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Quest Diagnostics Reports Second Quarter 2024 Financial Results; Raises Guidance for Full Year 2024

On July 23, 2024 Quest Diagnostics Incorporated (NYSE: DGX), a leading provider of diagnostic information services, reported financial results for the second quarter ended June 30, 2024 (Press release, Quest Diagnostics, JUL 23, 2024, View Source [SID1234645016]).

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"We delivered another strong quarter, with base business revenue growth of nearly 4% and total revenue growth of 2.5% as well as continued improvement in productivity and profitability in the base business," said Jim Davis, Chairman, CEO and President. "This performance is due to growth of new physician and hospital customers, more favorable test mix that includes greater adoption of advanced diagnostics and continued strength in healthcare utilization. We also made progress improving our operational quality and efficiency through greater use of automation and AI."

Mr. Davis added: "In addition, we are excited to announce four acquisitions that meet our criteria for growth, profitability and returns, and that will enable us to expand in strategic growth areas. Our planned acquisition of LifeLabs will position us to help this trusted lab leader grow and better serve Canada’s growing and aging population. The acquisitions we recently announced of select outreach lab assets of Allina Health in Minnesota and Wisconsin and OhioHealth in Ohio reflect our ability to partner with high-quality health systems and extend our presence in key geographies. Our recently completed PathAI Diagnostics acquisition positions us to rapidly scale digital pathology innovation to help health systems and other providers improve cancer diagnoses."

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

Change

2024

2023

Change

(dollars in millions, except per share data)

Reported:

Net revenues

$ 2,397

$ 2,338

2.5 %

$ 4,763

$ 4,669

2.0 %

Diagnostic Information Services revenues

$ 2,333

$ 2,268

2.8 %

$ 4,631

$ 4,527

2.3 %

Revenue per requisition

1.6 %

0.9 %

Requisition volume

1.1 %

1.4 %

Organic requisition volume

0.7 %

0.9 %

Operating income (a)

$ 355

$ 348

1.9 %

$ 655

$ 653

0.2 %

Operating income as a percentage of net revenues (a)

14.8 %

14.9 %

(0.1) %

13.7 %

14.0 %

(0.3) %

Net income attributable to Quest Diagnostics (a)

$ 229

$ 235

(2.4) %

$ 423

$ 437

(3.1) %

Diluted EPS (a)

$ 2.03

$ 2.05

(1.0) %

$ 3.75

$ 3.83

(2.1) %

Cash provided by operations

$ 360

$ 444

(18.9) %

$ 514

$ 538

(4.4) %

Capital expenditures

$ 92

$ 104

(10.8) %

$ 196

$ 231

(14.9) %

Adjusted (a):

Operating income

$ 398

$ 389

2.1 %

$ 747

$ 739

1.0 %

Operating income as a percentage of net revenues

16.6 %

16.7 %

(0.1) %

15.7 %

15.8 %

(0.1) %

Net income attributable to Quest Diagnostics

$ 266

$ 263

1.4 %

$ 496

$ 495

0.2 %

Diluted EPS

$ 2.35

$ 2.30

2.2 %

$ 4.39

$ 4.34

1.2 %

(a)

For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.

Updated Guidance for Full Year 2024

The company updates its full year 2024 guidance as follows:

Updated Guidance

Prior Guidance

Low

High

Low

High

Net revenues

$9.50 billion

$9.58 billion

$9.40 billion

$9.48 billion

Net revenues increase

2.7 %

3.5 %

1.6 %

2.5 %

Reported diluted EPS

$7.57

$7.77

$7.57

$7.82

Adjusted diluted EPS

$8.80

$9.00

$8.72

$8.97

Cash provided by operations

Approximately $1.3 billion

Capital expenditures

Approximately $420 million

The company’s updated guidance does not include the impact of the pending LifeLabs acquisition given the uncertainty around when the transaction will close. The company continues to expect to complete the transaction by the end of the year, subject to certain customary closing conditions and approvals, including Canadian regulatory approvals.

Note on Non-GAAP Financial Measures

As used in this press release the term "reported" refers to measures under accounting principles generally accepted in the United States ("GAAP"). The term "adjusted" refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, gains and losses associated with changes in the carrying value of our strategic investments, and other items.

Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.

Conference Call Information

Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on our website at www.QuestDiagnostics.com/investor. We suggest participants dial in approximately 10 minutes before the call.

A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on July 23, 2024 until midnight Eastern Time on August 6, 2024, by phone at 866-363-1805 for domestic callers or 203-369-0193 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.

Mendus announces collaboration with Institut Bergonié to study ilixadencel in soft tissue sarcomas

On July 23, 2024 Mendus AB ("Mendus" publ; IMMU.ST) reported that it has entered into a collaboration with Institut Bergonié, a leading cancer center in Bordeaux, France to study the Mendus’ intratumoral immune primer ilixadencel in soft tissue sarcomas as part of the REGOMUNE trial, a multicenter, prospective open-labeled phase 1/2 trial combining regorafenib and avelumab in solid tumors (Press release, mendus, JUL 23, 2024, View Source [SID1234645014]).

Based on promising signs of clinical efficacy in a wide range of solid tumors and following the successful implementation of manufacturing process improvements, Mendus had previously communicated its decision to move the ilixadencel program forward in hard-to-treat solid tumors, with soft tissue sarcomas as a prioritized indication. Mendus announces today a collaboration with Institut Bergonié, Bordeaux, France to study ilixadencel as a novel immunotherapy in combination with the tyrosine kinase inhibitor (TKI) regorafenib and the immune checkpoint inhibitor avelumab as part of the REGOMUNE trial, which is coordinated by Institut Bergonié. Bayer AG supplies regorafenib and Merck KGaA supplies avelumab as study drug for the trial.

"To study ilixadencel in soft tissue sarcomas provides for the opportunity to assess the relevance of intratumoral immune priming with ilixadencel in hard-to-treat tumors that are poorly responding to currently available therapies", says Jeroen Rovers, Chief Medical Officer at Mendus. "Based on our completed clinical trials we are confident that ilixadencel can be safely combined and may act synergistically with tyrosine kinase inhibitors and immune checkpoint inhibitors. This provides for a solid basis to study the combination with regorafenib and avelumab in collaboration with Institut Bergonié as part of the REGOMUNE trial."

The REGOMUNE trial (ClinicalTrials.gov ID: NCT03475953) is a prospective open-labeled phase 1/2 trial combining regorafenib and avelumab in multiple solid tumors, led by Dr Sophie Cousin and Prof Dr Antoine Italiano. Following a phase 1b dose escalation study design, the combination of regorafenib with avelumab is being evaluated in 17 cohorts of advanced or metastatic tumors in independent phase 2 trials. The trial is recruiting patients in 7 specialized cancer hospitals throughout France. As part of the trial, Mendus will supply ilixadencel as study drug to treat up to 43 patients suffering from soft tissue sarcomas (STS).

Institut Bergonié is a comprehensive cancer center which, is the regional reference center for oncology in the Nouvelle-Aquitaine region of France. The center has a long history in cancer research and recently celebrated its centennial anniversary. Institut Bergonié is part of UNICANCER, a national hospital network of 20 French Comprehensive Cancer Centers (FCCC) which are entirely devoted to fighting cancer with the same unique model based on patient care, research and oncology education.

"Institut Bergonié is committed to provide access to all areas of cancer research to patients", says Prof Dr Antoine Italiano, principal investigator of the REGOMUNE trial and head of the Department of Medicine at Institut Bergonié. "Through our own research and in collaboration with external partners, we develop innovative treatments where they are most needed and the REGOMUNE trial is an excellent example of how we bring together promising new combination therapies to address hard-to-treat tumors. Based on its promising signs of efficacy and excellent safety profile, we look forward to add ilixadencel to the combination of regorafenib and avelumab for treatment of soft tissue sarcomas in the REGOMUNE trial."

Mendus and Institut Bergonié expect to complete the preparations for the ilixadencel treatment arm within the REGOMUNE trial in the second half of 2024 and first patient data to be available first half of 2026.

"Our continued research efforts and manufacturing process improvements allow us to bring ilixadencel back into clinical development and we feel privileged to work with Institut Bergonié as one of the leading cancer centers in Europe based on clinical and medical-scientific expertise", says Mendus CSO Alex Karlsson Parra. "A next wave of innovation in immuno-oncology is expected to come from novel combination approaches for tumors that are poorly responding to currently available therapies and this is where we have focused our preclinical and clinical research with ilixadencel. The REGOMUNE trial provides for an excellent opportunity to evaluate intratumoral immune priming with ilixadencel as a treatment which can have a meaningful impact in the lives of people suffering from hard-to-treat tumors."

Evogene Announces Expected Implementation of 1-for-10 Reverse Share Split

On July 23, 2024 Evogene Ltd. (Nasdaq: EVGN, TASE: EVGN) (the "Company" or "Evogene"), a leading computational biology company targeting to revolutionize life-science-based product discovery and development utilizing cutting edge computational biology technologies, across multiple market segments, reported that a reverse share split of its issued and outstanding Ordinary Shares, at a ratio of 1-for-10, is expected to be implemented after market close on July 24, 2024 (Press release, Evogene, JUL 23, 2024, View Source [SID1234645013]). The Company’s Ordinary Shares will begin trading on the Nasdaq Capital Market on a post-reverse split basis at the market open on July 25, 2024, and on the Tel Aviv Stock Exchange at the market open on July 28, 2024, in each case under the Company’s existing trading symbol "EVGN".

The reverse share split was approved by the Company’s shareholders at the Company’s Annual Meeting of Shareholders held on June 13, 2024, to be effected at the board of directors’ discretion within approved parameters.

Following the implementation of the reverse split, the Company’s registered share capital under the Company’s amended and restated articles of association, as currently in effect (the "Articles"), which as of the date hereof consists of NIS 3,000,000 divided into 150,000,000 Ordinary Shares of NIS 0.02 par value each, will be adjusted to consist of NIS 3,000,000 divided into 15,000,000 Ordinary Shares of NIS 0.2 par value each. The reverse split will adjust the number of issued and outstanding Ordinary Shares of the Company from approximately 50,790,000 Ordinary Shares to approximately 5,079,000 Ordinary Shares (subject to any further adjustments based on the treatment of fractional shares).

No fractional Ordinary Shares will be issued as a result of the reverse split. In accordance with the Company’s Articles, all fractional shares shall be rounded to the nearest whole ordinary share, such that only shareholders holding fractional consolidated shares of more than half of the number of shares which consolidation constitutes one whole share, shall be entitled to receive one consolidated share. No cash will be paid with respect to any fractional shares. In addition, proportionate adjustments will be made to the number of shares issuable upon the exercise of all outstanding options entitling the holders to purchase Ordinary Shares (with a reciprocal increase in the per share exercise price) and to the number of Ordinary Shares underlying outstanding Restricted Share Units (RSUs).

Anixa Biosciences Announces FDA Approval of Individual Patient IND for its Ovarian Cancer CAR-T Therapy

On July 23, 2024 Anixa Biosciences, Inc. ("Anixa" or the "Company") (NASDAQ: ANIX), a biotechnology company focused on the treatment and prevention of cancer, reported that its collaborator, Moffitt Cancer Center (Moffitt), has received approval by the U.S. Food and Drug Administration (FDA) of an individual patient Investigational New Drug Application (IND) to allow a second dose of its CAR-T therapy for a patient that may be demonstrating clinical activity to the initial treatment (Press release, Anixa Biosciences, JUL 23, 2024, View Source [SID1234645012]).

Dr. Robert Wenham, Chair, Department of Gynecologic Oncology at Moffitt, and the principal investigator of the trial, stated, "In the first cohort and at the lowest dose administered, despite an initial increase in tumor size that met criteria for progression, one patient has remained off new therapy for many months with no new disease. Even her tumor marker that was initially elevating later began to fall. A biopsy demonstrated tumor with necrosis, inflammation and T cell infiltration by Immunohistochemistry (IHC). Based on these findings, we sought approval from the FDA to administer a second treatment to her, aiming to increase the likelihood of a partial or complete response. Recently, we received that approval from the FDA."

"I am pleased with the very long duration absent of any further disease and the possible response that my patient has exhibited with this innovative therapy, as she had no other realistic options. I look forward to evaluating her progress with successive dosing, as well as future patients who have no other alternatives," stated Dr. Monica Avila, the patient’s treating oncologist.

Dr. Amit Kumar, CEO of Anixa Biosciences commented, "We were somewhat surprised and quite encouraged to see such a notable response this early, given the low dose in the first cohort. We truly hope we can help this patient, as well as all other women fighting this terrible disease."

The Phase I clinical trial at Moffitt is treating recurrent ovarian cancer patients who have failed standard-of-care therapies. To date, six patients have been treated in the dose escalation trial, three in the first cohort and three in the second cohort. Dose escalation will continue after confirming the previous dosages are safe.

Flagship Pioneering Unveils Abiologics to Pioneer Supranatural Biologics, A New Biotherapeutic Class

On July 23, 2024 Flagship Pioneering, the bioplatform innovation company, today unveiled Abiologics, a company reimagining biologics with the creation of a new class of supranatural and programmable medicines, called Synteins (Press release, Abiologics, JUL 23, 2024, View Source [SID1234645011]). Synteins are computationally-generated and synthesized with novel building blocks, endowing them with extraordinary properties to bring life-changing treatments to patients across a wide range of diseases. Flagship has initially committed $50 million to advance the company’s platform and develop a diverse pipeline of medicines, with an initial focus on oncology and immunology indications.

"Biologics have transformed medicine in the past forty years, but only a fraction of their potential has been realized because we’ve been limited by the boundaries of nature," said Noubar Afeyan, Ph.D., Founder and CEO of Flagship Pioneering and Co-Founder and Chairman of the Strategic Oversight Board of Abiologics. "With the convergence of advancements in generative artificial intelligence, automated polymer synthesis and chemical functionalization coupled with a vision to develop more powerful medicines with unprecedented diversity, we asked, what if we could design biologics entirely from new building blocks that could overcome the most critical limitations of today’s medicines?"

The Abiologics platform is a fully integrated digital and automated wet-lab infrastructure to create supranatural biologics with powerful, desirable pharmacological properties. The platform leverages state-of-the-art generative artificial intelligence (AI) to computationally-design Synteins de novo using a broad set of artificial building blocks, far beyond the 20 naturally occurring amino acids that form the basis of today’s biologic medicines. These include biologics built with D-amino acids, chemically identical mirror images of standard amino acids. Once designed, Abiologics chemically synthesizes its digitally-optimized Synteins with pioneering new technologies. As a result, Synteins can be programmed to interact with virtually any therapeutic target while evading the body’s natural defenses. By surpassing the limitations of traditional biologics discovery tools, Abiologics is the first to discover, prototype and scale-up polymers composed solely of artificial building blocks, and to date, has successfully generated Synteins made entirely of D-amino acids that bind a diversity of therapeutically relevant targets while remaining ultrastable.

"For the first time, we are able to imagine and generate chemically synthesized biologics at scale and with increasing programmability, offering a new class of medicines with transformative potential," said Avak Kahvejian, Ph.D., Co-Founder and CEO of Abiologics and General Partner at Flagship Pioneering. "Creating protein biologics with artificial building blocks rather than naturally occurring amino acids allows Synteins to go unrecognized by the immune system, offering significant advantages compared to today’s biologics such as less frequent dosing, oral delivery and the ability to reach parts of the body that were previously impossible to access and treat. With Synteins, Abiologics is poised to bring boundary-breaking medicines to patients across a range of diseases."

In addition to Afeyan and Kahvejian, Abiologics’ founding team includes Mike Hamill, Ph.D., Chief Innovation Officer of Abiologics and Senior Principal at Flagship Pioneering, Kala Subramanian, Ph.D., Founding President of Abiologics and Operating Partner at Flagship Pioneering, Jaclyn Dunphy, Ph.D., Senior Director of Strategy and Research Operations at Abiologics, and Alicia Kaestli, Ph.D., Senior Associate at Flagship Pioneering. Bradley Pentelute, Ph.D., Professor of Chemistry at MIT, is an Academic Co-Founder of Abiologics.