Reports Q1 revenue $8.13M, consensus $4.22M. We continued to execute on our royalty-aggregator business model in 2019. In early April, we announced we are acquiring the potential royalty rights associated with five hematology assets, three of which are being developed under a collaboration with Bayer, and a percentage of the future milestone payments associated with the assets,” stated Jim Neal, Chief Executive Officer of XOMA. “Milestone payments help fuel XOMA’s model, as they are a means of adding non-dilutive capital that can fund our royalty asset acquisitions. As I have articulated in the past, we maintain a lean infrastructure to allow our milestones and royalties to have a meaningful impact on our financial results. This quarter’s $5.5 million milestone payment had a significant positive impact on XOMA’s financial statements.” Novartis (NVS) announced gevokizumab will enter oncology clinical studies. “There was a great deal of activity on XOMA-partnered assets in the first quarter of 2019, including the posting of Novartis’ first clinical study for gevokizumab in oncology. Given all that has happened with gevokizumab over the years, seeing that study posted on ClinicalTrials.gov was a proud moment for everyone at XOMA,” concluded Mr. Neal. Novartis also continued to expand the iscalimab Phase 2 development program and posted two additional Phase 2 trials on ClinicalTrials.gov during the first quarter. The anti-CD40 antibody is being studied in six separate indications across ten ongoing or completed trials.
Monday, May 6, 2019
Premier to exit specialty pharmacy business
Premier (PINC) is exiting its specialty pharmacy business to “enhance the company’s focus on the continuing evolution of its core supply chain, enterprise analytics and performance improvement capabilities.” On May 6, certain of Premier’s consolidated subsidiaries entered into a definitive asset purchase and sale agreement with ProCare Pharmacy, a subsidiary of CVS Health Corporation (CVS), under which Premier will sell certain assets related to its specialty pharmacy business for $22.5M, plus up to an additional $20.0M for inventory, each subject to adjustment. The transaction is expected to close in the current quarter ending June 30. The sale was made in connection with the company’s plans to discontinue its specialty pharmacy operations conducted by both Acro Pharmaceutical Services and Commcare Pharmacy by June 30. Net proceeds from the transaction will be used primarily to fund costs associated with the transaction and wind down and exit from the specialty pharmacy operations, and for general corporate purposes. In connection with Premier’s exit from the specialty pharmacy business, the company expects to record a non-cash impairment charge of approximately $87.0M-$92.0M related to goodwill, purchased intangibles and other assets of the specialty pharmacy business. Including costs incurred to date, it also expects to incur one-time, transaction and exit-related pre-tax charges of approximately $11.0M-$15.0M, primarily related to severance and retention benefits and financial advisor and legal fees. These expenses are expected to be recorded in Q4. These actions are expected to increase Premier’s consolidated non-GAAP adjusted EBITDA margin to approximately 45% for Fy19 compared to approximately 34% for the FY19 six-month period ended December 31, 2018, while reducing annual consolidated net revenue by approximately $470M and increasing annual pre-tax income by approximately $6M.
Ensign Group Announces Home Health, Hospice and Senior Living Spin-off
The Ensign Group, Inc. (ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, home health care, hospice care and senior living companies, announced today a plan to separate its home health and hospice agencies and substantially all of its senior living businesses into a separate publicly-traded company. Upon consummation of the spin-off, the two companies will include:
- The Ensign Group, Inc., which will include transitional and skilled services, rehabilitative care services, healthcare campuses, post-acute-related new business ventures and real estate investments; and
- The Pennant Group, Inc., which will include Ensign’s home health and hospice operations, substantially all of Ensign’s senior living operations, and Ensign’s mobile diagnostic and clinical laboratory operations.
Ensign plans to effect the strategic separation through a spin-off in which it will distribute shares of Pennant’s common stock to Ensign’s shareholders on a pro rata basis. At the time of the spin-off, it is anticipated that Pennant, which is currently a wholly-owned subsidiary of Ensign, will consist of 60 home health and hospice agencies, 51 senior living operations, and mobile diagnostics and lab operations located across 13 states. Pennant anticipates 23 of the senior living assets will remain subject to leases with third-party landlords. In addition, Pennant will operate 28 senior living communities pursuant to a new, long-term triple-net leases with Ensign subsidiaries.
The spin-off is expected to be tax-free to Ensign’s shareholders, except for any cash paid in lieu of fractional shares. Pennant has applied to list its shares on the NASDAQ stock market under the ticker symbol “PNTG.”
Ensign’s current management team will continue in place. Mr. Daniel H Walker, President of Ensign’s home health and hospice holding company, Cornerstone Healthcare, Inc., will become the Chairman, Chief Executive Officer and President of Pennant. Ensign’s current President and Chief Executive Officer, Mr. Christopher R. Christensen, will also serve as a director for both companies for the foreseeable future. In addition, Mr. John Nackel, a current Ensign director, will also serve as a Pennant director, and it is anticipated that he will temporarily continue his service on the Ensign board until his replacement is found or the end of his current term, whichever occurs first.
Osmotica: Positive Topline Results of Eye Med Phase 3
Second Phase III Study 202 Meets Primary Endpoint; Provides Additional Evidence of Efficacy and Safety –
– Long-term Phase III Study 203 Provides Additional Evidence of Safety –
– Company to Host Conference Call on Tuesday, May 7th at 12pm ET with Dr. Chuck Slonim and Dr. Shane Kannarr –
Osmotica Pharmaceuticals plc (“Osmotica” or the “Company”) (Nasdaq: OSMT), a fully integrated biopharmaceutical company, today announced positive topline results of its second Phase III efficacy and safety clinical trial (Study 202) of RVL (oxymetazoline hydrochloride ophthalmic solution, 0.1%) and long-term Phase III safety study (Study 203) for the treatment of ptosis (droopy eyelid).
“We are very pleased with the positive topline results of our second Phase III clinical Study 202 of RVL for the treatment of ptosis evaluating efficacy and safety compared to placebo. Our topline readout is consistent with our prior study results, which demonstrated a statistically significant improvement in the visual field of patients that were administered our once-daily drop. The topline readout also suggests that RVL was well tolerated by patients in this study. Given the positive topline results from this study, combined with our recently completed long-term safety Study 203, we intend to submit a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) in the third quarter of 2019. If approved, we could be on the market as early as the second half of 2020,” said Brian Markison, Chairman and Chief Executive Officer at Osmotica.
“We believe there is a large prevalence of ptosis and today there is no FDA-approved pharmacologic intervention for any of these patients. If approved, RVL would be the first non-surgical option available for patients. Administered as a single drop once daily, RVL has the potential to significantly improve the visual field of individuals living with the clinical sequelae of ptosis,” added Markison.
Brian Markison (Chief Executive Officer), JD Schaub (Chief Operating Officer), Tina deVries (EVP Research and Development), David Jacobs (VP Clinical Development), Dr. Chuck Slonim (Key Opinion Leader), and Dr. Shane Kannarr (Key Opinion Leader), will host a conference call as follows:
| Date | Tuesday, May 7, 2019 |
| Time | 12:00 p.m. EDT |
| Toll free (U.S.) | (866) 672-5029 |
| International | (409) 217-8312 |
| Conference ID | 7986401 |
| Webcast (live and replay) | www.osmotica.com under the “Investor & News” section |
The webcast will be archived for 30 days at the aforementioned URL.
Intersect ENT (XENT) Misses Q1 EPS by 5c, Cuts FY Guidance
Intersect ENT (NASDAQ: XENT) reported Q1 EPS of ($0.35), $0.05 worse than the analyst estimate of ($0.30). Revenue for the quarter came in at $26.7 million versus the consensus estimate of $26.31 million.
GUIDANCE:
Intersect ENT sees FY2019 revenue of $113-117 million, versus the consensus of $125.25 million.
Intersect ENT is updating its outlook for revenue for the full year 2019 revenue to $113 to $117 million compared to prior guidance of $123 to $127 million, and for modest growth in the second quarter. The company’s outlook for 2019 gross margin remains in the range of 80% to 81%. In consideration of the change in revenue outlook, the company is reducing its outlook for operating expenses excluding stock-based expense, which are expected to be offset by incremental stock-based expense associated with the leadership transition announced May 6, 2019. Thus the company is maintaining its outlook for 2019 operating expenses in the range of $135 to $137 million.
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