KemPharm, Inc. Reports Third Quarter 2016 Results
November 09 2016 - 4:10PM
Conference Call and Live Audio Webcast with Slide
Presentation Scheduled for Today at 5:00 p.m., ET
KemPharm, Inc. (NASDAQ:KMPH), a clinical-stage specialty
pharmaceutical company engaged in the discovery and development of
proprietary prodrugs, today reported its corporate and financial
results for the third quarter ended September 30, 2016, including
an update on key clinical and regulatory events involving its
product development pipeline.
“The third quarter 2016 began a transformative period for
KemPharm as we completed a strategic review of our development
pipeline and prioritized KP415 and KP201/IR as our co-lead product
candidates. We believe we achieved key milestones that should
enable us to capitalize on the value opportunities that each of
these product candidates offers to potentially address important
patient, prescriber and market needs,” said Travis C. Mickle,
Ph.D., President and Chief Executive Officer of KemPharm. “We
expect to report proof-of-concept data for KP415 by year-end, and
we anticipate initiating human clinical trials of KP201/IR in 2017.
KemPharm remains on target to potentially submit New Drug
Applications (NDA) for each lead candidate product in 2018.”
“In addition to our clinical progress this quarter, we entered
into a licensing agreement with Acura to utilize its proprietary
Aversion® Technology with our current and in-development immediate
release (IR) opioid prodrugs, starting with KP201/IR,” Dr. Mickle
continued. “We believe our Ligand Activated Therapy (LAT) prodrug
technology with an aversive formulation approach offers the
potential to develop IR opioid therapeutics that may satisfy
current FDA standards for abuse-deterrence and could potentially
raise the bar on abuse-deterrence within the opioid space.”
Q3 2016 Financial Results: KemPharm’s reported
net loss of $13.4 million, or $0.92 per basic and diluted share,
for the quarter ended September 30, 2016, compared to net loss of
$9.7 million, or $0.68 per basic and diluted share, for the same
period in 2015. Net loss for third quarter of 2016 was driven
primarily by a loss from operations of $10.4 million, interest
expense, net, of $1.7 million and a fair value adjustment expense
of $1.3 million for the quarter ended September 30, 2016. Loss from
operations for the quarter was $10.4 million, compared to $6.5
million for the same period in 2015. The increase in loss from
operations compared to the third quarter of 2015 was primarily due
to $3.0 million of severance expense recorded in the third quarter
of 2016 related to the deferral of commercial operations and
realignment of financial resources and operational priorities
during the period, and an increase in general and administrative
costs of $0.9 million due primarily to an increase in headcount
compared to the same period in 2015.
As of September 30, 2016, total cash, cash equivalents,
restricted cash, marketable securities and long-term investments
was $92.0 million, which reflected a decrease of $10.6 million
compared to June 30, 2016.
Conference Call Information:The company will
host a conference call and live audio webcast with slide
presentation on Wednesday, November 9, 2016, at 5:00 p.m. ET, to
discuss its corporate and financial results for the third quarter
of 2016. Interested participants and investors may access the
conference call by dialing either:
- (866) 395-2480 (U.S.)
- (678) 509-7538 (international)
- Conference ID: 11692265
The live webcast with accompanying slides will be accessible via
the Investor Relations section of the KemPharm website
http://investors.kempharm.com/. An archive of the webcast and
presentation will remain available for 90 days beginning at
approximately 6:00 p.m., ET on November 9, 2016.
Third Quarter and Recent Activities:
Clinical & Regulatory
- Prioritized KP415 and KP201/IR as Co-Lead Product
CandidatesAs announced in the corporate and clinical
update on September 15, 2016, after a thorough evaluation of its
entire drug development pipeline, KemPharm has designated KP415,
its extended release (ER) prodrug of d-threo-methylphenidate
(d-MPH) product candidate for the treatment of attention deficit
hyperactivity disorder (ADHD), and KP201/IR, its single-entity,
benzhydrocodone hydrochloride (HCl) IR, abuse-deterrent product
candidate for the treatment of acute pain, as its co-lead product
candidates. KemPharm is targeting submission of an NDA for the ER
formulation of KP511, its prodrug of hydromorphone, in 2019.
- Received Clearance from FDA to Initiate Clinical
Program for KP415On October 11, 2016, KemPharm announced
that its IND application for KP415 was accepted by the FDA. As a
result, KemPharm expects to complete a proof of concept human trial
prior to the end of 2016, with the goal of initiating pivotal
efficacy trials during 2017 and submitting an NDA in
2018.
- Filed IND with FDA for KP201/IROn October 25,
2016, KemPharm announced that it filed an IND application with the
FDA to begin human clinical trials of KP201/IR. KemPharm intends to
initiate human clinical trials of KP201/IR in 2017, with the goal
of submitting an NDA in 2018.
- Initiated Formal Dispute Resolution Request (FDRR)
Process with FDA for Apadaz™As announced on November 3,
2016, KemPharm appealed the FDA’s Complete Response Letter for
Apadaz™ (benzhydrocodone and acetaminophen) through the initiation
of the FDRR process.
Corporate & Operational
- Announced Licensing Agreement with Acura
Pharmaceuticals for Aversion® TechnologyOn October 18,
2016, KemPharm announced that it entered into a license agreement
with Acura Pharmaceuticals to utilize Aversion® Technology with
KemPharm’s current and in-development IR opioid product
candidates.
- Deferred Commercial Operations and Realigned Financial
Resources and Operational Priorities Towards Product Development
PipelineAs announced in the corporate and clinical update
on September 15, 2016, KemPharm decided to defer its commercial
operations and realign its financial resources and operational
priorities towards its product development pipeline.
About KemPharm
KemPharm is a clinical-stage specialty pharmaceutical company
focused on the discovery and development of proprietary prodrugs to
treat serious medical conditions through its LAT prodrug platform
technology. KemPharm utilizes its LAT platform technology to
generate improved prodrug versions of FDA-approved drugs in the
high-need areas of pain, ADHD and other CNS disorders.
Caution Concerning Forward Looking Statements
This press release may contain forward-looking statements made in
reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of
words such as “may,” “will,” “expect,” “project,” “estimate,”
“anticipate,” “plan,” “believe,” “potential,” “should,” “continue”
or the negative versions of those words or other comparable words.
These forward-looking statements include statements regarding the
expected features and characteristics of KP415, KP201/IR and
KP511/ER the expected timing of potential submissions of NDAs for
KP415, KP201/IR and KP511/ER, the expected timing of the initiation
and completion of clinical trials and the timeline and potential
outcome of the FDRR process for Apadaz. These forward-looking
statements are not guarantees of future actions or performance.
These forward-looking statements are based on information currently
available to KemPharm and its current plans or expectations, and
are subject to a number of uncertainties and risks that could
significantly affect current plans. Actual results and performance
could differ materially from those projected in the forward-looking
statements as a result of many factors, including, without
limitation, the risks and uncertainties associated with: KemPharm's
financial resources and whether they will be sufficient to meet
KemPharm's business objectives and operational requirements;
results of earlier studies and trials may not be predictive of
future clinical trial results; the protection and market
exclusivity provided by KemPharm's intellectual property; risks
related to the drug discovery and the regulatory approval process;
the impact of competitive products and technological changes; and
the FDA approval process under the Section 505(b)(2) regulatory
pathway, including without limitation any timelines for related
approval. KemPharm's forward-looking statements also involve
assumptions that, if they prove incorrect, would cause its results
to differ materially from those expressed or implied by such
forward-looking statements. These and other risks concerning
KemPharm’s business are described in additional detail in
KemPharm's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2016, and KemPharm’s other Periodic and Current
Reports filed with the Securities and Exchange Commission. KemPharm
is under no obligation to (and expressly disclaims any such
obligation to) update or alter its forward-looking statements,
whether as a result of new information, future events or
otherwise.
KEMPHARM, INC.UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS(In Thousands, Except
Share and Per Share Amounts)
| |
|
Three months ended September 30, |
|
Nine months ended September 30, |
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Revenue |
|
$ |
|
— |
|
|
|
$ |
|
— |
|
|
|
$ |
|
— |
|
|
|
$ |
— |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
|
4,287 |
|
|
|
|
|
4,328 |
|
|
|
|
|
12,509 |
|
|
|
|
9,215 |
|
| General and administrative |
|
|
|
3,104 |
|
|
|
|
|
2,152 |
|
|
|
|
|
11,127 |
|
|
|
|
6,317 |
|
| Severance expense |
|
|
|
3,010 |
|
|
|
|
|
— |
|
|
|
|
|
3,010 |
|
|
|
|
— |
|
| Total operating expenses |
|
|
|
10,401 |
|
|
|
|
|
6,480 |
|
|
|
|
|
26,646 |
|
|
|
|
15,532 |
|
| Loss from operations |
|
|
|
(10,401 |
) |
|
|
|
|
(6,480 |
) |
|
|
|
|
(26,646 |
) |
|
|
|
(15,532 |
) |
| Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss on extinguishment of debt |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(4,740 |
) |
|
|
|
— |
|
| Interest expense related to
amortization of debt issuance costs and discount |
|
|
|
(390 |
) |
|
|
|
|
(479 |
) |
|
|
|
|
(1,225 |
) |
|
|
|
(1,434 |
) |
| Interest expense on debt
principal |
|
|
|
(1,441 |
) |
|
|
|
|
(687 |
) |
|
|
|
|
(4,066 |
) |
|
|
|
(1,973 |
) |
| Fair value adjustment |
|
|
|
(1,299 |
) |
|
|
|
|
(2,089 |
) |
|
|
|
|
29,742 |
|
|
|
|
(26,512 |
) |
| Interest and other income |
|
|
|
98 |
|
|
|
|
|
11 |
|
|
|
|
|
344 |
|
|
|
|
17 |
|
| Total other (expense) income |
|
|
|
(3,032 |
) |
|
|
|
|
(3,244 |
) |
|
|
|
|
20,055 |
|
|
|
|
(29,902 |
) |
| Loss before income taxes |
|
|
|
(13,433 |
) |
|
|
|
|
(9,724 |
) |
|
|
|
|
(6,591 |
) |
|
|
|
(45,434 |
) |
| Income tax benefit (expense) |
|
|
|
19 |
|
|
|
|
|
(20 |
) |
|
|
|
|
11 |
|
|
|
|
(27 |
) |
| Net loss |
|
$ |
|
(13,414 |
) |
|
|
$ |
|
(9,744 |
|
) |
|
$ |
|
(6,580 |
) |
|
|
$ |
(45,461 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
|
$ |
|
(0.92 |
) |
|
|
$ |
|
(0.68 |
) |
|
|
$ |
|
(0.45 |
) |
|
|
$ |
(4.71 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
|
|
|
14,646,982 |
|
|
|
|
|
14,232,133 |
|
|
|
|
|
14,580,289 |
|
|
|
|
9,643,231 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEMPHARM, INC. CONDENSED
BALANCE SHEETS (In Thousands, Except Share and Par Value
Amounts)
| |
|
As of September 30, |
|
As of December 31, |
| |
|
2016 |
|
2015 |
| |
|
(unaudited) |
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
|
20,846 |
|
|
|
$ |
32,318 |
|
| Restricted cash |
|
|
|
1,100 |
|
|
|
|
— |
|
| Marketable securities |
|
|
|
42,679 |
|
|
|
|
19,002 |
|
| Prepaid expenses and other current
assets |
|
|
|
636 |
|
|
|
|
2,758 |
|
| Total current assets |
|
|
|
65,261 |
|
|
|
|
54,078 |
|
| Property and equipment, net |
|
|
|
1,456 |
|
|
|
|
403 |
|
| Long-term investments |
|
|
|
27,355 |
|
|
|
|
— |
|
| Other long-term assets |
|
|
|
472 |
|
|
|
|
109 |
|
| Total assets |
|
$ |
|
94,544 |
|
|
|
$ |
54,590 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities and stockholders'
deficit |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable and accrued
expenses |
|
$ |
|
5,599 |
|
|
|
$ |
4,906 |
|
| Current portion of convertible
notes |
|
|
|
— |
|
|
|
|
1,369 |
|
| Current portion of term notes |
|
|
|
— |
|
|
|
|
2,041 |
|
| Current portion of capital lease
obligation |
|
|
|
105 |
|
|
|
|
26 |
|
| Total current liabilities |
|
|
|
5,704 |
|
|
|
|
8,342 |
|
| Convertible notes, net |
|
|
|
90,779 |
|
|
|
|
7,412 |
|
| Term notes, net |
|
|
|
— |
|
|
|
|
11,118 |
|
| Derivative and warrant liability |
|
|
|
7,342 |
|
|
|
|
37,839 |
|
| Other long-term liabilities |
|
|
|
521 |
|
|
|
|
— |
|
| Total liabilities |
|
|
|
104,346 |
|
|
|
|
64,711 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and contingencies (Note D) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Stockholders' deficit: |
|
|
|
|
|
|
|
|
| Common stock, $0.0001 par value,
250,000,000 shares authorized, 14,646,982 shares issued and
outstanding as of September 30, 2016 (unaudited); 14,490,954 shares
issued and outstanding as of December 31, 2015 |
|
|
|
1 |
|
|
|
|
1 |
|
| Additional paid-in capital |
|
|
|
101,601 |
|
|
|
|
94,702 |
|
| Preferred stock, $0.0001 par value,
10,000,000 shares authorized, no shares issued or outstanding as of
September 30, 2016 (unaudited) or December 31, 2015 |
|
|
|
— |
|
|
|
|
— |
|
| Accumulated deficit |
|
|
|
(111,404 |
) |
|
|
|
(104,824 |
) |
| Total stockholders' deficit |
|
|
|
(9,802 |
) |
|
|
|
(10,121 |
) |
| Total liabilities and
stockholders' deficit |
|
$ |
|
94,544 |
|
|
|
$ |
54,590 |
|
| |
|
|
|
|
|
|
|
|
|
|
Investor Contacts:
Jason Rando / Joshua Drumm, Ph.D.
Tiberend Strategic Advisors, Inc.
212-375-2665 / 2664
jrando@tiberend.com
jdrumm@tiberend.com
Media Contact:
Daniel L. Cohen
Executive VP, Government and Public Relations
KemPharm, Inc.
202-329-1825
dcohen@kempharm.com
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