WAYNE, Penn., Aug. 9, 2017 /PRNewswire/ -- Egalet
Corporation (Nasdaq: EGLT) (Egalet), a fully integrated specialty
pharmaceutical company focused on developing, manufacturing and
commercializing innovative treatments for pain and other
conditions, today announced financial results for the second
quarter ended June 30, 2017 and an
expense reduction plan to support Egalet's path toward
profitability.
"We believe our 15 percent net revenue growth in the second
quarter of 2017 over the first quarter demonstrates our continued
commitment to commercial execution and the benefits of our products
to health care professionals and the patients they treat, and
represents our strongest quarter to date, with $6.3 million net revenue realized," said Egalet
president and chief executive officer Bob
Radie. "In addition, we are announcing an expense reduction
plan that includes a corporate restructuring that we expect will
significantly decrease the operating expenses that do not directly
support the growth of our commercial business. While we have had to
make some tough decisions, we believe these are the right steps to
support our commercial focus."
Highlights from the second quarter and recent events
include:
- Grew net revenue to $6.3 million
representing increases of 81 percent over the second quarter of
2016 and 15 percent over the first quarter of 2017;
- Increased SPRIX® (ketorolac tromethamine) Nasal
Spray prescriptions by 20% with 555 new prescribers added and
increased OXAYDO® (oxycodone HCI, USP) tablets for oral
use only –CII prescriptions by 17 percent and added 369 prescribers
from the first quarter 2017 to the second quarter of 2017;
- Educated target healthcare prescribers on the benefits and
risks of ARYMO ER for the first full quarter resulting in 1,120
prescriptions;
- Broadened market access with the addition of ARYMO®
ER (morphine sulfate) extended-release (ER) tablets C-II to a large
payer formulary covering 24 million lives;
- Partnered with Ascend Therapeutics to co-promote
SPRIX Nasal Spray to women's healthcare practitioners;
and
- Closed $30 million equity financing.
As part of an effort to prioritize projects, Egalet is reducing
its workforce, excluding the sales team, by nearly 40 percent. With
this initiative, along with elimination of certain other
expenditures and other non-recurring expenses, Egalet expects total
costs and expenses, as reported in its consolidated statement of
operations, excluding cost of sales, amortization of product
rights, depreciation and stock-based compensation expense
("Adjusted Costs and Expenses"), to be between $55 and $60 million in 2018, a 35 percent
reduction from expected 2017 Adjusted Costs and Expenses of between
$85 and $90 million. As of
June 30, 2017, Egalet had cash,
restricted cash and marketable securities totaling $87.9 million, excluding approximately
$28.6 million in net proceeds from
Egalet's July 6, 2017 public offering
of common stock and warrants. Based upon Egalet's current operating
plan, including net revenue, operating expense and debt service,
the company anticipates that its existing cash, cash equivalents
and marketable securities, will enable Egalet to fund its
operations into 2020.
Second Quarter 2017 Financial Results:
- Cash Position: As of June 30,
2017, Egalet had cash, restricted cash and marketable
securities totaling $87.9 million,
excluding approximately $28.6 million
in net proceeds from Egalet's July 6,
2017 public offering of common stock and warrants.
- Net Revenue: Total net product sales were $6.3 million for the quarter ended June 30, 2017 compared to $3.5 million for the quarter ended June 30, 2016.
- Cost of Sales: Cost of sales was $1.1 million for the quarter ended June 30, 2017 and $784,000 for the quarter ended June 30, 2016. Cost of sales for the quarter
ended June 30, 2017 reflected the
average cost of inventory produced and dispensed to patients.
- G&A Expenses: General and administrative expenses
increased to $12.5 million for the
quarter ended June 30, 2017 from
$8.9 million for the quarter ended
June 30, 2016. This increase was
primarily attributable to the post marketing requirement costs
required following FDA approval of ARYMO ER.
- S&M Expenses: Sales and marketing expenses increased
to $9.3 million for the quarter ended
June 30, 2017 from $6.3 million for the quarter ended June 30, 2016. This increase was primarily
attributable to the expansion of our commercial organization and
launch expenses related to ARYMO ER.
- R&D Expenses: Research and development expenses
decreased to $4.6 million for the
quarter ended June 30, 2017 from
$8.7 million for the quarter ended
June 30, 2016. The decrease was
driven primarily by decreased costs for the development of
Egalet-002, ARYMO ER and OXAYDO.
- Interest Expense: Interest expense increased to
$4.7 million for the quarter ended
June 30, 2017 from $2.3 million for the quarter ended June 30, 2016. The increase in interest expense
for the quarter ended June 30, 2017
was primarily attributable to payments on the 13% senior secured
notes, issued in August 2016 and
January 2017.
- Net Loss: Net loss for the quarter ended
June 30, 2017 was $26.5 million, or $1.04 per share, compared to a net loss of
$23.8 million, or $0.97 per share, for the quarter ended
June 30, 2016.
Non-GAAP Measures
Egalet has included in this
earnings release guidance with respect to Adjusted Costs and
Expenses, which the Securities and Exchange Commission considers to
be a "non-GAAP financial measure." Management believes that this
non-GAAP financial measure, when read in conjunction with Egalet's
results as reported under GAAP, can provide useful supplemental
information for investors. A reconciliation of Egalet's Adjusted
Costs and Expenses outlook for 2017 to the most comparable GAAP
financial measure has not been provided because of the variability,
complexity and lack of visibility with respect to certain
reconciling items between Adjusted Costs and Expenses and total
costs and expenses, including costs of sales and stock-based
compensation. These items cannot be reasonably and accurately
predicted without the investment of undue time, cost and other
resources and, accordingly, a reconciliation for such period is not
available without unreasonable effort. These reconciling items
could be material to Egalet's actual results for such periods.
Conference Call Information
The company will host a
live conference call and webcast at 4:30 p.m. Eastern
Time today to review the company's financial and operating
results and provide a general business update. Interested parties
may listen to the call via a live audio webcast which may be
accessed by visiting Egalet.com. Please connect to the website
a few minutes prior to the live webcast to ensure adequate time for
any software download that may be needed to access the webcast.
Individuals also may participate in the call by dialing
1-888-346-2615 (domestic) or 1-412-902-4253 (international) and
asking for the "Egalet Earnings Call." The replay will
be available approximately two hours after the call
on Egalet.com.
About Egalet
Egalet, a fully integrated specialty
pharmaceutical company, is focused on developing, manufacturing and
commercializing innovative treatments for pain and other
conditions. Egalet has three approved products: ARYMO® ER (morphine
sulfate) extended-release tablets for oral use —CII, developed
using Egalet's proprietary Guardian™ Technology, OXAYDO® (oxycodone
HCI, USP) tablets for oral use only —CII and SPRIX® (ketorolac
tromethamine) Nasal Spray. Using Guardian Technology, Egalet is
developing a pipeline of clinical-stage, product candidates
including Egalet-002, an abuse-deterrent, extended-release, oral
oxycodone formulation for the management of pain severe enough to
require daily, around-the-clock, long-term opioid treatment and for
which alternative treatment options are inadequate. Guardian
Technology can be applied broadly across different classes of
pharmaceutical products and can be used to develop combination
products that include multiple active pharmaceutical ingredients
with similar or different release profiles. For full prescribing
information on ARYMO ER, including the boxed warning and medication
guide, please visit arymoer.com. For full prescribing information
on SPRIX, including the boxed warning and medication guide, please
visit sprix.com. For full prescribing information on OXAYDO,
including the boxed warning and medication guide, please visit
oxaydo.com.
Safe Harbor
Statements included in this press release that are not historical
in nature and contain the words "anticipate," "believe,"
"estimate," "expect," "intend," "may," "plan," "predict,"
"project," "suggest," "target," "potential," "will," "would,"
"could," "should," "continue," "look forward to" and other similar
expressions are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on management's current
expectations and are subject to known and unknown uncertainties and
risks. Actual results could differ materially from those discussed
due to a number of factors, including, but not limited to: the
successful implementation and realization of the anticipated
benefits from Egalet's expense reduction plan; Egalet's estimates
with regard to its operating plan, expenses, future revenues,
capital requirements and needs for additional financing; the
success of Egalet's clinical trials, including the timely
recruitment of trial subjects and meeting the timelines therefor;
Egalet's ability to obtain regulatory approval of its product
candidates and the labeling claims that Egalet believes are
necessary or desirable for successful commercialization of its
products and product candidates; Egalet's ability to maintain the
intellectual property position of its products and product
candidates; Egalet's ability to identify and reliance upon
qualified third parties to manufacture its products; Egalet's
ability to commercialize its products, and to do so successfully;
the costs of commercialization activities, including marketing,
sales and distribution; Egalet's ability to execute on its sales
and marketing strategy, including developing relationships with
customers, physicians, payors and other constituencies; the size
and growth potential of the markets for Egalet's products and
product candidates, and Egalet's ability to service those markets;
Egalet's ability to obtain reimbursement and third-party payor
contracts for its products; Egalet's ability to service or
refinance its debt obligations; Egalet's ability to raise
additional funds to execute its business plan and growth strategy
on terms acceptable to Egalet, if at all; Egalet's ability to find
and hire qualified sales professionals; the rate and degree of
receptivity in the marketplace and among physicians to Egalet's
products; the success of products which compete with Egalet's that
are or become available; general market conditions; and the Risk
Factors set forth in Egalet's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the United States
Securities and Exchange Commission (SEC) and in other filings
Egalet makes with the SEC from time to time. In addition, the
forward-looking statements included in this press release represent
Egalet's views only as of the date hereof. Egalet anticipates that
subsequent events and developments may cause its views to change.
While Egalet may elect to update these forward-looking statements
at some point in the future, it specifically disclaims any
obligation to update or revise any forward-looking-statements
contained in this press release whether as a result of new
information or future events, except as may be required by law.
Investor and Media Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: bcs@egalet.com
Tel: 484-259-7370
Egalet Corporation
and Subsidiaries
|
|
Consolidated
Statements of Operations (Unaudited)
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
|
3,450
|
|
$
|
6,255
|
|
$
|
6,013
|
|
$
|
11,682
|
Collaboration
revenues
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
—
|
Total
revenue
|
|
|
3,450
|
|
|
6,255
|
|
|
6,113
|
|
|
11,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(excluding amortization of product rights)
|
|
|
784
|
|
|
1,072
|
|
|
1,666
|
|
|
2,397
|
Amortization of product
rights
|
|
|
503
|
|
|
522
|
|
|
1,004
|
|
|
1,025
|
General and
administrative
|
|
|
8,854
|
|
|
12,471
|
|
|
14,852
|
|
|
20,962
|
Sales and
marketing
|
|
|
6,280
|
|
|
9,340
|
|
|
12,482
|
|
|
18,598
|
Research and
development
|
|
|
8,697
|
|
|
4,594
|
|
|
14,816
|
|
|
11,114
|
Total costs and
expenses
|
|
|
25,118
|
|
|
27,999
|
|
|
44,820
|
|
|
54,096
|
Loss from
operations
|
|
|
(21,668)
|
|
|
(21,744)
|
|
|
(38,707)
|
|
|
(42,414)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of derivative liability
|
|
|
(43)
|
|
|
—
|
|
|
(653)
|
|
|
(12)
|
Interest expense,
net
|
|
|
2,315
|
|
|
4,749
|
|
|
4,624
|
|
|
9,283
|
Other loss
(gain)
|
|
|
69
|
|
|
(14)
|
|
|
66
|
|
|
167
|
Loss on foreign
currency exchange
|
|
|
5
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
|
2,346
|
|
|
4,735
|
|
|
4,040
|
|
|
9,438
|
Loss before provision
(benefit) for income taxes
|
|
|
(24,014)
|
|
|
(26,479)
|
|
|
(42,747)
|
|
|
(51,852)
|
Provision (benefit)
for income taxes
|
|
|
(237)
|
|
|
—
|
|
|
(422)
|
|
|
—
|
Net loss
|
|
$
|
(23,777)
|
|
$
|
(26,479)
|
|
$
|
(42,325)
|
|
$
|
(51,852)
|
Per share
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share of
common stock, basic and diluted
|
|
$
|
(0.97)
|
|
$
|
(1.04)
|
|
$
|
(1.73)
|
|
$
|
(2.06)
|
Weighted-average
shares outstanding, basic and diluted
|
|
|
24,468,747
|
|
|
25,542,733
|
|
|
24,437,497
|
|
|
25,154,440
|
Egalet Corporation
and Subsidiaries
|
Consolidated
Balance Sheets
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
June 30, 2017
|
|
|
|
|
|
|
(unaudited)
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
44,355
|
|
$
|
29,868
|
|
Marketable securities,
available for sale
|
|
|
42,471
|
|
|
57,627
|
|
Accounts
receivable
|
|
|
1,108
|
|
|
5,107
|
|
Inventory
|
|
|
1,700
|
|
|
1,949
|
|
Prepaid expenses and
other current assets
|
|
|
2,537
|
|
|
1,367
|
|
Other
receivables
|
|
|
1,001
|
|
|
1,190
|
|
Total current
assets
|
|
|
93,172
|
|
|
97,108
|
|
Intangible assets,
net
|
|
|
8,350
|
|
|
7,520
|
|
Restricted
cash
|
|
|
-
|
|
|
400
|
|
Property and
equipment, net
|
|
|
12,709
|
|
|
11,318
|
|
Deposits and other
assets
|
|
|
627
|
|
|
1,677
|
|
Total
assets
|
|
$
|
114,858
|
|
$
|
118,023
|
|
Liabilities and
stockholders' equity (deficit)
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
2,392
|
|
|
3,183
|
|
Accrued
expenses
|
|
|
18,147
|
|
|
21,280
|
|
Deferred
revenue
|
|
|
3,975
|
|
|
6,188
|
|
Debt -
current
|
|
|
381
|
|
|
624
|
|
Total current
liabilities
|
|
|
24,895
|
|
|
31,275
|
|
Debt - non-current
portion, net
|
|
|
83,711
|
|
|
124,680
|
|
Deferred income tax
liability
|
|
|
23
|
|
|
24
|
|
Derivative
liability
|
|
|
12
|
|
|
-
|
|
Other
liabilities
|
|
|
891
|
|
|
814
|
|
Total
liabilities
|
|
|
109,532
|
|
|
156,793
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 11)
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit)
|
|
|
|
|
|
|
|
Common stock--$0.001
par value; 75,000,000 shares authorized at
December 31, 2016 and
June 30, 2017; 25,189,125 and 26,335,983 shares
issued and outstanding at
December 31, 2016 and June 30, 2017,
respectively
|
|
|
25
|
|
|
26
|
|
Additional paid-in
capital
|
|
|
230,379
|
|
|
238,315
|
|
Accumulated other
comprehensive income
|
|
|
100
|
|
|
683
|
|
Accumulated
deficit
|
|
|
(225,178)
|
|
|
(277,794)
|
|
Total stockholders'
equity (deficit)
|
|
|
5,326
|
|
|
(38,770)
|
|
Total liabilities and
stockholders' equity
|
|
$
|
114,858
|
|
$
|
118,023
|
|
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SOURCE Egalet Corporation