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Charles River Laboratories Announces First-Quarter 2021 Results

On May 4, 2021 Charles River Laboratories International, Inc. (NYSE: CRL) reported its results for the first quarter of 2021 (Press release, Charles River Laboratories, MAY 4, 2021, View Source [SID1234579072]). For the quarter, revenue was $824.6 million, an increase of 16.6% from $707.1 million in the first quarter of 2020.

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Acquisitions contributed 0.7% to consolidated first-quarter revenue growth. The impact of foreign currency translation benefited reported revenue growth by 2.9%. Excluding the effect of these items, organic revenue growth of 13.0% was driven by contributions from all three business segments. The year-over-year comparison to last year’s COVID-19-related revenue impact contributed approximately 140 basis points to the reported and organic revenue growth rates in the first quarter, principally in the Research Models and Services segment.

On a GAAP basis, first-quarter net income attributable to common shareholders was $61.5 million, an increase of 21.2% from net income of $50.8 million for the same period in 2020. First-quarter diluted earnings per share on a GAAP basis were $1.20, an increase of 17.6% from $1.02 for the first quarter of 2020. The increases in the GAAP net income and earnings per share were driven primarily by higher revenue and operating margin improvement, partially offset by debt extinguishment costs and the write-off of deferred financing costs related to debt refinancing activities in the first quarter of 2021.

On a non-GAAP basis, net income from continuing operations was $129.2 million for the first quarter of 2021, an increase of 40.7% from $91.8 million for the same period in 2020. First‑quarter diluted earnings per share on a non-GAAP basis were $2.53, an increase of 37.5% from $1.84 per share for the first quarter of 2020. The non-GAAP net income and earnings per share increases were driven primarily by higher revenue and operating margin improvement.

James C. Foster, Chairman, President and Chief Executive Officer, said, "Our first-quarter performance demonstrates the power of our unique, non-clinical portfolio and the strength of the biopharmaceutical market environment. A global focus on scientific innovation is driving record levels of investment in the biopharmaceutical industry, which is generating biomedical breakthroughs across multiple therapeutic areas at a rapid pace. We believe these factors are resulting in unprecedented client demand across most of our businesses."

"To maintain and enhance our position as the leading, non-clinical CRO, we are strategically expanding our portfolio and enhancing our scientific capabilities, especially in the use of more complex research techniques and advanced drug modalities such as cell and gene therapies. These investments are enabling us to offer greater value to our clients and capitalize on the significant growth opportunities," Mr. Foster concluded.

First-Quarter Segment Results

Research Models and Services (RMS)

Revenue for the RMS segment was $176.9 million in the first quarter of 2021, an increase of 21.2% from $146.0 million in the first quarter of 2020. The impact of foreign currency translation contributed 4.2%, and acquisitions, principally Cellero which was completed in August 2020, contributed 2.2% to first-quarter RMS revenue. Organic revenue growth of 14.8% was driven by robust demand for research models in China, as well as higher revenue for research models services, particularly Genetically Engineered Models and Services (GEMS). The year-over-year comparison to last year’s COVID-19-related revenue impact contributed approximately 620 basis points to the RMS revenue growth rate in the first quarter.

In the first quarter of 2021, the RMS segment’s GAAP operating margin increased to 25.4% from 18.7% in the first quarter of 2020. On a non-GAAP basis, the operating margin increased to 28.7% from 23.0% in the first quarter of 2020. The GAAP and non-GAAP operating margin increases were driven primarily by operating leverage from higher sales volume for research models.

Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $501.2 million in the first quarter of 2021, an increase of 14.2% from $438.7 million in the first quarter of 2020. The impact of foreign currency translation contributed 2.3% to DSA revenue growth. Organic revenue growth of 11.6% was primarily driven by robust demand from global biopharmaceutical and biotechnology clients in both the Discovery Services and Safety Assessment businesses.

In the first quarter of 2021, the DSA segment’s GAAP operating margin increased to 18.1% from 16.5% in the first quarter of 2020. On a non-GAAP basis, the operating margin increased to 23.8% from 22.0% in the first quarter of 2020. The GAAP and non-GAAP operating margin increases were driven primarily by operating leverage from higher revenue in both the Discovery Services and Safety Assessment businesses.

Manufacturing Support (Manufacturing)

Revenue for the Manufacturing segment was $146.5 million in the first quarter of 2021, an increase of 19.7% from $122.4 million in the first quarter of 2020. The impact of foreign currency translation contributed 4.1% to Manufacturing revenue growth. Organic revenue growth of 15.6% was driven by strong demand in the Biologics Testing Solutions (Biologics) and Microbial Solutions businesses.

In the first quarter of 2021, the Manufacturing segment’s GAAP operating margin increased slightly to 33.8% from 33.6% in the first quarter of 2020. On a non-GAAP basis, the operating margin decreased slightly to 35.5% from 35.6% in the first quarter of 2020.

2021 Guidance

On February 17, 2021, the Company provided 2021 financial guidance, both excluding and including the impact of the Cognate BioServices acquisition. The acquisition of Cognate was subsequently completed on March 29, 2021.

The Company is increasing its revenue growth and non-GAAP earnings per share guidance for 2021, as a result of the stronger-than-expected first quarter financial performance and an expectation that robust client demand trends will continue for the remainder of the year. This updated guidance includes the acquisitions that have already been completed in 2021, including Cognate.

Footnotes to Guidance Table:
(1) The contribution from acquisitions reflects only those acquisitions that have been completed.

(2) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions and foreign currency translation.

(3) Acquisition-related amortization includes an estimate of $0.45-$0.65 for the impact of the Cognate acquisition and $0.05-$0.10 for other acquisitions completed in 2021 because the preliminary purchase price allocation has not been completed.

(4) These adjustments are related to the evaluation and integration of acquisitions, and primarily include transaction, advisory, and certain third-party integration costs, as well as certain costs associated with acquisition-related efficiency initiatives.

(5) These items primarily relate to charges of a) approximately $0.15 associated with U.S. and international tax legislation, and b) approximately $0.40 associated with debt extinguishment costs and the write-off of deferred financing costs related to debt refinancing.

(6) Venture capital and other strategic investment performance only includes recognized gains or losses. The Company does not forecast the future performance of these investments.

(7) Reconciliation of the current 2021 free cash flow guidance is as follows: Cash flow from operating activities of approximately $655 million, less capital expenditures of approximately $220 million, equates to free cash flow of approximately $435 million.

Webcast

Charles River has scheduled a live webcast on Tuesday, May 4th, at 9:00 a.m. ET to discuss matters relating to this press release. To participate, please go to ir.criver.com and select the webcast link. You can also find the associated slide presentation and reconciliations of GAAP financial measures to non-GAAP financial measures on the website.

Bank of America Health Care Conference Presentation

Charles River will virtually present at the Bank of America 2021 Health Care Conference, on Wednesday, May 12th, at 10:15 a.m. ET. Management will provide an overview of Charles River’s strategic focus and business developments.

A live webcast of the presentation will be available through a link that will be posted on ir.criver.com. A webcast replay will be accessible through the same website shortly after the presentation and will remain available for approximately two weeks.

Investor Day

Charles River will host a virtual Meeting with Management on Thursday, May 27th, beginning at 8:30 a.m. ET. Investors will have the opportunity to listen to a webcast of the virtual event through the Investor Relations section of the Company’s website at ir.criver.com. A replay will be accessible through the same website.

Non-GAAP Reconciliations

The Company reports non-GAAP results in this press release, which exclude often-one-time charges and other items that are outside of normal operations. A reconciliation of GAAP to non-GAAP results is provided in the schedules at the end of this press release.

Cerus Corporation Announces First Quarter 2021 Financial Results and Raises Full Year Product Revenue Guidance

On May 4, 2021 Cerus Corporation (Nasdaq: CERS) reported financial results for the first quarter ended March 31, 2021 (Press release, Cerus, MAY 4, 2021, View Source [SID1234579071]).

Recent developments and highlights include:

First quarter 2021 total revenue of $29.6 million, reflecting a 20% increase over the prior year period. Total revenue was composed of (in millions, except %):

Increasing 2021 annual product revenue guidance range to $110 million to $114 million (from prior guidance of $106 million to $110 million), representing an approximately 20% to 24% increase over full year 2020 reported product revenue.
Multiple blood center partners have completed validation efforts and are now manufacturing INTERCEPT Fibrinogen Complex, with inventory ready for release to hospital customers.
The Centers for Medicare and Medicaid Services (CMS) published the Fiscal Year 2022 Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule, which recommended that Intercept Fibrinogen Complex be eligible for incremental payment via a New Technology Add-On Payment (NTAP) when performed in the hospital inpatient setting.
Third module (CMC Data) submitted for CE Mark for INTERCEPT red blood cells. Fourth and final module (Manufacturing) submission anticipated by end of Q2:21.
Cash, cash equivalents, and short-term investments of $132 million at March 31, 2021.
"On the heels of our strong 2020 performance, product revenue in the first quarter of $23.4 million exceeded our expectations," said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. "As our U.S. customers continue to prepare for compliance with FDA’s guidance around the bacterial safety of platelets, demand for the INTERCEPT Blood System continues to build. The momentum we have in the U.S. market in particular gives us confidence that 2021 will be another year of strong growth for Cerus and we are increasing our full year product revenue guidance accordingly."

Revenue

Product revenue during the first quarter of 2021 was $23.4 million, compared to $18.6 million during the same period in 2020. Product revenue growth during the quarter benefited from increased demand for INTERCEPT platelet products in the U.S., led by adoption from the top five blood center networks in the country.

First quarter government contract revenue was $6.2 million, compared to $6.0 million during the same period in 2020. First quarter government contract revenue is primarily comprised of funding from the Biomedical Advanced Research and Development Authority (BARDA) agreement for the development of the INTERCEPT Blood System for Red Cells. The total potential value of the current BARDA agreement is $214 million, with $72.7 million cumulatively invoiced to BARDA through March 31, 2021.

BARDA is part of the Office of the Assistant Secretary for Preparedness and Response within the U.S. Department of Health and Human Services. The development of the INTERCEPT red blood cell program has been funded in whole or in part with Federal funds from the Department of Health and Human Services; Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority, under Contract No. HHSO100201600009C.

Gross Margins

Gross margins on product revenue during the first quarter of 2021 were 52.5% compared to 55.3% for the first quarter of 2020. The decrease in gross margin was tied to increased sales to our U.S. customers, who typically use our single dose platelet kits, which carry a less favorable gross margin contribution compared to our double dose kits, which are used more broadly outside of the U.S.

Operating Expenses

Total operating expenses for the first quarter of 2021 were $34.9 million compared to $31.7 million for the same period of the prior year.

Selling, general, and administrative (SG&A) expenses for the first quarter of 2021 totaled $19.2 million, compared to $15.9 million for the first quarter of 2020. The year-over-year increase in SG&A expenses was tied to incremental expenses associated with the launch of our INTERCEPT Fibrinogen Complex product as well as increased non-cash stock-based compensation expense.

Research and development (R&D) expenses for the first quarter of 2021 were $15.7 million, compared to $15.8 million for the first quarter of 2020. The Company continues to expect to incur costs associated with the development and testing of a new generation of INTERCEPT devices and disposable kits as well as the clinical development and pursuit of regulatory approval for the red blood cell system, among others.

Net Loss

Net loss for the first quarter of 2021 was $17.5 million, or $0.10 per basic and diluted share, compared to a net loss of $16.5 million, or $0.10 per basic and diluted share, for the first quarter of 2020. Non-cash stock-based compensation was higher by approximately $1.6 million during the first quarter of 2021 compared to the prior year period, contributing to the slightly higher net loss.

Balance Sheet

At March 31, 2021, the Company had cash, cash equivalents and short-term investments of $131.7 million, compared to $133.6 million at December 31, 2020.

Despite continued increased investments in inventory to meet customer demand, cash used for operations during Q1 2021 was narrower at $18.0 million compared to $19.8 million used during the prior year period. Offsetting this lower use were $15 million in term loan draws and $1.4 million in incremental draws from its revolving line of credit. At March 31, 2021, the Company had approximately $54.6 million in outstanding term loan debt and $9.9 million of borrowings under its revolving loan credit agreement, compared to $39.6 million in outstanding term loan debt and $8.5 million of borrowings under its revolving loan credit agreement at December 31, 2020.

Increasing 2021 Product Revenue Guidance

The Company now expects 2021 product revenue to be in the range of $110 million to $114 million, as compared to the prior range of $106 million to $110 million. The revised guidance range represents approximately 20% to 24% growth compared to 2020 reported product revenue.

Quarterly Conference Call

The Company will host a conference call at 4:30 P.M. EDT this afternoon, during which management will discuss the Company’s financial results and provide a general business overview and outlook. To listen to the live webcast, please visit the Investor Relations page of the Cerus website at View Source Alternatively, you may access the live conference call by dialing (866) 235-9006 (U.S.) or (631) 291-4549 (international).

A replay will be available on Cerus’ website, or by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and entering conference ID number 8668508. The replay will be available approximately three hours after the call through May 18, 2021.

Certara Launches Secondary Intelligence™ Software to Predict Risk of Unwanted Side Effects of Drug Candidates Earlier

On May 4, 2021 Certara, Inc. (Nasdaq: CERT), the global leader in biosimulation, reported the launch of its Secondary Intelligence software, the first and only software that quantitatively predicts the risk of adverse effects and safety issues derived from secondary pharmacology that may impede the clinical development of a drug (Press release, Certara, MAY 4, 2021, View Source [SID1234579070]).

Safety issues account for approximately one quarter of candidate attrition in drug development projects. They can arise from either intended or unintended drug-receptor interactions, also known as primary or secondary pharmacology, respectively. Secondary pharmacological profiling is increasingly applied by drug developers and assessed by regulators to evaluate the potential of off-target effects of novel drugs. To address secondary pharmacology, researchers typically screen their small molecule compounds against a broad panel of off-target receptors. The challenge is interpreting the readouts to understand which receptor interactions will contribute to potential adverse effects in clinical development and post-marketing.

"While drug developers and regulators rely on secondary pharmacology analyses to support critical development decisions, the current process is inefficient, inconsistent, and often imprecise," said William F. Feehery, Ph.D., CEO of Certara. "With our Secondary Intelligence software, drug developers will be able to make faster, more confident go/no go portfolio decisions earlier in the drug discovery and development process which will help to increase the likelihood of success in clinical trials."

Certara’s Secondary Intelligence software is the only software that curates and visualizes secondary pharmacology analyses to evaluate safety liabilities against multiple receptors. It ranks the likelihood of off-target interaction during clinical use to make critical decisions on which compounds to progress or modify.

"We have unlocked the potential of secondary pharmacology data to provide automated intelligence so that safety pharmacologists and toxicologists can more confidently and consistently predict the off-target safety risks associated with their compounds faster and earlier," said Will Redfern, Ph.D., Vice President, Quantitative Systems Toxicology & Safety at Certara. "Secondary Intelligence allows drug developers to de-risk their programs with evidence-based secondary pharmacology insights, which could save significant time, cost, and resources further down the line."

To learn more about the Secondary Intelligence software and consulting services, please visit: View Source

Cartesian Therapeutics Wins Fourth NIH Grant for Clinical Trials of RNA Cell Therapies

On May 4, 2021 Cartesian Therapeutics, a fully integrated, clinical-stage biopharmaceutical company pioneering RNA cell therapy in and beyond oncology, reported a $2 million competitive R&D award from the National Heart, Lung, and Blood Institute (NHLBI) of the National Institutes of Health (NIH) to support its clinical development for Descartes-30, the first RNA cell therapy for respiratory diseases (Press release, Cartesian Therapeutics, MAY 4, 2021, View Source [SID1234579069]).

This is the fourth Small Business Innovation Research (SBIR) grant awarded to Cartesian to support its clinical-stage investigational therapies developed with the company’s proprietary RNA Armory combination therapy platform. Cartesian previously won research grants from the National Cancer Institute (NCI) for Descartes-11 in multiple myeloma ($2.3 million) and from the National Institute of Allergy and Infectious Diseases (NIAID) for Descartes-08 in generalized myasthenia gravis ($2 million).

"We appreciate NIH’s recognition of the RNA Armory’s potential to treat a wide array of human disease," said Murat Kalayoglu, M.D., Ph.D., President and Chief Executive Officer at Cartesian Therapeutics. "RNA cell therapy is a new class of therapy, combining the safety of conventional (nanoparticle-delivered) RNA therapeutics with the potency of conventional (DNA-engineered) cell therapies. This new funding from NHLBI will accelerate our effort to bring RNA cell therapy to respiratory and critical care disease as we continue to demonstrate that cell therapy can expand beyond oncology."

"The overarching vision behind our RNA Armory platform is to RNA-engineer any cell to express any desired combination of secreted and membrane-bound proteins," said Michael Singer, M.D., Ph.D., Chief Scientific Officer at Cartesian Therapeutics. "The cell – which we can target to any tissue of choice – allows us to deliver a multimodal biologic drug factory directly to the site of disease."

Descartes-30 is an off-the-shelf mesenchymal stem cell (MSC) therapy engineered to secrete two DNases that degrade neutrophil extracellular traps (NETs), which are key drivers of several respiratory, autoimmune and cardiovascular diseases. The MSC acts both as a protein factory, by producing therapeutic DNases for an extended period, and as a vehicle to deliver those therapeutics directly to the lungs, where NETs accumulate. Future clinical candidates aim to engineer three or more therapeutic and targeting proteins within a cell.

BioNTech to Report First Quarter 2021 Financial Results and Operational Update on May 10, 2021

On May 4, 2021 BioNTech SE (Nasdaq: BNTX, "BioNTech" or "the Company") reported that it will announce its financial results for the first quarter 2021 on Monday, May 10th, 2021. BioNTech invites investors and the general public to join a conference call and webcast with investment analysts on the same day at 8.00 a.m. EDT (2.00 p.m. CEST) to report its financial results and provide a corporate update for the first quarter 2021 (Press release, BioNTech, MAY 4, 2021, View Source [SID1234579068]).

The slide presentation and audio of the webcast will be available via this link.

To participate in the conference call, please dial the following numbers ten minutes prior to the start and provide the Conference ID:

Participants may also access the slides and the webcast of the conference call via the "Events & Presentations" page of the Investor Relations section of the Company’s website at View Source A replay of the webcast will be available shortly after the conclusion of the call and archived on the Company’s website for 30 days following the call.