UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 2015
EMISPHERE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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| DELAWARE |
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000-17758 |
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13-3306985 |
| (State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
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| 4 Becker Farm Road
Suite 103, Roseland, New Jersey |
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07068 |
| (Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: 973-532-8000
Not Applicable
(Former
name or former address, if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On March 31, 2015, Emisphere Technologies, Inc. (the “Company”) issued a press release announcing results of operations for the fourth quarter
and year ended December 31, 2014. A copy of the press release is furnished herewith and is incorporated by reference herein as Exhibit 99.1.
The information contained herein, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01
Financial Statements and Exhibits.
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| Exhibit
No. |
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Description |
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| 99.1 |
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Press Release of Emisphere Technologies, Inc., dated March 31, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Emisphere Technologies, Inc. |
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| March 31, 2015 |
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By: |
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/s/ Michael R. Garone |
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Name: |
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Michael R. Garone |
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Title: |
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Chief Financial Officer |
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Exhibit Index
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| Exhibit
No. |
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Description |
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| 99.1 |
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Press release of Emisphere Technologies, Inc., dated March 31, 2015 |
4
Exhibit 99.1
Emisphere Reports Fourth Quarter and Full Year 2014 Financial Results
Recent Launch of Eligen B12™ Marks Company’s Expansion into Commercializing Practical Innovation
Management to Host Conference Call Today at 8:30 AM ET
ROSELAND, N.J., March 31, 2015 — Emisphere Technologies, Inc. (OTCBB: EMIS) today reported financial results for the fourth quarter and full
fiscal year ended December 31, 2014, and provided an overview of corporate accomplishments and plans.
“Eligen B12™ is the first oral
prescription tablet proven to normalize B12 levels without the need for injection, and the U.S. launch earlier this month and commencement of commercial operations are transformational milestones for Emisphere,” said Alan L. Rubino, President
and Chief Executive Officer of Emisphere. “Eligen B12 is the first marketed product using Emisphere’s advanced Eligen® Technology, a groundbreaking delivery technology that has
potential application across a broad range of chemical entities, diseases and conditions. On the development front, we recently highlighted positive Phase 2 data from Eligen licensee Novo Nordisk pertaining to the oral formulation of a long-acting
human GLP-1 analogue for treatment of Type 2 diabetes.”
Mr. Rubino continued: “In 2014, Emisphere set the stage for what we believe will
be a pivotal time in our Company’s history. We have started 2015 in a strong position and, with important global business development initiatives underway to identify and secure new partnerships for the Eligen Technology, we will continue
executing on our strategy and maintain the momentum we have created.”
2014 AND RECENT HIGHLIGHTS
| • |
|
Launched Eligen B12 in the U.S.: In March 2015, Emisphere announced the U.S. commercial availability of Eligen B12, the first and only once-daily oral prescription medical food tablet shown to normalize
B12 levels without the need for an injection. Eligen B12 is indicated for the dietary management of patients who have a medically-diagnosed vitamin B12 deficiency, associated with a disease or condition that cannot be managed by a modification of
the normal diet alone. Eligen B12 is the first product to market using Emisphere’s advanced Eligen Technology, which utilizes a carrier, salcaprozate sodium (SNAC), to chaperone B12 through the gastric lining and directly into the bloodstream
even in the absence of intrinsic factor, a protein made in the stomach that normally facilitates B12 absorption. |
| • |
|
Highlighted Positive Phase 2 Data From Eligen Licensee Novo Nordisk: In February 2015, Emisphere highlighted positive Phase 2 data from
Eligen licensee Novo Nordisk pertaining to OG217SC, the oral formulation of semaglutide, a long-acting human GLP-1 analogue. In a press release dated February 20, 2015, Novo Nordisk announced that it has
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1
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successfully completed the Phase 2 trial for OG217SC, investigating dose range, escalation, efficacy and safety of once-daily oral semaglutide compared with oral placebo or once-weekly
subcutaneously administered semaglutide in around 600 people with Type 2 diabetes treated for 26 weeks. Results of the study are available on Novo Nordisk’s website. Based on these results, Novo Nordisk announced that it will initiate
consultations with regulatory authorities subsequent to which a decision of whether to progress OG217SC into Phase 3 development will be made. Under Emisphere’s GLP-1 License Agreement, Emisphere could receive additional contingent product
development and sales milestone payments and would also be entitled to receive royalties in the event Novo Nordisk commercializes products developed under this Agreement. |
| • |
|
Secured $20 Million in Financing to Launch Eligen B12: In August 2014, Emisphere entered into an agreement with MHR Fund Management LLC (MHR), and certain of its affiliate funds, to finance the launch of
Eligen B12 in the U.S. through a new loan facility. Under the terms of the new loan facility, Emisphere may borrow, at specified times and based on the attainment of specified performance milestones, up to an aggregate of $20 million to finance the
development, manufacturing, marketing and sales of the B12 Product. To date, the Company has borrowed approximately $13 million under this loan facility. |
| • |
|
Global Eligen Technology Business Development Initiatives Underway: During 2014, Emisphere launched a comprehensive business development initiative designed to identify and secure new Eligen Technology
partnerships. Eligen Technology is a proven delivery system technology that is applicable to a broad range of chemical entities and has been shown to increase the benefit of the therapy by improving bioavailability or absorption or by decreasing
time to onset of action. The Company currently owns rights to an extensive portfolio of carriers with strong patent protection. The current focus of the business development initiative is on next generation, smaller proteins and peptides, proven
and/or approved drug compounds, and the development of new oral formulations to replace injectables. |
FOURTH QUARTER 2014 FINANCIAL
RESULTS
Emisphere reported net income of $0.4 million, or $0.01 per basic and diluted share, for the fourth quarter ended December 31, 2014,
compared to net loss of $2.8 million, or $0.05 per basic and diluted share, for the fourth quarter ended December 31, 2013.
The Company reported an
operating loss of $3.3 million for the fourth quarter 2014, compared to an operating loss of $2.3 million for the same period in 2013.
Total operating
expenses were $3.3 million for the fourth quarter 2014, an increase of $1.0 million or 40.1% compared to the same period in 2013. Total operating expenses include research and development costs of $0.2 million compared to $0.2 million in 2013, and
general and administrative expenses of $3.0 million, an increase of $0.9 million or 44% compared to the
2
same period in 2013. Other income for the fourth quarter of 2014 was $3.4 million compared to other expense of $0.4 million for the fourth quarter of 2013. The change from other expense to other
income for the fourth quarter 2014 was due primarily to a decrease in fair value of derivative instruments of $4.0 million, and a $0.2 million increase in interest expense.
FULL YEAR 2014 FINANCIAL RESULTS
Emisphere reported a
net loss of $25.4 million, or $0.42 per basic and diluted share, for the year ended December 31, 2014, compared to a net loss of $20.9 million, or $0.35 per basic and diluted share, for the year ended December 31, 2013.
Total operating expenses were $9.3 million for the year ended December 31, 2014, compared to $7.6 million for the year ended December 31, 2013, an
increase of $1.7 million or 22%. Total operating expenses include research and development costs of $1.1 million (an increase of $0.3 million or 34.9% compared to 2013), and general and administrative expenses of $8.2 million (an increase of $1.4
million or 20.9% compared to 2013).
Other expense for the year ended December 31, 2014, was $18.1 million, compared to other expense of $13.3
million for the year ended December 31, 2013. The $4.8 million increase was due primarily to a $3.4 million increase in the fair value of derivative instruments, and a $1.3 million increase in interest expense due to the restructuring of the
Company’s debt.
During 2014, Emisphere recognized a state income tax benefit of approximately $2.0 million as a result of proceeds from the sale of
$24.6 million of New Jersey net operating losses through the Technology Business Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority.
Weighted average basic and diluted shares outstanding for the years ended December 31, 2014, and December 31, 2013, was 60,687,478.
LIQUIDITY
As of December 31, 2014, Emisphere had
approximately $3.7 million in cash, a net decrease of $400,000 from December 31, 2013, approximately $1.7 million working capital deficiency, a stockholders’ deficit of approximately $111.9 million and an accumulated deficit of
approximately $514.1 million.
On August 20, 2014, the Company reached agreement with MHR, and certain of its affiliated funds, to finance the
upcoming launch of the Company’s first commercial prescription product, oral Eligen B12, in the United States through a new loan facility (the “Loan Agreement”), and to amend the terms of the Company’s existing obligations under
various promissory notes previously issued to MHR to extend the maturity dates of such promissory notes.
3
Under the terms of the Loan Agreement, Emisphere may borrow, at specified times and based on the attainment
of specified performance milestones, up to an aggregate of $20.0 million to finance the development, manufacturing, marketing and sales of its oral Eligen B12 prescription product. The new loan facility will mature on December 31, 2019, and
bear interest at a rate of 13 percent per year. The first borrowing under the Loan Agreement occurred on August 20, 2014, in an original principal amount of $5.0 million, the second occurred on November 4, 2014, in an original principal
amount of $3 million, and the third borrowing occurred on January 6, 2015, in an original principal amount of $5.0 million. Subject to achieving certain operational milestones relating to the timely manufacture and commencement of sales of
Eligen B12, of which there can be no assurance, the Company may request two additional borrowings under the Loan Agreement as follows: up to $5.0 million in the second quarter of 2015, and up to $2.0 million in the third quarter of 2015. In addition
to funding available through the Loan Agreement, the Company received approximately $1.7 million and $0.3 million on January 14, 2014, and December 9, 2014, respectively, from the sale of unused net operating losses by participating in the
Technology Business Tax Certificate Transfer Program, sponsored by the New Jersey Economic Development Authority.
Management believes that with the
funding made available through the Loan Agreement, assuming attainment of the milestones, the Company will have sufficient capital to support the commercial launch of oral Eligen B12 in the U.S. market and to continue operations through the end of
2015. The Company’s future capital requirements beyond 2015 and financial success depend largely on the commercial success of the oral Eligen B12 prescription product and the Company’s ability to leverage existing partnerships and secure
new partnering opportunities.
The Company is pursuing several courses of action to obtain additional capital resources including the global
commercialization of Eligen B12, seeking new partnerships, seeking new product development opportunities, and leveraging existing partnerships.
CONFERENCE CALL AND WEBCAST INFORMATION
The live webcast
of the conference call can be accessed through the Company’s web site at www.emisphere.com. The call can also be accessed by dialing (877) 303-9483 (United States and Canada) or (760) 666-3584 (international), and entering Conference
ID# 93074341. In addition, an archive of the webcast can be accessed through the same link and an audio replay of the call will be available beginning Tuesday, March 31, 2015 at 11:30 AM ET through 11:59 PM ET on April 13, 2015, by calling
(855) 859-2056 (United States and Canada) or (404) 537-3406 (International), and entering Conference ID# 93074341.
ABOUT ELIGEN B12™
Eligen B12 is indicated for the dietary management of patients who have a medically-diagnosed vitamin B12 deficiency, associated with a disease or
condition that cannot be managed by a modification of the normal diet alone. Eligen B12 is designed so that patients only need to take a single oral tablet (cyanocobalamin 1000 mcg/salcaprozate sodium [SNAC] 100 mg) of B12 daily.
4
Eligen B12 is the first and only prescription medical food that has been shown to normalize vitamin B12
levels comparable to an intramuscular (IM) injection of B12. In a study that compared the impact of Eligen B12 and IM B12 on plasma B12 levels in 50 patients with demonstrated B12 deficiency (serum B12 <350 pg/mL), both products normalized B12
levels by Day 15 (first observation) and maintained normal levels over the duration of the study (three months). In a study that compared bioavailability in 20 healthy subjects of Eligen B12™ with that of a standard oral B12 supplement, the
bioavailability of Eligen B12 was 5.09 percent compared with 2.16 percent, which is more than double the bioavailability of the conventional over-the-counter oral B12 supplement formulation at the same dose.
Eligen B12 is classified by the U.S. Food and Drug Administration as a medical food. A medical food is a prescription product formulated to be consumed or
administered orally under medical supervision for the treatment of a disease or condition that cannot be managed by a modification of the normal diet alone.
For more information, visit www.eligenb12.com.
ELIGEN B12™ IMPORTANT SAFETY INFORMATION
Those with
an allergy to B12, cobalt or any ingredients of Eligen B12 should not take this product. Eligen B12 should not be taken by people who have Leber’s disease, which physicians may refer to as hereditary optic nerve atrophy. Cyanocobalamin (B12)
can lead to optic nerve damage (and possibly blindness) in people with Leber’s disease. Note that Eligen B12 has not been studied in patients below 18 years of age.
ABOUT EMISPHERE
Emisphere is a specialty pharmaceutical
company that has recently commenced commercial operations. The Company launched its first prescription product, oral Eligen B12™, in the U.S. in March 2015. Beyond Eligen B12, the Company utilizes its proprietary Eligen® Technology to create new oral formulations of therapeutic agents. Emisphere is currently partnered with global pharmaceutical companies for the development of new orally delivered therapeutics.
For more information, please visit www.emisphere.com.
SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The statements in this release or oral statements made by representatives of Emisphere relating to matters that are not historical facts are forward-looking
statements that involve risks and uncertainties, including, but not limited to, the success of the Company’s commercialization initiatives, the sufficiency of the Company’s cash position, the Company’s ability to enter into
5
strategic partnerships, the Company’s ability to capture market share for oral Eligen B12 or any potential products, the Company’s ability and/or that of its partners to develop,
manufacture and commercialize products using Emisphere’s drug delivery technology, and other risks and uncertainties detailed in Emisphere’s filings with the Securities and Exchange Commission, including those factors discussed under the
caption “Risk Factors” identified in the documents Emisphere has filed, or will file, with the Securities and Exchange Commission (“SEC”). Copies of Emisphere’s filings with the SEC may be obtained from the SEC Internet site
at http://www.sec.gov. Emisphere expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Emisphere’s expectations with regard
thereto or any change in events, conditions, or circumstances on which any such statements are based.
COMPANY CONTACTS:
Alan L. Rubino, CEO
973.532.8000
arubino@emisphere.com
Michael R. Garone, CFO
973.532.8005
mgarone@emisphere.com
INVESTOR CONTACTS:
Matthew Haines/Susie Kim
Argot Partners
(212) 600-1902
matthew@argotpartners.com
susan@argotpartners.com
6
EMISPHERE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
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Year Ended December 31, |
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2014 |
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2013 |
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|
2012 |
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| |
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(In thousands, except share and per share data) |
|
| Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Cost of goods sold |
|
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— |
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|
|
— |
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|
|
— |
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| Gross profit |
|
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— |
|
|
|
— |
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|
|
— |
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|
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|
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| Costs and expenses: |
|
|
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|
|
|
|
|
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| Research and development |
|
|
1,128 |
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|
836 |
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|
1,867 |
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| General and administrative |
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|
8,162 |
|
|
|
6,749 |
|
|
|
4,935 |
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| Loss (gain) on disposal of fixed assets |
|
|
— |
|
|
|
10 |
|
|
|
(10 |
) |
| Depreciation and amortization |
|
|
15 |
|
|
|
9 |
|
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29 |
|
|
|
|
|
|
|
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|
|
|
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| Total costs and expenses |
|
|
9,305 |
|
|
|
7,604 |
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6,821 |
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|
|
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|
|
|
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|
|
|
|
|
|
|
|
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| Operating loss |
|
|
(9,305 |
) |
|
|
(7,604 |
) |
|
|
(6,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
| Other non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
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| Investment and other income |
|
|
10 |
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|
|
81 |
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|
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45 |
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| Change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
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| Related party |
|
|
(12,172 |
) |
|
|
(8,491 |
) |
|
|
7,880 |
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| Others |
|
|
300 |
|
|
|
58 |
|
|
|
230 |
|
| Interest expense - related party |
|
|
(6,232 |
) |
|
|
(4,955 |
) |
|
|
(6,236 |
) |
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| Total other non-operating income (expense) |
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|
(18,094 |
) |
|
|
(13,307 |
) |
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|
1,919 |
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| Loss before income tax benefit (expense) |
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(27,399 |
) |
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(20,911 |
) |
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|
(4,902 |
) |
| Income tax benefit (expense) |
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|
2,019 |
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(28 |
) |
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|
2,974 |
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| Net loss |
|
$ |
(25,380 |
) |
|
$ |
(20,939 |
) |
|
$ |
(1,928 |
) |
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|
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| Net loss per share, basic |
|
$ |
(0.42 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.03 |
) |
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|
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| Net loss per share, diluted |
|
$ |
(0.42 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.03 |
) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding, basic |
|
|
60,687,478 |
|
|
|
60,687,478 |
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|
|
60,687,478 |
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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| Weighted average shares outstanding, diluted |
|
|
60,687,478 |
|
|
|
60,687,478 |
|
|
|
60,687,478 |
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|
|
|
|
|
|
|
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|
|
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|
7
EMISPHERE TECHNOLOGIES, INC.
BALANCE SHEETS
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December 31, |
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2014 |
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2013 |
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| |
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(In thousands,
except share data) |
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| ASSETS |
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| Current assets: |
|
|
|
|
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|
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| Cash and cash equivalents |
|
$ |
3,683 |
|
|
$ |
4,053 |
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| Inventories |
|
|
2,068 |
|
|
|
230 |
|
| Prepaid expenses and other current assets |
|
|
188 |
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|
|
622 |
|
|
|
|
|
|
|
|
|
|
|
|
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| Total current assets |
|
|
5,939 |
|
|
|
4,905 |
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| Equipment and leasehold improvements, net |
|
|
25 |
|
|
|
40 |
|
| Other assets |
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|
24 |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
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|
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| Total assets |
|
$ |
5,988 |
|
|
$ |
4,979 |
|
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|
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| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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| Current liabilities: |
|
|
|
|
|
|
|
|
| Notes payable, related party, net of related discount |
|
$ |
— |
|
|
$ |
556 |
|
| Accounts payable and accrued expenses |
|
|
1,846 |
|
|
|
1,539 |
|
| Derivative instruments: |
|
|
|
|
|
|
|
|
| Related party |
|
|
5,548 |
|
|
|
3,638 |
|
| Others |
|
|
239 |
|
|
|
540 |
|
| Other current liabilities |
|
|
— |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
7,633 |
|
|
|
6,303 |
|
| Notes payable, related party net of related discount |
|
|
44,546 |
|
|
|
32,523 |
|
| Derivative instruments – Related party |
|
|
24,133 |
|
|
|
11,331 |
|
| Deferred revenue |
|
|
41,616 |
|
|
|
41,616 |
|
| Deferred lease liability and other liabilities |
|
|
10 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
117,938 |
|
|
|
91,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commitments and contingencies |
|
|
— |
|
|
|
— |
|
| Stockholders’ deficit: |
|
|
|
|
|
|
|
|
| Preferred stock, $.01 par value; authorized 4,000,000 shares at December 31, 2014; and authorized 2,000,000 shares at
December 31, 2013; issued and outstanding at December 31, 2014 - none |
|
|
— |
|
|
|
— |
|
| Common stock, $.01 par value; authorized 400,000,000 shares at December 31, 2014; and authorized 200,000,000 at
December 31, 2013; issued 60,977,210 shares (60,687,478 outstanding) at December 31, 2014 and 2013 |
|
|
610 |
|
|
|
610 |
|
| Additional paid-in capital |
|
|
405,531 |
|
|
|
405,300 |
|
| Accumulated deficit |
|
|
(514,139 |
) |
|
|
(488,759 |
) |
| Common stock held in treasury, at cost; 289,732 shares |
|
|
(3,952 |
) |
|
|
(3,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| Total stockholders’ deficit |
|
|
(111,950 |
) |
|
|
(86,801 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders’ deficit |
|
$ |
5,988 |
|
|
$ |
4,979 |
|
|
|
|
|
|
|
|
|
|
8