On May 04, 2016 RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL) ("RedHill" or the "Company"), a biopharmaceutical company primarily focused on development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for inflammatory and gastrointestinal diseases and cancer, report that the U.S. National Cancer Institute ("NCI") has awarded the Medical University of South Carolina ("MUSC") a $1.8 million grant to support a broad range of studies on the feasibility of targeting sphingolipid metabolism for the treatment of a variety of solid tumor cancers (Press release, RedHill Biopharma, MAY 4, 2016, View Source [SID:1234511893]).

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One component of the studies includes a planned Phase II study with YELIVA(TM) (ABC294640) for the treatment of advanced hepatocellular carcinoma ("HCC"), the most common primary malignant cancer of the liver1. YELIVA(TM) is a proprietary, first-in-class, orally-administered sphingosine kinase-2 (SK2) selective inhibitor.

The Phase II study, planned to be initiated in the third quarter of 2016, will be conducted at MUSC and additional clinical sites and is intended to evaluate the efficacy and safety of YELIVA(TM) as a second-line monotherapy in patients with advanced HCC. The study is planned to enroll up to 39 patients who have experienced tumor progression following treatment with first-line single-agent sorafenib (Nexavar). Carolyn D. Britten, MD, Director of Hematology/Oncology Division in the Department of Medicine at MUSC and Associate Director for Clinical Investigations at the MUSC Hollings Cancer Center, will act as Principal Investigator for the study.

Prof. Ran Oren, MD, Head of the Institute of Gastroenterology and Liver Diseases at Hadassah University Hospital, Ein Kerem, and a Member of RedHill’s Advisory Board, Said: "Hepatocellular carcinoma (HCC) is one of the most common malignancies worldwide, with one of the highest mortality rates among cancers. It arises most frequently in patients suffering from chronic liver disease and poses an increasing problem in the Western world due to hepatitis B and hepatitis C virus infections, alcoholic cirrhosis and non-alcoholic steatohepatitis resulting from high obesity rates. Curative treatments, such as hepatic resection and liver transplant, are available only to patients diagnosed with early HCC. While these treatments offer good prognosis, they are extremely limited in their application. Over two-thirds of HCC patients in the developed world are diagnosed at advance stages of the disease, emphasizing the strong need for novel therapeutic treatments for both early and late stage HCC."

The NCI grant covers a five-year period. The Phase II HCC study will be further supported by additional funding from RedHill, which acquired the exclusive worldwide rights to YELIVA(TM) from Apogee Biotechnology Corp. ("Apogee").

HCC is the most common primary malignant cancer of the liver. It is the sixth most prevalent cancer and the third most frequent cause of cancer-related death worldwide2. Annual worldwide incidence of liver cancer was estimated to have reached 782,000 cases in 2012, with mortality of 746,000; the corresponding U.S. numbers are 30,000 and 24,000, respectively3. Most patients with HCC suffer from liver cirrhosis, which develops following long periods of chronic liver disease. The majority of HCC cases are associated with hepatitis B and hepatitis C virus infections. Additional causes for HCC include heavy alcohol consumption, obesity, diabetes, tobacco smoking, metabolic syndrome leading to fatty liver and hemachromatosis. The prognosis of patients with HCC is affected by the disease stage at diagnosis and by the underlying liver function. Few treatment options exist for patients diagnosed at an advanced stage, representing the majority of HCC patients. Sorafenib (Nexavar) is a targeted drug approved for the treatment of HCC in patients who are not candidates for surgery and do not have severe cirrhosis. The worldwide and U.S. markets for the treatment of HCC are estimated to reach approximately $895 million and $471 million in 2017, respectively4.

RedHill previously announced positive top-line results from a Phase I study with YELIVA(TM) in patients with advanced solid tumors, the majority of which were gastrointestinal cancer patients, including pancreatic, colorectal and cholangiocarcinoma cancers. Top-line results demonstrated that YELIVA(TM) can be safely administered to cancer patients at doses that provide circulating drug levels that are predicted to have therapeutic activity, based on levels required in preclinical models. Final results are expected in the coming weeks. The Phase I study included the first-ever longitudinal analysis of plasma sphingosine-1-phosphate (S1P) levels as a potential pharmacodynamic biomarker for activity of a sphingolipid-targeted drug. The administration of YELIVA(TM) resulted in a rapid and pronounced decrease in S1P levels over the first 12 hours, with return to baseline at 24 hours, consistent with clearance of the drug, with several patients having prolonged stabilization of disease.

A Phase I/II clinical study was initiated in June 2015 in the U.S. evaluating YELIVA(TM) in patients with refractory/relapsed diffuse large B-cell lymphoma (DLBCL), including in patients with HIV-related DLBCL. The study is being conducted at the Louisiana State University Health Sciences Center (LSUHSC) in New Orleans and is supported by a grant awarded to Apogee from the NCI Small Business Technology Transfer (STTR) program, as well as additional support from RedHill.

A Phase I/II study with YELIVA(TM) for the treatment of refractory or relapsed multiple myeloma is planned to be initiated in the second quarter of 2016. The study will be conducted at Duke University Medical Center. The study is supported by a $2 million grant from the NCI Small Business Innovation Research Program (SBIR) awarded to Apogee in conjunction with Duke University, with additional support from RedHill.

A Phase II clinical study to evaluate YELIVA(TM) as a radioprotectant to prevent mucositis in cancer patients undergoing therapeutic radiotherapy is planned to be initiated in the U.S. during the second half of 2016, subject to regulatory and other conditions.

The Phase I/II clinical studies in patients with DLBCL and multiple myeloma, as well as the Phase I clinical study in cancer patients with advanced solid tumors are registered on www.ClinicalTrials.gov, a web-based service by the U.S. National Institute of Health which provides public access to information on publicly and privately supported clinical studies.

About YELIVA(TM) (ABC294640):

YELIVA(TM) (ABC294640) is a Phase II-stage, proprietary, first-in-class, orally-administered, sphingosine kinase-2 (SK2) selective inhibitor with anticancer and anti-inflammatory activities, targeting multiple oncology, inflammatory and gastrointestinal indications. By inhibiting the SK2 enzyme, YELIVA(TM) blocks the synthesis of sphingosine 1-phosphate (S1P), a lipid signaling molecule that promotes cancer growth and pathological inflammation. SK2 is an innovative molecular target for anticancer therapy because of its critical role in catalyzing the formation of S1P, which is known to regulate cell proliferation and activation of inflammatory pathways. YELIVA(TM) was originally developed by U.S.-based Apogee Biotechnology Corp. and completed multiple successful pre-clinical studies in oncology, inflammation, GI and radioprotection models, as well as the ABC-101 Phase I clinical study in cancer patients with advanced solid tumors. A Phase I/II clinical study evaluating YELIVA(TM) in patients with refractory/relapsed diffuse large B-cell lymphoma (DLBCL) has been initiated in the U.S. The development of YELIVA(TM) was funded to date primarily by grants and contracts from U.S. federal and state government agencies awarded to Apogee Biotechnology Corp., including the U.S. National Cancer Institute, the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority (BARDA), the U.S. Department of Defense and the FDA Office of Orphan Products Development.

On May 3, 2016 Mylan N.V. (NASDAQ, TASE: MYL) reported its financial results for the quarter ended March 31, 2016 (Press release, Mylan, MAY 3, 2016, View Source [SID:1234511897]).

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Financial Highlights
Total revenues of $2.19 billion, up 19% on a constant currency basis compared to the prior year period (up 17% on a U.S. GAAP basis)
Generics segment third party net sales of $1.93 billion, up 19% on a constant currency basis (up 17% on a U.S. GAAP basis). All regions in the Generics segment showed positive year-over-year growth.

Specialty segment third party net sales of $247.9 million, up 17%
Adjusted diluted earnings per ordinary share ("EPS") of $0.76, up 9% compared to the prior year period; U.S. GAAP diluted EPS of $0.03, down 77% as a result of higher operating expenses, including amortization expense related to acquisitions completed during 2015

Reaffirms 2016 total revenues guidance of $10.5 billion to $11.5 billion, the midpoint of which represents an increase of 16% versus 2015, and 2016 adjusted diluted EPS guidance of $4.85 to $5.15, the midpoint of which represents an increase of 16% versus 2015 (U.S. GAAP diluted EPS of $2.38 to $2.43, the midpoint of which represents an increase of 41% versus 2015)
Mylan CEO Heather Bresch commented, "We are off to a great start in 2016 with our strong first quarter results delivering year-over-year constant currency total revenues growth of 19% and adjusted diluted EPS growth of 9%. We showed again the strength and resilience of Mylan’s diverse, global platform, with double digit revenue growth in Europe, Rest of World and Specialty and high single digit revenue growth in North America. Based on our first quarter performance, we remain highly confident in our guidance and our business outlook for the full year 2016. Despite much external focus and discussion of the pricing environment, consistent with our previously communicated 2016 guidance and given Mylan’s position as a large-scale, differentiated player, we continue to see nothing out of the ordinary to change our generic pricing assumptions of low- to mid-single digit erosion for the full year.

Almost a decade ago, we laid out our vision and strategy for growth and our belief that it would come from both organic and inorganic initiatives to create unmatched scale in manufacturing, broad breadth in our product portfolio, and expansion across all geographic territories – all with the aim of achieving our mission of providing access to medicine to patients around the world. We are excited about our pending acquisition of Meda, which will further strengthen and diversify our business in terms of product portfolio, customer channels, and geography, and position us for continued growth and value creation over the near- and long-term. I am pleased to note that Meda’s Q1 2016 earnings results reported this morning were in-line with our modeled expectations for the business, and we remain fully committed to and look forward to closing this transaction."
Total Revenues

Three Months Ended

March 31,
(Unaudited; in millions)
2016

2015

Percent
Change
Total Revenues
$
2,191.3

$
1,871.7

17%
Generics Segment Third Party Net Sales
1,928.2

1,643.5

17%
North America*
919.7

855.0

8%
Europe
587.7

406.2

45%
Rest of World*
420.8

382.3

10%
Specialty Third Party Net Sales
247.9

211.1

17%
Other Revenues
15.2

17.1

(11)%
*Beginning in the first quarter of 2016, the Company reclassified sales from its Brazilian operation from the Rest of World region to the North America region. The amount reclassified for the three months ended March 31, 2015 was approximately $10.2 million.

Generics Segment Revenues
Generics segment third party net sales were $1.93 billion for the quarter, an increase of 17% when compared to the prior year period. When translating third party net sales for the current quarter at prior year comparative period exchange rates ("constant currency"), third party net sales increased by 19%.

Third party net sales from North America were $919.7 million for the quarter, an increase of 8% when compared to the prior year period. This increase was principally due to net sales from products launched since April 1, 2015 ("new products"), and to a lesser extent, incremental net sales from our established products. Factors offsetting this increase were lower sales on existing products. Constant currency third party net sales from North America increased by 8%.

Third party net sales from Europe were $587.7 million for the quarter, an increase of 45% when compared to the prior year period. This increase was primarily the result of incremental net sales from our established products as well as new products. Higher volumes on existing products, primarily in France, were offset by lower pricing throughout Europe, due to government-imposed pricing reductions and competitive market conditions. Constant currency third party net sales from Europe increased by 47%.
Third party net sales from Rest of World were $420.8 million for the quarter, an increase of 10% when compared to the prior year period. This increase was primarily driven by incremental net sales from established products, net sales by Jai Pharma Limited (certain female healthcare businesses acquired from Famy Care Limited), and to a lesser extent, new product launches across the region. Higher volumes in Japan and Australia also contributed to the increase. These increases were partially offset by lower pricing throughout the region and a decrease in third party net sales volumes from our operations in India, in particular the anti-retroviral ("ARV") franchise. Constant currency third party net sales from Rest of World increased by 15%.

Specialty Segment Revenues
Specialty segment reported third party net sales were $247.9 million for the quarter, an increase of 17% when compared to the prior year period. This increase was primarily the result of higher volumes of the EpiPen Auto-Injector and higher sales of the Perforomist Inhalation Solution.

Total Gross Profit
Adjusted gross profit was $1.18 billion and adjusted gross margins were 54% for the quarter as compared to adjusted gross profit of $990.6 million and adjusted gross margins of 53% in the comparable prior year period. The current quarter increase was primarily due to the incremental contribution from established products in the first quarter of 2016 as well as new product introductions, partially offset by decreased margins on existing products in North America. U.S. GAAP gross profit was $907.0 million and $830.1 million for the first quarter of 2016 and 2015, respectively. U.S. GAAP gross margins were 41% and 44% in the first quarter of 2016 and 2015, respectively. The decrease in gross margins relates principally to additional amortization expense related to acquisitions completed during 2015.

Total Profitability
Adjusted earnings from operations for the quarter were $490.1 million, up 14% from the comparable prior year period. U.S. GAAP earnings from operations were $105.6 million for the quarter, a decrease of 34% from the comparable prior year period. R&D expense on an adjusted basis increased primarily as a result of the continued development of our respiratory, insulin and biologics programs. U.S. GAAP R&D expense also increased primarily as a result of an upfront payment made to Momenta for $45 million related to the Company’s collaboration agreement. SG&A expense on a U.S. GAAP and adjusted basis primarily increased due to the incremental expense related to the established products.

EBITDA, which is defined as net earnings (excluding the non-controlling interest and losses from equity method investees) plus income taxes, interest expense, depreciation and amortization, was $417.3 million for the quarter ended March 31, 2016, and $340.5 million for the comparable prior year quarter. Adjusted net earnings attributable to Mylan N.V. increased by $77.2 million to $386.3 million compared to $309.1 million for the prior year comparable period. U.S. GAAP net earnings attributable to Mylan N.V. decreased by $42.7 million to $13.9 million for the quarter ended March 31, 2016, as compared to $56.6 million for the comparable prior year period. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $583.7 million for the quarter ended March 31, 2016 and $504.6 million for the comparable prior year period. Adjusted diluted EPS increased 9% to $0.76 compared to $0.70 in the prior year comparable period. U.S. GAAP diluted EPS decreased from $0.13 to $0.03 as a result of higher operating expenses, including amortization expense related to acquisitions completed during 2015.

Cash Flow
Adjusted cash provided by operating activities was $202 million for the three months ended March 31, 2016 compared to $336 million for the comparable prior year period. On a U.S. GAAP basis, net cash provided by operating activities was $81 million for the three months ended March 31, 2016 compared to $267 million for the comparable prior year period. Capital expenditures were approximately $52 million for the three months ended March 31, 2016 as compared to approximately $48 million for the comparable prior year period. Adjusted free cash flow was $150 million for the three months ended March 31, 2016, compared to $288 million in the prior year period.