BioMed X Inks Research Collaboration With Sanofi on Artificial Intelligence for Drug Development

First joint research project between Sanofi and the BioMed X Institute, co-creation of a next-generation virtual patient engine for clinical translation of drug candidates

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HEIDELBERG, Germany, Oct. 24, 2022 (GLOBE NEWSWIRE) — BioMed X announced today the launch of their first joint research project with Sanofi. As part of this, a new research group to be established at the BioMed X Institute in Heidelberg, Germany, will focus on the development of a versatile computational platform able to accurately predict the efficacy of first-in-class drug candidates in virtual patient populations.

The research collaboration will address one of the most important bottlenecks of the pharmaceutical industry today: a 90% failure rate of new drug candidates during clinical development. It is the aim to transform the practice of medicine with the use of digital data and artificial intelligence, and thus, this project will benefit from Sanofi’s deep datasets and expertise. As a proof-of-concept, the initial model will focus on chronic immune-mediated diseases such as atopic dermatitis (AD) and inflammatory bowel disease (IBD).

“In the past two years, we have gained significant experience in the field of artificial intelligence through our strategic partnership with AION Labs in Israel. Our new collaboration with Sanofi allows us to further extend our data science and AI expertise in Heidelberg, where we have developed an ideal incubation environment for biomedical innovation at the interface between academia and industry,” explains Christian Tidona, Founder and Managing Director of the BioMed X Institute.

“Identifying quality clinical candidates for treatment of patients with unmet need is among the most rewarding parts of the research and development process,” said Frank Nestle, Global Head of Research and Chief Scientific Officer at Sanofi. “This groundbreaking research collaboration will allow us to partner with scientists with unique computational skills and diverse capabilities that will help us to achieve our goals of bringing vital treatments to patients with chronic inflammatory diseases. This collaboration will be instrumental for advancing with our core mission of transforming drug discovery and development through application of AI-based modeling and simulation.”

A diverse team of talented early-career scientists tackling this challenge will be jointly selected by the two companies through the successful and unique recruiting model designed by BioMed X, which entails a global call for application followed by a five-day innovation boot camp. The winning team will be hosted for up to five years by the BioMed X Institute, which is embedded in the life sciences campus of the University of Heidelberg, less than an hour away from Sanofi’s Research & Development site in Frankfurt.

The new team will join the 11 research groups at the BioMed X Institute already working with complex human ex-vivo models and data science in oncology, immunology, and neuroscience.

Interested candidates who want to drive this research team are invited to respond to this international call for applications and submit a project proposal via the BioMed X Career Space at https://bio.mx/career before Jan. 8, 2023.

About BioMed X

BioMed X is an independent research institute located on the campus of the University of Heidelberg in Germany, with a world-wide network of partner locations. Together with our partners, we identify big biomedical research challenges and provide creative solutions by combining global crowdsourcing with local incubation of the world’s brightest early-career research talents. Each of the highly diverse research teams at BioMed X has access to state-of-the-art research infrastructure and is continuously guided by experienced mentors from academia and industry. At BioMed X, we combine the best of two worlds – academia and industry – and enable breakthrough innovation by making biomedical research more efficient, more agile, and more fun.

Contact Information:
Flavia-Bianca Cristian
Recruiting & Communications Manager
fbc@bio.mx
+49 6221 426 11 706

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CPC amends its constitution to adopt a more aggressive Chinese policy towards Taiwan

The Taiwanese government has condemned Beijing’s “old mindset” after the Communist Party of China (CPC) passed a constitutional amendment vowing its goal of “fully, faithfully, and resolutely implementing the policy of One Country, Two Systems.”

The Party Constitution is the CPC’s charter – the most important document by which all 96 million members must abide. 

Taiwan’s Mainland Affairs Council (MAC), the governmental administrative agency responsible for cross-Strait relations, said in a statement that the CPC’s new leadership “should break from the mindset of confronting or even invading Taiwan and resolve its differences with Taiwan in a peaceful, equitable and realistic manner.”

“Maintaining peace and stability in the Taiwan Strait is the shared responsibility of both sides of the strait,” the MAC said in the statement quoted by the official Central News Agency (CNA).

The CPC adopted several revisions of its Party Constitution at the closing ceremony of the 20th National Congress on Saturday to reflect Xi Jinping’s “new ideas, new thinking, and new strategies,” according to the Resolution on Party Constitution amendment.

Amongst new strategies on national defense and the armed forces put forward by “Comrade Xi Jinping,” the Taiwan issue is being featured prominently as the CPC pledges to build “a strong military with Chinese characteristics, making sustained and steady progress with the One Country, Two Systems policy, advancing national reunification…”

Congress closing.JPG
Delegates attend the closing ceremony of the 20th National Congress of the Communist Party of China in Beijing, Oct. 22, 2022. CREDIT: Tingshu Wang/Reuters

Hard line on Taiwan

The Communist Party’s revised Constitution, which came into immediate effect, includes statements on elevating the armed forces to world-class standards and “resolutely opposing and deterring separatists seeking ‘Taiwan independence’.”

The new language is seen as a step up in aggression from the previous amendment to the CPC’s Party Constitution, adopted at the 19th National Congress in 2017, which only pledged to strengthen the unity among all nationals, including people in Hong Kong, Macau, Taiwan and overseas and “to facilitate the national unification.”

It confirms President Xi Jinping’s hard line policy on Taiwan, which Beijing considers one of China’s provinces that should be “reunified” with the mainland.

In his opening speech at the twice-in-a-decade Congress, held in Beijing from Oct. 16 to Oct. 22, Xi said the CPC will “unswervingly advance the cause of national reunification.”

Xi outlined the official policy towards Taiwan that includes a firm warning on the use of force “directed solely at interference by outside forces and the few separatists seeking ‘Taiwan independence’ and their separatist activities.”

Last week, U.S. Secretary of State Antony Blinken said he believed that there had been “a change in approach” by Beijing in relation to Taiwan and “Beijing was determined to pursue reunification on a much faster timeline” than previously thought.

U.S. chief of naval operations Adm. Mike Gilday meanwhile said he couldn’t rule out that China may make a move on Taiwan this year or the next.

Philips’ Q3 performance impacted by operational and supply challenges; company is taking immediate actions to restore performance

October 24, 2022

Highlights

  • Group sales amounted to EUR 4.3 billion, with a 5% comparable sales decline, in line with the update provided on October 12, 2022
  • Comparable order intake decreased 6% on the back of 47% growth in Q3 2021
  • Income from operations amounted to a loss of EUR 1.5 billion, mainly due to the previously disclosed EUR 1.5 billion non-cash goodwill and R&D impairment, compared to an income of EUR 358 million in Q3 2021
  • Adjusted EBITA of EUR 209 million, or 4.8% of sales, compared to EUR 512 million, or 12.3% of sales, in Q3 2021
  • Immediate restructuring actions initiated, with approximately EUR 300 million charges expected in the coming quarters
  • Operating cash flow was an outflow of EUR 180 million, compared to an inflow of EUR 256 million in Q3 2021
  • Roy Jakobs appointed as President and CEO of Royal Philips per October 15, 2022

Roy Jakobs, CEO of Royal Philips:
“I am honored to have been given the responsibility to lead Philips, a great company with a strong brand, leading product portfolio, strong customer base and talented employees. However, we face multiple challenges and our Q3 2022 performance reflects this. Although Philips’ strategy and solutions resonate with our stakeholders, we have not lived up to their expectations in recent years.

My immediate priority is therefore to improve execution so that we can start rebuilding the trust of patients, consumers and customers, as well as shareholders and our other stakeholders. We will do this by first further strengthening our patient safety and quality management and addressing the various facets of the Philips Respironics recall; second, by urgently improving our supply chain operations so that we can deliver on our strong order book and improve performance; and third, by simplifying our way of working to improve productivity and increase agility. This includes the difficult, but necessary decision to immediately reduce our workforce by around 4,000 roles globally, which we do not take lightly and will implement with respect towards impacted colleagues. These initial actions are needed to start turning the company around in order to realize Philips’ profitable growth potential and create value for all our stakeholders.

While there is a lot to do in a fast-changing environment, our priorities are clear, and I am fully focused, together with our leadership team, on improving execution. I am committed to open and transparent communications with our stakeholders. We will elaborate further on our plans for Philips at our fourth quarter and annual results publication in January 2023.”

Group and business segment performance
Philips’ performance in the quarter was impacted by operational and supply challenges, inflationary pressures, the COVID situation in China and the Russia-Ukraine war, resulting in Group sales of EUR 4.3 billion, reflecting a 5% comparable sales decline, and an Adjusted EBITA of EUR 209 million, or 4.8% of sales. Operating cash flow was an outflow of EUR 180 million, mainly due to lower cash earnings, increased inventories and higher consumption of provisions. Comparable order intake declined 6% on the back of strong 47% growth in Q3 2021. The book-to-bill ratio was 1.18, and the equipment order book grew further in the quarter.

The Diagnosis & Treatment businesses’ comparable sales decreased 2% on the back of 10% growth in Q3 2021. Comparable order intake increased 3% on the back of 15% growth in Q3 2021. The Adjusted EBITA margin was 9.1%, mainly due to the decline in sales and cost inflation.

The Connected Care businesses’ comparable sales decreased 15%, mainly due to operational and supply challenges. Comparable order intake showed a 24% decrease, on the back of over 260% comparable order intake growth in Q3 2021. The Adjusted EBITA margin amounted to -9.5%, mainly due to the decline in sales and cost inflation.

The Personal Health businesses’ comparable sales increased by 4%, with good growth in North America and Western Europe. The Adjusted EBITA margin amounted to 14.1%.

Highlights of Philips’ ongoing focus on innovation and customer partnerships in the quarter:

  • Demonstrating the trust hospital leaders have in Philips’ ability to help them enhance health outcomes, lower the cost of care and improve patient and staff experience, the company signed multiple new long-term strategic partnerships across the world. This included a 10-year agreement with a large university hospital in Japan for the expansion of its eICU program for centralized, remote surveillance of high-risk ICU patients.
  • Philips signed several agreements in China, including with private hospitals Suzhou Kowloon Hospital and Wuhan Asia Heart Hospital to provide advanced diagnostic imaging and image-guided therapy systems to advance patient care.
  • Philips expanded its leading ultrasound portfolio with the FDA market clearance for its new Ultrasound 5000 Compact system to deliver cart-based premium image quality in compact form for point-of-care, cardiology, general imaging, and obstetrics and gynecology applications.
  • Philips continues to successfully expand into ambulatory care. Newly published research validated that Philips Mobile Cardiac Outpatient Telemetry (MCOT) is crucial in detecting arrhythmias and providing data that allows care teams to intervene quickly and decisively to provide the optimal patient treatment.
  • Building on its successful OneBlade platform, Philips introduced in Europe the new OneBlade 360, which leverages a new blade that adjusts to the curves of the face to enhance shaving comfort.

Philips Respironics field action for specific sleep therapy and ventilator devices
Philips Respironics continued to make progress with the repair and replacement program and the comprehensive test and research program for the CPAP, BiPAP and mechanical ventilator devices affected by the June 2021 field safety notice. To date, approximately 4 million replacement devices and repair kits have been produced. Philips Respironics aims to complete around 90% of the production and shipments to customers in 2022.

As previously communicated, following the FDA’s inspection of certain of Philips Respironics’ facilities in the US in 2021 and the subsequent inspectional observations, the US Department of Justice, acting on behalf of the FDA, began discussions with Philips in July 2022 regarding the terms of a proposed consent decree to resolve the identified issues.

Due to revisions to the financial forecast of Philips Respironics driven by current assumptions regarding the estimated impact of the proposed consent decree and changes to the pre-tax discount rate, Philips is recording a EUR 1.3 billion non-cash charge in the third quarter for the impairment of goodwill of this business.

As disclosed, Philips Respironics is subject to an investigation by the US Department of Justice, is a defendant in several class-action lawsuits and individual personal injury claims, and is in ongoing discussions with the FDA regarding the proposed consent decree. Given the uncertain nature and timing of the relevant events, and of their potential financial and operational impact and associated obligations, if any, the company has not made any provisions in the accounts for these matters.

Productivity initiatives and other actions to improve performance
Philips has initiated general productivity actions, including simplifying the organization to streamline the way of working and reduce operating expenses. This includes an immediate reduction of around 4,000 positions globally across the organization, subject to consultation with the relevant workers councils and social partners, with severance and termination-related costs expected to be approximately EUR 300 million in the coming quarters. The associated cost savings are expected to amount to annualized savings of approximately EUR 300 million. Philips will continue to review areas to further improve its supply operations, invest in quality, simplify the way of working and remove organizational complexity, which is expected to result in additional restructuring and associated costs in 2023.

Additionally, Philips is urgently implementing several actions to enhance performance and productivity in the supply chain (e.g. dual sourcing, supplier consolidation, warehouse footprint rationalization), R&D (e.g. shifting the focus to fewer, high-impact projects in the innovation pipeline) and quality (e.g. enhancing processes, increasing capabilities and product management). In connection with the previously announced initiative to enhance productivity in R&D, Philips recorded a non-cash charge in the third quarter of EUR 168 million.

Outlook
Looking ahead, the company sees prolonged operational and supply challenges, a worsening macro-economic environment and continued uncertainty related to COVID-19 measures in China, which will be partly offset by Philips’ productivity and pricing actions. Consequently, Philips now expects a mid-single-digit comparable sales decline for the fourth quarter of 2022, with a high-single-to-double-digit Adjusted EBITA margin range.

Capital allocation
In light of recent developments and market volatility, Philips is taking the following measures – in addition to its measures to manage cash – to further strengthen its liquidity position:

  • Securing a EUR 1 billion credit facility.
  • Executing the settlement of the forward contracts – entered into as part of the share repurchase program announced on July 26, 2021 – at the original settlement dates in 2023 and 2024, instead of in 2022 as earlier announced.

Click here to view the release online

For further information, please contact:

Ben Zwirs
Philips Global Press Office
Tel.: +31 6 1521 3446
E-mail: ben.zwirs@philips.com

Derya Guzel
Philips Investor Relations
Tel.: +31 20 59 77055
E-mail: derya.guzel@philips.com


About Royal Philips

Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people’s health and well-being, and enabling better outcomes across the health continuum – from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Philips generated 2021 sales of EUR 17.2 billion and employs approximately 79,000 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.

Forward-looking statements and other important information

Forward-looking statements

This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future Adjusted EBITA*), future restructuring and acquisition- related charges and other costs, future developments in Philips’ organic business and the completion of acquisitions and divestments. Forward-looking statements can be identified generally as those containing words such as “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “should”, “will”, “will likely result”, “forecast”, “outlook”, “projects”, “may” or similar expressions. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.

These factors include but are not limited to: Philips’ ability to gain leadership in health informatics in response to developments in the health technology industry; Philips’ ability to transform its business model to health technology solutions and services; macroeconomic and geopolitical changes; integration of acquisitions and their delivery on business plans and value creation expectations; securing and maintaining Philips’ intellectual property rights, and unauthorized use of third-party intellectual property rights; Philips’ ability to meet expectations with respect to ESG-related matters; failure of products and services to meet quality or security standards, adversely affecting patient safety and customer operations; breaches of cybersecurity; Philips’ ability to execute and deliver on programs on business transformation and IT system changes and continuity; the effectiveness of our supply chain; attracting and retaining personnel; COVID and other pandemics; challenges to drive operational excellence and speed in bringing innovations to market; compliance with regulations and standards including quality, product safety and (cyber) security; compliance with business conduct rules and regulations; treasury and financing risks; tax risks; reliability of internal controls, financial reporting and management process. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also the Risk management chapter included in the Annual Report 2021. Reference is also made to Risk management in the Philips semi-annual report 2022.

Philips has recognized a provision related to the voluntary recall notification in the US/field safety notice outside the US for certain sleep and respiratory care products, based on Philips’ best estimate for the expected field actions. Future developments are subject to significant uncertainties, which require management to make estimates and assumptions about items such as quantities and the portion to be replaced or repaired. Actual outcomes in future periods may differ from these estimates and affect the company’s results of operations, financial position and cash flows.

During the quarter, an indicator of impairment was identified for the Sleep & Respiratory Care cash-generating unit (CGU) as a consequence of revisions to the expected future cash flows of the CGU. The goodwill impairment charge recognized this quarter is due to revisions to the financial forecast of our Sleep & Respiratory Care business within the Connected Care segment. The impairment charge was calculated by comparing the carrying amount of the Sleep & Respiratory Care CGU with its recoverable amount, the basis of which is value in use. The forecast used to calculate the value in use required management to make significant estimates and assumptions about future cash flows. Actual outcomes in future periods may differ from these estimates. After this impairment charge, the estimated recoverable amount for Sleep & Respiratory Care is equal to its carrying value and consequently any adverse change in key assumptions would individually cause a material impairment loss to be recognized.

Third-party market share data

Statements regarding market share, contained in this document, including those regarding Philips’ competitive position, are based on outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, market share statements may also be based on estimates and projections prepared by management and/or based on outside sources of information. Management’s estimates of rankings are based on order intake or sales, depending on the business.

Market Abuse Regulation

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation. This press release was distributed at 07:00 am CET on October 24, 2022.

Use of non-IFRS information

In presenting and discussing the Philips Group’s financial position, operating results and cash flows, management uses certain non-IFRS financial measures. These non-IFRS financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measure and should be used in conjunction with the most directly comparable IFRS measures. Non-IFRS financial measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. A reconciliation of these non-IFRS measures to the most directly comparable IFRS measures is contained in this document. Further information on non-IFRS measures can be found in the Annual Report 2021.

Use of fair value information

In presenting the Philips Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable. Readers are cautioned that these values are subject to changes over time and are only valid at the balance sheet date. When quoted prices or observable market data are not readily available, fair values are estimated using appropriate valuation models and unobservable inputs. Such fair value estimates require management to make significant assumptions with respect to future developments, which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in the Annual Report 2021. In certain cases independent valuations are obtained to support management’s determination of fair values.

Presentation

All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up precisely to the totals provided. All reported data is unaudited. Financial reporting is in accordance with the accounting policies as stated in the Annual Report 2021 except for the adoption of new standards and amendments to standards which are also expected to be reflected in the company’s consolidated financial statements for the year ending December 31, 2022.

Prior-period amounts have been reclassified to conform to the current-period presentation; this includes immaterial organizational changes.

*) Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS information

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Vietnam disciplines Central Theoretical Council Vice Chair for previous errors

The Central Inspection Commission of Vietnam’s Communist Party has warned the Vice Chairman of its Central Theoretical Council over errors he made in two of his previous roles and also took action against senior members of the Vietnam Academy of Social Sciences for harming party unity and showing weak leadership. 

After the commission met on Oct.18 and 19, Nguyen Quang Thuan was told he made mistakes as Secretary of the Party Committee and as President of the Vietnam Academy of Social Sciences between 2016 and 2019. 

Senior Party officials of the Vietnam Academy of Social Sciences were also disciplined. Phung Ngoc Tan – former acting head of the Organization Department – was expelled from the party. Pham Van Duc – former Vice President of the Academy cum former Director of the Academy of Social Sciences; Vo Quang Trong – former director of the Vietnam Museum of Ethnology; Tran Minh Tuan – former head of the Organization and Personnel Department and former deputy director of the Academy of Social Sciences were also disciplined. 

Bui Nhat Quang – President of the Vietnam Academy of Social Sciences – received a warning from the Politburo on Sept. 30. for violations and shortcomings considered by the Party to have caused internal disunity and frustration among cadres and party members. The Politburo said his actions harmed the reputation of the Party and the Vietnam Academy of Social Sciences.

The academy is considered. the leading research institution in social sciences and humanities in Vietnam according to the Association of Asian Social Science Research Councils.

In September’s meeting, the Inspection Commission decided that the Standing Committee of the Party Committee of the Vietnam Academy of Social Sciences violated the principles of organization, Party activities and working regulations; lack of responsibility, weak leadership and direction; lack of inspection and supervision; and not strictly implementing the instructions and conclusions of superior party organizations. It said that led to many violations in the work of cadres; management and use of finance, assets and public investment; scientific research management; training masters and doctorates; and in resolving complaints.

The Inspection Commission warned the Standing Committee about violations in the 2015-2020, and 2020-2025 terms and also censured Dang Xuan Thanh, its Deputy Secretary and also Head of the Party Committee’s Organization Department and Deputy President of the Institute.

Bui Nhat Quang, President of the Vietnam Academy of Social Sciences, was warned by the Politburo. On October 3, the Central Committee agreed to revoke his membership of the Central Committee during its 13th tenure.                                        s