On October 28, 2021 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported financial results for the third quarter of 2021 (Press release, Merck & Co, OCT 28, 2021, View Source [SID1234592111]).

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"Merck delivered another strong quarter with positive momentum across our business and meaningful progress across our pipeline. Our teams continued to excel as we focus on evolving our operations, while driving innovations in our labs that exemplify the best of Merck science," said Robert M. Davis, chief executive officer and president, Merck. "We achieved notable clinical milestones in the key areas of oncology and COVID-19, including positive Phase 3 results for molnupiravir. We recently announced our proposed acquisition of Acceleron, which will strengthen our cardiovascular portfolio with complementary, cutting-edge science and an exciting late-stage candidate. Looking ahead, we remain focused on building more momentum, delivering on our mission of saving and improving lives and continuing to expand our portfolio and pipeline for long-term success and sustainable value creation."

Financial Summary – Continuing Operations

Financial information presented in this release reflects Merck’s results on a continuing operations basis, which excludes Organon & Co., that was spun-off on June 2, 2021.

GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) was $1.80 for the third quarter of 2021. Non-GAAP EPS of $1.75 for the third quarter of 2021 excludes acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items. Year-to-date results can be found in the attached tables.

Strong Performance Across the Business

Merck achieved strong performance across its key pillars of Oncology, Vaccines, and Animal Health, led by highly innovative products, including KEYTRUDA (pembrolizumab), Lynparza (olaparib), Lenvima (lenvatinib), GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine, Recombinant], GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and the BRAVECTO (fluralaner) line of products. In addition, BRIDION (sugammadex) injection 100 mg/mL saw strong growth in the quarter. The company continues to benefit from strong underlying demand for its products, as well as broad commercial scale and improved patient access to its innovative medicines across the globe.

Merck Reported Positive Phase 3 Results for Molnupiravir, an Investigational Oral Antiviral COVID-19 Treatment

Merck and Ridgeback Biotherapeutics announced positive results from the interim analysis of the Phase 3 MOVe-OUT trial of investigational oral antiviral therapeutic molnupiravir (MK-4482/EIDD-2801) in at-risk, non-hospitalized adult patients with mild-to-moderate COVID-19. The company announced on Oct. 11, 2021, the submission of an application for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration (FDA) based on these findings and plans to submit marketing applications to other regulatory bodies worldwide. If authorized or approved, Merck anticipates that molnupiravir can become an important treatment as part of the global effort to fight the COVID-19 pandemic. On Oct. 14, 2021, the FDA announced a Nov. 30, 2021, meeting of its Antimicrobial Drugs Advisory Committee to discuss the available data supporting the use of molnupiravir to treat at-risk adults with mild-to-moderate COVID-19. On Oct. 25, 2021, the European Medicines Agency (EMA) initiated a rolling review for molnupiravir for the treatment of COVID-19 in adults. Merck plans to work with the EMA’s Committee for Medicinal Products for Human Use (CHMP) to complete the rolling review process to facilitate initiating the formal review of the Marketing Authorization Application.

Merck is committed to providing timely access to molnupiravir globally, if it is authorized or approved, and plans to implement a tiered pricing approach based on World Bank country income criteria to reflect countries’ relative ability to finance their pandemic response and health systems. Merck has entered into non-exclusive voluntary licensing agreements with established generic manufacturers in India for molnupiravir. Additionally, Merck and the Medicines Patent Pool (MPP) jointly announced the signing of a voluntary licensing agreement to facilitate access to generic molnupiravir, upon local regulatory authorization. These agreements will help expand access to molnupiravir in more than 100 low- and middle-income countries.

Merck has entered into supply and purchase commitments for molnupiravir with several governments worldwide, including Australia, New Zealand, South Korea, the U.K. and the U.S., pending regulatory authorization, and is currently in discussions with other governments. The company expects to produce 10 million courses of treatment by the end of 2021, with at least 20 million additional courses expected to be produced in 2022.

Planned Acquisition of Acceleron Bolsters Innovation and Broadens Cardiovascular Pipeline

Merck announced a definitive agreement and tender offer to acquire Acceleron Pharma Inc. (Acceleron). The planned acquisition complements and strengthens Merck’s cardiovascular pipeline with Acceleron’s lead therapeutic candidate, sotatercept, a potentially first-in-class therapy in Phase 3 clinical trials for the treatment of pulmonary arterial hypertension. Merck commenced a tender offer on Oct. 12, 2021, and upon successful completion of the tender offer and receipt of necessary regulatory approvals, Merck, through a subsidiary, will acquire Acceleron for $180 per share in cash for an approximate total equity value of $11.5 billion. The transaction is expected to close in the fourth quarter of 2021.

Oncology Program Highlights

Merck continued to advance development programs across its oncology portfolio, anticipating more than 90 potential new indications by 2028, including notable progress for KEYTRUDA, the company’s anti-PD-1 therapy; Lynparza, an oral poly (ADP-ribose) polymerase (PARP) inhibitor being co-developed and co-commercialized with AstraZeneca; Lenvima, an orally available tyrosine kinase inhibitor (TKI) being co-developed and co-commercialized with Eisai Co., Ltd. (Eisai); and WELIREG (belzutifan), an oral hypoxia-inducible factor-2 alpha inhibitor (HIF-2α).

Merck announced the following regulatory milestones:
FDA approval of WELIREG for the treatment of adult patients with von Hippel-Lindau disease who require therapy for associated renal cell carcinoma (RCC), central nervous hemangioblastomas, or pancreatic neuroendocrine tumors, not requiring immediate surgery based on the open label Study 004 trial. WELIREG is the first HIF-2α inhibitor therapy approved in the U.S. and is currently being evaluated in three Phase 3 studies as monotherapy and in combination with other novel therapies.
FDA approval of KEYTRUDA in combination with Lenvima for the first-line treatment of adult patients with advanced RCC. The approval was based on results from the pivotal Phase 3 CLEAR study (KEYNOTE-581/Study 307).
FDA approval of KEYTRUDA in combination with chemotherapy, with or without bevacizumab, for the treatment of patients with persistent, recurrent or metastatic cervical cancer whose tumors express PD-L1 (Combined Positive Score [CPS] ≥1) as determined by an FDA-approved test, based on results from the Phase 3 KEYNOTE-826 trial.
FDA priority review for a new supplemental Biologics License Application (sBLA) for KEYTRUDA for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy (surgical removal of a kidney), or following nephrectomy and resection of metastatic lesions. This sBLA was based on data that demonstrated a statistically significant and clinically meaningful improvement in disease-free survival compared to placebo from the pivotal Phase 3 KEYNOTE-564 trial. The Prescription Drug User Fee Act (PDUFA) date is Dec. 10, 2021.
FDA priority review for a new sBLA for KEYTRUDA for the adjuvant treatment of adult and pediatric patients (12 years and older) with STAGE IIB or IIC melanoma following complete resection, based on results from the Phase 3 KEYNOTE-716 trial that showed a statistically significant and clinically meaningful improvement in recurrence-free survival compared to placebo. The PDUFA date is Dec. 4, 2021.
FDA review of a new sBLA seeking approval for KEYTRUDA as a single agent for the treatment of patients with advanced endometrial carcinoma (EC) that is microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR), who have disease progression following prior systemic therapy in any setting and are not candidates for curative surgery or radiation. The application is based on overall response data from Cohorts D and K of the KEYNOTE-158 trial. The PDUFA date is March 28, 2022.
Positive opinion from the CHMP of the EMA for KEYTRUDA in combination with chemotherapy for the treatment of locally recurrent unresectable or metastatic triple-negative breast cancer (TNBC) in adults whose tumors express PD-L1 (CPS ≥10) and who have not received prior chemotherapy for metastatic disease. The positive opinion is based on progression-free survival and overall survival (OS) results from the Phase 3 KEYNOTE-355 trial.
European Commission approval of KEYTRUDA, in combination with chemotherapy, for the first-line treatment of locally recurrent unresectable or metastatic TNBC in adults whose tumors express PD-L1 (CPS ≥10) and who have not received prior chemotherapy for metastatic disease.
Positive opinions from the CHMP of the EMA recommending approval of the combination of KEYTRUDA plus Lenvima for two different indications: advanced RCC and advanced or recurrent EC. The positive opinions are based on data from two pivotal Phase 3 trials: CLEAR (KEYNOTE-581/Study 307) evaluating the combination in adult patients with advanced RCC and KEYNOTE-775/Study 309 evaluating the combination in certain patients with advanced or recurrent EC.
National Medical Products Administration approval in China of KEYTRUDA in combination with platinum- and fluoropyrimidine-based chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic carcinoma of the esophagus or gastroesophageal junction. This new indication was granted approval based on OS findings from the pivotal Phase 3 KEYNOTE-590 trial. KEYTRUDA is now approved for eight indications across five different types of cancer in China.
Pharmaceuticals and Medical Devices Agency approval in Japan of two KEYTRUDA indications. KEYTRUDA was approved for the treatment of patients with PD-L1-positive, hormone receptor-negative and human epidermal growth factor receptor 2-negative, inoperable or recurrent breast cancer based on the results of the Phase 3 KEYNOTE-355 trial and for the treatment of patients with unresectable, advanced or recurrent MSI-H colorectal cancer, based on the results of the Phase 3 KEYNOTE-177 trial. With these approvals, KEYTRUDA has 15 authorized uses in Japan, including indications in nine tumor types as well as MSI-H tumors.
Merck provided additional data presentations and updates including:
Final OS results from the pivotal Phase 3 KEYNOTE-355 trial were presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2021 demonstrating a 27% reduction in risk of death for patients with metastatic TNBC whose tumors expressed PD-L1 (CPS ≥10) using first-line treatment of KEYTRUDA in combination with chemotherapy (paclitaxel, nab-paclitaxel or gemcitabine/carboplatin) as compared to chemotherapy alone.
Positive results from the Phase 3 PROpel trial demonstrating superior radiographic progression-free survival with Lynparza in combination with abiraterone and prednisone versus abiraterone plus prednisone as a first-line treatment for men with metastatic castration-resistant prostate cancer with or without homologous recombination repair gene mutations.
Other Highlights

Vaccines

Merck announced positive topline results from the pivotal Phase 3 PNEU-PED (V114-029) study evaluating the immunogenicity, safety and tolerability of VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine) in healthy infants enrolled between 42-90 days of age.
Merck announced that the CHMP of the EMA has recommended the approval of VAXNEUVANCE for active immunization for the prevention of invasive disease and pneumonia caused by Streptococcus pneumoniae in individuals 18 years of age and older. The CHMP recommendation will now be reviewed by the European Commission for marketing authorization in the EU, and a final decision is expected by the end of the year.
Merck announced the U.S. Centers for Disease Control and Prevention’s (CDC’s) Advisory Committee on Immunization Practices (ACIP) voted to provisionally recommend vaccination either with a sequential regimen of VAXNEUVANCE followed by PNEUMOVAX 23 (Pneumococcal Vaccine Polyvalent), or with a single dose of 20-valent pneumococcal conjugate vaccine, for both adults 65 years and older and for adults ages 19 to 64 with certain underlying medical conditions or other risk factors. Final recommendations are subject to review by the director of the CDC and the Department of Health and Human Services, and will become official when published in the CDC’s Morbidity and Mortality Weekly Report (MMWR).
Infectious Diseases

Merck announced top-line results from two pivotal Phase 3 trials of the investigational, once-daily oral fixed dose combination pill of doravirine/islatravir in adults with HIV-1 infection who are virologically suppressed on different antiretroviral therapy regimens (ILLUMINATE SWITCH A) or bictegravir/emtricitabine/tenofovir (ILLUMINATE SWITCH B).
Merck anticipates the initiation of a phased resupply of ZERBAXA (ceftolozane and tazobactam) for injection beginning with the U.S. in the fourth quarter of 2021 following a voluntary recall in 2020. Additionally, the FDA has accepted for review two supplemental New Drug Applications for ZERBAXA in pediatric complicated urinary tract infections and complicated intra-abdominal infections with PDUFA dates of April 21, 2022, and May 2, 2022, respectively.
Third-Quarter Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as sales of Animal Health products.

Pharmaceutical Revenue

Third-quarter pharmaceutical sales increased 18% to $11.5 billion, compared to the third quarter of 2020. Excluding the favorable effect of foreign exchange, sales grew by 17%, reflecting strength in the company’s oncology and vaccine businesses.

Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 22% to $4.5 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from the non-small-cell lung cancer indications as well as uptake in other indications, including RCC, head and neck squamous cell carcinoma, TNBC and MSI-H cancers. Also contributing to higher sales in oncology was a 25% increase in Lynparza alliance revenue, primarily reflecting continued uptake in the United States and Europe, as well as a 32% increase in Lenvima alliance revenue, driven primarily by higher demand in the United States and China.

Growth in vaccines for the third quarter was primarily driven by higher combined sales of GARDASIL and GARDASIL 9, vaccines to prevent certain cancers and other diseases caused by HPV. Third-quarter 2021 GARDASIL/GARDASIL 9 sales grew 68% to $2.0 billion, primarily driven by strong global demand, particularly in China, which also benefitted from increased supply, as well as in the United States, which also benefitted from the timing of public sector purchases.

Combined sales of pediatric vaccines VARIVAX (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox; PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a combination vaccine to help protect against measles, mumps, rubella and varicella; and M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella, also contributed to higher sales in vaccines, increasing by 15% to $661 million primarily driven by the ongoing recovery of wellness visits in the United States.

Vaccine performance was negatively affected by lower sales of PNEUMOVAX 23, a vaccine to help prevent pneumococcal disease, which declined 26% to $277 million primarily driven by lower demand in the United States reflecting prioritization of the COVID-19 vaccine.

Performance in hospital acute care reflects the suspension of sales of ZERBAXA for injection, a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of adults with certain bacterial infections, following a product recall in the fourth quarter of 2020. This unfavorability was partially offset by higher demand globally for BRIDION injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults and pediatric patients aged 2 years and older undergoing surgery, which increased 16% to $369 million due in part to the ongoing COVID-19 pandemic recovery, and growth in DIFICID (fidaxomicin), a macrolide antibacterial drug for treatment of Clostridioides difficile-associated diarrhea in adults and pediatric patients aged 6 months and older, in the United States.

Animal Health Revenue

Animal Health sales totaled $1.4 billion for the third quarter of 2021, an increase of 16% compared with the third quarter of 2020. Excluding the favorable effect from foreign exchange, Animal Health sales increased 14%, reflecting growth across geographies and species, including the biopharmaceutical portfolio and the Animal Health Intelligence portfolio. Sales growth in livestock was primarily driven by higher demand globally for ruminant products, including Animal Health Intelligence products. Sales growth in companion animal was primarily driven by the BRAVECTO parasiticide line of products, as well as vaccines.

Third-Quarter Expense, EPS and Related Information

The tables below present selected expense information.

GAAP Expense, EPS and Related Information

Gross margin was 73.8% for the third quarter of 2021 compared to 72.4% for the third quarter of 2020. The increase primarily reflects the favorable effects of product mix and lower acquisition- and divestiture-related costs, partially offset by higher manufacturing costs.

Selling, general and administrative expenses were $2.3 billion in the third quarter of 2021, an increase of 13% compared to the third quarter of 2020. The increase primarily reflects higher administrative costs, increased promotional expenses in support of the company’s growth pillars, higher acquisition- and divestiture-related costs, as well as the unfavorable effects of foreign exchange.

Research and development expenses were $2.4 billion in the third quarter of 2021 compared with $3.3 billion in the third quarter of 2020. The decrease was primarily driven by lower upfront payments related to collaborations and license agreements, partially offset by higher oncology and COVID-19 clinical development spending, as well as increased investment in discovery research and early drug development.

Other (income) expense, net, was $450 million of income in the third quarter of 2021 compared to $312 million of income in the third quarter of 2020, primarily reflecting higher income from investments in equity securities, net, partially offset by higher pension settlement costs.

The effective income tax rate was 13.2% for the third quarter of 2021, reflecting the beneficial impact of the settlement of a foreign tax matter.

GAAP EPS was $1.80 for the third quarter of 2021 compared with $0.92 for the third quarter of 2020.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 76.8% for the third quarter of 2021 compared to 76.5% for the third quarter of 2020. The increase in non-GAAP gross margin primarily reflects the favorable effect of product mix, partially offset by higher manufacturing costs.

Non-GAAP selling, general and administrative expenses were $2.3 billion in the third quarter of 2021, an increase of 12% compared to the third quarter of 2020. The increase primarily reflects higher administrative costs, increased promotional expenses in support of the company’s growth pillars, as well as the unfavorable effects of foreign exchange.

Non-GAAP R&D expenses were $2.5 billion in the third quarter of 2021, an 11% increase compared to the third quarter of 2020. The increase primarily reflects higher oncology and COVID-19 clinical development spending, as well as increased investment in discovery research and early drug development.

Non-GAAP other (income) expense, net, was $244 million of expense in the third quarter of 2021 compared to $35 million of expense in the third quarter of 2020, primarily reflecting higher pension settlement costs.

The non-GAAP effective income tax rate was 13.0% for the third quarter of 2021, reflecting the beneficial impact of the settlement of a foreign tax matter.

Non-GAAP EPS was $1.75 for the third quarter of 2021 compared with $1.37 for the third quarter of 2020.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

Financial Outlook

Merck continues to experience strong global underlying demand across its business. Consequently, Merck is raising and narrowing its full-year estimated ranges for revenue and EPS. At mid-October 2021 exchange ranges, Merck now expects sales growth of 14% to 15% in 2021, with full-year 2021 revenue estimated to be between $47.4 billion and $47.9 billion, including a positive impact from foreign exchange of approximately 1.5%.

Merck continues to believe that the global health systems and patients have largely adapted to the impacts of the COVID-19 pandemic, and, that while certain negative effects will persist, the trend will continue to improve. Merck continues to estimate that the pandemic will have a net unfavorable impact to 2021 revenues of less than 3%, all of which relates to the pharmaceutical segment.

Merck is raising and narrowing its full-year 2021 GAAP EPS range to be between $4.71 and $4.76.

Merck is raising and narrowing its non-GAAP EPS range and now expects full-year 2021 to be between $5.65 and $5.70, including a positive impact from foreign exchange of approximately 2%. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, income and losses from investments in equity securities, and certain other items. Neither the sales nor the EPS ranges provided above include the impact of the potential launch of Merck’s COVID-19 antiviral drug candidate, molnupiravir.

The following table summarizes the company’s full-year 2021 financial guidance.

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EDT on Merck’s website at View Source Institutional investors and analysts can participate in the call by dialing (833) 353-0277 or (469) 886-1947 and using ID code number 6768456. Members of the media are invited to monitor the call by dialing (833) 353-0277 or (469) 886-1947 and using ID code number 6768456. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call.

On October 28, 2021 Kura Oncology, Inc. (Nasdaq: KURA), a clinical-stage biopharmaceutical company committed to realizing the promise of precision medicines for the treatment of cancer, reported that it will report third quarter 2021 financial results after the close of U.S. financial markets on Thursday, November 4, 2021 (Press release, Kura Oncology, OCT 28, 2021, View Source [SID1234592109]). Kura’s management will host a webcast and conference call at 4:30 p.m. ET / 1:30 p.m. PT that day to discuss the financial results and provide a corporate update.

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The live call may be accessed by dialing (866) 269-4260 for domestic callers and (323) 347-3277 for international callers and entering the conference code: 9395801. A live webcast and archive of the call will be available online from the investor relations section of the company website at www.kuraoncology.com.

On October 28, 2021 Intellia Therapeutics, Inc. (NASDAQ:NTLA), a leading clinical-stage genome editing company focused on developing curative therapeutics using CRISPR/Cas9 technology both in vivo and ex vivo, reported that it will present its third quarter 2021 financial results and operational highlights in a conference call on November 4, 2021 at 8 a.m. ET (Press release, Intellia Therapeutics, OCT 28, 2021, View Source [SID1234592108]).

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To join the call:

U.S. callers should dial 1-833-316-0545 and international callers should dial 1-412-317-5726, approximately five minutes before the call. All participants should ask to be connected to the Intellia Therapeutics conference call.
Please visit this link for a simultaneous live webcast of the call.
A replay of the call will be available through the Events and Presentations page of the Investors & Media section on Intellia’s website at www.intelliatx.com, beginning on November 4, 2021 at 12 p.m. ET.

On October 28, 2021 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported that it has appointed Jan D. De Witte as its next President and Chief Executive Officer (Press release, Integra LifeSciences, OCT 28, 2021, View Source [SID1234592107]). Mr. De Witte succeeds Peter J. Arduini, who previously announced he will step down as Chief Executive Officer to accept the role of President and Chief Executive Officer of GE Healthcare. Mr. De Witte will join Integra prior to the end of the year, at which time he will also be appointed to Integra’s board of directors.

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With over two decades in the healthcare industry, De Witte brings global public company leadership experience as well as deep technological, operational and commercial expertise to Integra. For the past five years, De Witte served as Chief Executive Officer of Barco N.V. (Euronext: BAR), where he created shareholder value through digital innovation and new product development, commercial acceleration, international market growth and operational excellence while effectively leading the company through the COVID-19 pandemic. In addition, De Witte spent 17 years in senior-level leadership roles at GE, including serving as President and CEO of GE Global Healthcare IT, where he had full global P&L

responsibility for product management, technology and software development, commercialization, services and solutions delivery. Prior to GE, De Witte spent five years in strategic consulting at McKinsey and three years in operations at Procter & Gamble (NYSE: PG). De Witte currently serves on the Board of Directors of ResMed (NYSE: RMD, ASX: RMD), a global leader in digital health technologies and cloud-connected medical devices that transform care for people with sleep apnea, COPD and other chronic diseases.

Integra’s special board committee on CEO succession partnered with Heidrick & Struggles to conduct a comprehensive search that included interviewing and evaluating a talented slate of internal and external candidates.

"We are thrilled to have Jan join Integra at this exciting time in the company’s history. Jan is a proven global business leader with extensive C-level experience at internationally-recognized companies. His deep experience in healthcare and technology, commitment to advancing sustainability and proven ability to develop and commercialize innovative new products led the board to select Jan as Integra’s next CEO. His values around inclusivity, integrity and accountability are highly aligned with Integra’s people-first culture. We look forward to Jan’s start later this year and his many future contributions to Integra," said Stuart Essig, Chairman of Integra’s board of directors.

"I would like to express my genuine appreciation to Pete for his 11 years of leadership. Pete shaped Integra into the company it is today, and we wish him all the best in his next endeavor," concluded Essig.

Mr. De Witte stated, "I am honored and excited to be joining Integra and a very talented and dedicated team. The company has a rich history of global leadership in neurosurgery with some of the most recognized brands in plastic and reconstructive surgery. I look forward to building on an already strong foundation to drive value for all our stakeholders. To the 3,700 employees around the world, I am delighted to join such an engaged and entrepreneurial culture and look forward to working with you to further elevate Integra’s impact around the world."

Mr. De Witte holds a master’s of science degree in electromechanical engineering with greatest distinction from the KU Leuven in Belgium and a master’s degree in business administration from Harvard University. He has lived and worked in seven countries, with much of his career spent in the U.S., and is fluent in three languages. He is also a dedicated community leader.

On October 28, 2021 Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical company on a mission to transform the lives of patients with serious and rare diseases, reported financial results for the third quarter ended September 30, 2021 and provided a business update (Press release, Insmed, OCT 28, 2021, View Source [SID1234592106]).

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"In the third quarter of 2021, Insmed made important progress against our strategic priorities, including steady performance of our commercial operations, advancement of our clinical development programs in line with expectations, and meaningful acceleration of our translational medicine efforts with a sharp focus on disruptive technologies that we believe will have a significant impact on patients’ lives," commented Will Lewis, Chair and Chief Executive Officer of Insmed. "Notably, we are excited about our launch progress for ARIKAYCE in Japan, where we are already seeing positive early trends. As we navigate this critical execution period for Insmed, we are well-capitalized and highly driven to launch the next phase of growth for our company and to serve many more patients around the world."

Recent Corporate Developments & Program Highlights

ARIKAYCE

Insmed launched ARIKAYCE in Japan in July of 2021, with a price in line with list prices in the U.S. and Europe. Initial uptake in Japan has been strong, with several positive trends at this early stage of the launch.
Insmed continues to advance the launch of ARIKAYCE in Europe. In addition to previous launches in Germany and the Netherlands, ARIKAYCE has been reimbursed and launched in Wales as of September of 2021. The Company is pursuing country-by-country reimbursement throughout Europe, with a near-term focus on Ireland, additional UK countries, Italy, Belgium, and France.
Enrollment continues in line with expectations in the post-approval confirmatory frontline clinical trial program of ARIKAYCE in patients nontuberculous mycobacterial (NTM) lung disease caused by Mycobacterium avium complex (MAC). The program consists of ARISE, an interventional study designed to validate a patient-reported outcome (PRO) tool in MAC lung disease, and ENCORE, a pivotal trial designed to establish, using the PRO tool validated in the ARISE trial, the clinical benefits and evaluate the safety of ARIKAYCE in patients with newly diagnosed MAC lung disease.
Insmed presented data this quarter at ID Week 2021 and the CHEST Annual Meeting that advance the understanding of NTM lung disease and underscore the importance of appropriate diagnosis and management.
Brensocatib

Enrollment continues in line with expectations in the Phase 3 ASPEN study, a global, randomized, double-blind, placebo-controlled trial to assess the efficacy, safety, and tolerability of brensocatib in patients with bronchiectasis. Patients with bronchiectasis due to cystic fibrosis (CF) may not be enrolled in the study.
Insmed remains on track to share results from a Phase 2 pharmacokinetic/pharmacodynamic (PK/PD) study of brensocatib in patients with CF in 2022.
Insmed presented PK/PD data this quarter from the Phase 2 WILLOW study of brensocatib in patients with bronchiectasis at the European Respiratory Society International Congress. Results demonstrated that patients treated with brensocatib were more likely to have sputum neutrophil elastase levels below the limit of quantification at the end of treatment compared to patients treated with placebo.
TPIP

Insmed is advancing two Phase 2 studies of TPIP in patients with pulmonary arterial hypertension (PAH). The Phase 2a study will measure the impact of TPIP on pulmonary vascular resistance (PVR) over a 24-hour period. The Company anticipates having preliminary data from a small number of patients in this study by the end of 2021. The Phase 2b study will evaluate the effect of TPIP on PVR and 6-minute walk distance over a 16-week treatment period. Insmed remains on track to initiate sites for this study by the end of 2021.
Insmed plans to initiate a Phase 2 study of TPIP in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD) in early 2022.
Third Quarter 2021 Financial Results

Total revenue for the third quarter ended September 30, 2021 was $46.8 million, compared to total revenue of $43.6 million for the third quarter of 2020.
Cost of product revenues (excluding amortization of intangible assets) was $10.2 million for the third quarter of 2021, compared to $10.6 million for the third quarter of 2020.
Research and development (R&D) expenses were $70.3 million for the third quarter of 2021, compared to $41.4 million for the third quarter of 2020.
Selling, general and administrative (SG&A) expenses for the third quarter of 2021 were $60.3 million, compared to $46.6 million for the third quarter of 2020.
For the third quarter of 2021, Insmed reported a GAAP net loss of $112.7 million, or $0.96 per share, compared to a GAAP net loss of $63.7 million, or $0.63 per share, for the third quarter of 2020.
Balance Sheet and Planned Investments

As of September 30, 2021, Insmed had cash and cash equivalents of $846.6 million. The Company’s total operating expenses for the third quarter of 2021 were $150.4 million. Adjusted R&D expenses for the third quarter of 2021 were $64.3 million and adjusted SG&A expenses for the third quarter of 2021 were $51.8 million. Adjusted R&D expenses and adjusted SG&A expenses are non-GAAP measures, which we describe further below.

The Company plans to continue to invest in the following key activities:

(i)

U.S. commercialization of ARIKAYCE;

(ii)

launch activities for ARIKAYCE in initial European countries and in Japan; and

(iii)

clinical trial activities, including (a) advancement of the frontline clinical trial program for ARIKAYCE (ARISE and ENCORE), (b) advancement of the Phase 3 ASPEN study of brensocatib in patients with bronchiectasis, (c) advancement of clinical development of TPIP, and (d) advancement of our translational medicine efforts.

Conference Call

Insmed will host a conference call beginning today at 8:30 AM Eastern Time. Shareholders and other interested parties may participate in the conference call by dialing (844) 200-6205 (U.S. toll free), (646) 904-5544 (U.S. local), or +44-208-0682-558 (international) and referencing access code 594997. The call will also be webcast live on the Company’s website at www.insmed.com.

A replay of the conference call will be accessible approximately 1 hour after its completion through November 26, 2021 by dialing (866) 813-9403 (U.S. toll free), (929) 458-6194 (U.S. local), or +44-204-525-0658 (international) and referencing access code 963633. A webcast of the call will also be archived for 90 days under the Investor Relations section of the Company’s website at www.insmed.com.

Non-GAAP Financial Measures

In addition to the U.S. generally accepted accounting principles (GAAP) results, this earnings release includes non-GAAP financial measures: adjusted R&D expenses, which Insmed defines as R&D expenses less stock-based compensation expense and depreciation; and adjusted SG&A expenses, which Insmed defines as SG&A expenses less stock-based compensation and depreciation. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure is presented in the table attached to this press release.

Management believes that these non-GAAP financial measures are useful to both management and investors in analyzing our ongoing business and operating performance. Management believes that providing this non-GAAP information to investors, in addition to the GAAP results, allows investors to view our financial results in the way that management views financial results. Management does not intend the presentation of these non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ from similarly named measures used by other companies.

About ARIKAYCE

ARIKAYCE is approved in the United States as ARIKAYCE (amikacin liposome inhalation suspension), in Europe as ARIKAYCE Liposomal 590 mg Nebuliser Dispersion, and in Japan as ARIKAYCE inhalation 590 mg (amikacin sulfate inhalation drug product). Current international treatment guidelines recommend the use of ARIKAYCE for appropriate patients. ARIKAYCE is a novel, inhaled, once-daily formulation of amikacin, an established antibiotic that was historically administered intravenously and associated with severe toxicity to hearing, balance, and kidney function. Insmed’s proprietary PULMOVANCE liposomal technology enables the delivery of amikacin directly to the lungs, where liposomal amikacin is taken up by lung macrophages where the infection resides, while limiting systemic exposure. ARIKAYCE is administered once daily using the Lamira Nebulizer System manufactured by PARI Pharma GmbH (PARI).

About PARI Pharma and the Lamira Nebulizer System

ARIKAYCE is delivered by a novel inhalation device, the Lamira Nebulizer System, developed by PARI. Lamira is a quiet, portable nebulizer that enables efficient aerosolization of ARIKAYCE via a vibrating, perforated membrane. Based on PARI’s 100-year history working with aerosols, PARI is dedicated to advancing inhalation therapies by developing innovative delivery platforms to improve patient care.

About Brensocatib

Brensocatib is a small molecule, oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1) being developed by Insmed for the treatment of patients with bronchiectasis and other neutrophil-mediated diseases. DPP1 is an enzyme responsible for activating neutrophil serine proteases (NSPs), such as neutrophil elastase, in neutrophils when they are formed in the bone marrow. Neutrophils are the most common type of white blood cell and play an essential role in pathogen destruction and inflammatory mediation. In chronic inflammatory lung diseases, neutrophils accumulate in the airways and result in excessive active NSPs that cause lung destruction and inflammation. Brensocatib may decrease the damaging effects of inflammatory diseases such as bronchiectasis by inhibiting DPP1 and its activation of NSPs. Brensocatib is an investigational drug product that has not been approved for any indication in any jurisdiction.

About TPIP

Treprostinil palmitil inhalation powder (TPIP) is a dry powder formulation of treprostinil palmitil, a treprostinil prodrug consisting of treprostinil linked by an ester bond to a 16-carbon chain. Developed entirely in Insmed’s laboratories, TPIP is a potentially highly differentiated prostanoid being evaluated for the treatment of patients with PAH and other rare and serious pulmonary disorders. TPIP is administered in a capsule-based inhalation device. TPIP is an investigational drug product that has not been approved for any indication in any jurisdiction.

IMPORTANT SAFETY INFORMATION FOR ARIKAYCE IN THE U.S.

WARNING: RISK OF INCREASED RESPIRATORY ADVERSE REACTIONS

ARIKAYCE has been associated with an increased risk of respiratory adverse reactions, including hypersensitivity pneumonitis, hemoptysis, bronchospasm, and exacerbation of underlying pulmonary disease that have led to hospitalizations in some cases.

Hypersensitivity Pneumonitis has been reported with the use of ARIKAYCE in the clinical trials. Hypersensitivity pneumonitis (reported as allergic alveolitis, pneumonitis, interstitial lung disease, allergic reaction to ARIKAYCE) was reported at a higher frequency in patients treated with ARIKAYCE plus background regimen (3.1%) compared to patients treated with a background regimen alone (0%). Most patients with hypersensitivity pneumonitis discontinued treatment with ARIKAYCE and received treatment with corticosteroids. If hypersensitivity pneumonitis occurs, discontinue ARIKAYCE and manage patients as medically appropriate.

Hemoptysis has been reported with the use of ARIKAYCE in the clinical trials. Hemoptysis was reported at a higher frequency in patients treated with ARIKAYCE plus background regimen (17.9%) compared to patients treated with a background regimen alone (12.5%). If hemoptysis occurs, manage patients as medically appropriate.

Bronchospasm has been reported with the use of ARIKAYCE in the clinical trials. Bronchospasm (reported as asthma, bronchial hyperreactivity, bronchospasm, dyspnea, dyspnea exertional, prolonged expiration, throat tightness, wheezing) was reported at a higher frequency in patients treated with ARIKAYCE plus background regimen (28.7%) compared to patients treated with a background regimen alone (10.7%). If bronchospasm occurs during the use of ARIKAYCE, treat patients as medically appropriate.

Exacerbations of underlying pulmonary disease has been reported with the use of ARIKAYCE in the clinical trials. Exacerbations of underlying pulmonary disease (reported as chronic obstructive pulmonary disease (COPD), infective exacerbation of COPD, infective exacerbation of bronchiectasis) have been reported at a higher frequency in patients treated with ARIKAYCE plus background regimen (14.8%) compared to patients treated with background regimen alone (9.8%). If exacerbations of underlying pulmonary disease occur during the use of ARIKAYCE, treat patients as medically appropriate.

Anaphylaxis and Hypersensitivity Reactions: Serious and potentially life-threatening hypersensitivity reactions, including anaphylaxis, have been reported in patients taking ARIKAYCE. Signs and symptoms include acute onset of skin and mucosal tissue hypersensitivity reactions (hives, itching, flushing, swollen lips/tongue/uvula), respiratory difficulty (shortness of breath, wheezing, stridor, cough), gastrointestinal symptoms (nausea, vomiting, diarrhea, crampy abdominal pain), and cardiovascular signs and symptoms of anaphylaxis (tachycardia, low blood pressure, syncope, incontinence, dizziness). Before therapy with ARIKAYCE is instituted, evaluate for previous hypersensitivity reactions to aminoglycosides. If anaphylaxis or a hypersensitivity reaction occurs, discontinue ARIKAYCE and institute appropriate supportive measures.

Ototoxicity has been reported with the use of ARIKAYCE in the clinical trials. Ototoxicity (including deafness, dizziness, presyncope, tinnitus, and vertigo) were reported with a higher frequency in patients treated with ARIKAYCE plus background regimen (17%) compared to patients treated with background regimen alone (9.8%). This was primarily driven by tinnitus (7.6% in ARIKAYCE plus background regimen vs 0.9% in the background regimen alone arm) and dizziness (6.3% in ARIKAYCE plus background regimen vs 2.7% in the background regimen alone arm). Closely monitor patients with known or suspected auditory or vestibular dysfunction during treatment with ARIKAYCE. If ototoxicity occurs, manage patients as medically appropriate, including potentially discontinuing ARIKAYCE.

Nephrotoxicity was observed during the clinical trials of ARIKAYCE in patients with MAC lung disease but not at a higher frequency than background regimen alone. Nephrotoxicity has been associated with the aminoglycosides. Close monitoring of patients with known or suspected renal dysfunction may be needed when prescribing ARIKAYCE.

Neuromuscular Blockade: Patients with neuromuscular disorders were not enrolled in ARIKAYCE clinical trials. Patients with known or suspected neuromuscular disorders, such as myasthenia gravis, should be closely monitored since aminoglycosides may aggravate muscle weakness by blocking the release of acetylcholine at neuromuscular junctions.

Embryo-Fetal Toxicity: Aminoglycosides can cause fetal harm when administered to a pregnant woman. Aminoglycosides, including ARIKAYCE, may be associated with total, irreversible, bilateral congenital deafness in pediatric patients exposed in utero. Patients who use ARIKAYCE during pregnancy, or become pregnant while taking ARIKAYCE should be apprised of the potential hazard to the fetus.

Contraindications: ARIKAYCE is contraindicated in patients with known hypersensitivity to any aminoglycoside.

Most Common Adverse Reactions: The most common adverse reactions in Trial 1 at an incidence ≥5% for patients using ARIKAYCE plus background regimen compared to patients treated with background regimen alone were dysphonia (47% vs 1%), cough (39% vs 17%), bronchospasm (29% vs 11%), hemoptysis (18% vs 13%), ototoxicity (17% vs 10%), upper airway irritation (17% vs 2%), musculoskeletal pain (17% vs 8%), fatigue and asthenia (16% vs 10%), exacerbation of underlying pulmonary disease (15% vs 10%), diarrhea (13% vs 5%), nausea (12% vs 4%), pneumonia (10% vs 8%), headache (10% vs 5%), pyrexia (7% vs 5%), vomiting (7% vs 4%), rash (6% vs 2%), decreased weight (6% vs 1%), change in sputum (5% vs 1%), and chest discomfort (5% vs 3%).

Drug Interactions: Avoid concomitant use of ARIKAYCE with medications associated with neurotoxicity, nephrotoxicity, and ototoxicity. Some diuretics can enhance aminoglycoside toxicity by altering aminoglycoside concentrations in serum and tissue. Avoid concomitant use of ARIKAYCE with ethacrynic acid, furosemide, urea, or intravenous mannitol.

Overdosage: Adverse reactions specifically associated with overdose of ARIKAYCE have not been identified. Acute toxicity should be treated with immediate withdrawal of ARIKAYCE, and baseline tests of renal function should be undertaken. Hemodialysis may be helpful in removing amikacin from the body. In all cases of suspected overdosage, physicians should contact the Regional Poison Control Center for information about effective treatment.

U.S. INDICATION

LIMITED POPULATION: ARIKAYCE is indicated in adults, who have limited or no alternative treatment options, for the treatment of Mycobacterium avium complex (MAC) lung disease as part of a combination antibacterial drug regimen in patients who do not achieve negative sputum cultures after a minimum of 6 consecutive months of a multidrug background regimen therapy. As only limited clinical safety and effectiveness data for ARIKAYCE are currently available, reserve ARIKAYCE for use in adults who have limited or no alternative treatment options. This drug is indicated for use in a limited and specific population of patients.

This indication is approved under accelerated approval based on achieving sputum culture conversion (defined as 3 consecutive negative monthly sputum cultures) by Month 6. Clinical benefit has not yet been established. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

Limitation of Use: ARIKAYCE has only been studied in patients with refractory MAC lung disease defined as patients who did not achieve negative sputum cultures after a minimum of 6 consecutive months of a multidrug background regimen therapy. The use of ARIKAYCE is not recommended for patients with non-refractory MAC lung disease.

Patients are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch, or call 1–800–FDA–1088. You can also call the Company at 1-844-4-INSMED.