditures to be approximately $700 million.
Third Quarter Product and Pipeline Update
Key development milestones:

Clinical Program
Indication
Projected Milestone
Repatha
Hyperlipidemia
Phase 3 CV outcomes data Q1 2017*
Omecamtiv mecarbil
Chronic heart failure
Phase 3 CV outcomes study initiation*
KYPROLIS
Relapsed and
refractory multiple
myeloma
Phase 3 weekly administration data 2017
Romosozumab
Postmenopausal
osteoporosis
U.S. regulatory review
Active controlled Phase 3 fracture data H1 2017*
Erenumab (AMG 334)
Migraine prophylaxis
Phase 3 episodic migraine data Q4 2016
Parsabiv (etelcalcetide)†
Secondary
hyperparathyroidism
Global regulatory reviews
ABP 215
(biosimilar bevacizumab)
Oncology
Global regulatory submissions
ABP 501
(biosimilar adalimumab)
Inflammatory diseases
Ex-U.S. regulatory reviews
ABP 980
(biosimilar trastuzumab)
Breast cancer
Global regulatory submissions

*Event driven study; †Trade name provisionally approved by FDA; CV = cardiovascular

The Company provided the following updates on selected product and pipeline programs:

Repatha

In September, the Phase 3 GLAGOV study evaluating the effect of Repatha on coronary artery disease met its primary and secondary endpoints. The results will be presented Nov. 15, 2016, at the American Heart Association Scientific Sessions 2016.
Data from an event driven Phase 3 study evaluating the effects of Repatha on cardiovascular outcomes are expected in Q1 2017.
Omecamtiv mecarbil

Agreement was reached with the U.S. Food and Drug Administration (FDA) on key elements of an omecamtiv mecarbil Phase 3 cardiovascular outcomes study in chronic heart failure through a Special Protocol Assessment. Details of the protocol are being finalized with regulators and enrollment in the study is anticipated to begin in Q1 2017.
KYPROLIS

In September, a Phase 3 study evaluating an investigational regimen of KYPROLIS, melphalan and prednisone versus Velcade (bortezomib), melphalan and prednisone for 54 weeks in newly diagnosed, transplant ineligible multiple myeloma patients did not meet the primary endpoint of superiority in progression-free survival.
A Phase 3 study of once weekly KYPROLIS administration in relapsed and refractory multiple myeloma patients has completed enrollment. The results are expected in 2017.
XGEVA

In October, a Phase 3 study evaluating XGEVA for the prevention of skeletal-related events in multiple myeloma patients met the primary endpoint of non-inferiority to zoledronic acid in delaying the time to first on-study skeletal-related event.
BLINCYTO

In August, FDA approved BLINCYTO for the treatment of pediatric patients with Philadelphia chromosome‑negative relapsed or refractory B-cell precursor acute lymphoblastic leukemia.
Prolia

In August, a Phase 3 study evaluating Prolia compared with risedronate in patients receiving glucocorticoid treatment met primary and secondary endpoints at 12 months.
Romosozumab

In September, a Biologics License Application for the treatment of osteoporosis in postmenopausal women at increased risk for fracture was accepted for review by FDA, with a Prescription Drug User Fee target action date of July 19, 2017.
Results from an event driven active controlled Phase 3 fracture study in postmenopausal women with osteoporosis are expected in H1 2017.
Erenumab

In September, a Phase 3 study in episodic migraine prevention met its primary endpoint. Results from a second Phase 3 study in this population are expected in Q4 2016.
Parsabiv

In August, FDA issued a Complete Response Letter for the New Drug Application for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease (CKD) on hemodialysis.
In September, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion for the Marketing Authorization of Parsabiv, recommending approval for the treatment of sHPT in adult patients with CKD on hemodialysis.
AMJEVITA (adalimumab-atto)*

In September, FDA approved AMJEVITA across all eligible indications of the reference product, HUMIRA (adalimumab), including treatment of psoriatic arthritis, ankylosing spondylitis and moderate-to-severe rheumatoid arthritis, polyarticular juvenile idiopathic arthritis (patients 4 years of age or older), chronic plaque psoriasis, adult Crohn’s disease and ulcerative colitis. AMJEVITA is the Company’s first biosimilar to receive regulatory approval in the U.S.
ABP 798 (biosimilar rituximab)

Phase 3 studies in Non-Hodgkin lymphoma and rheumatoid arthritis are currently enrolling patients.
ABP 710 (biosimilar infliximab)

A Phase 3 study in rheumatoid arthritis is currently enrolling patients.
Erenumab is developed in collaboration with Novartis
Omecamtiv mecarbil is developed in collaboration with Cytokinetics and Servier
Romosozumab is developed in collaboration with UCB globally, as well as Astellas in Japan
Velcade is a registered trademark of Millennium Pharmaceuticals, Inc.
Humira is a registered trademark of AbbVie Inc.
*Formerly ABP 501

Non-GAAP Financial Measures
In this news release, management has presented its operating results for the third quarters of 2016 and 2015 in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2016 EPS and tax rate guidance in accordance with GAAP and on a non-GAAP basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the third quarters of 2016 and 2015. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP.

The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor’s overall understanding of the financial performance and prospects for the future of the Company’s ongoing business activities by facilitating comparisons of results of ongoing business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company’s liquidity.

The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.