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BIO-TECHNE RELEASES FIRST QUARTER FISCAL 2024 RESULTS

On October 31, 2023 Bio-Techne Corporation (NASDAQ: TECH) reported its financial results for the first quarter ended September 30, 2023 (Press release, Bio-Techne, OCT 31, 2023, View Source [SID1234636572]).

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First Quarter FY2024 Highlights

First quarter organic revenue increased by 2% (3% reported) to $276.9 million.

GAAP earnings per share1) (EPS) was $0.31 versus $0.55 one year ago. Delivered adjusted EPS1) of $0.41 compared to $0.45 one year ago.

Our ExoDx prostate test and GMP proteins continued their growth trajectories with test volume increasing 49% and revenue increasing 39%, respectively.

Our ProteinSimple branded portfolio of instruments and consumables services increased 9% in the quarter and grew over 18% excluding China.

Strong commercial execution in EMEA led to first quarter organic growth of 15% in the region.

Cash flow generated from operations increased to $59.4 million, a 6% increase from the prior year.

On October 19, 2023, announced the appointment of current Diagnostics and Genomics President, Kim Kelderman, as CEO effective February 1, 2024.
1)On November 29, 2022, the company executed a four-for-one split of Bio-Techne’s common stock in the form of a stock dividend to all shareholders of record on November 14, 2022. All references made to share or per share amounts in this press release have been retroactively adjusted to reflect the effects of the stock split.

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted diluted EPS, adjusted net earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, organic growth, adjusted operating margin, earnings before interest, taxes, depreciation, and amortization (EBITDA), and adjusted EBITDA are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of non-GAAP Adjusted Financial Measures." A reconciliation of GAAP to non-GAAP financial measures is included in this press release.

"The Bio-Techne team continues to execute in a challenging market, with our durable portfolio delivering 2% organic growth despite the soft biotech funding environment and evolving macroeconomic landscape in China. Our European team’s performance was particularly impressive with 15% growth in the region," said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. "We delivered these results with a continued focus on profitability, as our disciplined approach led to an adjusted operating margin of 31.4%, in-line with our expectations."

Kummeth continued, "Our growth pillars continue to perform well, including 49% ExoDx Prostate test volume growth, a 39% increase in our GMP proteins business, as well as 9% growth in our ProteinSimple branded portfolio of instruments and consumables. In fact, excluding China, our ProteinSimple portfolio increased over 18% in the quarter."

Kummeth concluded, "I also want to personally congratulate Kim Kelderman on his appointment as CEO effective February 1, 2024. I am looking forward to working with Kim in his interim role as Chief Operating Officer and will continue to support him as a Senior Advisor until my retirement on July 1, 2024. One thing is certain, Kim is inheriting an experienced and talented team, and I am confident he is the right leader to execute our strategic playbook and drive results going forward. I am excited for the future of Bio-Techne and believe our portfolio, strategy and leadership position the Company incredibly well for the future."

First Quarter Fiscal 2024

Revenue

Net sales for the first quarter increased 3% to $276.9 million. Organic growth was 2% compared to the prior year, with acquisitions contributing 1% and foreign currency exchange having an immaterial impact.

GAAP Earnings Results

GAAP EPS was $0.31 per diluted share, versus $0.55 in the same quarter last year. GAAP operating income for the first quarter of fiscal 2024 decreased 1% to $55.9 million, compared to $56.3 million in the first quarter of fiscal 2023. Prior year GAAP EPS was favorably impacted by a non-recurring gain of $37.2 million on the sale of our ChemoCentryx investment and a non-recurring gain of $11.7 million on the sale of our Eminence investment. GAAP operating margin was 20.2%, compared to 20.9% in the first quarter of fiscal 2023. Current year GAAP operating margin was unfavorably impacted by the Lunaphore acquisition and by year-over-year increases in strategic growth investments.

Non-GAAP Earnings Results

Adjusted EPS decreased to $0.41 per diluted share compared to $0.45 in the same quarter last year. Adjusted operating income for the first quarter of fiscal 2024 decreased 7% compared to the first quarter of fiscal 2023. Adjusted operating margin was 31.4%, compared to 34.8% in the first quarter of fiscal 2023. Adjusted operating margin was unfavorably impacted by the acquisition of Lunaphore this year and other strategic growth investments.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the Company’s business segments, as highlighted below.

Protein Sciences Segment

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s first quarter fiscal 2024 net sales were $204.7 million, an increase of 2% from $199.9 million for the first quarter of fiscal 2023. Organic growth for the segment was 2%, with foreign currency exchange having an immaterial impact. Protein Sciences segment’s operating margin was 43.2% in the first quarter of fiscal 2024 compared to 43.0% in the first quarter of fiscal 2023.

Diagnostics and Genomics Segment

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides spatial biology products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s first quarter fiscal 2024 net sales were $72.8 million, an increase of 4% from $69.9 million for the first quarter of fiscal 2023. Organic revenue growth was flat for the first quarter of fiscal 2024, with acquisitions having a 3% impact and foreign exchange having a favorable impact of 1%. The Diagnostics and Genomics segment’s operating margin was 0.7% in the first quarter of fiscal 2024 compared to 12.4% in the first quarter of fiscal 2023. The segment’s operating margin decreased primarily due to the acquisition of Lunaphore this year along with other strategic growth investments and unfavorable product mix.

Conference Call

Bio-Techne will host an earnings conference call today, October 31, 2023 at 8:00 a.m. CDT. To listen, please dial 1-877-407-9208 or 1-201-493-6784 for international callers, and reference conference ID 13741775. The earnings call can also be accessed via webcast through the following link View Source

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512- 2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 13741775. The replay will be available from 11:00 a.m. CDT on Tuesday, October 31, 2023, until 11:00 p.m. CST on Thursday, November 30, 2023.

Kite And Epic Bio Announce Collaboration To Develop New Therapies For Cancer

On October 31, 2023 Kite, a Gilead Company (Nasdaq: GILD)and Epicrispr Biotechnologies ("Epic Bio"), reported the companies have entered into a research collaboration and license agreement using Epic Bio’s proprietary gene regulation platform to develop next-generation cancer cell therapies (Press release, Gilead Sciences, OCT 31, 2023, View Source [SID1234636571]). The agreement will allow Kite to leverage the licensed technology to modulate certain genes to potentially enhance CAR T-cell functionality.

"Cell-based cancer immunotherapies have reshaped modern cancer care, but we have still only scratched the surface of their potential benefit for patients. At Kite, we are committed to developing next generation CAR T-cell therapies with the goal of reaching more patients with cancer who could benefit," said David Barrett, Vice President of Cell Biology and Translational Medicine at Kite. "We look forward to collaborating with Epic Bio with the goal of further advancing today’s cell therapies and potentially expanding their reach and impact on patients."

"We are proud to partner with Kite to extend the potential application of Epic Bio’s platform for cancer treatment. Epic Bio’s approach is not only promising for in vivo medicines, but may also enable next-generation cell therapies to reach a wide range of patient populations," said Amber Salzman, Ph.D., Chief Executive Officer of Epic Bio. "We look forward to applying our expertise in gene modulation to help advance CAR T-cell therapies."

Under the terms of the agreement, Epic Bio will develop constructs for Kite-selected targets for use in CAR T-cell therapies directed to blood cancers. Kite will make an upfront payment to Epic Bio and Epic Bio will be eligible to receive performance-based development, regulatory and sales milestone payments. Epic Bio is also eligible to receive tiered royalties on any approved products that result from the collaboration.

The transaction with Epic Bio is expected to have a de minimis financial impact on Gilead’s 2023 GAAP and non-GAAP EPS.

XOMA Earns $5 Million Milestone Upon FDA Acceptance of Day One’s Tovorafenib NDA for Relapsed or Progressive Pediatric Low-Grade Glioma (pLGG)

On October 31, 2023 XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported that it has earned a $5 million milestone related to the U.S. Food and Drug Administration’s (FDA) acceptance of Day One Biopharmaceuticals’ New Drug Application (NDA) for tovorafenib as a monotherapy for relapsed or progressive pediatric low-grade glioma (pLGG) (Press release, Xoma, OCT 31, 2023, View Source [SID1234636570]). The FDA has granted tovorafenib Priority Review and established a Prescription Drug User Fee Act (PDUFA) date of April 30, 2024.

"Tovorafenib has the potential to address a key unmet need in children whose low-grade gliomas with BRAF alterations have relapsed or progressed," stated Owen Hughes, Executive Chairman of XOMA. "A novel, targeted, orally available option has the opportunity to set a new standard-of-care in this patient population."

In March 2021, XOMA paid $13.5 million upfront plus a share of a future event-based milestone, to acquire the $54 million in potential milestones and mid-single digit royalties associated with tovorafenib, in addition to the economics associated with vosaroxin, from Viracta Therapeutics.

Vaccinex Reports Clinical Benefit in Interim Analyses from two Phase 2 Studies of Pepinemab Combination Treatment at Society for Immunotherapy of Cancer’s Annual Meeting

On October 31, 2023 Vaccinex, Inc. (Nasdaq: VCNX), a clinical-stage biotechnology company, reported that it will present novel findings for its lead product, pepinemab, in two presentations at the 38th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper), being held in San Diego, CA November 1-5, 2023 (Press release, Vaccinex, OCT 31, 2023, View Source [SID1234636558]). Vaccinex reports consistent findings from two independent studies demonstrating novel activity of pepinemab antibody to induce the formation of lymphoid structures in tumors that promote efficient immune responses and are known to be associated with improved outcomes to immune checkpoint inhibitors (ICI). In a pre-specified interim analysis of the Phase 2 KEYNOTE-B84 study (NCT04815720) evaluating pepinemab in combination with Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab) for immunotherapy of recurrent or metastatic head and neck squamous cell carcinoma (HNSCC), these structures were associated with an approximate doubling of objective responses (ORR) and progression free survival (PFS) relative to historical results with checkpoint monotherapy in patients with hard-to-treat tumors that express low levels of PD-L1 (CPS<20). Similarly, findings will be reported from a separate study with collaborators at Emory University indicating that pepinemab in combination with nivolumab and/or ipilimumab (BMS), appeared to induce tertiary lymphoid structures in tumors. Remarkably, patients receiving neoadjuvant treatment with the triple combination have not experienced tumor recurrence for more than 2 years following treatment (ongoing response in 8/8 patients) (NCT03769155).

The potential of immune checkpoint therapies to sustain cytotoxic T cells is limited by insufficient support from other immune cell interactions, including with myeloid cells and B cells. The tumor microenvironment creates barriers to efficient immune cell communication, including by expression of semaphorin 4D (SEMA4D), which binds receptors on myeloid cells to inhibit the migration and maturation of dendritic cells (DC) that are crucial for priming and expanding T cells in adaptive immune responses. Preclinical and clinical studies have previously demonstrated improved trafficking of DC and T cells and reduction of immature myeloid derived suppressor cells in tumor following treatment with pepinemab SEMA4D blocking antibody. Data from two independent studies to be presented at SITC (Free SITC Whitepaper) provide new evidence that pepinemab induces the formation of lymphoid structures within treated tumors and that this is associated with enhanced immune interactions and durable responses. These results highlight pepinemab’s novel mechanisms to overcome limitations of ICI.

"Neoadjuvant SEMA4D inhibitor pepinemab combination with nivolumab increases crosstalk between B cell and CD26hi T cell in patients with resectable stage III melanoma" will be presented by Dr. Ayana Ruffin of Emory University together with Vaccinex authors on Friday, November 3, 2023.

"Pepinemab, anti semaphorin 4D antibody, in combination with pembrolizumab induced formation of organized lymphoid aggregates and enhanced response to treatment in CPS<20 R/M HNSCC tumors (KEYNOTE-B84)" will be presented by Dr. Terrence Fisher together with Merck authors and study investigators on Saturday, November 4, 2023.

About Pepinemab
Pepinemab is a humanized IgG4 monoclonal antibody designed to block SEMA4D, which can trigger collapse of the actin cytoskeleton and loss of homeostatic functions of dendritic cells in immune tissue and of astrocytes and glial cells in the brain. Pepinemab has been administered to more than 400 patients and appears to be well-tolerated and to have a favorable safety profile.

United Therapeutics Corporation to Present at the UBS Biopharma Conference 2023

On October 31, 2023 United Therapeutics Corporation (Nasdaq: UTHR), a public benefit corporation, reported that Patrick Poisson, Executive Vice President, Technical Operations, will provide an overview and update on the company’s business during a fireside chat session at the UBS Biopharma Conference 2023 in Miami Beach, Florida (Press release, United Therapeutics, OCT 31, 2023, View Source [SID1234636557]).

The session will take place on Wednesday, November 8, 2023, from 10:00 a.m. to 10:25 a.m., Eastern Standard Time, and can be accessed via a live webcast on the United Therapeutics website at View Source An archived, recorded version of the session will be available approximately 24 hours after the session ends and can be accessed for 180 days.