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TapImmune Completes Scale-Up and GMP Manufacturing of TPIV 200 Vaccine to Supply Additional Phase 2 Clinical Trials

On February 2, 2017 TapImmune, Inc. (NASDAQ: TPIV), a clinical-stage immuno-oncology company specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of cancer and metastatic disease, reported it has successfully completed a multi-gram scale-up and GMP manufacturing of a second clinical lot of TPIV 200, the company’s multi-epitope T-cell vaccine targeting folate receptor alpha (Press release, TapImmune, FEB 2, 2017, View Source;utm_medium=email&utm_campaign=investor_alerts&utm_content=%5B%5Brssitem_title%5D%5D [SID1234517634]). The manufactured vaccine product will be used to supply an ongoing Phase 2 study of TPIV 200 for the treatment of platinum-sensitive ovarian cancer, as well as a planned Phase 2 study sponsored by the Mayo Clinic for treating triple-negative breast cancer.

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"The successful release of our second lot of TPIV 200 represents another important milestone in the progression of our product pipeline and technologies," said Dr. Glynn Wilson, Chairman and CEO of TapImmune. "Improvements to the manufacturing process include a process change to improve scalability and a formulation change to improve the physical appearance and consistency of the final vialed product. The end result is a superior formulation that is more amenable to large scale manufacturing and commercialization."

"Our first TPIV 200 lot was manufactured in early 2016 to fully supply a TapImmune-sponsored Phase 2 trial evaluating the vaccine for the treatment of triple-negative breast cancer as well as a Phase 2 trial evaluating the vaccine in combination with a checkpoint inhibitor for platinum-resistant ovarian cancer, both of which are currently enrolling patients," said Dr. John Bonfiglio, President and COO of TapImmune. "The current, larger clinical batch of TPIV 200 will fully supply the first TapImmune-sponsored Phase 2 trial in platinum-sensitive ovarian cancer, for which a number of clinical sites are currently being screened and initiated. The batch will also supply a planned Mayo Clinic-sponsored Phase 2 trial for triple-negative breast cancer, which is fully funded by a grant from the Department of Defense."

TRILLIUM THERAPEUTICS OUTLINES ANTICIPATED ACTIVITIES AND MILESTONES FOR 2017

On February 2, 2017 Trillium Therapeutics Inc. (NASDAQ/TSX: TRIL), a clinical-stage immuno-oncology company developing innovative therapies for the treatment of cancer, reported its expected 2017 activities and milestones (Press release, Trillium Therapeutics, FEB 2, 2017, View Source [SID1234517631]).

Phase 1 trials of TTI-621:
During the year, Trillium expects to make progress in the Phase 1b TTI-621-01 study (NCT02663518) of its anti-CD47 checkpoint inhibitor TTI-621 (SIRPaFc), which is designed to evaluate safety, pharmacokinetics and preliminary anti-tumor activity across a broad range of hematologic malignancies. One cohort of lymphoma patients is receiving TTI-621 in combination with rituximab, and the company will consider additional combination cohorts based on emerging preclinical data. Furthermore, given the good safety profile of the agent, further dose intensification is planned with the goal of achieving increased blockade of CD47.

In a second Phase 1 trial, TTI-621-02 (NCT02890368), patients with percutaneously accessible solid tumors are receiving intratumoral injections of TTI-621 with the goal of achieving a high level of localized CD47 blockade. The company expects to complete the dose escalation phase, and potentially begin an expansion phase in 2017. This trial provides a unique opportunity to closely characterize local anti-tumor immune responses and to assess the impact of TTI-621 treatment on the tumor microenvironment. Combination cohorts are also under consideration for this trial.

"We are aggressively advancing the TTI-621 clinical program through multiple efforts. After completing the phase 1a dose escalation trial in patients with lymphoma, where we observed preliminary evidence of anti-tumor activity at well-tolerated doses, we finished the year with robust enrollment in the 10-cohort expansion phase and recruitment continues to progress well. As our data mature, we intend to explore the addition of other cohorts to this trial. The TTI-621-02 solid tumor trial has enrolled its first patient and we expect this study to provide key scientific data for charting the course of our clinical development program, especially as it relates to combination therapies," said Dr. Niclas Stiernholm, Trillium’s Chief Executive Officer. "In TTI-621 we believe that we have a potent CD47-targeting agent, and we aim to identify cancers that depend upon the CD47 ‘do not eat’ signal to evade the immune system."

Trillium intends to provide an update on both ongoing TTI-621 trials by year-end. There may be additional opportunities to report on individual cohorts in both trials throughout the year.

Expanding the CD47 Franchise with TTI-622:
In 2017, Trillium is also planning to advance its second SIRPaFc fusion protein, TTI-622, into clinical testing. TTI-622 contains an IgG4 Fc region and is thus anticipated to have a different pharmacologic profile and enable greater exposures in patients than TTI-621 (IgG1 Fc). Like TTI-621, TTI-622 does not bind erythrocytes, and the company believes that this property could give TTI-622 best-in-class status among IgG4-based CD47 blocking agents currently in development. The company plans to submit an IND by the end of 2017 and begin enrolling patients in early 2018, with the goal of rapidly advancing this agent into combination studies.

"With the introduction of TTI-622, we are specifically targeting opportunities for drug combinations that are complementary to TTI-621. Our two SIRPaFc fusion proteins allow us to block CD47 and achieve different levels of Fc receptor engagement on macrophages, which we believe represents a diversified approach to targeting the CD47 axis in the treatment of cancer," said Dr. Bob Uger, Trillium’s Chief Scientific Officer. "CD47 is in its infancy as a therapeutic cancer target and we have chosen to apply a broad, science-driven investigative approach to maximize our chances of defining patient populations that will derive clinical benefit from TTI-621 or TTI-622 therapy."

Additional Preclinical Data and Small Molecule Pipeline:
In 2017 Trillium intends to continue investigating SIRPaFc in relevant preclinical models, focusing on combination strategies and mechanism of action studies. The company expects to report data at the 2017 American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting in Washington D.C., as well as at other international scientific conferences throughout the year.

The company is actively investigating the competitive advantages and positioning of its orally available small molecule bromodomain and EGFR inhibitor programs and expects to provide guidance on the next steps in the first half of 2017. In addition, Trillium recently launched a discovery program against an undisclosed immuno-oncology target using its proprietary fluorine-based chemistry platform.

Trillium’s cash balance at the end of 2016 was approximately $50 million. A major component of the company’s business strategy continues to be a focus on evaluating potential partnering opportunities across all programs, which may help fund future growth.

The company also announced that its ticker symbol on the Toronto Stock Exchange changed to "TRIL" effective Feb. 1, 2017.

Immune Therapeutics Clears Critical Certification Milestone

On February 2, 2017 Immune Therapeutics, Inc. (OTCQB:IMUN), a global specialty pharmaceutical company dedicated to advancing the science of affordable, non-toxic therapies in Emerging Markets, reported that the Dominican Republic’s Ministry of Health and Social Assistance has issued a Certificate of Pharmaceutical Product (COPP) for Lodonal (Naltrexone) (Press release, Immune Therapeutics, FEB 2, 2017, View Source [SID1234517625]). This certificate grants approval for the manufacturing and export of LodonalTM for the treatment of HIV/AIDS, opportunistic infections, inflammatory disease and cancer in the dosages specified in the filings.

The approval of Lodonal (Naltrexone) was supported by a vast array of research including dossier, certificate of analysis, stability reports, pharmacology and toxicology reports as well as clinical data from several Phase II multi-center, randomized studies. The results of these studies and documents showed patients treated with LodonalTM reported significant improvements when compared with patients receiving placebo.

"We are thrilled with this certification as we are now only one step away of seeing all of our hard work come to fruition," said Noreen Griffin, CEO of Immune Therapeutics. "Before selling into the Nigerian market, we required three main approvals: We received our Drug Approval last year; our Certificate of Pharmaceutical Product which was announced today; and our final approval which is the Marketing Approval from Nigeria."

"The Certificate of Pharmaceutical Product is not just required for Nigeria," Ms. Griffin continued. "It is the cornerstone for exportation into any of the other countries we are engaged in. This certificate is required to follow the World Health Organization format as it provides quality assurance for the pharmaceutical products (LodonalTM) and the facility (Acromax). As we push forward in Nigeria, we are simultaneously leveraging the successful clinical trial results and NAFDAC approval to expedite the approval and distribution into other nations devastated by HIV/AIDS including Malawi, Equatorial Guinea and Senegal."

Vividion Therapeutics, Inc., Launches With $50 Million Series A Financing

On February 2, 2017 – ARCH Venture Partners and Versant Ventures
reported the launch of Vividion Therapeutics, Inc., a biotechnology company
focused on developing innovative therapeutics that treat major unmet clinical needs
using the first platform for proteome-wide ligand and target discovery. ARCH and
Versant co-led today’s $50 million Series A financing and were joined by founding
investor Cardinal Partners (Press release, Vividion Therapeutics, FEB 2, 2017, View Source [SID1234520718]).

Vividion Therapeutics has advanced a novel drug discovery platform that applies
chemical proteomics to expand the druggable proteome and address difficult targets to
bring new, transformative treatments to patients with serious illnesses. Making
accessible the broad set of proteins expressed in human cells, the company’s cutting
edge platform was spun out of the lab of Ben Cravatt, Professor at The Scripps
Research Institute in La Jolla, Calif.

In conjunction with the financing, Tom Daniel will join the Board as Executive Chairman.
"This Series A financing reflects deep commitment to Vividion Therapeutics’ approach
to transform chemical drug discovery and development," stated Dr. Daniel. "The
founders, experienced team and platform are ruthlessly focused on the accelerated
delivery of impactful drugs to serve patients. The platform expands the definition of
druggability on mechanism in serious illnesses, while delivering new routes to address
highly validated disease targets."

Vividion Therapeutics Novel Scientific Approach
Conventional drug discovery is target-centric;; a compound library is screened using a
target-specific assay and high-affinity binding ligands are optimized to develop a drug
candidate. This approach is limited, as research is performed in artificial systems that
fail to account for native protein structure, context and function. Further, conventional
target-specific assays are applied to a narrow subset of the proteome and selectivity is
assessed later in development.

In contrast, Vividion Therapeutics assesses with high precision and broad coverage
protein-drug candidate interactions in native biological systems. This eliminates artifacts
and creates proteome-wide drug interaction maps for simultaneous target engagement
and global selectivity profiling. Through novel chemistry, Vividion Therapeutics’ platform
allows efficient, accelerated optimization of hit fragments into drug candidates. The
company has a robust intellectual property estate that includes the assignment of
numerous, heretofore unrecognized, druggable sites in the human proteome.
"The Vividion Therapeutics’ platform allows human biology to fundamentally drive the
selection of drug targets and to create entry points for targets previously considered to
be undruggable," said Kristina Burow, Managing Director at ARCH. "The team at
Vividion Therapeutics has created a novel platform based on chemical proteomics and
modern synthetic chemistry that will radically expand the druggability of the human
proteome. We believe this will lead to innovative therapeutics that have the ability to
significantly benefit patients."

Vividion Therapeutics Co-Founders
The Vividion Therapeutics founding team includes:
• Benjamin F. Cravatt III, Ph.D., Professor and Co-Chair, Department of Molecular
Medicine, the Skaggs Institute for Chemical Biology at The Scripps Research
Institute
• Phil S. Baran, Ph.D., Professor, Darlene Shiley Professor of Chemistry,
Department of Chemistry, the Skaggs Institute for Chemical Biology at The
Scripps Research Institute
• Jin-Quan Yu, Ph.D., Frank and Bertha Hupp Professor of Chemistry,
Department of Chemistry, The Scripps Research Institute
• John K. Clarke, Managing General Partner, Cardinal Partners
Vividion Therapeutics Board of Directors
The Vividion Therapeutics scientific team is complemented by a Board of Directors that
has significant experience in creating, leading and growing biopharmaceutical
companies. In addition to Dr. Cravatt and Mr. Clarke, they include:
• Tom Daniel, M.D., Executive Chairman of the Board, formerly President, Global
Research and Early Development, Celgene Corporation
• Kristina Burow, Managing Director, ARCH Venture Partners
• Tom Woiwode, Ph.D., Managing Director, Versant Ventures
• Paul Schimmel, Ph.D., Professor, Department of Cell and Molecular Biology,
Department of Chemistry, The Skaggs Institute for Chemical Biology at The
Scripps Research Institute

About Vividion Therapeutics
Vividion Therapeutics is a biotechnology company focused on developing innovative
therapeutics that treat major unmet clinical needs using the first platform for proteome-
wide ligand and target discovery. Headquartered in San Diego, CA, Vividion
Therapeutics is a private, biotechnology company founded in 2014 with seed financing
from Cardinal Partners as a spin out from the labs of Dr. Benjamin Cravatt, Dr. Phil
Baran and Dr. Jin-Quan Yu at TSRI. In 2017, Vividion launched with $50 million in
Series A financing from ARCH Venture Partners, Versant Ventures and founding
investor Cardinal Partners. For more information, please visit www.vividion.com.

About ARCH Venture Partners
ARCH Venture Partners, one of the largest early stage technology venture firms in the
U.S., invests in seed and early stage advanced technology companies. ARCH enjoys
special recognition as a leader in the commercialization of technologies developed at
academic institutions, corporate research labs and national laboratories. Now in its 30th
year, ARCH has over $2.5 billion in committed capital through nine venture funds, and
has co-founded and provided initial investments for over 200 companies. For more
information, please visit View Source

About Versant Ventures
Versant Ventures is a leading healthcare investment firm committed to helping
exceptional entrepreneurs build the next generation of great healthcare companies. The
firm invests across the healthcare sector and at all stages of company development,
with an emphasis on the discovery and development of novel therapeutics. With $2.3
billion under management and offices in North America and Europe, Versant has built a
team with deep investment, operating, and scientific expertise that enables a hands-on
approach to company building. Since the firm’s founding in 1999, more than 65 Versant
companies have achieved successful acquisitions or IPOs. For more information,
please visit www.versantventures.com.

About Cardinal Partners
Cardinal Partners, founded in 1996, is one of the leading venture capital partnerships
focused exclusively on healthcare investing. Cardinal specializes in early-stage
financing rounds. As veteran company-builders, over the course of their careers, the
Cardinal Partners team has invested in over 100 growth companies. Companies funded
by Cardinal have a cumulative market valuation exceeding $20 billion. Cardinal’s
investors include university endowments, foundations, pension funds, banks, and
insurance companies. Cardinal currently manages funds totaling $400 million. For more
information, please visit View Source

Amgen Reports Fourth Quarter And Full Year 2016 Financial Results

On February 2, 2017 Amgen (NASDAQ:AMGN) reported financial results for the fourth quarter and full year of 2016 (Press release, Amgen, FEB 2, 2017, View Source [SID1234517628]).

Key results include:

For the fourth quarter, total revenues increased 8 percent versus the fourth quarter of 2015 to $6.0 billion.
Product sales grew 6 percent driven by Enbrel (etanercept), Prolia (denosumab), Repatha (evolocumab) and KYPROLIS (carfilzomib).
For the full year, total revenues increased 6 percent to $23.0 billion, with 5 percent product sales growth.
GAAP earnings per share (EPS) increased 9 percent in the fourth quarter to $2.59 and 13 percent for the full year to $10.24, driven by higher revenues and higher operating margins.
GAAP operating income increased 22 percent in the fourth quarter to $2.5 billion and 16 percent for the full year to $9.8 billion.
Non-GAAP EPS increased 11 percent in the fourth quarter to $2.89 and 12 percent for the full year to $11.65, driven by higher revenues and higher operating margins.
Non-GAAP operating income increased 21 percent in the fourth quarter to $2.9 billion and 14 percent for the full year to $11.4 billion.
2017 total revenues guidance of $22.3-$23.1 billion; EPS guidance of $10.45-$11.31 on a GAAP basis and $11.80-$12.60 on a non-GAAP basis.
The Company generated $9.6 billion of free cash flow for the full year versus $9.1 billion in 2015 driven by higher net income.
"We finished the year with strong operating performance," said Robert A. Bradway, chairman and chief executive officer. "We anticipate several new product development opportunities and launches in 2017, and are excited about the Repatha cardiovascular outcomes data we released today. We have established a firm foundation for longer-term growth."

$Millions, except EPS and percentages

Q4’16

Q4’15

YOY Δ

FY ’16

FY ’15

YOY Δ

Total Revenues

$ 5,965

$ 5,536

8%

$ 22,991

$ 21,662

6%
GAAP Operating Income

$ 2,485

$ 2,033

22%

$ 9,794

$ 8,470

16%
GAAP Net Income

$ 1,935

$ 1,800

8%

$ 7,722

$ 6,939

11%
GAAP EPS

$ 2.59

$ 2.37

9%

$ 10.24

$ 9.06

13%
Non-GAAP Operating Income

$ 2,859

$ 2,366

21%

$ 11,446

$ 10,052

14%
Non-GAAP Net Income

$ 2,160

$ 1,985

9%

$ 8,785

$ 7,954

10%
Non-GAAP EPS

$ 2.89

$ 2.61

11%

$ 11.65

$ 10.38

12%

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 increased 6 percent for the fourth quarter of 2016 versus the fourth quarter of 2015. The increase was driven primarily by ENBREL, Prolia, Repatha and KYPROLIS. Product sales increased 5 percent for the full year.
ENBREL sales increased 14 percent for the fourth quarter driven by net selling price and favorable changes in inventory levels, offset partially by the impact of competition. Sales increased 11 percent for the full year driven by net selling price, offset partially by the impact of competition.
Neulasta (pegfilgrastim) sales decreased 3 percent for the fourth quarter and 1 percent for the full year driven by lower unit demand.
Aranesp (darbepoetin alfa) sales increased 5 percent for the fourth quarter and 7 percent for the full year driven by higher unit demand due to a shift by some U.S. dialysis customers from EPOGEN (epoetin alfa) to Aranesp, offset partially by unfavorable changes in net selling price.
Prolia sales increased 22 percent for the fourth quarter and 25 percent for the full year driven by higher unit demand.
Sensipar/Mimpara (cinacalcet) sales increased 7 percent for the fourth quarter driven by net selling price. Sales increased 12 percent for the full year driven by net selling price and higher unit demand.
XGEVA (denosumab) sales increased 6 percent for the fourth quarter and 9 percent for the full year driven by higher unit demand.
EPOGEN sales decreased 8 percent for the fourth quarter and 31 percent for the full year driven by the impact of competition and a shift by some U.S. dialysis customers to Aranesp.
KYPROLIS sales increased 24 percent for the fourth quarter and 35 percent for the full year driven by higher unit demand.
NEUPOGEN (filgrastim) sales decreased 34 percent for the fourth quarter and 27 percent for the full year driven primarily by the impact of competition in the U.S.
Nplate (romiplostim) sales increased 9 percent for the fourth quarter and 11 percent for the full year driven by higher unit demand.
Vectibix (panitumumab) sales increased 6 percent for the fourth quarter and 11 percent for the full year driven by higher unit demand.
Repatha sales growth for the fourth quarter and full year was driven by higher unit demand.
BLINCYTO (blinatumomab) sales increased 32 percent for the fourth quarter and 49 percent for the full year driven by higher unit demand.

Product Sales Detail by Product and Geographic Region

$Millions, except percentages

Q4’16

Q4’15

YOY Δ

US
ROW
TOTAL

TOTAL

TOTAL

Enbrel

$1,582
$62
$1,644

$1,441

14%
Neulasta

943
173
1,116

1,156

(3%)
Aranesp

286
240
526

499

5%
Prolia

293
170
463

380

22%
Sensipar / Mimpara

330
81
411

384

7%
XGEVA

273
103
376

356

6%
EPOGEN

316
0
316

342

(8%)
KYPROLIS

143
40
183

148

24%
NEUPOGEN

116
57
173

263

(34%)
Nplate

88
62
150

137

9%
Vectibix

57
86
143

135

6%
Repatha
36
22
58

7

*
BLINCYTO
24
5
29

22

32%
Other**

19
56
75

59

27%

Total product sales

$4,506
$1,157
$5,663

$5,329

6%

* Change in excess of 100%

** Other includes MN Pharma, Bergamo, IMLYGICand Corlanor

$Millions, except percentages

FY ’16

FY ’15

YOY Δ

US
ROW
TOTAL

TOTAL

TOTAL

Enbrel

$5,719
$246
$5,965

$5,364

11%
Neulasta

3,925
723
4,648

4,715

(1%)
Aranesp

1,082
1,011
2,093

1,951

7%
Prolia

1,049
586
1,635

1,312

25%
Sensipar / Mimpara

1,240
342
1,582

1,415

12%
XGEVA

1,115
414
1,529

1,405

9%
EPOGEN

1,282
0
1,282

1,856

(31%)
NEUPOGEN

534
231
765

1,049

(27%)
KYPROLIS

554
138
692

512

35%
Vectibix

229
382
611

549

11%
Nplate

350
234
584

525

11%
Repatha

101
40
141

10

*
BLINCYTO

85
30
115

77

49%
Other**

60
190
250

204

23%

Total product sales

$17,325
$4,567
$21,892

$20,944

5%

* Change in excess of 100%

** Other includes MN Pharma, Bergamo, IMLYGICand Corlanor

Operating Expense, Operating Margin and Tax Rate Analysis

On a GAAP basis:

Total Operating Expenses decreased 1 percent in the fourth quarter and were flat for the full year, with all expense categories reflecting savings from our transformation and process improvement efforts. Cost of Sales margin improved by 1.3 percentage points in the fourth quarter and 1.2 percentage points for the full year driven primarily by manufacturing efficiencies. Research & Development (R&D) expenses were flat for the fourth quarter. For the full year, R&D expenses decreased 6 percent driven primarily by lower spending required to support certain later-stage clinical programs and transformation and process improvement efforts, offset partially by external business development activities. Selling, General & Administrative (SG&A) expenses decreased 7 percent in the fourth quarter due to the Oct. 31, 2016, expiration of ENBREL residual royalty payments. For the full year, SG&A expenses increased 4 percent driven primarily by investments in new product launches, offset partially by the expiration of ENBREL residual royalty payments. Other expenses increased in the fourth quarter and for the full year as the prior year periods included gains from the sale of assets related to our site closures.
Operating Margin improved by 5.8 percentage points in the fourth quarter to 43.9 percent, and 4.3 percentage points for the full year to 44.7 percent.
Tax Rate for the fourth quarter increased 9.3 percentage points driven primarily by changes in the geographic mix of earnings and the discrete impact of the enactment of the federal R&D credit in the fourth quarter of 2015. The full year tax rate increased 2.7 percentage points driven by changes in the geographic mix of earnings, offset partially by the benefit of adopting Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09).
On a non-GAAP basis:

Total Operating Expenses decreased 2 percent in the fourth quarter and 1 percent for the full year, with all expense categories reflecting savings from our transformation and process improvement efforts. Cost of Sales margin improved by 1.0 percentage points in the fourth quarter and 1.2 percentage points for the full year driven primarily by manufacturing efficiencies. R&D expenses were flat in the fourth quarter. For the full year, R&D expenses decreased 4 percent driven primarily by lower spending required to support certain later-stage clinical programs and transformation and process improvement efforts, offset partially by external business development activities. SG&A expenses decreased 4 percent in the fourth quarter due to the Oct. 31, 2016, expiration of ENBREL residual royalty payments. For the full year, SG&A expenses increased 5 percent driven primarily by investments in new product launches, offset partially by the expiration of ENBREL residual royalty payments.
Operating Margin improved by 6.1 percentage points in the fourth quarter to 50.5 percent, and 4.3 percentage points for the year to 52.3 percent.
Tax Rate for the fourth quarter increased 7.1 percentage points driven primarily by changes in the geographic mix of earnings and the discrete impact of the enactment of the federal R&D credit in the fourth quarter of 2015. The full year tax rate increased 2.0 percentage points driven by changes in the geographic mix of earnings, offset partially by the benefit of adopting ASU 2016-09.

$Millions, except percentages

GAAP

Non-GAAP

Q4’16

Q4’15

YOY Δ

Q4’16

Q4’15

YOY Δ

Cost of Sales
$1,067

$1,071

(0%)

$753

$764

(1%)

% of product sales
18.8%

20.1%

(1.3) pts

13.3%

14.3%

(1) pts
Research & Development
$1,078

$1,093

(1%)

$1,056

$1,057

0%

% of product sales
19.0%

20.5%

(1.5) pts

18.6%

19.8%

(1.2) pts
Selling, General & Administrative
$1,323

$1,416

(7%)

$1,297

$1,349

(4%)

% of product sales
23.4%

26.6%

(3.2) pts

22.9%

25.3%

(2.4) pts
Other
$12

($77)

*

$0

$0

0%
TOTAL Operating Expenses
$3,480

$3,503

(1%)

$3,106

$3,170

(2%)

Operating Margin

operating income as a % of product sales
43.9%

38.1%

5.8 pts

50.5%

44.4%

6.1 pts

Tax Rate
15.2%

5.9%

9.3 pts

18.7%

11.6%

7.1 pts

* Change in excess of 100%

pts: percentage points

$Millions, except percentages

GAAP

Non-GAAP

FY ’16

FY ’15

YOY Δ

FY ’16

FY ’15

YOY Δ

Cost of Sales
$4,162

$4,227

(2%)

$2,913

$3,033

(4%)

% of product sales
19.0%

20.2%

(1.2) pts

13.3%

14.5%

(1.2) pts
Research & Development
$3,840

$4,070

(6%)

$3,755

$3,917

(4%)

% of product sales
17.5%

19.4%

(1.9) pts

17.2%

18.7%

(1.5) pts
Selling, General & Administrative
$5,062

$4,846

4%

$4,877

$4,660

5%

% of product sales
23.1%

23.1%

0 pts

22.3%

22.2%

0.1 pts
Other
$133

$49

*

$0

$0

0%
TOTAL Operating Expenses
$13,197

$13,192

0%

$11,545

$11,610

(1%)

Operating Margin

operating income as a % of product sales
44.7%

40.4%

4.3 pts

52.3%

48.0%

4.3 pts

Tax Rate
15.7%

13.0%

2.7 pts

18.8%

16.8%

2 pts

* Change in excess of 100%

pts: percentage points

Cash Flow and Balance Sheet

The Company generated $2.9 billion of free cash flow in the fourth quarter of 2016 versus $1.9 billion in the fourth quarter of 2015 due primarily to the timing of tax and other payments, as well as higher net income. The Company generated $9.6 billion of free cash flow in 2016 versus $9.1 billion in 2015 due to higher net income.
The Company’s first quarter 2017 dividend of $1.15 per share declared on Dec. 20, 2016, will be paid on March 8, 2017, to all stockholders of record as of Feb. 15, 2017. This represents a 15 percent increase from that paid in each of the previous four quarters.
During the fourth quarter, the Company repurchased 6.7 million shares of common stock at a total cost of $1.0 billion. For the full year, the Company repurchased 19.7 million shares of common stock at a total cost of $3.0 billion. At the end of 2016, the Company had $4.1 billion remaining under its stock repurchase authorization.

$Billions, except shares
Q4’16

Q4’15

YOY Δ

FY ’16

FY ’15

YOY Δ

Operating Cash Flow
$3.1

$2.1

$1.0

$10.4

$9.7

$0.6
Capital Expenditures
0.2

0.2

0.0

0.7

0.6

0.1
Free Cash Flow
2.9

1.9

1.0

9.6

9.1

0.5
Dividends Paid
0.7

0.6

0.2

3.0

2.4

0.6
Share Repurchase
1.0

0.2

0.8

3.0

1.9

1.1
Avg. Diluted Shares (millions)
748

761

(13)

754

766

(12)

Cash and Investments
38.1

31.4

6.7

38.1

31.4

6.7
Debt Outstanding
34.6

31.4

3.2

34.6

31.4

3.2
Stockholders’ Equity
29.9

28.1

1.8

29.9

28.1

1.8

Note: Numbers may not add due to rounding

2017 Guidance

For the full year 2017, the Company expects:

Total revenues in the range of $22.3 billion to $23.1 billion.
On a GAAP basis, EPS in the range of $10.45 to $11.31 and a tax rate in the range of 16 percent to 18 percent.
On a non-GAAP basis, EPS in the range of $11.80 to $12.60 and a tax rate in the range of 18.5 percent to 19.5 percent.
Capital expenditures to be approximately $700 million.
Share repurchases of approximately $2.5 billion to $3.5 billion.

Fourth Quarter Product and Pipeline Update
Key development milestones:

Clinical Program
Indication
Projected Milestone
Repatha
Hyperlipidemia
Phase 3 CV outcomes data presentation Q1 2017*
KYPROLIS
Relapsed or refractory
multiple myeloma
Phase 3 study initiation with DARZALEX
XGEVA
Prevention of SREs in
multiple myeloma
Global regulatory submissions
BLINCYTO
Diffuse large B-cell
lymphoma
Phase 2/3 study initiations
EVENITY (romosozumab)†
Postmenopausal
osteoporosis
U.S. regulatory review
Active controlled Phase 3 fracture data Q2 2017*
Erenumab (AMG 334)
Migraine prophylaxis
Global regulatory submissions
Parsabiv (etelcalcetide)†
Secondary
hyperparathyroidism
U.S. regulatory review
ABP 215
(biosimilar bevacizumab)
Oncology
Global regulatory reviews
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; SRE =
skeletal-related event

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

Repatha

In December, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion for an extension to the marketing authorization of a new 420 mg single-dose delivery option.
Data from a Phase 3 study evaluating the effects of Repatha on cardiovascular outcomes that met its primary composite endpoint and key secondary composite endpoint will be presented at the American College of Cardiology 66th Annual Scientific Session on March 17.
Omecamtiv mecarbil

Enrollment of the Phase 3 cardiovascular outcomes study in chronic heart failure patients commenced in Q1 2017.
KYPROLIS

The primary endpoint in a Phase 3 study of once weekly KYPROLIS administration in relapsed and refractory multiple myeloma patients (ARROW) has been modified from overall response rate to progression-free survival, an event driven endpoint, with results expected in 2019.
In November, a collaboration was established with Janssen Biotech, Inc. (Janssen) to evaluate the combination of KYPROLIS and Janssen’s DARZALEX (daratumumab) in multiple clinical studies in patients with multiple myeloma.
A Phase 3 registrational study evaluating KYPROLIS in combination with DARZALEX and dexamethasone compared to KYPROLIS and dexamethasone alone in patients with multiple myeloma who have had one, two or three prior lines of therapy is anticipated to begin enrollment in Q2 2017.
XGEVA

Regulatory submissions for the prevention of skeletal-related events in multiple myeloma patients are expected in 2017.
BLINCYTO

Regulatory submissions for Philadelphia chromosome-positive relapsed or refractory (R/R) B-cell precursor acute lymphoblastic leukemia (ALL) are expected in 2017. BLINCYTO is currently approved for the treatment of adult and pediatric patients with Philadelphia chromosome-negative R/R B-cell precursor ALL.
Phase 2/3 studies in patients with diffuse large B-cell lymphoma will enroll patients in 2017.
EVENITY (romosozumab)

In December, an application for marketing approval for the treatment of osteoporosis for men and women at high risk for fracture was submitted to the Pharmaceuticals and Medical Devices Agency in Japan. This follows the postmenopausal osteoporosis U.S. filing in 2016 with a U.S. Food and Drug Administration (FDA) Prescription Drug User Fee Act (PDUFA) target action date of July 19, 2017.
Primary results from an event driven active controlled Phase 3 fracture study (ARCH) in postmenopausal women with osteoporosis are expected in Q2 2017.
Erenumab

In November, a second Phase 3 study met its primary endpoint, demonstrating statistically significant reductions from baseline in monthly migraine days in patients with episodic migraine treated with either 70 mg or 140 mg erenumab compared with placebo.
Regulatory submissions for the prevention of episodic and chronic migraine are expected in Q2 2017.
CNP520

In December, FDA granted fast track designation to CNP520, a small molecule beta-site amyloid precursor protein-cleaving enzyme-1 (BACE) inhibitor for the potential treatment of Alzheimer’s disease.
Parsabiv

FDA has set a Feb. 9, 2017, PDUFA target action date for the review of Parsabiv for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease (CKD) on hemodialysis.
In November, the EMA granted marketing authorization for the treatment of sHPT in adult patients with CKD on hemodialysis.
ENBREL

In November, FDA approved the supplemental Biologics License Application (BLA) for the expanded use to treat pediatric patients (ages 4-17) with chronic moderate-to-severe plaque psoriasis.
ABP 215 (biosimilar bevacizumab)

In January 2017, a BLA was accepted by FDA with a Sept. 14, 2017, Biosimilar User Fee target action date.
In December, a Marketing Authorization Application was submitted to the EMA.
ABP 501 (biosimilar adalimumab)

In January 2017, the CHMP adopted a positive opinion for the Marketing Authorization of ABP 501, recommending approval for all available indications. ABP 501 has been recommended for approval for the treatment of certain inflammatory diseases in adults, including moderate-to-severe rheumatoid arthritis, psoriatic arthritis, severe ankylosing spondylitis (AS), severe axial spondyloarthritis without radiographic evidence of AS, moderate-to-severe chronic plaque psoriasis, moderate-to-severe hidradenitis suppurativa, non-infectious intermediate, posterior and panuveitis, moderate-to-severe Crohn’s disease and moderate-to-severe ulcerative colitis. The CHMP opinion also recommends approval for the treatment of certain pediatric inflammatory diseases, including moderate-to-severe Crohn’s disease (ages six and older), severe chronic plaque psoriasis (ages four and older), enthesitis-related arthritis (ages six and older) and polyarticular juvenile idiopathic arthritis (ages two and older).

Erenumab and CNP520 are developed in collaboration with Novartis AG
Omecamtiv mecarbil is developed in collaboration with Cytokinetics and in an alliance with Servier for certain territories.
EVENITY is developed in collaboration with UCB globally, as well as our joint venture partner Astellas in Japan
DARZALEX is a registered trademark of Janssen Biotech, Inc.