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Invitae Announces Strategic Business Realignment to Accelerate Its Path to Positive Cash Flow and Realize Full Potential of Industry-Leading Genetics Testing Platform

On July 18, 2022 Invitae (NYSE: NVTA), a leading medical genetics company, reported a comprehensive plan to realize the full potential of its industry-leading genetics platform (Press release, Invitae, JUL 18, 2022, View Source [SID1234616731]). The plan introduces a significant realignment of the company’s operations in support of business lines and geographies that generate sustainable margins, provide the best return to fuel future investment and accelerate the company’s path to positive cash flow. The plan further helps ensure Invitae remains at the forefront of innovation and advancements in genomics by allocating resources towards the company’s core genome sequencing and genome management platforms that have the potential to improve healthcare outcomes.

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Invitae’s (NVTA) mission is to bring comprehensive genetic information into mainstream medical practice to improve the quality of healthcare for billions of people. www.invitae.com (PRNewsFoto/Invitae Corporation)

The operational realignment includes streamlining and cost reduction programs that are expected to deliver approximately $326 million in annualized cost savings to be fully realized by 2023 and extend the company’s cash runway to the end of 2024.

In a separate press release issued earlier today, Invitae announced executive and board-level transitions to lead the company in this next phase and achieve its mission of bringing the power of genetic information to mainstream medicine.

Kenneth D. Knight, Invitae’s CEO, said, "We are at a unique, transitional moment in the rapidly-evolving genomics industry when companies that balance accessible, trusted and cutting-edge genomic information with disciplined operational excellence will be in a far stronger position to thrive and deliver transformative healthcare outcomes. This operational imperative is at the center of the plan we announced today, which will advance several critical objectives and is intended to drive long-term profitable growth. First, our refocused and realigned platform will allocate resources where they should be: at our core, we are a growth-oriented genomic testing platform. Second, aggressive actions to substantially reduce spend over the coming 12-18 months will improve operating leverage and align Invitae’s cost structure with current market dynamics and the broader economy. These adjustments will meaningfully extend our cash runway and accelerate the pursuit of our long-term growth targets and positive cash flow. Most importantly, the plan reaffirms our commitment to leading the way in shaping the future of medicine through powerful genomic tools."

Mr. Knight continued, "Invitae’s new operating plan has far-reaching and – for many of our dedicated, hard-working team members – difficult implications, and we regret that impact. Invitae is committed to working closely and compassionately with those adversely affected to help ensure as smooth a transition as possible, and we thank everyone on our team for their contributions. As we look to that future, we are as committed as ever to driving forward our mission and advancing the kind of transformative healthcare that is Invitae’s core."

Operating Plan Overview
At a high level, Invitae will eliminate non-core operations while realigning and sharpening its focus on the portfolio of businesses that generate sustainable margins and deliver returns to fuel future investment. In the testing business, Invitae will shift operational and commercial efforts to accelerate positive cash flow by maintaining robust support of the higher-margin, higher-growth testing opportunities among oncology, women’s health, rare disease and pharmacogenomics. The company also plans to continue its expansion and integration of key digital health-based technologies and services in order to create a differentiated model in genetic health. Longer-term, Invitae remains committed to its genomic management business. The company believes that it holds outsized growth potential and intends to continue to prioritize the tools, partnerships and applications that support the development of genome management as the catalyst for the future of healthcare.

Operating Plan Details
Headcount and office/lab space: The company plans workforce reductions aligned with its newly-streamlined operations. The company is also taking immediate steps to consolidate underutilized office and laboratory space.
Portfolio optimization: The company has conducted a rigorous assessment of its product portfolio as well as the associated research & development and commercial spending. The new plan shifts the focus to programs relevant to the core testing businesses to drive near-term cost of goods sold (COGS) reductions. These programs will speed the pathway to positive cash flow and drive the completion of the genome management platform that places Invitae in the middle of patients, providers and the greater healthcare ecosystem. Initiatives and products that are not attached to the go-forward core priorities have been put on hold or eliminated.
Other operating expenses: The company has performed an extensive review of internal and external costs and how those may align with the new business structure. Through that analysis, additional savings will be generated through the ongoing digitization of workflows, elimination of duplication and streamlined processes across the core platforms and rationalization of technology and external services spend.
International business structure: As part of the plan announced today, the company will shift its focus to serving less than a dozen international geographies where the testing business demonstrates the potential to reach positive cash flow in a shorter duration. The company plans to conduct an orderly exit from territories and countries in which the business is more nascent, focusing on supporting those territories through the transition and allowing those providers and patients sufficient time to shift to alternative resources for their testing needs.
As noted, these changes are expected to deliver approximately $326 million in annual cost savings by the end of 2023 and allow the company to extend its cash runway to the end of 2024. Invitae will operate as a leaner, more focused organization, targeting both a stronger and more profitable testing services business as well as the completion and launch of a genome management platform, which will serve to allow patients, providers, and the entire healthcare ecosystem to utilize genomic information for a lifetime of better personal health decisions and outcomes.

Supporting the growth of the company’s core testing and other commercial efforts remains a priority. The company will continue to drive its commercial efforts to best suit its differentiated platform offerings through a more efficient sales and marketing approach.

Preliminary Second Quarter Results
On a preliminary basis, the revenue for the quarter ended June 30, 2022 is approximately $136 million.

GAAP gross margin in the second quarter of 2022 is expected to be 18-19%. Non-GAAP gross margin is estimated to be 39-40%.

Cash, cash equivalents, restricted cash and marketable securities totaled around $737 million on June 30, 2022. Second quarter 2022 cash burn is estimated to be approximately $150 million.

Invitae has not completed preparation of its financial statements for the second quarter. The preliminary, unaudited results presented in this press release are based on current expectations and are subject to change. Actual results may differ materially from those disclosed in this press release.

Guidance
Invitae has updated its 2022 annual revenue guidance to reflect the preliminary first half results and the anticipated impacts of the actions announced today, which include the sale or wind down of non-core products and services and the elimination of certain international territories to focus on more profitable revenue streams. Revenue in the near term is anticipated to be flat in the second half of 2022 over the first half, representing a low double-digit growth rate for full year 2022 over 2021 despite the impacts of the strategic realignment. We expect 2023 to be an adjustment year and for longer term revenue growth rates to return to between 15% and 25% beyond 2023.

Invitae is maintaining its previous 2022 cash burn guidance of $600-650 million, which includes an estimated $75-100 million to be used for reorganization activities and severance. The company also anticipates its cash burn to be in the range of $225-275 million in 2023, or a $325-425 million reduction from expected 2022 cash burn.

Non-GAAP gross margins are expected to continue to increase for the rest of the year, based on ongoing margin improvement efforts and the current realignment initiatives, to the range of 42-43% for full year 2022.

Non-cash related charges are expected to be recorded in the third quarter of 2022 and in following quarters.

Webcast and Conference Call Details
Management will host a conference call and webcast today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss today’s announcements. To access the conference call, please register at the link below:

View Source DE684B93E9A64871E619579F0C45867A

Upon registering, each participant will be provided with call details and a conference ID.

The live webcast of the call and slide deck may be accessed here or by visiting the investors section of the company’s website at ir.invitae.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company’s website.

Immunocore Announces $140 Million Private Placement Financing

On July 18, 2022 Immunocore Holdings plc (Nasdaq: IMCR) ("Immunocore" or the "Company"), a commercial-stage biotechnology company pioneering the development of a novel class of T cell receptor (TCR) bispecific immunotherapies designed to treat a broad range of diseases, including cancer, autoimmune and infectious diseases, reported that it has agreed to sell an aggregate of 3,733,333 ordinary shares, consisting of 2,000,000 American Depository Shares (the "ADSs") with each ADS representing one ordinary share, and 1,733,333 non-voting ordinary shares, to certain institutional accredited investors through a private investment in public equity ("PIPE") financing at a price per ADS/non-voting ordinary share of $37.50 (Press release, Immunocore, JUL 18, 2022, View Source [SID1234616730]). Immunocore anticipates that gross proceeds from the PIPE will be approximately $140 million, before deducting estimated offering expenses payable by the Company. The closing of the PIPE is expected to occur on or about July 20, 2022, subject to customary closing conditions.

The PIPE financing included participation from existing investors including RTW Investments, LP, Rock Springs Capital, and General Atlantic.

Immunocore expects to use the proceeds from the PIPE to fund its oncology and infectious disease clinical pipeline including the continued clinical development of tebentafusp in advanced cutaneous melanoma and ImmTAC clinical candidates targeting MAGE-A4 and PRAME. The proceeds will also be used for working capital and other general corporate purposes.

"We are grateful to our investors, including some who have been with us for many years, for their continued support and follow-on investments that will allow us to accelerate the development of our existing pipeline and further expand our platform," said Bahija Jallal, Chief Executive Officer.

"The proceeds from the private placement, combined with anticipated KIMMTRAK revenue in metastatic uveal melanoma, and cash on hand are expected to fund our current operating plan through 2025," commented Brian Di Donato, Chief Financial Officer & Head of Strategy.

The securities sold in this PIPE are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Concurrently with the execution of the securities purchase agreement, Immunocore and the investors entered into a registration rights agreement pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the securities sold in the PIPE.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

Transactions in connection with share buy-back program

On July 18, 2022 Genmab A/S reported the initiation of a share buy-back program to mitigate dilution from warrant exercises and to honor our commitments under our Restricted Stock Units program (Press release, Genmab, JUL 18, 2022, View Source [SID1234616728]).

The share buy-back program is expected to be completed no later than August 31, 2022 and comprises up to 370,000 shares.

The following transactions were executed under the program from July 11, 2022 to July 15, 2022:

Details of each transaction are included as an appendix to this announcement.

Following these transactions, Genmab holds 398,883 shares as treasury shares, corresponding to 0.61% of the total share capital and voting rights.

The share buy-back program is undertaken in accordance with Regulation (EU) No. 596/2014 (‘MAR’) and the Commission Delegated Regulation (EU) 2016/1052, also referred to as the "Safe Harbour Regulation." Further details on the terms of the share buy-back program can be found in our company announcement no. 22 dated June 17, 2022.

Genmab Announces That AbbVie Will Submit Marketing Authorization Application to European Medicines Agency for Epcoritamab (DuoBody®-CD3xCD20) for the Treatment of Relapsed/Refractory Diffuse Large B-Cell Lymphoma (DLBCL)

On July 18, 2022 Genmab A/S (Nasdaq: GMAB) reported that AbbVie (NYSE: ABBV) will submit a conditional marketing authorization application (MAA) with the European Medicines Agency (EMA) for subcutaneous epcoritamab (DuoBody-CD3xCD20), an investigational bispecific antibody, for the treatment of patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL), in the second half of 2022 (Press release, Genmab, JUL 18, 2022, View Source [SID1234616727]). Genmab recently announced that the company will submit a biologics license application (BLA) for epcoritamab with the U.S. Food and Drug Administration (FDA) for the treatment of patients with relapsed/refractory large B-cell lymphoma (LBCL), also in the second half of 2022.

The MAA submission is supported by results from the large b-cell lymphoma (LBCL) cohort of the pivotal EPCORE NHL-1 open-label, multi-center trial evaluating the safety and preliminary efficacy of epcoritamab in patients with relapsed, progressive or refractory CD20+ mature B-cell non-Hodgkin lymphoma (B-NHL), including DLBCL. In April 2022, Genmab and AbbVie announced the topline results from the Phase II expansion part of the EPCORE NHL-1 trial. In June 2022, primary results were presented in a late-breaking oral presentation as part of the Presidential Symposium at the 27th Annual Meeting of the European Hematology Association (EHA) (Free EHA Whitepaper) (EHA2022) in Vienna, Austria.

"The MAA submission will mark the next step towards potentially obtaining marketing approval in Europe and being able to deliver a new therapeutic option to patients with relapsed or refractory DLBCL," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab. "While there are existing treatments for DLBCL patients across Europe, we recognize the significant medical need for alternative therapeutic options for patients unable to tolerate current treatments or whose treatments have failed."

Epcoritamab is being co-developed by Genmab and AbbVie as part of the companies’ oncology collaboration. The companies will share commercial responsibilities in the U.S. and Japan, with AbbVie responsible for further global commercialization. The companies are committed to evaluating epcoritamab as a monotherapy, and in combination, across lines of therapy in a range of hematologic malignancies, including an ongoing phase 3, open-label, randomized trial evaluating epcoritamab as a monotherapy in patients with relapsed/refractory DLBCL (NCT: 04628494).

About Diffuse Large B-cell Lymphoma (DLBCL)
DLBCL is a fast-growing type of NHL that affects B-cell lymphocytes, a type of white blood cell. DLBCL, the most common type of NHL worldwide, accounts for about 25 percent of diagnosed cases of B-cell NHL worldwide. DLBCL can arise in lymph nodes as well as in organs outside of the lymphatic system. The disease occurs more commonly in the elderly and is slightly more prevalent in men.i,ii

About the EPCORE NHL-1 Trial
EPCORE NHL-1 is an open-label, multi-center safety and preliminary efficacy trial of epcoritamab including a phase 1 first-in-human, dose escalation part; a phase 2 expansion part; and an optimization part. The trial was designed to evaluate subcutaneous epcoritamab in patients with relapsed, progressive or refractory CD20+ mature B-NHL, including LBCL and DLBCL. Data from the dose escalation part of the study, which determined the recommended phase 2 dose, were published in The Lancet in 2021. In the phase 2 expansion part, additional patients are treated with epcoritamab to further explore the safety and efficacy of epcoritamab in patients with different types of relapsed/refractory B-NHLs who had limited therapeutic options.

The primary endpoint of the phase 2 expansion part was overall response rate (ORR) as assessed by an IRC. Secondary efficacy endpoints included duration of response, complete response rate, progression-free survival, overall survival, time to response, time to next therapy, and rate of minimal residual disease negativity.

About Epcoritamab
Epcoritamab is an investigational IgG1-bispecific antibody created using Genmab’s proprietary DuoBody technology. Genmab’s DuoBody-CD3 technology is designed to direct cytotoxic T cells selectively to elicit an immune response towards target cell types. Epcoritamab is designed to simultaneously bind to CD3 on T cells and CD20 on B-cells and induces T cell mediated killing of CD20+ cells.iii CD20 is expressed on B-cells and a clinically validated therapeutic target in many B-cell malignancies, including diffuse large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma and chronic lymphocytic leukemia.iv,v

Fresenius Kabi launches its first generic contrast media agent in the U.S.

On July 18, 2022 Fresenius Kabi reported that Iodixanol Injection, a radiographic contrast agent, is now available in the United States (Press release, Fresenius, JUL 18, 2022, View Source [SID1234616726]). It is the first FDA-approved generic iso-osmolar, dimeric iodinated contrast media agent, which is used during diagnostic x-ray-based imaging such as computed tomography (CT) scans. The launch represents the first move of Fresenius Kabi North America into radiology, another key area of the hospital.