Capnia, Inc. (NASDAQ:CAPN), a diversified healthcare company that
develops and commercializes innovative diagnostics, devices and
therapeutics addressing unmet medical needs, today announced
financial results for the third quarter ended September 30, 2016.
“We continue to see significant interest from
hospitals in the US and other countries for the installation of our
CoSense ETCO monitor, and we believe the developing installed base
will drive future revenue growth,” said Anish Bhatnagar, M.D.,
Chief Executive Officer of Capnia. “Also, consumer feedback from
our pilot launch of Serenz® Allergy Relief in the United Kingdom
continues to be strong, and we are working on a full commercial
launch of the product. We have established a solid foundation, and
look forward to a fruitful 2017.”
Third Quarter 2016 and Recent
Highlights
Serenz and Therapeutics
Pipeline
- Continued European Commercial Launch of
Serenz. Serenz is available over the counter at more than
150 retail pharmacy locations as well as online across the UK and
Ireland. The Company continues to prepare for a potential full
commercial launch in Europe.
- Ongoing Phase 2 Clinical Trials Evaluating Nasal CO2
for the Symptomatic Treatment of Trigeminal Neuralgia (TN) and
Cluster Headache. The Company’s Phase 2 clinical
trials evaluating nasal, non-inhaled carbon dioxide (nasal CO2) for
the symptomatic treatment of TN and cluster headache continue to
enroll at multiple sites across the US.
CoSense and Neonatology-Focused
Commercial Product Line
- Securing Early Influential Adopters in the US.
CoSense units continue to be placed at a number of leading
hospitals driving growth in recurring sales of Precision Sample
Sets.
- Advancing New CoSense Distribution Agreements in Global
Territories. Capnia continues to execute on its
comprehensive global commercialization strategy by securing
partnerships in key market territories, including the U.S., China,
India, Canada, Saudi Arabia, Singapore and Qatar.
Third Quarter 2016 Financial
Results
Total revenue recognized in the three and nine
months ended September 30, 2016 was $329,000 and $1.2 million,
respectively, compared to $247,000 and $366,000 for the same
periods in 2015. The increase in revenue for the nine months ended
September 30, 2016 versus the same period in 2015 was primarily a
result of the revenue of NeoForce, a company acquired by Capnia in
September of 2015.
Research and development expenses in the three
and nine months ended September 30, 2016 were $1.1 million and $4.2
million, respectively, compared to $1.2 million and $3.3 million
for the same periods in 2015. For the nine months ended
September 30, 2016 versus the same period in 2015, the increase was
primarily due to expenses incurred for the launch of Serenz in the
UK and employee-related expenses.
Sales and marketing expenses in the three and
nine months ended September 30, 2016 were $342,000 and $1.5
million, respectively, compared to $467,000 and $1.2 million for
the same periods in 2015. The increase was primarily due to an
increase in outside sales and marketing expenses for the commercial
efforts related to CoSense, as well as the launch of Serenz in the
UK.
General and administrative expenses in the three
and nine months ended September 30, 2016 were $1.4 million and $4.8
million, respectively, compared to $1.7 million and $4.4 million
for the same periods in 2015. For the nine months ended September
30, 2016 versus the same period in 2015, the $0.4 million increase
was primarily due to higher legal fees and consulting costs,
increased headcount, costs associated with the operations of
Capnia’s wholly-owned subsidiary, NeoForce, Inc., the Company’s
expanded corporate headquarters space in Redwood City and an
increase in stock based compensation expense in 2016 versus
2015.
The change in fair value of warrants for the
three months ended September 30, 2016 resulted in $200,000 of
income, which represents a decrease in the fair value of the Series
A and Series C Warrants compared to the value of the warrants at
June 30, 2016. For the nine months ended September 30, 2016, the
change in value of warrants resulted in $1.3 million of income,
which represents a decrease in the value of the Series A, Series B
and Series C Warrants compared to the value of the warrants at
December 31, 2015.
Net loss attributable to common stockholders for
the three months ended September 30, 2016 was $6.4 million, or a
loss of $0.41 per share, compared to a net loss of $3.3 million, or
$0.33 per share, for the same period in 2015. Net loss attributable
to common stockholders for the three months ended September 30,
2016, was primarily the result of a $3.6 million reduction to the
net loss of $2.8, from the extinguishment of Series A Convertible
Preferred Stock and modification of Series D Warrants. Net
loss attributable to common stockholders for the nine months ended
September 30, 2016 was $13.1 million, or a loss of $0.85 per share,
compared to a net loss of $13.1 million, or a loss of $1.60 per
share, for the same period in 2015.
Cash and cash equivalents at September 30, 2016
totaled $5.4 million, compared to $5.5 million at December 31,
2015.
About Capnia
Capnia is a leading provider and developer of
innovative healthcare products to be used for the screening,
detection and treatment of medical conditions. Capnia’s
flagship products are based on its proprietary technologies, which
utilize precision metering of gas flow. Capnia currently
markets Serenz® Allergy Relief in the UK and Ireland. The CoSense®
ETCO Monitor measures ETCO, which can be used to detect hemolysis
and the Infant Solutions product line, including innovative
pulmonary resuscitation devices for neonates and infants, are
marketed globally. Capnia is also clinically evaluating its
nasal, non-inhaled CO2 technology to treat trigeminally-mediated
pain conditions such as cluster headache and trigeminal
neuralgia. For more information, please visit
www.capnia.com.
Forward-Looking Statements
This press release contains forward-looking
statements that are subject to many risks and uncertainties.
Forward-looking statements include statements regarding our
intentions, beliefs, projections, outlook, analyses or current
expectations concerning, among other things, our ongoing and
planned product commercialization and development and our ability
to successfully launch Serenz.
We may use terms such as "believes,"
"estimates," "anticipates," "expects," "plans," "intends," "may,"
"could," "might," "will," "should," "approximately" or other words
that convey uncertainty of future events or outcomes to identify
these forward-looking statements. Although we believe that we have
a reasonable basis for each forward-looking statement contained
herein, we caution you that forward-looking statements are not
guarantees of future performance and that our actual results of
operations, financial condition and liquidity, and the development
of the industry in which we operate may differ materially from the
forward-looking statements contained in this presentation. As a
result of these factors, we cannot assure you that the
forward-looking statements in this presentation will prove to be
accurate. Additional factors that could materially affect actual
results can be found in Capnia's Form 10-Q filed with the
Securities and Exchange Commission on November 14, 2016, including
under the caption titled "Risk Factors." Capnia expressly disclaims
any intent or obligation to update these forward looking
statements, except as required by law.
Capnia, Inc. |
Condensed Consolidated Balance
Sheets |
(In thousands, except share
amounts) |
unaudited) |
|
|
|
|
|
As of September 30, |
|
As of December 31. |
|
|
2016 |
|
|
|
2015 |
|
Assets |
|
|
|
|
Current Assets |
|
|
|
|
Cash & Cash
Equivalents |
|
$ |
5,415 |
|
|
$ |
5,495 |
|
|
Accounts
Receivable |
|
|
137 |
|
|
|
156 |
|
|
Restricted Cash |
|
|
35 |
|
|
|
35 |
|
|
Inventory |
|
|
703 |
|
|
|
551 |
|
|
Prepaid expenses and
other current assets |
|
|
217 |
|
|
|
167 |
|
|
Total
Current Assets |
|
|
6,507 |
|
|
|
6,404 |
|
|
Long-term Assets |
|
|
|
|
|
Property &
Equipment, net |
|
|
116 |
|
|
|
86 |
|
|
Goodwill |
|
|
718 |
|
|
|
718 |
|
|
Other intangible
assets, net |
|
|
842 |
|
|
|
917 |
|
|
Other Assets |
|
|
126 |
|
|
|
76 |
|
|
Total
Assets |
|
$ |
8,309 |
|
|
$ |
8,201 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts Payable |
|
$ |
862 |
|
|
$ |
695 |
|
|
Accrued compensation
and other current liabilities |
|
|
915 |
|
|
|
1,634 |
|
|
Series B Warrant
Liability |
|
|
- |
|
|
|
865 |
|
|
Total
Current Liabilities |
|
|
1,777 |
|
|
|
3,194 |
|
|
Long-Term Liabilities |
|
|
|
|
|
|
Series A Warrant
Liability |
|
|
509 |
|
|
|
1,213 |
|
|
Series C Warrant
Liability |
|
|
115 |
|
|
|
462 |
|
|
Other liabilities |
|
|
196 |
|
|
|
109 |
|
|
Total
Long-Term Liabilities |
|
|
820 |
|
|
|
1,784 |
|
|
|
Total
Liabilities |
|
|
2,597 |
|
|
|
4,978 |
|
|
Stockholder's equity |
|
|
|
|
|
Preferred Stock, $0.001 par value, 10,000,000 shares
authorized |
|
|
|
|
|
Series A convertible preferred stock, $0.001 par value, 10,000
shares designated, 0 and 4,555 shares issued and outstanding at
September 30, 2016 and December 31, 2015, respectively |
|
|
- |
|
|
|
- |
|
|
Series B
convertible preferred stock, $0.001 par value, 13,780 shares
designated, 13,780 and 0 shares issued and outstanding at September
30, 2016 and December 31, 2015, respectively |
|
|
- |
|
|
|
- |
|
|
Common stock, $0.001 par value, 100,000,000 shares authorized,
15,761,530 and 14,017,909 shares issued and outstanding at June 30,
2016 and December 31, 2015, respectively |
|
|
15 |
|
|
|
14 |
|
|
Additional paid-in-capital |
|
|
101,395 |
|
|
|
89,456 |
|
|
Accumulated deficit |
|
|
(95,698 |
) |
|
|
(86,247 |
) |
|
Total stockholders'
equity |
|
|
5,712 |
|
|
|
3,223 |
|
|
Total
liabilities and stockholders' equity |
|
$ |
8,309 |
|
|
$ |
8,201 |
|
|
|
|
Capnia, Inc. |
Condensed Consolidated Statements of
Operations |
(In thousands, except share and per share
amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Government grant revenue |
|
|
- |
|
|
|
155 |
|
|
|
- |
|
|
|
220 |
|
Product revenue |
|
|
329 |
|
|
|
92 |
|
|
|
1,167 |
|
|
|
146 |
|
Total revenue |
|
|
329 |
|
|
|
247 |
|
|
|
1,167 |
|
|
|
366 |
|
Cost of product revenue |
|
|
399 |
|
|
|
56 |
|
|
|
1,287 |
|
|
|
96 |
|
|
Gross profit |
|
|
(70 |
) |
|
|
191 |
|
|
|
(120 |
) |
|
|
50 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Research and
Development |
|
|
1,131 |
|
|
|
1,193 |
|
|
|
4,231 |
|
|
|
3,252 |
|
|
Sales and
Marketing |
|
|
342 |
|
|
|
467 |
|
|
|
1,457 |
|
|
|
1,239 |
|
|
General and
Administrative |
|
|
1,398 |
|
|
|
1,714 |
|
|
|
4,846 |
|
|
|
4,432 |
|
|
Total expenses |
|
|
2,871 |
|
|
|
3,374 |
|
|
|
10,534 |
|
|
|
8,923 |
|
|
Operating loss |
|
|
(2,941 |
) |
|
|
(3,183 |
) |
|
|
(10,654 |
) |
|
|
(8,653 |
) |
Interest and other income (expense) |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
|
|
|
|
|
|
(1 |
) |
|
Change in fair value of
warrant liabilities (expense) |
|
|
200 |
|
|
|
73 |
|
|
|
1,323 |
|
|
|
(1,177 |
) |
|
Cease-use expense |
|
|
- |
|
|
|
- |
|
|
|
(94 |
) |
|
|
- |
|
|
Other expense |
|
|
(9 |
) |
|
|
(183 |
) |
|
|
(27 |
) |
|
|
(183 |
) |
|
Inducement charge for
Series C warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,050 |
) |
|
Interest and other
income (expense), net |
|
|
191 |
|
|
|
(110 |
) |
|
|
1,202 |
|
|
|
(4,411 |
) |
Net loss |
|
$ |
(2,750 |
) |
|
$ |
(3,293 |
) |
|
$ |
(9,452 |
) |
|
$ |
(13,064 |
) |
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of convertible preferred stock |
|
|
(3,651 |
) |
|
|
- |
|
|
|
(3,651 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders |
|
$ |
(6,401 |
) |
|
$ |
(3,293 |
) |
|
$ |
(13,103 |
) |
|
$ |
(13,064 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share |
|
$ |
(0.41 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.85 |
) |
|
$ |
(1.60 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding used to calculate
basis and diluted net loss per common share |
|
|
15,761,530 |
|
|
|
10,040,079 |
|
|
|
15,363,648 |
|
|
|
8,178,897 |
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:
Michelle Carroll/Susie Kim
Argot Partners
(212) 600-1902
michelle@argotpartners.com
susan@argotpartners.com
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