Market Newsdesk

May 5, 2021 7:06 am

Amryt Pharma to Acquire Chiasma, Inc. to Further Strengthen Global Leadership in Rare and Orphan Diseases

–
Combined business will
have
three approved commercial products
,
lomitapide
(
Lojuxta
®/
Juxtapid
®),
metreleptin
(
Myalept
®/
Myalepta
®)
,
octreotide (
MYCAPSSA
®)
and
a robust
clinical
pipeline

– Lead
pipeline
product Oleogel-S10*
(Filsuvez®)
under regulatory review in the US and EU

–
Deal
expe
c
ted to
pave a path to a combined potential $1
BN
peak revenue for Amryt

–
The acquisition is expected to
deliver
estimated
annual cost synergies of
approximately
$50M and
be revenue
and
EBITDA
accretive
and cash generative
in the first full
calendar
year of combined operations and substantially accretive thereafter

–
MYCAPSSA® is the first and only oralsomatostatin analog (“SSA”)approved for appropriate patients with acromegaly in aglobalmarketestimated at approximately $800M with the potential to expand into the neuroendocrinetumor (“NET”) marketestimated at approximately $1.9BN globally and has a confirmed modified 505(b)(2) regulatory pathway in the US

–
Acquisition
l
everage
s
Amryt’s
proven commercial
execution
ability, global infrastructure and integration
capabilities
to accelerate
MYCAPSSA
®
launch in the US and international markets

–
All stock transaction with
Amryt shareholders
to
own
approximately
60%
and
Chiasma shareholders
approximately
40% of the combined entity
with voting agreements received from
lead shareholders
of both businesse
s
–
Athyrium Capital Management LP, Highbridge Capital Management and MPM Capital

C

onference call

and webcast

for analysts and investors

today at

0

8

30

EDT

(

1

3

30

BST

)

DUBLIN, Ireland, and Boston MA,
May
5
,
2021, Amryt (Nasdaq: AMYT, AIM: AMYT), a global, commercial-stage biopharmaceutical company dedicated to acquiring, developing and commercializing novel treatments for rare diseases, today announces that it has signed a definitive agreement to acquire Chiasma, Inc. (Nasdaq: CHMA) in an all-stock combination. The combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans. The transaction has been approved and recommended by the Boards of both Amryt and Chiasma.

Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction will be exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares. As of the close of trading on May 4, 2021 Amryt’s ordinary shares on AIM were £2.00 ($2.78) per share and Amryt’s ADS’s on Nasdaq were $12.95 (£9.31) per ADS.

Amryt already has in place the infrastructure, expertise and the financial flexibility to realize the full potential of MYCAPSSA® globally and further develop life-cycle management opportunities to expand the benefits of MYCAPSSA® to other patient populations including NET. The transaction is expected to accelerate and diversify Amryt’s growing revenues and Amryt expects to deliver estimated annual cost synergies of approximately $50M.

Dr.
Joe Wiley, Chief Executive Officer of Amryt, commented:
“We are really excited by today’s news and
are looking forward
to welcom
ing
the Chiasma team to Amryt.
Amryt has grown significantly in the past
six
years and our success to date is due to the phenomenal
commitment
and drive of the Amryt team.
Th
is
transaction brings together two teams that have a strong track record of execution and passion for developing therapies that can help improve
the lives of patients in need.
The addition of
MYCAPSSA
®
,
which was recently launched in the US
,
to our commercial
product portfolio represents a strong strategic, operational and commercial fit given the significant call-point overlap that exists across our portfolio.

This deal further
solidifies our position as
a global leader in treating rare
and orphan
conditio
ns. The combined business
will have
three
approved
commercial
products
and
an exciting pipeline of development
asset
s.
Our lead development candidate, Oleogel-S10, is currently progressing through the regulatory process in the US and EU and
,
if approved, will bring our portfolio of commercial products to four.
We see significant revenue growth opportunities for
MYCAPSSA® in acromegaly and are also very excited to further develop the potential forMYCAPSSA® in patients with carcinoid symptoms stemming from NET where we believe the commercial opportunity is significant.With the addition of NET, our combined pipeline will have four product candidates in late clinical stages as well as our exciting pre-clinical gene therapy asset, AP103 in dystrophic Epidermolysis Bullosa (“EB”).

The
proposed transaction will
leverage our track record of successful integration and
significantly
enhance
our
future
growth
plans
in highly attractive markets globally. With this transaction,
we
beli
e
ve that we
can continue the strong growth trajectory already underway at Amryt
and
have
the financial
strength
to execute our
future
growth plans.”

Raj Kannan, Chief Executive Officer of Chiasma commented:
“
I am incredibly proud of what the team at Chiasma has been able to accomplish and we look forward to joining A
mryt
in continuing to focus on making the lives of patie
nts with rare diseases better.
Th
e merger with A
mryt
allows the combined company to
significantly leverage the operational efficiencies
in successfully commercializing MYCAPSSA
®
globally and expand the potential benefits of MYCAPSSA
®
to ot
her patients with unmet needs.
The combined business has significant potential to further enhance shareholder value with a diversified portfolio of both marketed products and
a meaningful
late
–
stage pipeline
that could potentially drive future
growth opportunities.
I am confident that this
combination with Amryt, given their track record of success, positions us well
to deliver
long-term
value for our patients and for our shareholders.
”

Transaction
Benefits

A
leading orphan
a
nd rare disease
company
with a diversified portfolio of established and grow
ing
products
and financial strength – Consistent with Amryt’s shareholder endorsed strategy to acquire, develop and commercialize novel treatments for rare diseases, the combined portfolio of products offers a pathway to a potential $1BN of peak revenues. Amryt has a proven track record of successful integration and expects to deliver approximately $50M in cost synergies per annum. Both Amryt and Chiasma currently enjoy a significant degree of customer call-point overlap and combining operations will provide significant salesforce scale opportunities. In the endocrinology space, both Myalept®/Myalepta® and MYCAPSSA® are growth assets and by combining and scaling salesforces, Amryt believes that this will not only drive MYCAPSSA® adoption but also enable further Myalept®/Myalepta® revenue growth. The combined business will have three approved commercial products as well as a robust clinical pipeline. Both Oleogel-S10 (if approved) and MYCAPSSA® are first-to-market novel therapies. MYCAPSSA® is the first and only oral SSA approved for appropriate patients with acromegaly and Oleogel-S10 has the potential to be the first approved therapy for EB.

Delivers improved competitive positioning with increased scale in US, EU and beyond – The transaction is expected to enhance the combined group’s commercial and medical infrastructure globally. Amryt plans to deploy its significant expertise and commercial platforms to further accelerate the launch of MYCAPSSA® in the US and also to seek MYCAPSSA® approval and launch internationally.

Significant market potential for
MYCAPSSA® in NET– Amryt believes MYCAPSSA® is well positioned to address the desire for an oral option in the treatment of carcinoid symptoms associated with NET. Injectable octreotide is already approved and used in the treatment of NET and SSA utilization in NET is expected to account for an estimated $1.3BN in the US and $2.4BN globally by 2028. During the first quarter of 2021, Chiasma submitted an Investigational New Drug (“IND”) application for a Phase 1 relative bioavailability study followed by a single Phase 3, randomized, double-blind, placebo-controlled study of MYCAPSSA® in patients with carcinoid syndrome, which are designed to support a modified 505(b)(2) regulatory pathway for marketing approval. Subject to ongoing discussions with the FDA and completion of the Phase 1 study, we plan to commence enrollment to the Phase 3 study as early as H1 2022.

Culture
s, values
and
e
xpertise aligned – Amryt and Chiasma share a deep commitment and passion for serving patients by developing and bringing to market innovative therapies. We share a similar business philosophy of placing patients at the center of everything we do and in celebrating inclusion and diversity across our business operations.

Expected to deliver significant shareholder valu
e – The acquisition is expected to be revenue and EBITDA accretive and cash generative in the first full calendar year of combined operations and substantially accretive thereafter. Significant value is also expected to be created through the realization of estimated annual cost synergies of approximately $50m. We expect that the transaction will result in a diversified and broad shareholder base with leading biotech investors supportive of the company’s long-term growth plans.

Webcast and Conference Call Details

Management will host a webcast and conference call for analysts and investors today at 0830 EDT (1330 BST).

Webcast Player URL: https://edge.media-server.com/mmc/p/hdecnon9
Dial in details: Conference ID: 8698345
From the US: +1 646 787 1226
From the UK/International: +44 (0) 203 009 5709
From Ireland: + 353 (0) 1 506 0626

Transaction
Overview

Recommended acquisition of Chiasma by Amryt in an all-stock transaction
Chiasma shareholders will receive 0.396 Amryt ADSs for each share of Chiasma common stock, subject to rounding for fractional shares. As of the close of trading on May 4, 2021 Amryt’s ordinary shares on AIM were £2.00 ($2.78) per share and Amryt’s ADS’s on Nasdaq were $12.95 (£9.31) per ADS.
Based on the fixed exchange ratio, Amryt shareholders prior to the transaction will own approximately 60% of Amryt post transaction and Chiasma shareholders prior to the transaction will own approximately 40% of Amryt post transaction.
Chiasma’s existing royalty interest financing agreement expected to be fully repaid on closing delivering a high margin unencumbered asset to Amryt’s portfolio
Transaction is endorsed and supported by voting agreements with lead shareholders – Athyrium Capital Management LP, Highbridge Capital Management and MPM Capital
Transaction is subject to the approval of Amryt and Chiasma shareholders and other customary closing conditions, including regulatory approvals
Subject to the satisfaction or waiver of closing conditions, the transaction is expected to close in Q3 2021

Listing,
Governance
and
Management

Amryt is currently listed on Nasdaq (AMYT) and AIM in London (AMYT) and will be the publicly quoted company following closing
Amryt’s global headquarters will remain in Dublin, Ireland and its US headquarters will remain in Boston, Massachusetts
The Amryt team will continue to be led by Dr Joe Wiley, CEO of Amryt
Raj Kannan, CEO of Chiasma, is expected to join the Board of Amryt on closing of the transaction, subject to regulatory approval. Chiasma will nominate one additional director to join the Board of Amryt, to be confirmed on closing.

Advisors
to Amryt

Moelis & Company LLC is serving as exclusive financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal advisor to Amryt in this transaction. Shore Capital is acting as NOMAD and Joint Broker to Amryt.

Advisors to Chiasma

Torreya Capital LLC is serving as financial advisor and Goodwin Procter LLP is serving as legal advisor to Chiasma. Chiasma’s Board of Directors was provided a fairness opinion by Duff & Phelps.

* For the purposes of this announcement, we use the name Oleogel-S10. Filsuvez® has been selected as the brand name for the product but please note, Amryt does not, as yet, have regulatory approval for Filsuvez® to treat EB.

About Amryt

Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing innovative treatments to help improve the lives of patients with rare and orphan diseases. Amryt comprises a strong and growing portfolio of commercial and development assets.

Amryt’s commercial business comprises two orphan disease products – metreleptin (Myalept®/ Myalepta®) and lomitapide (Juxtapid®/Lojuxta®).

Myalept®/Myalepta® (metreleptin) is approved in the US (under the trade name Myalept®) as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy (GL) and in the EU (under the trade name Myalepta®) as an adjunct to diet for the treatment of leptin deficiency in patients with congenital or acquired GL in adults and children two years of age and above and familial or acquired partial lipodystrophy (PL) in adults and children 12 years of age and above for whom standard treatments have failed to achieve adequate metabolic control. For additional information, please follow this link.

Juxtapid®/Lojuxta® (lomitapide) is approved as an adjunct to a low-fat diet and other lipid-lowering medicinal products for adults with the rare cholesterol disorder, Homozygous Familial Hypercholesterolaemia (“HoFH”) in the US, Canada, Colombia, Argentina and Japan (under the trade name Juxtapid®) and in the EU, Israel and Brazil (under the trade name Lojuxta®). For additional information, please follow this link.

Amryt’s lead development candidate, Oleogel-S10 (Filsuvez®) is a potential treatment for the cutaneous manifestations of Junctional and Dystrophic EB, a rare and distressing genetic skin disorder affecting young children and adults for which there is currently no approved treatment. Filsuvez® has been selected as the brand name for Oleogel-S10. The product does not currently have regulatory approval to treat EB.

Amryt’s pre-clinical gene therapy platform, AP103, offers a potential treatment for patients with Dystrophic EB, and is also potentially relevant to other genetic disorders.

For more information on Amryt, including products, please visit www.amrytpharma.com.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014.

The person making this notification on behalf of Amryt is Rory Nealon, CFO/COO and Company Secretary.

About Chiasma

Chiasma is a commercial stage biopharmaceutical company focused on developing and commercializing oral therapies to improve the lives of patients who face challenges associated with their existing treatments for rare and serious chronic diseases. Employing its Transient Permeability Enhancer (TPE^®) technology platform, Chiasma seeks to develop oral medications that are currently available only as injections. In June 2020, Chiasma received FDA approval of MYCAPSSA® for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide. MYCAPSSA, the first and only oral SSA approved by the FDA, is available for commercial sale. For the financial year to 31 December 2020, Chiasma reported revenues of $1.1 million and pre-tax loss of $74.8 million. Total assets amounted to $176.3 million, including cash and cash equivalents of $15.4 million. Chiasma is headquartered in Needham, MA with a wholly owned subsidiary in Israel. MYCAPSSA®, TPE® and Chiasma® are registered trademarks of Chiasma. For more information, please visit the company’s website at www.chiasma.com.

About Acromegaly

Acromegaly typically develops when a benign tumor of the pituitary gland produces too much growth hormone, ultimately leading to significant health problems. Common features of acromegaly are facial changes, intense headaches, joint pain, impaired vision and enlargement of the hands, feet, tongue and internal organs. Serious health conditions associated with the progression of acromegaly include type 2 diabetes, hypertension, respiratory disorders and cardiac and cerebrovascular disease. Chiasma estimates that approximately 8,000 adult acromegaly patients are chronically treated with SSA injections in the United States.

About
Neuroendocrine
Tumors
(NET)

NETs arise from neuroendocrine cells throughout the body, most commonly in the gastrointestinal tract, lung, and rarely, the pancreas. While well differentiated neuroendocrine tumors are known to be slow growing, they are often asymptomatic in early stages leading to a substantial number of patients being diagnosed when the tumors have already spread regionally or distantly. Capable of secreting hormones and bioactive amines, approximately 19% of patients have carcinoid syndrome characterized by secretory diarrhea and flushing. With an annual incidence rate of 6.98 per 100,000, it is estimated there are greater than 170,000 individuals living with a diagnosis of NET in the United States.

About MYCAPSSA

MYCAPSSA® (octreotide capsules) has only been approved by the U.S. Food and Drug Administration for long-term maintenance treatment in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide. The full Prescribing Information for MYCAPSSA is available at www.MYCAPSSA.com.

Forward-Looking Statements

This press release relates to the proposed business combination transaction between Amryt and Chiasma and includes forward-looking statements containing the words “expect”, “anticipate”, “intends”, “plan”, “estimate”, “aim”, “forecast”, “project” and similar expressions (or their negative) identify certain of these forward-looking statements. Forward-looking statements relate to future events and anticipated results of operations, business strategies, the anticipated benefits of the proposed transaction, the anticipated impact of the proposed transaction on the combined company’s business and future financial and operating results, the expected amount and timing of synergies from the proposed transaction, the anticipated closing date for the proposed transaction and other aspects of our operations or operating results. The forward-looking statements in this announcement are based on numerous assumptions and Amryt’s and Chiasma’s present and future business strategies and the environment in which Amryt and Chiasma expect to operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, and actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. These statements are not guarantees of future performance or the ability to identify and consummate investments. Many of these risks and uncertainties relate to factors that are beyond each of Amryt’s and Chiasma’s ability to control or estimate precisely, such as future market conditions, the course of the COVID-19 pandemic, currency fluctuations, the behaviour of other market participants, the outcome of clinical trials, the actions of regulators and other factors such as Amryt’s ability to obtain financing, changes in the political, social and regulatory framework in which Amryt operates or in economic, technological or consumer trends or conditions. Forward-looking statements in this communication include, without limitation, statements about the anticipated benefits of the contemplated transaction, including future financial and operating results and expected synergies related to the contemplated transaction, the plans, objectives, expectations and intentions of Amryt, Chiasma or the combined company and the expected timing of the completion of the contemplated transaction. Risks and uncertainties that could cause results to differ from expectations include: uncertainties as to the timing of the contemplated transaction; uncertainties as to the approvals by Amryt’s shareholders of Chiasma’s stockholders required in connection with the contemplated transaction; the possibility that a competing proposal will be made; the possibility that the closing conditions to the contemplated transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval; the effects of disruption caused by the announcement of the contemplated transaction making it more difficult to maintain relationships with employees, customers, vendors and other business partners; the risk that stockholder litigation in connection with the contemplated transaction may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability; other business effects, including the effects of industry, economic or political conditions outside of the control of the parties to the contemplated transaction; transaction costs; actual or contingent liabilities; disruptions to the financial or capital markets; and other risks and uncertainties discussed in Amryt’s and Chiasma’s respective filings with the U.S. Securities and Exchange Commission (the “SEC”). You can obtain copies of Amryt’s and Chiasma’s respective filings with the SEC for free at the SEC’s website (www.sec.gov). Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. No person is under any obligation to update or keep current the information contained in this announcement or to provide the recipient of it with access to any additional relevant information that may arise in connection with it. Such forward-looking statements reflect the Company’s current beliefs and assumptions and are based on information currently available to management.

Important Additional Information
and Where to Find It

In connection with the proposed acquisition, Amryt intends to file a registration statement on Form F-4 with the SEC, which will include a document that serves as a prospectus of Amryt and a proxy statement of Chiasma (the “proxy statement/prospectus”), Chiasma intends to file a proxy statement with the SEC (the “proxy statement”) and each party will file other documents regarding the proposed acquisition with the SEC. Investors and security holders are urged to carefully read the entire registration statement and proxy statement/prospectus or proxy statement and other relevant documents filed with the SEC when they become available because they will contain important information. A proxy statement/prospectus or a proxy statement when available will be sent to Chiasma’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus or the proxy statement free of charge from the SEC’s website or from Amryt or Chiasma as described in the paragraphs below.

Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. Any failure to comply with this restriction may constitute a violation of such laws or regulations. Persons in possession of this announcement or other information referred to herein should inform themselves about, and observe, any restrictions in such laws or regulations.

This announcement has been prepared for the purpose of complying with the applicable law and regulation of the United Kingdom and the United States and information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of jurisdictions outside the United Kingdom or the United States.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

Participants in the Solicitation

Amryt, Chiasma and certain of their respective directors, executive officers and employees may be deemed participants in the solicitation of proxies from Chiasma shareholders in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of Chiasma in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus or proxy statement when it is filed with the SEC. Information about the directors and executive officers of Chiasma and their ownership of Chiasma shares is set forth in the definitive proxy statement for Chiasma’s 2021 annual meeting of shareholders, as previously filed with the SEC on April 26, 2021. Free copies of these documents may be obtained as described in the paragraphs above.

Contacts

Joe Wiley, CEO / Rory Nealon, CFO/COO, +353 (1) 518 0200, [email protected]

Edward Mansfield, Shore Capital, NOMAD, +44 (0) 207 468 7906, [email protected]

Tim McCarthy, LifeSci Advisors, LLC, +1 (212) 915 2564, [email protected]

Amber Fennell, Consilium Strategic Communications, +44 (0) 203 709 5700, [email protected]

May 5, 2021 7:06 am

Inivata to be Acquired by NeoGenomics

Inivata
to be Acquired by
NeoGenomics

Exercise of purchase option to acquire remaining Inivata equity interest for $390m

Inivata
to become
a
liquid biopsy focused division
of NeoGenomics

Research Triangle Park, NC, USA and Cambridge, UK, 5 May 2021 — Inivata, a leader in liquid biopsy, today announces that NeoGenomics, Inc (NASDAQ: NEO.), a leading provider of cancer-focused genetic testing services and global oncology contract research services, has agreed to acquire Inivata. The acquisition follows a $25 million minority equity investment by NeoGenomics in Inivata in May 2020, at which time NeoGenomics was granted a fixed price option to purchase the remainder of Inivata for $390 million.

Inivata, with its leading liquid biopsy technology platform, will remain a separate business division alongside NeoGenomics’ growing clinical, pharma and informatics divisions. Current Inivata CEO Clive Morris will become the President of Inivata and will report to Mark Mallon, CEO of NeoGenomics.

Inivata will be focused on the continued development of leading liquid biopsy tests including RaDaR™, the highly sensitive personalized assay for the detection of residual disease and recurrence (MRD). Proof-of-principle data presented at this year’s AACR Annual Meeting showed RaDaR demonstrated excellent specificity (100%) and sensitivity (100%) in detecting MRD in patient cohorts with head and neck cancer and early-stage breast cancer. These results provided growing evidence in support of RaDaR’s capabilities in different cancer types, building on data previously reported in non-small cell lung cancer (NSCLC), where RaDaR detected ctDNA 6-12 months ahead of clinical progression in the majority of cases and predicted lower progression free survival.

Clive Morris, CEO of Inivata, commented: “Joiningthe NeoGenomics Group provides Inivata with an excellent foundation to support our growth ambitions. Our two organizations have highly complementary capabilities and we are excited to combine with NeoGenomics following a successful year of working together.By leveraging our combined resources, we expect to accelerate the development of our promising RaDaR minimal residual disease assay and bolster commercialization efforts with biopharma before driving a successful launch into the clinical setting.”

Mark Mallon
, CEO of NeoGenomics, commented: “NeoGenomics has spent the better part of the last year working in partnership with the exceptional team of professionals at Inivata while conducting confirmatory due diligence on Inivata and its world-leading liquid biopsy platform technology. We are exercising our option to purchase Inivata eight months ahead of plan and are delighted to welcome Inivata’s world class team of liquid biopsy experts and talented employees to NeoGenomics.”

Douglas M. VanOort, Executive Chairman of NeoGenomics
commented: “Testing for minimal residual disease has the potential to revolutionize oncology care to benefit millions of patients as they manage through their cancer journey and we are excited to innovate our offerings with Inivata’s best-in-class platform. Combining Inivata’s compelling technology with our unrivaled reach into the clinical community channel and existing relationships with biopharma is a winning strategy.”

Perella Weinberg Partners LP acted as financial advisor to Inivata. Inivata was represented by K&L Gates LLP through a cross-border, multi-disciplinary transactional legal team spread across offices in Raleigh, Chicago, New York, San Francisco, Washington D.C. and London.

About Inivata

Inivata is a leader in liquid biopsy. Its InVision® platform unlocks essential genomic information from a simple blood draw to guide and personalize cancer treatment, monitor response and detect relapse. Inivata’s technology is based on pioneering research from the Cancer Research UK Cambridge Institute, University of Cambridge. Its lead product, InVisionFirst®-Lung is commercially available internationally and through NeoGenomics in the US. It offers competitive sensitivity and turnaround, providing molecular insights that enable clinicians to make more informed treatment decisions for advanced NSCLC patients. Inivata has also launched the personalized RaDaR® assay – allowing the highly sensitive detection of residual disease and recurrence – which has been granted Breakthrough Device Designation by the US FDA. Inivata is partnering with pharmaceutical, biotechnology companies and commercial partners in a range of early and late-stage cancer development programs. The Company has a CLIA certified, CAP accredited laboratory in Research Triangle Park, NC and R&D laboratories in Cambridge, UK.

About NeoGenomics

NeoGenomics, Inc. specializes in cancer genetics testing and information services, providing one of the most comprehensive oncology-focused testing menus in the world for physicians to help them diagnose and treat cancer. The Company’s Pharma Services Division serves pharmaceutical clients in clinical trials and drug development.

NeoGenomics is committed to connecting patients with life altering therapies and trials. We believe that, together, with our partners, we can help patients with cancer today and the next person diagnosed tomorrow. In carrying out these commitments, NeoGenomics adheres to all relevant data protection laws, provides transparency and choice to patients regarding the handling and use of their data through our Notice of Privacy Practices, and has invested in leading technologies to ensure the data we maintain is secured at all times.

Headquartered in Fort Myers, FL, NeoGenomics operates CAP accredited and CLIA certified laboratories in Fort Myers and Tampa, Florida; Aliso Viejo, Carlsbad and San Diego, California; Houston, Texas; Atlanta, Georgia; Nashville, Tennessee; and CAP accredited laboratories in Rolle, Switzerland, and Singapore. NeoGenomics serves the needs of pathologists, oncologists, academic centers, hospital systems, pharmaceutical firms, integrated service delivery networks, and managed care organizations throughout the United States, and pharmaceutical firms in Europe and Asia.

Media Contacts:

Consilium Strategic Communications
Chris Gardner/Angela Gray/Priscila Radu
Alix Floyd (US)
[email protected] +44 (0)20 3709 5700

Karen Chandler-Smith
[email protected] +44 (0)7900 430235

May 5, 2021 7:06 am

Amryt Pharma to Acquire Chiasma, Inc. to Further Strengthen Global Leadership in Rare and Orphan Diseases

– Combined business will have three approved commercial products, lomitapide (Lojuxta®/Juxtapid®), metreleptin (Myalept®/ Myalepta®), octreotide (MYCAPSSA®) and a robust clinical pipeline

– Lead pipeline product Oleogel-S10*(Filsuvez®) under regulatory review in the US and EU

– Deal expected to pave a path to a combined potential $1BN peak revenue for Amryt

– The acquisition is expected to deliver estimated annual cost synergies of approximately $50M and be revenue and EBITDA accretive and cash generative in the first full calendar year of combined operations and substantially accretive thereafter

– MYCAPSSA® is the first and only oral somatostatin analog (“SSA”) approved for appropriate patients with acromegaly in a global market estimated at approximately $800M with the potential to expand into the neuroendocrine tumor (“NET”) market estimated at approximately $1.9BN globally and has a confirmed modified 505(b)(2) regulatory pathway in the US

– Acquisition leverages Amryt’s proven commercial execution ability, global infrastructure and integration capabilities to accelerate MYCAPSSA® launch in the US and international markets

– All stock transaction with Amryt shareholders to own approximately 60% and Chiasma shareholders approximately 40% of the combined entity with voting agreements received from lead shareholders of both businesses – Athyrium Capital Management LP, Highbridge Capital Management and MPM Capital

Conference call and webcast for analysts and investors today at 0830 EDT (1330 BST)

DUBLIN, Ireland, and BOSTON, May 05, 2021 (GLOBE NEWSWIRE) — Amryt (Nasdaq: AMYT, AIM: AMYT), a global, commercial-stage biopharmaceutical company dedicated to acquiring, developing and commercializing novel treatments for rare diseases, today announces that it has signed a definitive agreement to acquire Chiasma, Inc. (Nasdaq: CHMA) in an all-stock combination. The combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans. The transaction has been approved and recommended by the Boards of both Amryt and Chiasma.

Dr. Joe Wiley, Chief Executive Officer of Amryt, commented:
“We are really excited by today’s news and are looking forward to welcoming the Chiasma team to Amryt. Amryt has grown significantly in the past six years and our success to date is due to the phenomenal commitment and drive of the Amryt team. This transaction brings together two teams that have a strong track record of execution and passion for developing therapies that can help improve the lives of patients in need. The addition of MYCAPSSA®, which was recently launched in the US, to our commercial product portfolio represents a strong strategic, operational and commercial fit given the significant call-point overlap that exists across our portfolio.

This deal further solidifies our position as a global leader in treating rare and orphan conditions. The combined business will have three approved commercial products and an exciting pipeline of development assets. Our lead development candidate, Oleogel-S10, is currently progressing through the regulatory process in the US and EU and, if approved, will bring our portfolio of commercial products to four. We see significant revenue growth opportunities for MYCAPSSA® in acromegaly and are also very excited to further develop the potential for MYCAPSSA® in patients with carcinoid symptoms stemming from NET where we believe the commercial opportunity is significant. With the addition of NET, our combined pipeline will have four product candidates in late clinical stages as well as our exciting pre-clinical gene therapy asset, AP103 in dystrophic Epidermolysis Bullosa (“EB”).

The proposed transaction will leverage our track record of successful integration and significantly enhance our future growth plans in highly attractive markets globally. With this transaction, we believe that we can continue the strong growth trajectory already underway at Amryt and have the financial strength to execute our future growth plans.”

Raj Kannan, Chief Executive Officer of Chiasma commented:
“I am incredibly proud of what the team at Chiasma has been able to accomplish and we look forward to joining Amryt in continuing to focus on making the lives of patients with rare diseases better. The merger with Amryt allows the combined company to significantly leverage the operational efficiencies in successfully commercializing MYCAPSSA® globally and expand the potential benefits of MYCAPSSA® to other patients with unmet needs. The combined business has significant potential to further enhance shareholder value with a diversified portfolio of both marketed products and a meaningful late-stage pipeline that could potentially drive future growth opportunities. I am confident that this combination with Amryt, given their track record of success, positions us well to deliver long-term value for our patients and for our shareholders.”

Transaction Benefits

A leading orphan and rare disease company with a diversified portfolio of established and growing products and financial strength – Consistent with Amryt’s shareholder endorsed strategy to acquire, develop and commercialize novel treatments for rare diseases, the combined portfolio of products offers a pathway to a potential $1BN of peak revenues. Amryt has a proven track record of successful integration and expects to deliver approximately $50M in cost synergies per annum. Both Amryt and Chiasma currently enjoy a significant degree of customer call-point overlap and combining operations will provide significant salesforce scale opportunities. In the endocrinology space, both Myalept®/Myalepta® and MYCAPSSA® are growth assets and by combining and scaling salesforces, Amryt believes that this will not only drive MYCAPSSA® adoption but also enable further Myalept®/Myalepta® revenue growth. The combined business will have three approved commercial products as well as a robust clinical pipeline. Both Oleogel-S10 (if approved) and MYCAPSSA® are first-to-market novel therapies. MYCAPSSA® is the first and only oral SSA approved for appropriate patients with acromegaly and Oleogel-S10 has the potential to be the first approved therapy for EB.

Significant market potential for MYCAPSSA® in NET – Amryt believes MYCAPSSA® is well positioned to address the desire for an oral option in the treatment of carcinoid symptoms associated with NET. Injectable octreotide is already approved and used in the treatment of NET and SSA utilization in NET is expected to account for an estimated $1.3BN in the US and $2.4BN globally by 2028. During the first quarter of 2021, Chiasma submitted an Investigational New Drug (“IND”) application for a Phase 1 relative bioavailability study followed by a single Phase 3, randomized, double-blind, placebo-controlled study of MYCAPSSA® in patients with carcinoid syndrome, which are designed to support a modified 505(b)(2) regulatory pathway for marketing approval. Subject to ongoing discussions with the FDA and completion of the Phase 1 study, we plan to commence enrollment to the Phase 3 study as early as H1 2022.

Cultures, values and expertise aligned – Amryt and Chiasma share a deep commitment and passion for serving patients by developing and bringing to market innovative therapies. We share a similar business philosophy of placing patients at the center of everything we do and in celebrating inclusion and diversity across our business operations.

Expected to deliver significant shareholder value – The acquisition is expected to be revenue and EBITDA accretive and cash generative in the first full calendar year of combined operations and substantially accretive thereafter. Significant value is also expected to be created through the realization of estimated annual cost synergies of approximately $50m. We expect that the transaction will result in a diversified and broad shareholder base with leading biotech investors supportive of the company’s long-term growth plans.

Webcast and Conference Call Details

Management will host a webcast and conference call for analysts and investors today at 0830 EDT (1330 BST).

Transaction Overview

Recommended acquisition of Chiasma by Amryt in an all-stock transaction
Chiasma shareholders will receive 0.396 Amryt ADSs for each share of Chiasma common stock, subject to rounding for fractional shares. As of the close of trading on May 4, 2021 Amryt’s ordinary shares on AIM were £2.00 ($2.78) per share and Amryt’s ADS’s on Nasdaq were $12.95 (£9.31) per ADS.
Based on the fixed exchange ratio, Amryt shareholders prior to the transaction will own approximately 60% of Amryt post transaction and Chiasma shareholders prior to the transaction will own approximately 40% of Amryt post transaction.
Chiasma’s existing royalty interest financing agreement expected to be fully repaid on closing delivering a high margin unencumbered asset to Amryt’s portfolio
Transaction is endorsed and supported by voting agreements with lead shareholders – Athyrium Capital Management LP, Highbridge Capital Management and MPM Capital
Transaction is subject to the approval of Amryt and Chiasma shareholders and other customary closing conditions, including regulatory approvals
Subject to the satisfaction or waiver of closing conditions, the transaction is expected to close in Q3 2021

Listing, Governance and Management

Amryt is currently listed on Nasdaq (AMYT) and AIM in London (AMYT) and will be the publicly quoted company following closing
Amryt’s global headquarters will remain in Dublin, Ireland and its US headquarters will remain in Boston, Massachusetts
The Amryt team will continue to be led by Dr Joe Wiley, CEO of Amryt
Raj Kannan, CEO of Chiasma, is expected to join the Board of Amryt on closing of the transaction, subject to regulatory approval. Chiasma will nominate one additional director to join the Board of Amryt, to be confirmed on closing.

Advisors to Amryt

Moelis & Company LLC is serving as exclusive financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal advisor to Amryt in this transaction. Shore Capital is acting as NOMAD and Joint Broker to Amryt.

Amryt’s commercial business comprises two orphan disease products – metreleptin (Myalept®/ Myalepta®) and lomitapide (Juxtapid®/Lojuxta®).

Amryt’s pre-clinical gene therapy platform, AP103, offers a potential treatment for patients with Dystrophic EB, and is also potentially relevant to other genetic disorders.

For more information on Amryt, including products, please visit www.amrytpharma.com.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014.

The person making this notification on behalf of Amryt is Rory Nealon, CFO/COO and Company Secretary.

About Neuroendocrine Tumors (NET)

NETs arise from neuroendocrine cells throughout the body, most commonly in the gastrointestinal tract, lung, and rarely, the pancreas. While well differentiated neuroendocrine tumors are known to be slow growing, they are often asymptomatic in early stages leading to a substantial number of patients being diagnosed when the tumors have already spread regionally or distantly. Capable of secreting hormones and bioactive amines, approximately 19% of patients have carcinoid syndrome characterized by secretory diarrhea and flushing. With an annual incidence rate of 6.98 per 100,000, it is estimated there are greater than 170,000 individuals living with a diagnosis of NET in the United States.

Important Additional Information and Where to Find It

In connection with the proposed acquisition, Amryt intends to file a registration statement on Form F-4 with the SEC, which will include a document that serves as a prospectus of Amryt and a proxy statement of Chiasma (the “proxy statement/prospectus”), Chiasma intends to file a proxy statement with the SEC (the “proxy statement”) and each party will file other documents regarding the proposed acquisition with the SEC. Investors and security holders are urged to carefully read the entire registration statement and proxy statement/prospectus or proxy statement and other relevant documents filed with the SEC when they become available because they will contain important information. A proxy statement/prospectus or a proxy statement when available will be sent to Chiasma’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus or the proxy statement free of charge from the SEC’s website or from Amryt or Chiasma as described in the paragraphs below.

Contacts

Joe Wiley, CEO / Rory Nealon, CFO/COO, +353 (1) 518 0200, [email protected]

Edward Mansfield, Shore Capital, NOMAD, +44 (0) 207 468 7906, [email protected]

Tim McCarthy, LifeSci Advisors, LLC, +1 (212) 915 2564, [email protected]

Amber Fennell, Consilium Strategic Communications, +44 (0) 203 709 5700, [email protected]

May 5, 2021 7:06 am

Genespire Strengthens Management Team with Two Key Appointments

Genespire
Strengthens
M
anagem
ent
T
eam
with
T
wo Key Appointments

Dr.
Julianne Smith appointed Chief Development Officer

Dr.
Smaragda Angelidou appointed as Head of
CMC

Italy
, Milan
,
5
May
2021
: Genespire, a gene therapy company developing durable and transformative therapies for genetic diseases, today announces the appointments of Dr. Julianne Smith as Chief Development Officer and Dr. Smaragda Angelidou as Head of CMC. Dr. Smith and Dr. Angelidou bring extensive industrial experience in the development of cell and gene therapies as well as deep scientific knowledge in this area.

Dr. Julia Berretta, Chief Executive Officer of Genespire, commented: “I am delighted to welcome Julianne and Smaragda to the growing Genespire team. They both bring deep scientific and development expertise from pioneering companies that have made a significant contribution to the richgene therapy landscape we have today.The addition of such experienced and highly-regarded individuals,strengthens Genespire’s ability to achieve its missionof developing transformative and durable gene therapiesforpatients affected by debilitating and life-threatening genetic diseases.”

As Chief Development Officer Dr. Smith will be responsible for leading and delivering product development and pipeline strategy, and overseeing translational research within Genespire. In her position, Dr. Smith will also work hand-in-hand with gene therapy pioneer Pr. Luigi Naldini, co-founder of Genespire and Director of SR-Tiget, to progress the Company’s programs towards the clinic.

Dr. Smith is a senior leader in biotech and brings over 30 years of experience in scientific research, with 18 of those working within the biotech industry. She joins Genespire from Nasdaq-listed Cellectis, a global leader in gene editing and allogeneic CAR-T cells, where she held various senior roles, managing research teams responsible for the development of allogeneic CAR-T cell products, working on product portfolio prioritization and shaping development strategies. While at Cellectis, Dr. Smith also established and led the translational sciences department and interacted with regulatory authorities in both the US and Europe. Dr. Smith received her Bachelors degree in Biology from The Johns Hopkins University, Baltimore and her PhD in Genetics and Development from Columbia University, New York and pursued her academic career as a Post-Doctoral Fellow at the Institut Curie, Paris.

“I am
looking forward to
joining such a
ground-breaking and innovative company
at a pivotal time in its growth and development
,”

Dr.

Julianne Smith commented

.

“
Genespire’s
novel gene editing and lentiviral
vector
technologies are first
–
in
–
class and have the potential to bring life-altering treatments to patients, something I am proud and excited to be a part of.”

Dr. Angelidou is a CMC subject matter expert in the field of advanced therapies and will be responsible for developing and delivering Genespire’s CMC strategy and plans for the Company’s pipeline. She has extensive industry experience in cell and gene therapies, ranging from early stage development through to late stage development and commercialisation. She joins Genespire from Autolus, a clinical stage autologous CAR-T cell therapy company, where she was the Senior Director of Tech Transfer and Product Delivery projects and was responsible for defining and delivering individual and integrated CMC plans for multiple programs. Prior to joining Autolus, Dr. Angelidou spent a number of years at GlaxoSmithKline, where she held positions of increasing responsibility in Cell and Gene Therapy Product Development and Medicine and Process Delivery program leadership. In her roles, she worked on a range of cell and gene therapy programs at different stages of development and post-launch, including autologous TCR T-cell therapies for oncology indications and HSPC gene therapies for rare diseases, which notably included Strimvelis, the first ex vivo autologous gene therapy to be approved in Europe.

Dr. Angelidou holds a BSc in Human Genetics and a Masters in Molecular Medicine from the University College London and a PhD in Molecular Oncology from Imperial College London.

Dr. Smaragda Angelidou commented: “I am thrilled to join Julia and the growing Genespire team and feel privileged to contribute my knowledge and experience to develop therapies for such urgent and important medical needs.”

J
ö
rn
Aldag
, Chairman
of Genespire,
co
ncluded
:
“
This is an exciting time
for Julianne and Smaragda
to be joining Genespire as we grow the business and accelerate our development candidates using our gene therapy and gene editing platforms.
The
se appointments are
testament to the strength of our science and technologies and the
future
promise th
ey
hold.
”

Enquiries:

Genespire	Tel: +39 02 83991300 [email protected]

Consilium Strategic Communications	Tel: +44 (0) 20 3709 5700
Amber Fennell / Ashley Tapp	[email protected]

About Genespire

Genespire is a biotechnology company focused on the development of durable and transformative gene therapies for patients affected by genetic diseases, particularly inherited metabolic diseases and primary immunodeficiencies. Based in Milan, Italy, Genespire was founded in March 2020 by the gene therapy pioneer Prof. Luigi Naldini and Dr. Alessio Cantore, Fondazione Telethon and Ospedale San Raffaele. Genespire is a spin-out of SR-Tiget, a world leading cell and gene therapy research institute and is backed by Sofinnova Partners. Find out more about us at www.genespire.com.

May 5, 2021 7:06 am

United Fire Group, Inc. Reports First Quarter 2021 Results

CEDAR RAPIDS, Iowa, May 05, 2021 (GLOBE NEWSWIRE) — United Fire Group, Inc. (Nasdaq: UFCS),

May 5, 2021 – FOR IMMEDIATE RELEASE

Consolidated Financial Results – Highlights
⁽¹⁾
:

Three Months Ended March 31, 2021
Net income per diluted share	$	0.74
Adjusted operating income (loss)⁽²⁾ per diluted share	$	(0.03	)
Net realized investment gains per diluted share	$	0.77
GAAP combined ratio	107.2			%
Book value per share	$	32.79
Return on equity⁽³⁾	9.1			%

United Fire Group, Inc. (the “Company” or “UFG”) (Nasdaq: UFCS) today reported consolidated net income, including net realized investment gains and changes in the fair value of equity securities, of $18.7 million ($0.74 per diluted share) for the three-month period ended March 31, 2021 (the “first quarter of 2021”), compared to a consolidated net loss of $72.5 million ($2.90 per diluted share) for the same period in 2020.

The Company reported a consolidated adjusted operating loss of $0.03 per diluted share for the first quarter of 2021, compared to consolidated adjusted operating income of $0.05 per diluted share for the same period in 2020.

“Net income reported in the first quarter of 2021 was driven by net realized investment gains and higher net investment income from an increase in the valuation of our investments in equity securities and limited liability partnerships. Also contributing to net income in the first quarter was a decrease in expenses due to a change in the design of our employee post-retirement benefit plans,” stated Randy A. Ramlo, President and Chief Executive Officer. “Offsetting these items was an increase in both catastrophe losses and severity of commercial auto losses. The increase in catastrophe losses was primarily due to winter storm Uri, mostly occurring in the state of Texas. This catastrophic event was a full retention loss, with losses in excess of our stated reinsurance retention of $20.0 million.”

“In the first quarter of 2021, we continued to see a decrease in the frequency of commercial auto claims and a decrease in the number of commercial auto exposure units, both positive signs of progress with our strategic initiatives. However, there was an increase in severity of commercial auto losses involving bodily injuries.”

_________
(1) Per share amounts are after tax.
(2) Adjusted operating income (loss) is a non-GAAP financial measure of net income excluding net realized investment
gains and losses, after applicable federal and state income taxes. Management evaluates this measure and ratios derived from this measure and the Company provides this information to investors because we believe it better represents the normal, ongoing performance of our business. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income (loss) to net income (loss).
(3) Return on equity is calculated by dividing annualized net income (loss) by average year-to-date stockholders’ equity.

Financial Highlights

Net income, including net realized investment gains and losses, totaled $18.7 million ($0.74 per diluted share) for the first quarter of 2021, compared to a net loss of $72.5 million ($2.90 per diluted share) for the same period in 2020. The change was primarily due to an increase in net realized investment gains from an increase in the fair value of equity securities as compared to net realized investment losses for the same period of 2020 and a decrease in other underwriting expenses. These were partially offset by an increase in losses and loss settlement expenses, namely from catastrophe losses, and a decrease in net premiums earned.

Net premiums earned decreased 3.6 percent to $259.2 million in the first quarter of 2021, compared to $268.8 million in the same period in 2020. The decrease in the three-month period ended March 31, 2021 was primarily due to our focus on improving profitability through non-renewal of under-performing accounts in our commercial auto line of business and exit of the personal lines business which began in September 2020. These were partially offset by growth in our reinsurance assumed business and the addition of our participation in Lloyd’s syndicates.

The average renewal pricing increases were driven by commercial auto and commercial property, both increasing slightly from fourth quarter 2020. During the first quarter of 2021, the commercial auto average renewal rate increase remained in the double digits at 10.8 percent. The commercial property average renewal rate increase was 7.9 percent, remaining in the mid-single digits again in the first quarter of 2021.

Net investment income was $17.1 million for the first quarter of 2021, as compared to net investment income of $2.4 million for the same period in 2020. The increase in net investment income in the first quarter of 2021 as compared to the same period in 2020 was primarily due to an increase in the fair value of our investments in limited liability partnerships. The valuation of these investments in limited liability partnerships varies from period to period due to the current equity market conditions, specifically related to financial institutions.

The Company recognized net realized investment gains of $24.5 million during the first quarter of 2021 as compared to net realized investment losses of $93.4 million for the same period in 2020. The change in the first quarter of 2021 as compared to the same period in 2020 was primarily due to the change in the fair value of equity securities.

Losses and loss settlement expenses increased by 10.7 percentage points during the first quarter of 2021 as compared to the same period of 2020. The increase in losses and loss settlement expenses was primarily due to an increase in catastrophe losses and severity of commercial auto losses as compared to the same period in 2020.

Consolidated net unrealized investment gains, net of tax, totaled $59.6 million as of March 31, 2021, a decrease of $23.5 million from December 31, 2020. The decrease in net unrealized investment gains was primarily the result of an increase in interest rates in the first quarter of 2021.

Total consolidated assets as of March 31, 2021 were $3.1 billion, which included $2.1 billion of invested assets. The Company’s book value per share was $32.79, which is a decrease of $0.14 per share, or 0.4 percent, from December 31, 2020. This decrease is primarily attributed to a decrease in net unrealized investment gains on fixed maturity securities of $23.5 million, net of tax, and shareholder dividends of $3.8 million, partially offset by net income of $18.7 million during the first quarter of 2021.

The annualized return on equity was 9.1 percent year-to-date compared to (33.3) percent for the same period in 2020. The change in the annualized return on equity was primarily driven by net income of $18.7 million in the first three months of 2021 compared to a net loss of $72.5 million in the same period in 2020.

Reserve Development

We experienced favorable development in our net reserves for prior accident years of $13.3 million in the first quarter of 2021, compared to favorable development of $13.7 million in the same period in 2020. The favorable prior accident year reserve development in the first quarter of 2021 came primarily from our commercial fire and allied and personal lines of business. Development amounts can vary significantly from quarter-to-quarter depending on a number of factors, including the number of claims settled and the settlement terms. At March 31, 2021, our total reserves were within our actuarial estimates.

GAAP Combined Ratio

The GAAP combined ratio increased by 2.0 percentage points to 107.2 percent for the first quarter of 2021, compared to 105.2 percent in the same period in 2020. The increase in the combined ratio during the first quarter of 2021 as compared to the same period in 2020 was primarily driven by an increase in the net loss ratio partially offset by a decrease in the expense ratio.

Net Loss Ratio

The GAAP net loss ratio deteriorated 10.2 percentage points during the first quarter of 2021 as compared to the same period in 2020. The increase in the net loss ratio was primarily due to an increase in catastrophe losses and prior accident year reserve strengthening on commercial auto claims.

Pre-tax catastrophe losses in the first quarter of 2021 were higher when compared to first quarter of 2020, with catastrophe losses adding 11.3 percentage points to the combined ratio in 2021, as compared to 5.7 percentage points in 2020. The most significant catastrophe loss in the first quarter of 2021 was from winter storm Uri, primarily in the state of Texas, which was a full retention loss, with losses in excess of our stated reinsurance retention of $20.0 million. Our 10-year historical average for first quarter catastrophe losses is 4.0 percentage points added to the combined ratio.

The GAAP net loss ratio excluding catastrophe losses and prior accident year reserve development deteriorated by 4.6 percentage points in the three-month period ended March 31, 2021 as compared to the same period of 2020. This deterioration in the GAAP net loss ratio in the first quarter of 2021 was primarily due to an increase in severity of commercial auto losses, especially claims involving bodily injuries.

Expense Ratio

The expense ratio for the first quarter of 2021 was 27.6 percent compared to 35.8 percent for the first quarter in 2020. The decrease in the expense ratio during the first quarter of 2021 as compared to the same period in 2020 was primarily due to a change in the design of our employee post-retirement benefit plans.

Capital Management

During the first quarter of 2021, we declared and paid a $0.15 per share cash dividend to shareholders of record as of March 5, 2021. We have paid a quarterly dividend every quarter since March 1968.

Earnings Call Access Information

An earnings call will be held at 9:00 a.m. Central Time on May 5, 2021 to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company’s first quarter of 2021 results.

Teleconference: Dial-in information for the call is toll-free 1-844-492-3723. The event will be archived and available for digital replay through May 19, 2021. The replay access information is toll-free 1-877-344-7529; conference ID no. 10153948.

Webcast: An audio webcast of the teleconference can be accessed at the Company’s investor relations page at
http://ir.ufginsurance.com/event or https://services.choruscall.com/links/ufcs210505. The archived audio webcast will be available until May 19, 2021.

Transcript: A transcript of the teleconference will be available on the Company’s website soon after the completion of the teleconference.

About UFG

Founded in 1946 as United Fire & Casualty Company, UFG, through its insurance company subsidiaries, is engaged in the business of writing property and casualty insurance.

Through our subsidiaries, we are licensed as a property and casualty insurer in 50 states, plus the District of Columbia, and we are represented by approximately 1,000 independent agencies. A.M. Best Company assigns a rating of “A” (Excellent) for members of the United Fire & Casualty Group.

For more information about UFG, visit www.ufginsurance.com or contact:

Randy Patten, AVP and Controller, 319-286-2537 or [email protected].

Disclosure of Forward-Looking Statements

This release may contain forward-looking statements about our operations, anticipated performance and other similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. The forward-looking statements are not historical facts and involve risks and uncertainties that could cause actual results to differ from those expected and/or projected. Such forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, the industry in which we operate, and beliefs and assumptions made by management. Words such as “expect(s),” “anticipate(s),” “intend(s),” “plan(s),” “believe(s),” “continue(s),” “seek(s),” “estimate(s),” “goal(s),” “remain(s) optimistic,” “target(s),” “forecast(s),” “project(s),” “predict(s),” “should,” “could,” “may,” “will,” “might,” “hope,” “can” and other words and terms of similar meaning or expression in connection with a discussion of future operations, financial performance or financial condition, are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Information concerning factors that could cause actual outcomes and results to differ materially from those expressed in the forward-looking statements is contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021. The risks identified in our Annual Report on Form 10-K and in our other SEC filings are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release or as of the date they are made. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures

The Company prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Management also uses certain non-GAAP measures to evaluate its operations and profitability. As further explained below, management believes that disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. Non-GAAP financial measures disclosed in this report include: adjusted operating income (loss) and net premiums written. The Company has provided the following definitions and reconciliations of the non-GAAP financial measures:

Adjusted operating income (loss): Adjusted operating income (loss) is calculated by excluding net realized investment gains and losses, after applicable federal and state income taxes from net income. Management believes adjusted operating income (loss) is a meaningful measure for evaluating insurance company performance and a useful supplement to GAAP information because it better represents the normal, ongoing performance of our business. Investors and equity analysts who invest and report on the insurance industry and the Company generally focus on this metric in their analyses.

Net Income Reconciliation
	Three Months Ended March 31,
(In Thousands, Except Per Share Data)	2021			2020			Change %
Income Statement Data
Net income (loss)	$	18,702		$	(72,534	)	125.8		%
Less: after-tax net realized investment gains (losses)	19,361			(73,792		)	126.2		%
Adjusted operating income (loss)	$	(659	)	$	1,258		(152.4	)	%
Diluted Earnings Per Share Data
Net income (loss)	$	0.74		$	(2.90	)	125.5		%
Less: after-tax net realized investment gains (losses)	0.77			(2.95		)	126.1		%
Adjusted operating income (loss)	$	(0.03	)	$	0.05		(160.0	)	%

Net premiums written: While not a substitute for any GAAP measure of performance, net premiums written is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Net premiums written are the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Management believes net premiums written are a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net premiums written for an insurance company consists of direct premiums written and reinsurance assumed, less reinsurance ceded. Net premiums earned is calculated on a pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policy in force. The difference between net premiums earned and net premiums written is the change in unearned premiums and change in prepaid reinsurance premiums.

Net Premiums Earned Reconciliation
	Three Months Ended March 31,
(In Thousands, Except Ratios)	2021		2020			Change %
Premiums:
Net premiums earned	$	259,225	$	268,849		(3.6	)	%
Less: change in unearned premiums	3,316		(15,798		)	121.0		%
Less: change in prepaid reinsurance premiums	448		2,139			(79.1	)	%
Net premiums written	$	255,461	$	282,508		(9.6	)	%

Supplemental Tables

Consolidated Financial Highlights
(unaudited)	Three Months Ended March 31,
(In Thousands, Except Share and Per Share Data and Ratios)	2021				2020				Change %
Revenue Highlights
Net premiums earned	$	259,225			$	268,849			(3.6	)	%
Net investment income	17,081				2,363				NM
Net realized investment gains (losses)	24,508				(93,407		)		126.2		%
Other income (loss)	(79		)		—				NM
Total revenues	$	300,735			$	177,805			69.1		%
Income Statement Data
Net income (loss)	$	18,702			$	(72,534	)		125.8		%
After-tax net realized investment gains (losses)	19,361				(73,792		)		126.2		%
Adjusted operating income (loss)⁽¹⁾	$	(659	)		$	1,258			(152.4	)	%
Diluted Earnings Per Share Data
Net income (loss)	$	0.74			$	(2.90	)		125.5		%
After-tax net realized investment gains (losses)	0.77				(2.95		)		126.1		%
Adjusted operating income (loss)⁽¹⁾	$	(0.03	)		$	0.05			(160.0	)	%
Catastrophe Data
Pre-tax catastrophe losses	$	29,247			$	15,267			91.6		%
Effect on after-tax earnings per share	0.91				0.48				89.6		%
Effect on combined ratio	11.3			%	5.7			%	98.2		%

Favorable reserve development experienced on prior accident years	$	13,259			$	13,747			(3.5	)	%

GAAP combined ratio	107.2			%	105.2			%	1.9		%
Return on equity	9.1			%	(33.3		)	%	127.3		%
Cash dividends declared per share	$	0.15			$	0.33			(54.5	)	%
Diluted weighted average shares outstanding	25,379,812				25,014,027				1.5		%

NM = Not meaningful
(1) Adjusted operating income (loss) is a non-GAAP financial measure of net income (loss). See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income (loss) to net income (loss).

Income Statement
(unaudited)	Three Months Ended March 31,
(In Thousands, Except Ratios)	2021				2020
Revenues
Net premiums earned	$	259,225			$	268,849
Investment income, net of investment expenses	17,081				2,363
Net realized investment gains (losses)	24,508				(93,407		)
Other income (loss)	(79		)		—
Total Revenues	$	300,735			$	177,805

Benefits, Losses and Expenses
Losses and loss settlement expenses	$	206,398			$	186,503
Amortization of deferred policy acquisition costs	53,265				54,452
Other underwriting expenses	18,368				41,849
Total Benefits, Losses and Expenses	$	278,031			$	282,804

Income (loss) before income taxes	22,704				(104,999		)
Federal income tax expense (benefit)	4,002				(32,465		)
Net income (loss)	$	18,702			$	(72,534	)

GAAP combined ratio:
Net loss ratio – excluding catastrophes	68.3			%	63.7			%
Catastrophes – effect on net loss ratio	11.3				5.7
Net loss ratio	79.6			%	69.4			%
Expense ratio	27.6				35.8
GAAP combined ratio	107.2			%	105.2			%

Balance Sheet
	March 31, 2021		December 31, 2020
(In Thousands)
	*(unaudited)*
Invested assets	$	2,136,142	$	2,149,217
Cash	71,514		87,948
Total assets	3,064,967		3,069,678
Losses and loss settlement expenses	1,613,025		1,578,131
Total liabilities	2,241,368		2,244,529
Net unrealized investment gains, after-tax	59,614		83,070
Total stockholders’ equity	823,599		825,149

Net Premiums Written by Line of Business
(unaudited)	Three Months Ended March 31,
	2021		2020
(In Thousands)
Net Premiums Written ⁽¹⁾
Commercial lines:
Other liability⁽²⁾	$	72,279	$	84,940
Fire and allied lines⁽³⁾	60,954		66,842
Automobile	65,619		79,186
Workers’ compensation	17,364		21,739
Fidelity and surety	8,349		6,975
Miscellaneous	367		415
Total commercial lines	$	224,932	$	260,097

Personal lines:
Fire and allied lines⁽⁴⁾	$	754	$	8,393
Automobile	389		7,566
Miscellaneous	9		303
Total personal lines	$	1,152	$	16,262
Reinsurance assumed	29,377		6,149
Total	$	255,461	$	282,508

(1) Net premiums written is a non-GAAP financial measure of net premiums earned. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of net premiums written to net premiums earned.
(2) Commercial lines “Other liability” is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured’s premises and products manufactured or sold.
(3) Commercial lines “Fire and allied lines” includes fire, allied lines, commercial multiple peril and inland marine.
(4) Personal lines “Fire and allied lines” includes fire, allied lines, homeowners and inland marine.

Net Premiums Earned, Net Losses and Loss Settlement Expenses and Net Loss Ratio by Line of Business
Three Months Ended March 31,	2021								2020
			Net Losses								Net Losses
			and Loss								and Loss
	Net		Settlement			Net			Net		Settlement		Net
(In Thousands, Except Ratios)	Premiums		Expenses			Loss			Premiums		Expenses		Loss
(unaudited)	Earned		Incurred			Ratio			Earned		Incurred		Ratio
Commercial lines
Other liability	$	75,359	$	42,147		55.9		%	$	79,309	$	43,723	55.1	%
Fire and allied lines	58,332		62,974			108.0			61,669		51,925		84.2
Automobile	65,977		67,202			101.9			78,018		65,305		83.7
Workers’ compensation	16,502		7,780			47.1			19,428		7,708		39.7
Fidelity and surety	7,360		1,079			14.7			6,418		32		0.5
Miscellaneous	349		(18		)	(5.2	)		395		92		23.3
Total commercial lines	$	223,879	$	181,164		80.9		%	$	245,237	$	168,785	68.8	%

Personal lines
Fire and allied lines	$	6,221	$	4,609		74.1			$	9,970	$	6,734	67.5	%
Automobile	4,040		3,300			81.7			7,630		5,149		67.5
Miscellaneous	177		90			50.8			306		2,606		NM
Total personal lines	$	10,438	$	7,999		76.6		%	$	17,906	$	14,489	80.9	%
Reinsurance assumed	$	24,908	$	17,235		69.2		%	$	5,706	$	3,229	56.6	%
Total	$	259,225	$	206,398		79.6		%	$	268,849	$	186,503	69.4	%

NM = Not Meaningful

May 5, 2021 7:06 am

ScottsMiracle-Gro Announces Record Second Quarter Results; Sales Increase 32% Driven by Strong Demand in Both Major Segments

Sales guidance for Hawthorne increases; U.S. Consumer continues to exceed expectations

Hawthorne sales rise 66% in Q2 with strong growth in all product categories
U.S. Consumer sales rise 23% driven by continued increases in consumer demand
GAAP EPS: $5.44 versus $4.43; Non-GAAP adjusted EPS of $5.64 versus $4.50
Company affirms plan to increase pricing to offset continued commodity pressure

MARYSVILLE, Ohio, May 05, 2021 (GLOBE NEWSWIRE) — The Scotts Miracle-Gro Company (NYSE: SMG), the world’s leading marketer of branded consumer lawn and garden as well as indoor and hydroponic growing products, today announced company-wide sales increased 32 percent in its fiscal second quarter driven by strong volume growth in both major business segments.

For the quarter ended April 3, 2021, GAAP earnings from continuing operations were $5.44 per share compared with $4.43 per share in the prior year. Non-GAAP adjusted earnings, which exclude impairment, restructuring and other non-recurring items, and are the basis of the Company’s financial guidance, were $5.64 per share compared with $4.50 a year ago.

On a fiscal year-to-date basis entering May, consumer purchases of the Company’s lawn and garden products at its largest four retailers in the U.S. increased over 20 percent from the same period a year ago. The Company said consumer purchases entering May were up double digits in every major product category and all regions of the U.S.

“The record level of consumer demand we have seen for our lawn and garden products is greater than we expected and may provide upside to the updated guidance we provided for our U.S. Consumer business in early April,” said Jim Hagedorn, chairman and chief executive officer. “Consumers told us entering the season that they intended to stay engaged with lawn and garden and, so far, that is exactly what they are doing. Retailer support for the category remains strong as we enter a period of challenging year-over-year comparisons.

“We also continue to exceed expectations at Hawthorne as we reported our fifth consecutive quarter of sales growth in excess of 60 percent and another month of strong results in April. Given the current momentum of this business, we feel comfortable once again increasing our sales guidance for Hawthorne to a range of 30 to 40 percent growth on a fiscal year basis.”

Second quarter details

For the fiscal second quarter, the Company reported sales of $1.83 billion, up 32 percent from $1.38 billion a year earlier. U.S. Consumer segment sales increased 23 percent to $1.37 billion. Sales for the Hawthorne segment increased 66 percent to $363.8 million. Due to the Company’s fiscal calendar, the second quarter of 2021 ended six days later than the second quarter of fiscal 2020. The shift had a sales impact of approximately $122.5 million within the lawn and garden business, impacting the U.S. Consumer and Other segments.

The company-wide gross margin rate was 36.0 percent on a GAAP basis and 36.6 percent on a non-GAAP adjusted basis compared with a rate of 39.8 percent and 40.0 percent, respectively, a year ago. As expected, segment mix was a significant driver of the decline given the growth of the lower-margin Hawthorne segment. Higher commodity and distribution costs also negatively impacted the rate but were partially offset by improved fixed cost leverage.

“The margin pressure we are experiencing from higher commodity and distribution costs is expected again in the third quarter and should begin to moderate with year-over-year pricing that takes effect in the fourth quarter,” said Cory Miller, senior vice president and interim chief financial officer. “Given cost pressures and other investments necessary to keep pace with recent growth trends, we have communicated to our retail partners our intention to increase prices of our consumer lawn and garden products by mid- to high-single digits effective in August. A similar price increase was implemented at Hawthorne in recent weeks.”

Selling, general and administrative expenses (SG&A) increased 18 percent to $231.5 million due to increased marketing investment and higher accruals related to variable compensation.

On a company-wide basis, GAAP income from continuing operations was $311.1 million, or $5.44 per diluted share, compared with $249.8 million, or $4.43 per diluted share, for the second quarter of fiscal 2020. These results include impairment, restructuring and other non-recurring items. Excluding these items, non-GAAP adjusted earnings were $322.3 million, or $5.64 per diluted share, compared with $253.8 million, or $4.50 per diluted share, last year.

Year-to-date details

For the first six months of fiscal 2021, the Company reported sales of $2.58 billion, up 47 percent from $1.75 billion a year earlier. U.S. Consumer segment sales increased 39 percent to $1.78 billion. Sales for the Hawthorne segment increased 68 percent to $673.2 million. The shift in the fiscal calendar contributed approximately $176.9 million. This impact will reverse in the second half of the year, which will have six fewer days than the second half of fiscal 2020.

The company-wide gross margin rate was 32.9 percent on a GAAP basis and 33.7 percent on a non-GAAP adjusted basis compared with a rate of 34.6 percent and 34.8 percent, respectively, a year ago. Selling, general and administrative expense (SG&A) increased 23 percent to $388.2 million.

“The increases we have seen in SG&A for the year are due primarily to planned increases in marketing investment as well as higher year-over-year variable compensation,” Miller said. “However, the compensation expense is driven by the timing of recognition and is expected to decline considerably in the third quarter compared with the prior year, bringing the total year-over-year SG&A down to a level closer to where we expect on a full-year basis.”

On a company-wide basis, GAAP income from continuing operations was $336.2 million, or $5.88 per diluted share, compared with $178.5 million, or $3.15 per diluted share, for the first six months of fiscal 2020. Excluding impairment, restructuring and other non-recurring items, non-GAAP adjusted earnings were $344.5 million, or $6.04 per diluted share, compared with $191.4 million, or $3.38 per diluted share, last year.

Full-year outlook

The Company now expects Hawthorne sales to increase 30 to 40 percent for fiscal 2021. While it reaffirmed its sales outlook for the U.S. Consumer segment of 4 to 6 percent growth, the Company said sales growth in the segment continues to trend above that level and believes upside to be possible on a full-year basis. The gross margin rate is now expected to decline 175 to 225 basis points with the added downward pressure due to higher commodity and distribution costs. All other aspects of its fiscal 2021 guidance were reaffirmed, although management said it expected to provide an update on its full-year expectations in early June.

“We continue to see tremendous momentum in all aspects of the business, and we are extremely optimistic in our ability to drive another year of record results,” Hagedorn said. “Obviously, consumer activity in May is extremely important, and it is historically one of the most critical months of the lawn and garden season. That said, we are encouraged by the level of consumer participation we have been seeing so far this season and are optimistic that consumers will remain engaged throughout the season.”

Conference Call and Webcast Scheduled for 9 a.m. ET Today, May 5

The Company will discuss results during a webcast and conference call today at 9:00 a.m. ET. To participate in the conference call, please call 1-800-289-0438 (Confirmation Code: 5691876). A replay of the call can be heard by calling 1-888-203-1112. The replay will be available for 15 days. A live webcast of the call and the press release will be available on the Company’s investor relations website at http://investor.scotts.com. An archive of the press release and any accompanying information will remain available for at least a 12-month period.

About ScottsMiracle-Gro

With approximately $4.1 billion in sales, the Company is one of the world’s largest marketers of branded consumer products for lawn and garden care. The Company’s brands are among the most recognized in the industry. The Company’s Scotts®, Miracle-Gro® and Ortho® brands are market-leading in their categories. The Company’s wholly-owned subsidiary, The Hawthorne Gardening Company, is a leading provider of nutrients, lighting and other materials used in the indoor and hydroponic growing segment. For additional information, visit us at www.scottsmiraclegro.com.

Cautionary Note Regarding Forward-Looking Statements

Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company’s management, and the Company’s assumptions regarding such performance and plans are “forward-looking statements” within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as “guidance,” “outlook,” “projected,” “believe,” “target,” “predict,” “estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “should” or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to:

The ongoing COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operation, financial condition and/or cash flows;
Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase the Company’s costs of doing business or limit the Company’s ability to market all of its products;
Damage to the Company’s reputation or the reputation of its products or products it markets on behalf of third parties could have an adverse effect on its business;
If the Company underestimates or overestimates demand for its products and does not maintain appropriate inventory levels, its net sales and/or working capital could be negatively impacted;
If the Company is unable to effectively execute its e-commerce business, its reputation and operating results may be harmed;
Because of the concentration of the Company’s sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company’s financial results;
Climate change and unfavorable weather conditions could adversely impact financial results;
Certain of the Company’s products may be purchased for use in new or emerging industries or segments and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions;
The Company’s operations may be impaired if its information technology systems fail to perform adequately or if it is the subject of a data breach or cyber-attack;
The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company’s business;
In the event the Third Restated Marketing Agreement for consumer Roundup products terminates, or Monsanto’s consumer Roundup business materially declines the Company would lose a substantial source of future earnings and overhead expense absorption;
Hagedorn Partnership, L.P. beneficially owns approximately 25% of the Company’s common shares and can significantly influence decisions that require the approval of shareholders;
Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact the Company’s business and results of operations.

Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

Contact:

Jim King

Executive Vice President

Investor Relations & Corporate Affairs

(937) 578-5622

THE SCOTTS MIRACLE-GRO COMPANY

Condensed Consolidated Statements of Operations

(In millions, except per share data)
(Unaudited)

		Three Months Ended							Six Months Ended
	Footnotes	April 3, 2021			March 28, 2020			% Change	April 3, 2021			March 28, 2020			% Change
Net sales		$	1,828.8		$	1,382.8		32 %	$	2,577.4		$	1,748.6		47 %
Cost of sales		1,158.9			829.2				1,707.7			1,140.6
Cost of sales—impairment, restructuring and other		12.4			3.4				21.4			3.6
Gross profit		657.5			550.2			20 %	848.3			604.4			40 %
% of sales		36.0		%	39.8		%		32.9		%	34.6		%
Operating expenses:
Selling, general and administrative		231.5			195.6			18 %	388.2			315.4			23 %
Impairment, restructuring and other		2.5			0.3				3.2			(2.2		)
Other (income) expense, net		(0.6		)	0.6				(1.2		)	0.1
Income from operations		424.1			353.7			20 %	458.1			291.1			57 %
% of sales		23.2		%	25.6		%		17.8		%	16.6		%
Equity in loss of unconsolidated affiliates		1.5			—				1.5			—
Costs related to refinancing		—			—				—			15.1
Interest expense		19.3			22.7				35.4			42.7
Other non-operating income, net		(0.9		)	(2.8		)		(16.1		)	(5.4		)
Income from continuing operations before income taxes		404.2			333.8			21 %	437.3			238.7			83 %
Income tax expense from continuing operations		93.1			84.0				101.1			60.2
Income from continuing operations		311.1			249.8			25 %	336.2			178.5			88 %
Income (loss) from discontinued operations, net of tax		(0.9		)	2.6				(0.9		)	2.6
Net income		$	310.2		$	252.4			$	335.3		$	181.1
Net income attributable to noncontrolling interest		(0.2		)	(0.2		)		(0.9		)	(0.3		)
Net income attributable to controlling interest		$	310.0		$	252.2			$	334.4		$	180.8

Basic income (loss) per common share:	(1)
Income from continuing operations		$	5.58		$	4.48		25 %	$	6.02		$	3.20		88 %
Income (loss) from discontinued operations		(0.01		)	0.05				(0.02		)	0.05
Net income		$	5.57		$	4.53			$	6.00		$	3.25

Diluted income (loss) per common share:	(2)
Income from continuing operations		$	5.44		$	4.43		23 %	$	5.88		$	3.15		87 %
Income (loss) from discontinued operations		(0.01		)	0.04				(0.01		)	0.04
Net income		$	5.43		$	4.47			$	5.87		$	3.19

Common shares used in basic income (loss) per share calculation		55.7			55.7			— %	55.7			55.7			— %
Common shares and potential common shares used in diluted income (loss) per share calculation		57.1			56.4			1 %	57.0			56.6			1 %

Non-GAAP results:
Adjusted net income attributable to controlling interest from continuing operations	(3)	$	322.3		$	253.8		27 %	$	344.5		$	191.4		80 %
Adjusted diluted income per common share from continuing operations	(2) (3)	$	5.64		$	4.50		25 %	$	6.04		$	3.38		79 %
Adjusted EBITDA	(3)	$	478.9		$	394.2		21 %	$	554.3		$	359.7		54 %
Note: See accompanying footnotes on page 9.

THE SCOTTS MIRACLE-GRO COMPANY

Segment Results

(In millions)
(Unaudited)

The Company divides its operations into three reportable segments: U.S. Consumer, Hawthorne and Other. U.S. Consumer consists of the Company’s consumer lawn and garden business located in the geographic United States. Hawthorne consists of the Company’s indoor and hydroponic gardening business. Other consists of the Company’s consumer lawn and garden business in geographies other than the U.S. and the Company’s product sales to commercial nurseries, greenhouses and other professional customers. In addition, Corporate consists of general and administrative expenses and certain other income and expense items not allocated to the business segments. This identification of reportable segments is consistent with how the segments report to and are managed by the chief operating decision maker of the Company.

During the first quarter of fiscal 2021, the Company changed its internal organization structure such that AeroGrow International, Inc. (“AeroGrow”) is now managed by and reported within the U.S. Consumer segment. Within the U.S. Consumer segment, AeroGrow is integrated into the Company’s overall direct to consumer focus and strategy. AeroGrow was previously managed by and reported within the Hawthorne segment. The prior period amounts have been reclassified to conform with the new organization structure.

The performance of each reportable segment is evaluated based on several factors, including income (loss) from continuing operations before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure. Senior management uses Segment Profit (Loss) to evaluate segment performance because they believe this measure is indicative of performance trends and the overall earnings potential of each segment.

The following tables present financial information for the Company’s reportable segments for the periods indicated:

	Three Months Ended							Six Months Ended
	April 3, 2021			March 28, 2020			% Change	April 3, 2021			March 28, 2020			% Change
Net Sales:
U.S. Consumer	$	1,374.0		$	1,113.2		23 %	$	1,782.2		$	1,278.6		39 %
Hawthorne	363.8			219.5			66 %	673.2			400.3			68 %
Other	91.0			50.1			82 %	122.0			69.7			75 %
Consolidated	$	1,828.8		$	1,382.8		32 %	$	2,577.4		$	1,748.6		47 %

Segment Profit (Non-GAAP):
U.S. Consumer	$	435.9		$	374.6		16 %	$	481.2		$	334.6		44 %
Hawthorne	41.4			23.8			74 %	81.8			36.3			125 %
Other	17.6			4.0			340 %	17.6			0.4			4,300 %
Total Segment Profit (Non-GAAP)	494.9			402.4			23 %	580.6			371.3			56 %
Corporate	(48.1		)	(36.9		)		(82.7		)	(63.0		)
Intangible asset amortization	(7.8		)	(8.1		)		(15.2		)	(15.8		)
Impairment, restructuring and other	(14.9		)	(3.7		)		(24.6		)	(1.4		)
Equity in loss of unconsolidated affiliates	(1.5		)	—				(1.5		)	—
Costs related to refinancing	—			—				—			(15.1		)
Interest expense	(19.3		)	(22.7		)		(35.4		)	(42.7		)
Other non-operating income, net	0.9			2.8				16.1			5.4
Income from continuing operations before income taxes (GAAP)	$	404.2		$	333.8		21 %	$	437.3		$	238.7		83 %

THE SCOTTS MIRACLE-GRO COMPANY

Condensed Consolidated Balance Sheets

(In millions)
(Unaudited)

	April 3, 2021		March 28, 2020		September 30, 2020
	April 3, 2021		March 28, 2020		September 30, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	14.4	$	30.8	$	16.6
Accounts receivable, net	1,408.1		1,172.5		497.1
Inventories	1,019.2		743.3		621.9
Prepaid and other current assets	132.0		95.8		81.0
Total current assets	2,573.7		2,042.4		1,216.6
Investment in unconsolidated affiliates	201.4		—		—
Property, plant and equipment, net	565.3		535.4		560.0
Goodwill	546.1		538.3		544.1
Intangible assets, net	674.9		692.0		679.2
Other assets	372.7		327.6		380.6
Total assets	$	4,934.1	$	4,135.7	$	3,380.5
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	212.8	$	212.2	$	66.4
Accounts payable	549.9		324.7		391.0
Other current liabilities	584.8		444.3		493.0
Total current liabilities	1,347.5		981.2		950.4
Long-term debt	2,322.5		2,113.8		1,455.1
Other liabilities	323.2		246.1		272.1
Total liabilities	3,993.2		3,341.1		2,677.6
Equity	940.9		794.6		702.9
Total liabilities and equity	$	4,934.1	$	4,135.7	$	3,380.5

THE SCOTTS MIRACLE-GRO COMPANY

Reconciliation of Non-GAAP Disclosure Items (3)

(In millions, except per share data)
(Unaudited)

	Three Months Ended April 3, 2021												Three Months Ended March 28, 2020
	As Reported (GAAP)			Discontinued Operations			Impairment, Restructuring and Other			Adjusted (Non- GAAP)			As Reported (GAAP)			Discontinued Operations		Impairment, Restructuring and Other			Adjusted (Non- GAAP)
Gross profit	$	657.5		$	—		$	(12.4	)	$	669.9		$	550.2		$	—	$	(3.4	)	$	553.6
Gross profit as a % of sales	36.0		%							36.6		%	39.8		%						40.0		%
Income from operations	424.1			—			(14.9		)	438.9			353.7			—		(3.7		)	357.4
Income from operations as a % of sales	23.2		%							24.0		%	25.6		%						25.8		%
Income from continuing operations before income taxes	404.2			—			(14.9		)	419.1			333.8			—		(3.7		)	337.5
Income tax expense from continuing operations	93.1			—			(3.5		)	96.6			84.0			—		0.5			83.5
Income from continuing operations	311.1			—			(11.4		)	322.5			249.8			—		(4.2		)	254.0
Net income attributable to controlling interest	310.0			(0.9		)	(11.4		)	322.3			252.2			2.6		(4.2		)	253.8
Diluted income per common share from continuing operations	5.44			—			(0.20		)	5.64			4.43			—		(0.07		)	4.50

Calculation of Adjusted EBITDA (3):	Three Months Ended April 3, 2021			Three Months Ended March 28, 2020
Net income (GAAP)	$	310.2		$	252.4
Income tax expense from continuing operations	93.1			84.0
Income tax expense from discontinued operations	0.9			1.1
Interest expense	19.3			22.7
Depreciation	15.6			15.2
Amortization	7.8			8.1
Impairment, restructuring and other charges from continuing operations	14.9			3.7
Impairment, restructuring and other charges (recoveries) from discontinued operations	—			(3.1		)
Interest income	(0.6		)	(1.9		)
Share-based compensation expense	17.7			12.0
Adjusted EBITDA (Non-GAAP)	$	478.9		$	394.2

Note: See accompanying footnotes on page 9.
The sum of the components may not equal due to rounding.

	Six Months Ended April 3, 2021														Six Months Ended March 28, 2020
	As Reported (GAAP)			Discontinued Operations			Impairment, Restructuring and Other			Other Non- Operating		Adjusted (Non- GAAP)			As Reported (GAAP)			Discontinued Operations		Impairment, Restructuring and Other			Costs Related to Refinancing			Adjusted (Non- GAAP)
Gross profit	$	848.3		$	—		$	(21.4	)	$	—	$	869.7		$	604.4		$	—	$	(3.6	)	$	—		$	608.0
Gross profit as a % of sales	32.9		%									33.7		%	34.6		%									34.8		%
Income from operations	458.1			—			(24.6		)	—		482.7			291.1			—		(1.4		)	—			292.5
Income from operations as a % of sales	17.8		%									18.7		%	16.6		%									16.7		%
Income from continuing operations before income taxes	437.3			—			(24.6		)	12.6		449.3			238.7			—		(1.4		)	(15.1		)	255.2
Income tax expense from continuing operations	101.1			—			(5.8		)	3.0		103.9			60.2			—		1.1			(4.4		)	63.5
Income from continuing operations	336.2			—			(18.8		)	9.6		345.4			178.5			—		(2.5		)	(10.7		)	191.7
Net income attributable to controlling interest	334.4			(0.9		)	(18.8		)	9.6		344.5			180.8			2.6		(2.5		)	(10.7		)	191.4
Diluted income per common share from continuing operations	5.88			—			(0.33		)	0.17		6.04			3.15			—		(0.04		)	(0.19		)	3.38

Calculation of Adjusted EBITDA (3):	Six Months Ended April 3, 2021			Six Months Ended March 28, 2020
Net income (GAAP)	$	335.3		$	181.1
Income tax expense from continuing operations	101.1			60.2
Income tax expense from discontinued operations	0.9			1.1
Costs related to refinancing	—			15.1
Interest expense	35.4			42.7
Depreciation	31.3			30.1
Amortization	15.2			15.8
Impairment, restructuring and other charges from continuing operations	24.6			1.4
Impairment, restructuring and other charges (recoveries) from discontinued operations	—			(3.1		)
Other non-operating income, net	(12.6		)	—
Interest income	(2.7		)	(3.7		)
Share-based compensation expense	25.8			19.0
Adjusted EBITDA (Non-GAAP)	$	554.3		$	359.7

Note: See accompanying footnotes on page 9.
The sum of the components may not equal due to rounding.

THE SCOTTS MIRACLE-GRO COMPANY

Footnotes to Preceding Financial Statements

(1)	Basic income (loss) per common share amounts are calculated by dividing income (loss) attributable to controlling interest from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares outstanding during the period.

(2)	Diluted income (loss) per common share amounts are calculated by dividing income (loss) attributable to controlling interest from continuing operations, income (loss) from discontinued operations and net income (loss) attributable to controlling interest by the weighted average number of common shares, plus all potential dilutive securities (common stock options, performance shares, performance units, restricted stock and restricted stock units) outstanding during the period.

(3)	Reconciliation of Non-GAAP Measures

Use of Non-GAAP Measures

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses non-GAAP financial measures. The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables above. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than the Company, limiting the usefulness of those measures for comparative purposes.

In addition to GAAP measures, management uses these non-GAAP financial measures to evaluate the Company’s performance, engage in financial and operational planning and determine incentive compensation because it believes that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of the Company’s underlying, ongoing business.

Management believes that these non-GAAP financial measures are useful to investors in their assessment of operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions routinely received from analysts and investors and, in order to ensure that all investors have access to the same data, management has determined that it is appropriate to make this data available to all investors. Non-GAAP financial measures exclude the impact of certain items (as further described below) and provide supplemental information regarding operating performance. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Management views free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends and discretionary investment. Management views free cash flow productivity as a useful measure to help investors understand the Company’s ability to generate cash.

Exclusions from Non-GAAP Financial Measures

Non-GAAP financial measures reflect adjustments based on the following items:

Impairments, which are excluded because they do not occur in or reflect the ordinary course of the Company’s ongoing business operations and their exclusion results in a metric that provides supplemental information about the sustainability of operating performance.
Restructuring and employee severance costs, which include charges for discrete projects or transactions that fundamentally change the Company’s operations and are excluded because they are not part of the ongoing operations of its underlying business, which includes normal levels of reinvestment in the business.
Costs related to refinancing, which are excluded because they do not typically occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of these types of charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.
Discontinued operations and other unusual items, which include costs or gains related to discrete projects or transactions and are excluded because they are not comparable from one period to the next and are not part of the ongoing operations of the Company’s underlying business.

The tax effect for each of the items listed above is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded.

Definitions of Non-GAAP Financial Measures

The reconciliations of non-GAAP disclosure items include the following financial measures that are not calculated in accordance with GAAP and are utilized by management in evaluating the performance of the business, engaging in financial and operational planning, the determination of incentive compensation, and by investors and analysts in evaluating performance of the business:

Adjusted gross profit: Gross profit excluding impairment, restructuring and other charges / recoveries.
Adjusted income (loss) from operations: Income (loss) from operations excluding impairment, restructuring and other charges / recoveries.
Adjusted income (loss) from continuing operations before income taxes: Income (loss) from continuing operations before income taxes excluding impairment, restructuring and other charges / recoveries and costs related to refinancing.
Adjusted income tax expense (benefit) from continuing operations: Income tax expense (benefit) from continuing operations excluding the tax effect of impairment, restructuring and other charges / recoveries and costs related to refinancing.
Adjusted income (loss) from continuing operations: Income (loss) from continuing operations excluding impairment, restructuring and other charges / recoveries and costs related to refinancing, each net of tax.
Adjusted net income (loss) attributable to controlling interest from continuing operations: Net income (loss) attributable to controlling interest excluding impairment, restructuring and other charges / recoveries, costs related to refinancing and discontinued operations, each net of tax.
Adjusted diluted income (loss) per common share from continuing operations: Diluted net income (loss) per common share from continuing operations excluding impairment, restructuring and other charges / recoveries and costs related to refinancing, each net of tax.
Adjusted EBITDA: Net income (loss) before interest, taxes, depreciation and amortization as well as certain other items such as the impact of the cumulative effect of changes in accounting, costs associated with debt refinancing and other non-recurring or non-cash items affecting net income (loss). The presentation of adjusted EBITDA is intended to be consistent with the calculation of that measure as required by the Company’s borrowing arrangements, and used to calculate a leverage ratio (maximum of 4.50 at April 3, 2021) and an interest coverage ratio (minimum of 3.00 for the twelve months ended April 3, 2021).
Free cash flow: Net cash provided by (used in) operating activities reduced by investments in property, plant and equipment.
Free cash flow productivity: Ratio of free cash flow to net income (loss).

For the three and six months ended April 3, 2021, the following items were adjusted, in accordance with the definitions above, to arrive at the non-GAAP financial measures:

The World Health Organization recognized a novel strain of coronavirus (“COVID-19”) as a public health emergency of international concern on January 30, 2020 and as a global pandemic on March 11, 2020. In response to the COVID-19 pandemic, the Company has implemented additional measures intended to both protect the health and safety of its employees and maintain its ability to provide products to its customers, including (i) requiring a significant part of its workforce to work from home, (ii) monitoring its employees for COVID-19 symptoms, (iii) making additional personal protective equipment available to its operations team, (iv) requiring all manufacturing and warehousing associates to take their temperatures before beginning a shift, (v) modifying work methods and schedules of its manufacturing and field associates to create distance or add barriers between associates, consumers and others, (vi) expanding cleaning efforts at its operation centers, (vii) modifying attendance policies so that associates may elect to stay home if they have symptoms, (viii) prioritizing production for goods that are more essential to its customers and (ix) implementing an interim premium pay allowance for certain associates in its field sales force or working in manufacturing or distribution centers. During the three and six months ended April 3, 2021, the Company incurred costs of $12.3 million and $21.0 million, respectively, in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and incurred costs of $2.6 million and $3.2 million, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with the COVID-19 pandemic primarily related to premium pay. These direct and incremental costs were excluded from the Company’s non-GAAP financial measures because they are not comparable from one period to the next and are not expected to be part of the ongoing operations of the Company’s underlying business.
On December 31, 2020, pursuant to the terms of the Contribution and Unit Purchase Agreement between the Company and Alabama Farmers Cooperative, Inc. (“AFC”), the Company acquired a 50% equity interest in the Bonnie Plants business through a newly formed joint venture with AFC (“Bonnie Plants, LLC”) in exchange for a cash payment of $100.7 million, forgiveness of the Company’s outstanding loan receivable with AFC and termination of the Company’s options to increase its economic interest in the Bonnie Plants business. The Company’s loan receivable with AFC, which was previously recognized in the “Other assets” line in the Condensed Consolidated Balance Sheets, had a carrying value of $66.4 million on December 31, 2020 and the Company recognized a gain of $12.5 million during the first quarter of fiscal 2021 to write-up the value of the loan to its closing date fair value in the “Other non-operating income, net” line in the Condensed Consolidated Statements of Operations. The Company’s interest in Bonnie Plants, LLC had an initial fair value of $202.9 million and is recorded in the “Investment in unconsolidated affiliates” line in the Condensed Consolidated Balance Sheets. The Company’s interest is accounted for using the equity method of accounting, with the Company’s proportionate share of Bonnie Plants, LLC earnings subsequent to December 31, 2020 reflected in the Condensed Consolidated Statements of Operations.

For the three and six months ended March 28, 2020, the following items were adjusted, in accordance with the definitions above, to arrive at the non-GAAP financial measures:

During the three and six months ended March 28, 2020, the Company incurred costs of $3.1 million in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations and incurred costs of $0.7 million in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with the COVID-19 pandemic primarily related to premium pay.
During the three and six months ended March 28, 2020, the Company received zero and $2.6 million, respectively, from the final settlement of escrow funds related to a previous Hawthorne acquisition that was recognized in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.
On October 23, 2019, the Company redeemed all of its outstanding 6.000% Senior Notes for a redemption price of $412.5 million, comprised of $0.5 million of accrued and unpaid interest, $12.0 million of redemption premium, and $400.0 million for outstanding principal amount. The $12.0 million redemption premium was recognized in the “Costs related to refinancing” line in the Condensed Consolidated Statements of Operations during the first quarter of fiscal 2020. Additionally, the Company had $3.1 million in unamortized bond issuance costs associated with the 6.000% Senior Notes, which were written-off during the first quarter of fiscal 2020 and were recognized in the “Costs related to refinancing” line in the Condensed Consolidated Statements of Operations.
The Company recognized insurance recoveries of $1.5 million related to the previously disclosed legal matter In re Morning Song Bird Food Litigation during the three and six months ended March 28, 2020 in the “Income (loss) from discontinued operations, net of tax” line in the Condensed Consolidated Statements of Operations.

Forward Looking Non-GAAP Measures

In this earnings release, the Company presents its outlook for fiscal 2021 non-GAAP adjusted EPS. The Company does not provide a GAAP EPS outlook, which is the most directly comparable GAAP measure to non-GAAP adjusted EPS, because changes in the items that the Company excludes from GAAP EPS to calculate non-GAAP adjusted EPS, described above, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, due to their unpredictability, management does not forecast the excluded items for internal use and therefore cannot create or rely on a GAAP EPS outlook without unreasonable efforts. The timing and amount of any of the excluded items could significantly impact the Company’s GAAP EPS. As a result, the Company does not provide a reconciliation of guidance for non-GAAP adjusted EPS to GAAP EPS, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K.

May 5, 2021 7:06 am

Medivolve and Marvel Diagnostics Successfully Complete First Stage Clinical Testing of BlowFISH, a Non-Invasive Exhaled Breath Diagnostic Technology For COVID-19, Developed by a UCLA Research Team Led by Dr. Pirouz Kavehpour

Medivolve is well positioned to deliver shareholder value from its equity position in Marvel Diagnostics and the team’s successful development of BlowFISH, a non-invasive exhaled breath diagnostic technology that has cleared the first milestone in a series of clinical tests and has entered the next phase toward applying for an Emergency Use Authorization from the FDA to use the technology to test for the COVID-19 virus.

TORONTO, May 05, 2021 (GLOBE NEWSWIRE) — Medivolve Inc. (“Medivolve”) (NEO:MEDV; OTC:COPRF; FRA:4NC) a healthcare company that seeks out disruptive technologies, ground-breaking innovations and exclusive partnerships to help combat COVID-19, and Marvel Diagnostics, the developer of the non-invasive exhaled breath diagnostic technology, BlowFISH, announced today that BlowFISH has successfully cleared the first milestone in a series of clinical tests targeting application of an Emergency Use Authorization (EUA) from the United States Food and Drug Administration (FDA) to test for the COVID-19 virus.

During the clinical trial, BlowFISH’s proprietary technology, designed to efficiently collect a substantial liquid sampling directly from deep within the lungs, successfully detected the COVID-19 virus in three test samples. Developed by Marvel Diagnostics and funded by Medivolve, the technology offers the potential for a simple, inexpensive, non-invasive, massively deployable, rapid diagnostic system for detecting respiratory illness and airborne viral threats in approximately 10 minutes.

“This is an exciting and important milestone in advancing BlowFISH toward achieving EUA status in testing for COVID-19, and providing a non-invasive, cost-effective and scalable testing alternative to nasal swab solutions currently in market,” said David Preiner, CEO, Medivolve. “Making testing more accessible to populations, such as children and the elderly, where it may be difficult to administer a nasopharyngeal swab test, will become important in our transition to resuming daily life in the ‘new normal’. Data obtained from BlowFISH powered testing will also further Medivolve’s mission to use innovation and artificial intelligence to close the loop in health management for every American.”

Marvel Diagnostics is partnering with a research team from Louisiana State University Health Shreveport (LSUSH) to conduct clinical trials. With the second phase of testing now in progress, BlowFISH is currently on the right track to seek EUA approval from the FDA.

“BlowFISH’s detection of the COVID-19 virus brings us one significant step closer to changing the future of diagnostics for not only COVID-19, but for a wide range of respiratory illnesses,” said Dr. Pirouz Kavehpour, UCLA Professor and Marvel Diagnostics Co-Founder. “We are moving forward with urgency through proof-of-concept clinical trials, as these studies are a critical next step in making respiratory testing more comfortable, convenient and accessible for all…one breath at a time.”

Medivolve announced a landmark investment in Marvel Diagnostic in January of 2021, providing up to $1 million in funding, subject to the achievement of certain milestones, to be used to complete the clinical studies for the BlowFISH collection system and to design and optimize, manufacture and market the device.

About Marvel Diagnostics Inc.

Marvel Diagnostics Inc. is a company focused on the commercialization of the novel BlowFISH technology developed by its research team based at University of California Los Angeles. This research is funded by a Rapid Response Research (RAPID) grant from National Science Foundation (NSF), National Institutes of Health (NIH) and Medivolve. The Marvel Diagnostics research team led by Pirouz Kavehpour (Professor, UCLA) with Jonathan Rothstein (Professor, University of Massachusetts-Amherst) and Jeff Ruberti (Professor, Northeastern University), all former lab mates at Massachusetts Institute of Technology nearly 20 years ago. Leyla Mirmomen (PhD/MBA) leads the commercialization of the technology and operations of the company. Dr. Jeremy Kamil is Associate Professor of Microbiology & Immunology and co-PI of the local study at Louisiana State University Health Shreveport. Dr John A Vanchiere (MD, PhD), the physician who leading the study and Jennifer L. Carroll, director of the EVT diagnostic laboratory, are key team members at LSUHS.

About Medivolve Inc.
Medivolve Inc. (NEO:MEDV; OTC:COPRF; FRA:4NC) focuses on commercializing technologies to help combat the COVID-19 pandemic. This includes providing convenient and accessible medical services for testing, prevention and treatment. Medivolve is comprised of a team of renowned global medical and business advisors who are committed to helping fulfill Medivolve’s mission of searching for and investing in breakthrough sciences, technologies, research or resolutions to empower the betterment of mankind. This panel includes prominent Stanford neurologist and immunologist Dr. Lawrence Steinman as well as Dr. Glenn Copeland, one of North America’s most prominent orthopedic treatment and sports medicine specialists. Through its braintrust of industry specialists, thought leaders, influencers, and opinion makers, Medivolve has also developed a proprietary strategy to capitalize on high-margin opportunities across three areas: the prevention, detection, and treatment of COVID-19.
 
For investing inquiries, please contact: 
[email protected]  
  
For U.S. media inquiries, please contact: 
Sophia Powe 
[email protected] 

Cautionary Note Regarding Forward-looking Information 
  
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the BlowFISH diagnostic technology; the pursuit by Marvel Diagnostics of FDA and EUA approval for BlowFISH; and the merits or potential opportunity for the BlowFISH technology. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. 
  
NEITHER THE NEO EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAS REVIEWED OR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. 

May 5, 2021 7:06 am

XPO Logistics Tests Battery-Electric Truck from Daimler Trucks North America

GREENWICH, Conn., May 05, 2021 (GLOBE NEWSWIRE) — XPO Logistics, Inc. (NYSE: XPO), a leading global provider of transportation and logistics solutions, has partnered with Daimler Trucks North America (DTNA) to test Daimler’s battery-electric commercial trucks under real-life operating conditions in California.

XPO drivers will use tractors from DTNA’s Freightliner Electric Innovation and Customer Experience (CX) Fleet for a nine-month pilot program in the Oakland area. The data generated by the XPO pilot will help inform DTNA’s final design of its battery-electric truck prior to full series production. XPO and DTNA have collaborated on transportation innovation for more than a decade. Watch the video here.

Troy Cooper, president of XPO Logistics, said, “We’re pleased to contribute to the environmental sustainability of supply chains by providing real-life operating data to our long-time partner, Daimler Trucks North America. The CX pilot is also an opportunity for us to evaluate how battery-electric trucks perform for our customers and drivers. Our partnerships with manufacturers are an important way we help advance industry innovation.”

Richard Howard, senior vice president, on-highway sales and marketing, Daimler Trucks North America, said, “XPO is providing us valuable information about the performance, maintenance and cost of operating our all-electric Freightliner eCascadia, while helping to shape the future of CO₂-neutral transportation for supply chains nationwide. We appreciate their partnership and participation in the process of co-creation.”

In addition to leading the Freightliner CX pilot in Oakland, XPO provides input to DTNA as a member of the Freightliner Electric Vehicle Council. The pilot is supported by the Bay Area Air Quality Management District (Bay Area AQMD), which partially funded the deployment.

About XPO Logistics

XPO Logistics, Inc. (NYSE: XPO) provides cutting-edge supply chain solutions to the most successful companies in the world. The company is the second largest contract logistics provider and the second largest freight broker globally, and a top three less-than-truckload provider in North America. XPO uses a highly integrated network of 1,621 locations in 30 countries to serve more than 50,000 customers. Approximately 140,000 team members, including 108,000 employees and 32,000 temporary workers, help XPO’s customers manage their supply chains most efficiently. The company’s corporate headquarters are in Greenwich, Conn., USA, and its European headquarters are in Lyon, France. Visit xpo.com for more information, and connect with XPO on Facebook, Twitter, LinkedIn, Instagram and YouTube.

About Daimler Trucks North America

Daimler Trucks North America LLC (DTNA), headquartered in Portland, Ore., is the leading heavy-duty truck manufacturer in North America. Freightliner Trucks is a division of DTNA, which manufactures, sells, and services commercial vehicles under the Freightliner, Western Star, Detroit, and Thomas Built Buses nameplates. Daimler company is the world’s leading commercial vehicle manufacturer. More information about the Freightliner Electric Trucks is available at www.freightliner.com/electric-trucks.

Media Contact

XPO Logistics, Inc.
Joe Checkler
+1-203-423-2098
[email protected]

May 5, 2021 7:05 am

New Data Reveals That Downtown Toronto Rent Plummeted By Almost 20% Last Year

These are the most affected neighbourhoods in the GTA

TORONTO, May 05, 2021 (GLOBE NEWSWIRE) — liv.rent has published its new Toronto Rental Market Q1 2021 Report. The online rental platform, which collects rental market data every month for Toronto, Vancouver, and Montreal, is providing the report free for everyone to see.

Both renters and landlords will find the data in this report extremely valuable. It tracks the changes in the rental market for the first quarter of 2021 and compares it with the first quarter of 2020. It offers an incredible glimpse by the numbers of the effects COVID-19 had on the cost of rent across the city.

This report provides a breakdown of the changes in each GTA neighbourhood: Downtown Toronto, North York, Etobicoke, Scarborough, Markham, Mississauga, Brampton, and Vaughan/Richmond Hill.

A glimpse of what’s in the full report:

Downtown Toronto rent for furnished units dropped 25%, unfurnished dropped 18%.
Etobicoke was the only GTA neighbourhood that saw a rental increase, up 0.3% for furnished one-bedrooms.
The biggest percentage drop in rental prices in Toronto was for three-bedrooms, it dropped -14.9% for furnished units and -13.9% for unfurnished units.

liv.rent’s next upcoming Quarterly Report will provide even more insights into the changes that COVID-19 had on the Toronto rental market by comparing Q2 2020 to what we’re seeing now in Q2 2021.

Rental Data Methodology

liv.rent invests in a unique manual data collection process, combining data from popular listing sites with its own extensive proprietary data. Through this process of excluding duplicate postings, luxury rentals, and rooms and by ascertaining up-to-date asking rents, liv.rent has created the most accurate monthly rent report in Canada.

A PDF version of the 23-page report can be downloaded here.

Journalists may share this link https://landing.liv.rent/to-rentreport/ with their audience should they wish to download the report.

Note to the media: this report may not be disseminated in its entirety. We welcome you to share and post tables and data set with credit on your channels, and you can contact us for additional assets.

About liv.rent

Deciding where you live should be a safe and joyful experience. Instead, the rental landscape is so full of stress and scammers that it can feel like a never-ending battle to secure the perfect home.

We are liv.rent — a group of renters and landlords who knew there had to be a better way. So, we created solutions for each step of the rental process to help everyone save time and energy. Now, we provide a better way to rent across Canada with a safe network of trusted landlords.

For more information, and assets for journalists, please contact

Matisse Yiu
liv.rent Marketing Manager
[email protected]
[email protected]

May 5, 2021 7:05 am

Baudax Bio Reports First Quarter 2021 Financial Results

ANJESO
^®
Demonstrates Continued Progress with Launch; Growth in End-User Unit Sales Increased 40% in Q1 compared to Q4’20

Average Sales per Account Increased 30% in Q1 compared to Q4’20

Richard S. Casten Strengthens Management Team in Chief Financial Officer Role

Management to Host Investor Conference Call and Webcast Today at 8:00 a.m. ET

MALVERN, Pa., May 05, 2021 (GLOBE NEWSWIRE) — Baudax Bio, Inc. (NASDAQ:BXRX) (the “Company”), a pharmaceutical company focused on developing and commercializing innovative products for acute care settings, today reported financial results for the three months ended March 31, 2021.

“The first quarter has been busy and fruitful at Baudax. ANJESO sustained marked progress in the areas of new account wins, increasing units sold, reorder rates, and deepening usage across the hospital and ambulatory surgery center space. Although we are seeing some relief from COVID in the marketplace, it continues to impact elective surgical procedures and hospital administration’s focus as well as access into accounts, which the team will need to continue to monitor to maintain the growth of ANJESO,” said Gerri Henwood, President and CEO of Baudax Bio. “We continue to receive positive feedback from physicians using ANJESO for the management of moderate to severe pain in the acute care setting.”

First Quarter 2021 and Recent Business Highlights

Continued Progress on U.S. Launch of ANJESO. Baudax Bio built infrastructure, executed group purchasing organization agreements with the top three medical distributors and began developing awareness and knowledge of ANJESO in 2020. In the first quarter of 2021 we have seen more meaningful progress in deepening usage of ANJESO in early users as reflected in sales to existing hospitals and ambulatory surgery centers, which doubled in the first quarter of 2021 compared to the fourth quarter of 2020. Total unit sales grew 40% in the first quarter of 2021 compared to the fourth quarter of 2020 and the reorder rate was nearly 70% for the same comparable period.

During the first quarter, formulary wins grew by 22 institutions, for a total of 90 institutions as of March 31, 2021, an increase of over 30% from the fourth quarter.

Publication of ANJESO Phase IIIb Data in Pain Medicine. In April 2021, the company announced the online publication of ANJESO Phase IIIb data in the peer-reviewed medical journal Pain Medicine. The data highlights the safety and pain management efficacy of preoperative ANJESO injection in total knee arthroplasty (TKA). This study also reported that ANJESO decreased the need for opioids following surgery. The findings published were especially compelling because they suggest select measures of health care resource utilization (HRU) were lower in the ANJESO treated patients.
Announced Partial Adjournment of Annual Meeting of Shareholders. In April 2021, Baudax Bio partially adjourned its 2021 Annual Meeting of Shareholders solely with respect to Proposal 3 set forth in its Definitive Proxy Statement filed with the Securities and Exchange Commission on March 11, 2021. Proposal 3 is a proposal to amend the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized, not issued, shares of common stock from 100 million shares to 190 million shares. This adjournment provides its shareholders additional time to vote on Proposal 3. The Annual Meeting will resume with respect to Proposal 3 at 10:00 a.m. Eastern time on May 6, 2021.
Richard S. Casten Strengthens Management Team in Chief Financial Officer Role. In March 2021, Baudax Bio announced the appointment of Richard S. Casten, CPA, MBA as Chief Financial Officer. In this role, Mr. Casten will be responsible for leading and directing the financial activities of the Company. Mr. Casten brings to Baudax Bio 25 years of diversified financial experience across pharmaceutical, Fortune 500 consumer products and public accounting.
In February, Announced $17.6 Million Offering Priced At-the-Market under Nasdaq Rules. Baudax Bio announced that it entered into a definitive agreement with institutional and accredited investors for the purchase and sale of an aggregate of 11,000,000 shares of common stock at a purchase price of $1.60 per share in a registered direct offering, priced at-the-market under Nasdaq rules. The gross proceeds from the offering were approximately $17.6 million, prior to deducting fees and expenses.
In January, Announced Exercise of Warrants for Gross Proceeds of $13.4 Million. Baudax Bio announced the agreement by an accredited healthcare-focused institutional investor to cash exercise certain warrants to purchase up to an aggregate of 10,300,430 shares of common stock having an exercise price of $1.18 issued by the company in December 2020. In connection therewith, Baudax Bio sold the exercising holder new warrants, which are cash exercisable for an aggregate of 10,300,430 shares of common stock at an exercise price of $1.60 per share, for an aggregate purchase price $1,287,554, or $0.125 per warrant. The gross proceeds to Baudax Bio from the exercise of the warrants and the sale of the additional warrants was $13.4 million, prior to deducting fees and expenses.

First Quarter 2021 Financial Results

As of March 31, 2021, Baudax Bio had cash, cash equivalents and short-term investments of $38.2 million.

Net product revenue for the three months ended March 31, 2021 was $0.2 million, related to sales of ANJESO in the U.S. There was no product revenue recognized during the three months ended March 31, 2020.

Cost of sales for the three months ended March 31, 2021 was $0.8 million and consisted of product costs, royalty expense and certain fixed costs associated with the manufacturing of ANJESO including supply chain and quality costs. Certain product costs of ANJESO units recognized as revenue during the three months ended March 31, 2021 were incurred prior to the FDA approval of ANJESO in February 2020, and therefore are not included in cost of sales during the period. Baudax Bio expects that over time, its cost of sales will increase as sales increase and as inventory values change to include all direct and indirect costs and expenses post FDA approval. No cost of sales was recorded for the three months ended March 31, 2020.

Research and development expenses for the three months ended March 31, 2021 were $1.1 million, compared to $3.1 million for the three months ended March 31, 2020. The decrease of $2.0 million was primarily due to a decrease of $1.7 million as a result of re-allocating costs related to supply chain, regulatory, quality, and medical affairs associated with support of the commercial launch of ANJESO from research and development expense to cost of sales and selling, general and administrative expense and a decrease in personnel costs of $0.3 million.

Selling, general and administrative expenses for the three months ended March 31, 2021 were $12.1 million, compared to $8.0 million for the same prior year period. The increase of $4.1 million was primarily due to the commercial launch of ANJESO, specifically, an increase in personnel related costs of $1.6 million, an increase of $1.3 million attributable to medical affairs and regulatory support reallocated from research and development expense post FDA approval, an increase of $0.3 million in public company costs and an increase of $0.3 million in marketing costs. In addition, the first quarter of 2020 included $0.5 million in reimbursed general and administrative expenses related to the Transition Services Agreement with Recro Pharma, which ended on December 31, 2020.

Baudax Bio reported a net loss, including non-cash charges of $5.1 million, of $16.9 million, or $(0.27) per share, for the three months ended March 31, 2021. The non-cash charge of $5.1 million was associated with stock-based compensation, non-cash interest expense, depreciation, amortization, changes in warrant valuations, and changes in fair value of contingent consideration. This compares to a net loss, including non-cash charges of $32.0 million, of $40.3 million, or $(4.03) per share, for the comparable period in 2020. The non-cash charge of $32.0 million in 2020 was associated with changes in fair value of contingent consideration, stock-based compensation, change in warrant valuation, depreciation and amortization.

About Baudax Bio

Baudax Bio is a pharmaceutical company focused on developing and commercializing innovative products for acute care settings. The launch of Baudax Bio’s first commercial product ANJESO® began in mid-2020. ANJESO is the first and only 24-hour, intravenous (IV) COX-2 preferential non-steroidal anti-inflammatory (NSAID) for the management of moderate to severe pain, which can be administered alone or in combination with other non-NSAID analgesics. It has successfully completed three Phase III clinical trials, including two pivotal efficacy trials, a large double-blind Phase III safety trial and a Phase IIIb program evaluating ANJESO and its health economic impact in specific surgical settings. In addition to ANJESO, Baudax Bio has a pipeline of other innovative pharmaceutical assets including two novel neuromuscular blocking agents (NMBAs) and a proprietary chemical reversal agent specific to these NMBAs which is currently in preclinical studies. For more information, please visit www.baudaxbio.com.

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements reflect Baudax Bio’s expectations about its future performance and opportunities that involve substantial risks and uncertainties. When used herein, the words “anticipate,” “believe,” “estimate,” “may,” “upcoming,” “plan,” “target,” “goal,” “intend,” and “expect,” and similar expressions, as they relate to Baudax Bio or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information available to Baudax Bio as of the date of publication on this internet site and are subject to a number of risks, uncertainties, and other factors that could cause Baudax Bio’s performance to differ materially from those expressed in, or implied by, these forward-looking statements. These forward-looking statements are subject to risks and uncertainties including, among other things, the ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the commercial launch of ANJESO® or disruption in supply chain, Baudax Bio’s ability to maintain regulatory approval for ANJESO, Baudax Bio’s ability to successfully commercialize ANJESO; the acceptance of ANJESO by the medical community, including physicians, patients, health care providers and hospital formularies; Baudax Bio’s ability and that of Baudax Bio’s third party manufacturers to successfully scale-up our commercial manufacturing process for ANJESO, Baudax Bio’s ability to produce commercial supply in quantities and quality sufficient to satisfy market demand for ANJESO, Baudax Bio’s ability to raise future financing for continued product development, payment of milestones and ANJESO commercialization, Baudax Bio’s ability to pay its debt and satisfy conditions necessary to access future tranches of debt, Baudax Bio’s ability to comply with the financial and other covenants under its credit facility, Baudax Bio’s ability to manage costs and execute on our operational and budget plans, the accuracy of Baudax Bio’s estimates of the potential market for ANJESO, Baudax Bio’s ability to achieve its financial goals; and Baudax Bio’s ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection. These forward-looking statements should be considered together with the risks and uncertainties that may affect Baudax Bio’s business and future results included in Baudax Bio’s filings with the Securities and Exchange Commission at www.sec.gov. These forward-looking statements are based on information currently available to Baudax Bio, and Baudax Bio assumes no obligation to update any forward-looking statements except as required by applicable law.

CONTACTS:

Investor Relations Contact:
Argot Partners
Sam Martin / Claudia Styslinger
(212) 600-1902
[email protected]
[email protected]

Media Contact:
Argot Partners
David Rosen
(212) 600-1902
[email protected]

BAUDAX BIO, INC.

Consolidated Balance Sheets
(Unaudited)

(amounts in thousands, except share and per share data)	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	30,690		$	30,342
Short-term investments		7,495			—
Accounts receivable, net		163			51
Inventory, net		2,773			2,978
Prepaid expenses and other current assets		2,569			3,346
Total current assets		43,690			36,717
Property, plant and equipment, net		5,039			5,052
Intangible assets, net		23,610			24,254
Goodwill		2,127			2,127
Other long-term assets		520			583
Total assets	$	74,986		$	68,733
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,140		$	3,653
Accrued expenses and other current liabilities		4,680			5,326
Current portion of long-term debt, net		1,196			683
Current portion of contingent consideration		7,107			8,467
Total current liabilities		14,123			18,129
Long-term debt, net		8,185			8,469
Warrant liability		83			65
Long-term portion of contingent consideration		53,348			56,576
Other long-term liabilities		241			293
Total liabilities		75,980			83,532
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value. Authorized, 10,000,000 shares; none issued and outstanding		—			—
Common stock, $0.01 par value. Authorized, 100,000,000 shares; issued and outstanding, 70,142,608 shares at March 31, 2021 and 48,688,480 shares at December 31, 2020		701			487
Additional paid-in capital		127,537			97,034
Accumulated deficit		(129,232	)		(112,320	)
Total shareholders’ equity (deficit)		(994	)		(14,799	)
Total liabilities and shareholders’ equity	$	74,986		$	68,733

BAUDAX BIO, INC.

Consolidated and Combined Statements of Operations
(Unaudited)

	For the Three Months Ended March 31,
(amounts in thousands, except share and per share data)	2021			2020
Revenue, net	$	198		$	—

Operating expenses:
Cost of sales		821			—
Research and development		1,108			3,070
Selling, general and administrative		12,088			8,046
Amortization of intangible assets		644			215
Change in warrant valuation		18			1,378
Change in contingent consideration valuation		1,841			27,626
Total operating expenses		16,520			40,335
Operating loss		(16,322	)		(40,335	)
Other expense:
Interest and other expense		(590	)		37
Net loss	$	(16,912	)	$	(40,298	)

Per share information:
Net loss per share of common stock, basic and diluted	$	(0.27	)	$	(4.03	)
Weighted average common shares outstanding, basic and diluted		62,584,129			10,001,228