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Integra LifeSciences Reports Third Quarter 2023 Financial Results

On October 25, 2023 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the third quarter ending September 30, 2023 (Press release, Integra LifeSciences, OCT 25, 2023, View Source [SID1234636328]).

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Third Quarter 2023 Highlights
•Third quarter revenues of $382.4 million declined 0.7% on a reported basis and declined 0.4% on an organic basis compared to the prior year and increased 7.1% on an organic basis excluding Boston

•Third quarter GAAP earnings per diluted share of $0.24, compared to $0.60 in the prior year; adjusted earnings per diluted share of $0.76, compared to $0.86 in the prior year

•Successfully completed all interim external inspections in preparation for the Boston manufacturing facility restart and remain on track to committed timelines

•Relaunched CereLink ICP Monitor in select international markets and submitted a 510(k) premarket notification in the U.S.

•Completed $125 million accelerated share repurchase initiated in the third quarter

•Updating full-year 2023 revenue and adjusted earnings per share guidance with a range of $1.541 billion to $1.547 billion and $3.10 to $3.14 respectively, which reflects the impact of third quarter Boston recall returns, strong organic growth of the business excluding Boston, strengthening U.S. dollar and tax favorability

"Although the Boston returns weighed further on our third quarter results, we are on track to restart the Boston facility by the end of the year, and we also met two significant CereLink milestones with the relaunch in international markets and submission for regulatory approval in the U.S.," said Jan De Witte, Integra LifeSciences’ president and chief executive officer. "At the same time, our strong organic growth performance in the Codman Specialty Surgical and Tissue Technologies businesses, excluding Boston, plus advances across our product pipeline, give us confidence in our long-range growth commitments."

Third Quarter 2023 Consolidated Performance

Total reported revenues of $382.4 million declined 0.7% on a reported basis and declined 0.4% on an organic basis compared to the prior year.
The Company reported GAAP gross margin of 57.1%, compared to 61.5% in the third quarter of 2022. Adjusted gross margin was 64.6%, compared to 66.7% in the prior year.
Adjusted EBITDA for the third quarter of 2023 was $88.1 million, or 23.0% of revenue, compared to $105.3 million, or 27.3% of revenue, in the prior year.

The Company reported GAAP net income of $19.5 million, or $0.24 per diluted share, in the third quarter of 2023, compared to a GAAP net income of $49.9 million, or $0.60 per diluted share, in the prior year.
Adjusted net income for the third quarter of 2023 was $60.5 million, or $0.76 per diluted share, compared to $71.7 million or $0.86 per diluted share, in the prior year.

Third Quarter 2023 Segment Performance
Codman Specialty Surgical (~70% of Revenues)
•Total revenues were $268.2 million, representing reported growth of 7.4% and organic growth of 7.4% compared to the third quarter of 2022, attributable to low-double digit growth in CSF management and Neuro Monitoring driven by Certas Plus valves, BactiSeal catheters and ICP microsensors; high-single-digit growth in Dural Access and Repair driven by DuraGen DuraSeal and Mayfield; low single-digit decline in Advanced Energy due to timing of CUSA capital orders; and mid single-digit growth in Instruments.

Tissue Technologies (~30% of Revenues)

•Total revenues were $114.2 million, representing reported decline of 15.6% and organic decline of 15.1% compared to the third quarter of 2022, due to the impact of the lost revenue and increase in the return provision related to the Boston product recall which was partially offset by double digit growth from MicroMatrix, Cytal, Gentrix and amniotics.

•Tissue Technologies organic growth excluding Boston products was 6.7%.

Key Products and Business Highlights

•Boston Restart
◦Project team driving progress on Boston remediation plan with external inspections confirming quality of execution

◦Expect to restart manufacturing in Boston by end of Q4’23 and resume commercial distribution in mid-to late Q2’24

•Advancing our portfolio

◦Relaunched CereLink in select international markets and submitted a 510(k) premarket notification to the U.S. Food and Drug Administration for CereLink.
◦Submitted 510(k) premarket notification for next generation Aurora 8mm Surgiscope
◦Continued international expansion of CUSA platform with the launch of Clarity Stage 3, Laparoscopic tip and Single Sided Bone Tip in Saudi Arabia
◦Launched DuraGen Plus in China
◦Completed international registrations of DuraGen, DuraSeal, Mayfield, Duo LED lighting, electrosurgery and nerve products primarily in LATAM and EMEA
◦Extended the Urinary Bladder Matrix platform by obtaining 510(k) clearance for MicroMatrix Flex

•Progressed In-China-for-China strategy by beginning buildout of leased manufacturing facility

•Issued 2022 ESG report

•Further strengthened executive leadership team with the appointment of Chantal Veillon as chief human resources officer

Balance Sheet, Cash Flow and Capital Allocation
The Company generated cash flow from operations of $26.8 million in the quarter. Total balance sheet debt and net debt at the end of the quarter were $1.52 billion and $1.24 billion, respectively, and the consolidated total leverage ratio was 3.0x.

As of quarter end, the Company had total liquidity of approximately $1.48 billion, including $273.7 million in cash and the remainder available under its revolving credit facility.

2023 Outlook
For the full year 2023, the Company is updating its revenue and adjusted EPS expectations to $1.541 to $1.547 billion and $3.10 to $3.14, respectively. The revenue range represents reported growth of -1.1% to -0.7%, with organic growth of 0.1% to 0.5%, reflecting the impact of higher-than-expected Boston recall returns, strong organic growth excluding Boston, the strength of the U.S. dollar, and an updated tax rate.

For the fourth quarter 2023, the Company expects reported revenues in the range of $397 million to $403 million, representing reported growth of -0.4% to +1.1% and organic growth of -0.8% to +0.7%. Adjusted earnings per diluted share are expected to be in the range of $0.89 to $0.93, including the impact of the Boston recall, the strength of the U.S. dollar, and an updated tax rate.

The Company’s guidance for the fourth quarter and full-year organic sales growth excludes acquisitions and divestitures, the effects of foreign currency and the year-over-year change in revenue from discontinued products. Organic growth excludes sales from the divestiture of the Company’s traditional wound care (TWC) business as of September 1, 2022, and sales from the acquisition of Surgical Innovation Associates, Inc. (SIA) through December 1, 2023. Adjusted earnings per share guidance reflects the impacts of the divestiture of the TWC business, the SIA acquisition, and foreign currency.

Conference Call and Presentation Available Online
Integra has scheduled a conference call for 8:30 a.m. ET on Wednesday, October 25, 2023, to discuss third quarter 2023 financial results and forward-looking financial guidance. The conference call will be hosted by Integra’s senior management team and will be open to all listeners. Additional forward-looking information may be discussed in a question-and-answer session following the call. Integra’s management team will reference a presentation during the conference call, which can be found on the Investor section of the website at investor.integralife.com.

A live webcast will be available on the Investors section of the Company’s website at investor.integralife.com. For those planning to participate on the call, register here to receive dial-in details and an individual pin. While not required, it is recommended to join 10 minutes prior to the event’s start. A webcast replay of the conference call will be available on the Investors section of the Company’s website following the call.

Hepion Pharmaceuticals’ Rencofilstat Demonstrates Anti-Cancer Activity in Hepatitis C-Associated Cancer Model

On October 25, 2023 Hepion Pharmaceuticals, Inc. (NASDAQ:HEPA), a clinical stage biopharmaceutical company focused on Artificial Intelligence ("AI")-driven therapeutic drug development for the treatment of non-alcoholic steatohepatitis ("NASH"), fibrotic diseases, hepatocellular carcinoma ("HCC"), and other chronic diseases, reported the publication of a new research study in mice, where Hepion’s lead drug candidate, rencofilstat, prevented the growth of liver tumors that occurred as a result of chronic infection with the human hepatitis C virus ("HCV") (Press release, Hepion Pharmaceuticals, OCT 25, 2023, View Source [SID1234636327]).

The study was published in the peer-reviewed, open access scientific journal, Viruses, and was conducted by Drs. Winston Stauffer, Philippe Gallay, and colleagues at The Scripps Research Institute (La Jolla, California). Mice were infected with HCV, which caused the development of small liver nodules at around 12 weeks post-infection that progressed to very large tumors by 24 weeks post-infection. Daily rencofilstat treatment was initiated at week 0 or later time points:

When initiated at week 0, rencofilstat treatment completely prevented HCC development measured at week 30 likely because the drug also blocked HCV infection and therefore eliminated a key driver of HCC development;
When initiated at week 12, when tumors were in a small nodular stage, rencofilstat treatment similarly resulted in no visible nodules or tumors at week 30, suggesting that rencofilstat was able to completely regress small cancerous nodules; and
When initiated at week 16, when livers contained many small-to-medium-sized nodules and tumors, rencofilstat treatment resulted in significantly decreased numbers and sizes of tumors ("tumor burden") measured at week 30, which also indicated preventative or regressive anti-tumor activity.
To investigate whether some of rencofilstat’s anti-HCC effects occurred independent of its anti-HCV activity, rencofilstat was compared to the anti-HCV agents sofosbuvir and velpatasvir, which belong to the recently developed direct-acting class of HCV drugs representing billions of dollars in annual sales.

Sofosbuvir, velpatasvir and rencofilstat treatments initiated at week 16 all eliminated HCV infection. However, only rencofilstat decreased tumors when measured at week 30. Sofosbuvir and velpatasvir-treated mice developed the same large tumor burden as mice that received no drug treatment, whereas the tumor burden of rencofilstat-treated mice was 80% lower.

"These results highlight one of rencofilstat’s greatest strengths, which is the ability to exert pleiotropic effects that can be harnessed to treat multiple diseases," said Dr. Daren Ure, Hepion’s Chief Scientific Officer. "This contrasts with highly selective drugs that target single mechanisms, such as the currently available anti-HCV drugs that do not effectively treat liver cancer arising from HCV infection. We believe that rencofilstat is the ideal treatment for this kind of cancer as it stops viral replication and suppresses cancer through separate and complementary pathways."

Dr. Robert Foster, Hepion’s CEO, added "The antiviral, anti-cancer, and antifibrotic activities of rencofilstat address many of the most deadly and prevalent diseases affecting people today. Not only could rencofilstat have an enormous impact on human health, but the investment growth opportunities associated with treating these high-need, global-scale diseases are equally large."

Hepion recently announced a new mechanism by which rencofilstat exerts anti-cancer activity in liver cancer and the drug’s anti-cancer activity in numerous cell lines representing 86% of cancer types.

The Viruses journal article, entitled "The Cyclophilin Inhibitor Rencofilstat Decreases HCV-Induced Carcinoma Independently of Its Antiviral Activity", can be accessed here.

Enterome to Present Clinical Progress on its OncoMimics™ Pipeline at Upcoming Investor Meetings

On October 25, 2023 Enterome, a clinical-stage company developing first-in-class immunomodulatory drugs for solid and liquid malignancies and inflammatory diseases based on its unique Mimicry platform, reported that Pierre Bélichard, CEO, will present an overview of the Company and participate in 1-on-1 meetings with institutional investors at the following investor meetings (Press release, Enterome, OCT 25, 2023, View Source [SID1234636326]):

10th China Healthcare Summit in Shanghai, China, November 2-3
– Enterome’s presentation is scheduled on November 2 at 2:45 pm in Function Room III.

Inv€$tival Showcase in London, UK, November 13
– Enterome’s presentation is scheduled at 10:30 am on Stage 3.

Jefferies’ London Healthcare Conference, UK, November 14-16
42ndP. Morgan Annual Healthcare Conference in San Francisco, USA,
January 8-11

Additionally, Enterome’s Senior Business Development Manager, Rachel Morra, will engage in 1-on-1 meetings with potential business partners at BIO-Europe, which will take place in Munich, Germany, on November 6-8.

CYTEA

On October 25, 2023 CYTEA|BIO, reported that it has completed a formal pre-IND consultation with FDA for CYT-102, the company’s lead product, consisting of monoclonal antibody armed donor NK cells, constructed using the proprietary Pin arming technology and designed for post-surgery treatment of glioblastoma multiforme (GBM), a devastating disease and the most common form of brain cancer (Press release, CYTEA BIO, OCT 25, 2023, View Source [SID1234636325]).

FDA review has confirmed no red flags and no significant CMC, non-clinical or clinical impediments to completion of all pre-clinical activities and progression to first clinical studies. CYTEA|BIO expects clinical studies to commence within about 15-18 months of closing a Series A investment round currently in progress.

The company has also completed an EMA "scientific advice" consultation with a similar outcome.
CYTEA|BIO will also leverage CYT-102 for other oncology applications, and to utilize common manufacturing technologies for multiple additional products without further significant development efforts.

Alan Cookson, CEO of CYTEA|BIO said: "These are important milestones for the company and for our unique Pin platform which will greatly simplify the development, manufacture, and roll out of multiple product configurations. The use of normal allogeneic effector cell constructs using conventional ligands obviates the need for cell modification and secures common manufacturing methodologies for whole families of products. Regulators in the USA and Europe have recognized the potential of this approach and provided encouraging and helpful advice which will now enable the company to plan the completion all pre-clinical activities for the lead indication".

PD1 Agonist (Rosnilimab) R & D event

On October 25, 2023 AnaptysBio presented its corporate presentation (Presentation, AnaptysBio, OCT 25, 2023, View Source [SID1234636324]).