Aquestive Therapeutics, Inc. (NASDAQ:AQST), a pharmaceutical
company focused on developing and commercializing differentiated
products that address patients’ unmet needs and solve therapeutic
problems, today reported financial results for the first quarter
ended March 31, 2021 and provided an update on recent developments
in its business.
“We are focused on continuing to make
progress this year in advancing our proprietary products. In
response to feedback from the FDA, we are developing additional
analyses of the existing clinical data in the NDA for Libervant and
expect to refile by the end of the second quarter of 2021. We
recently initiated the first-in-human Phase 1 PK study with our
second generation epinephrine candidate AQST-109 and anticipate
reporting top-line data in the second half of the year,” said Keith
Kendall, President and Chief Executive Officer of Aquestive.
Libervant™Libervant is a
buccally, or inside of the cheek, administered soluble film
formulation of diazepam, a benzodiazepine intended for rapid
treatment of acute uncontrolled seizures in selected, refractory
patients with epilepsy on stable regimens of AEDs who require
intermittent use of diazepam to control bouts of increased seizure
activity. The Company is developing Libervant as an alternative to
more invasive, inconvenient, and difficult to administer device
driven products, including a rectal gel, for patients with
refractory epilepsy. As a result of these issues, a large portion
of the patient population does not receive adequate treatment or
foregoes treatment altogether. The Company believes that Libervant,
if approved by the FDA for U.S. market access, will enable a larger
share of these patients to receive more appropriate treatment by
providing consistent therapeutic dosing in a non-invasive and
innovative treatment form.
The Company previously received a Complete
Response Letter (CRL) from the FDA in September 2020. Since
September, Aquestive has engaged with the FDA and developed a plan
to address the deficiencies noted in the CRL. Aquestive continues
to believe that no additional clinical studies will be required to
resubmit the NDA. The Company anticipates a six month review
process and PDUFA action date by the end of 2021.
Epinephrine
Aquestive continues to advance its two product
candidates, AQST-108 and AQST-109, for the potential treatment of
severe allergic reactions, including anaphylaxis, utilizing
Aquestive’s PharmFilm® technologies. In late March 2021, Aquestive
began a two part Phase 1 PK trial of AQST-109 in Canada and
continues to conduct non-clinical modeling analysis of AQST-108 in
anticipation of engaging regulators in the second half of 2021
after the readout from both of these activities.
Sympazan®Despite the continued
limitations on provider in-person interactions caused by the
COVID-19 pandemic, the Company’s proprietary product Sympazan®
(clobazam), an oral film for the treatment of seizures associated
with Lennox-Gastaut syndrome, continues to meet key performance
metrics. Shipment volume has grown 13% sequentially quarter over
quarter and 40% year over year. Sympazan saw continued growth in
the prescriber base, with over 30% penetration into the Company’s
focused group of prescribers, with approximately 80% of those
prescribers writing multiple prescriptions.
First Quarter 2021
FinancialsTotal revenues were $11.1 million in the first
quarter 2021, compared to $8.8 million in the first quarter
2020. This year-over-year increase reflected higher license
and royalty revenue and growth in Sympazan
revenue. Aquestive saw net revenue growth in the first
quarter 2021, compared to the prior year period, of 56% for
Sympazan, the first of its proprietary products to be launched.
Aquestive’s net loss for the first quarter 2021
was $14.7 million, or $0.41 loss per share. The net loss for the
first quarter 2020 was $16.5 million, or $0.49 loss per
share. The year-over-year change in net loss was driven by
higher revenue and reductions in costs and expenses, partly offset
by increased interest expense related to the sale of future
revenue. This increase in interest expense was due to the
accounting associated with the KYNMOBI® monetization transaction
which closed on November 3, 2020 and does not represent a cash
output or monetary obligation at any time during the life of the
transaction. Adjusted EBITDA loss was $6.3 million in the first
quarter 2021, compared to $11.2 million in the first quarter of
2020. The year-over-year change in adjusted EBITDA loss was
driven by higher revenue and reductions in costs and expenses.
As of March 31, 2021, cash and cash equivalents
were $27.5 million. During the first quarter 2021, Aquestive
accessed capital under its "At-The-Market" (ATM) facility resulting
in net proceeds of $9.9 million.
2021 OutlookAquestive is
maintaining its full year 2021 financial outlook.
The Company expects:
- Total revenues of approximately $38
million to $42 million
- Non-GAAP adjusted gross margins of
approximately 70% to 75% on total revenues
- Non-GAAP adjusted EBITDA loss of
approximately $42 million to $45 million
Tomorrow’s Conference Call and Webcast
ReminderThe Company will host a conference call at 8:00
a.m. ET on Wednesday, May 5, 2021. Investors and analysts may
participate in the conference call by dialing (866) 417-5886 from
the U.S. and (409) 217-8235 internationally, followed by the
conference ID: 4455107.
There will also be a simultaneous, live webcast
available on the Investors section of the Company’s website at
https://investors.aquestive.com/events-and-presentations. The
webcast will be archived for 30 days.
About Aquestive
TherapeuticsAquestive Therapeutics is a pharmaceutical
company that applies innovative technology to solve therapeutic
problems and improve medicines for patients. The Company has
commercialized one internally-developed proprietary product to
date, Sympazan, has a commercial proprietary product pipeline
focused on the treatment of diseases of the central nervous system,
or CNS, and other unmet needs, and is developing orally
administered complex molecules to provide alternatives to
invasively administered standard of care therapies. The Company
also collaborates with other pharmaceutical companies to bring new
molecules to market using proprietary, best-in-class technologies,
like PharmFilm®, and has proven capabilities for drug development
and commercialization.
Non-GAAP Financial
InformationThis press release and our webcast earnings
call regarding our quarterly financial results contains financial
measures that do not comply with U.S. generally accepted accounting
principles (GAAP), such as non-GAAP adjusted EBITDA loss, non-GAAP
adjusted gross margins, non-GAAP adjusted costs and expenses and
other adjusted expense measures, because such measures exclude, as
applicable, share-based compensation expense, interest expense,
interest expense related to the sale of future revenue, interest
income, depreciation, amortization, and income taxes.
Specifically, the Company adjusts net income
(loss) for loss on the extinguishment of debt; certain non-cash
expenses, including share-based compensation expenses; depreciation
and amortization; and interest expense related to the sale of
future revenue, interest income and other income (expense), net and
income taxes, with a result of adjusted EBITDA loss. Similarly,
manufacture and supply expense, research and development expense,
and selling, general and administrative expense were adjusted for
certain non-cash expenses of share-based compensation expense and
depreciation and amortization. Adjusted EBITDA loss and these
non-GAAP expense categories are used as a supplement to the
corresponding GAAP measures to provide additional insight regarding
the Company’s ongoing operating performance.
These measures supplement the Company’s
financial results prepared in accordance with GAAP. Aquestive
management uses these measures to analyze its financial results,
and its future manufacture and supply expenses, gross margins,
research and development expense and selling, general and
administrative expense and to help make managerial decisions. In
management’s opinion, these non-GAAP measures provide added
transparency into the operating performance of Aquestive and added
insight into the effectiveness of our operating strategies and
actions. We may provide one or more revenue measures adjusted for
certain discrete items, such as fees collected on certain licensed
products, in order to provide investors added insight into our
revenue stream and breakdown, along with providing our GAAP
revenue. Such measures are intended to supplement, not act as
substitutes for, comparable GAAP measures and should not be read as
a measure of liquidity for Aquestive. Adjusted EBITDA loss and the
other non-GAAP measures are also likely calculated in a way that is
not comparable to similarly titled measures reported by other
companies.
Non-GAAP OutlookIn providing
outlook for non-GAAP adjusted EBITDA and non-GAAP gross margin, we
exclude certain items which are otherwise included in determining
the comparable GAAP financial measures. In order to inform our
outlook measures of non-GAAP adjusted EBITDA and non-GAAP gross
margin, a description of the 2021 and 2020 adjustments which have
been applicable in determining non-GAAP Adjusted EBITDA and
non-GAAP gross margin for these periods are reflected in the tables
below. In providing outlook for non-GAAP gross margin, we adjust
for non-cash share-based compensation expense and depreciation and
amortization. We are providing such outlook only on a non-GAAP
basis because the Company is unable to predict with reasonable
certainty the totality or ultimate outcome or occurrence of these
adjustments for the forward-looking period such as share-based
compensation expense, income tax, amortization, and certain other
adjusted items, which can be dependent on future events that may
not be reliably predicted. Based on past reported results, where
one or more of these items have been applicable, such excluded
items could be material, individually or in the aggregate, to
reported results.
Forward-Looking
StatementCertain statements in this press release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as “believe,”
“anticipate,” “plan,” “expect,” “estimate,” “intend,” “may,”
“will,” or the negative of those terms, and similar expressions,
are intended to identify forward-looking statements. These
forward-looking statements include, but are not limited to,
statements regarding the clinical advancement and related
timing of Libervant, AQST-108 and AQST-109 through the regulatory
and development pipeline; the focus on growing the Company’s
commercial sales of Sympazan®; ability to address the concerns
identified in the FDA’s Complete Response Letter dated September
25, 2020 regarding the New Drug Application for Libervant and
obtain FDA approval of Libervant for U.S. market access; the 2021
financial outlook; and business strategies, market opportunities,
and other statements that are not historical facts. These
forward-looking statements are subject to the uncertain impact of
the COVID-19 global pandemic on our business including with respect
to our clinical trials including site initiation, patient
enrollment and timing and adequacy of clinical trials; on
regulatory submissions and regulatory reviews and approvals of our
product candidates; pharmaceutical ingredient and other raw
materials supply chain, manufacture, and distribution; sale of and
demand for our products; our liquidity and availability of capital
resources; customer demand for our products and services;
customers’ ability to pay for goods and services; and ongoing
availability of an appropriate labor force and skilled
professionals. Given these uncertainties, the Company is unable to
provide assurance that operations can be maintained as planned
prior to the COVID-19 pandemic.
These forward-looking statements are also based
on our current expectations and beliefs and are subject to a number
of risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking
statements. Such risks and uncertainties include, but are not
limited to, risks associated with the Company's development work,
including any delays or changes to the timing, cost and success of
our product development activities and clinical trials and plans
for AQST-108, AQST-109 and our other drug candidates; risk of
delays in regulatory advancement through the FDA of Libervant,
AQST-108, AQST-109 and our other drug candidates or failure to
receive approval; risk of our ability to demonstrate to the FDA
“clinical superiority” within the meaning of the FDA regulations of
our drug candidate Libervant relative to FDA-approved diazepam
rectal gel and nasal spray products including by establishing a
major contribution to patient care within the meaning of FDA
regulations relative to the approved products as well as risks
related to other potential pathways or positions which are or may
in the future be advanced to the FDA to overcome the seven year
orphan drug exclusivity granted by the FDA for the approved nasal
spray product of a competitor in the U.S. and there can be no
assurance that we will be successful; risk that a competitor
obtains FDA orphan drug exclusivity for a product with the same
active moiety as any of our other drug products for which we are
seeking FDA approval and that such earlier approved competitor
orphan drug blocks such other product candidates in the U.S. for
seven years for the same indication; risk that a competitor will
obtain other market exclusivity with respect to our products; risk
inherent in commercializing a new product (including technology
risks, financial risks, market risks and implementation risks and
regulatory limitations); risk of development of our sales and
marketing capabilities; risk of legal costs associated with and the
outcome of our patent litigation challenging third party at risk
generic sale of our proprietary products; risk of sufficient
capital and cash resources, including access to available debt and
equity financing and revenues from operations, to satisfy all of
our short-term and longer term cash requirements and other cash
needs, at the times and in the amounts needed; risks and
uncertainties concerning the royalty and other revenue stream of
the KYNMOBI® monetization, achievement of royalty targets worldwide
or in any jurisdiction and certain other commercial targets
required for contingent payments under the monetization
transaction; risk of failure to satisfy all financial and other
debt covenants and of any default; short-term and long-term
liquidity and cash requirements, cash funding and cash burn; risk
related to government claims against Indivior for which we license,
manufacture and sell Suboxone® and which accounts for the
substantial part of our current operating revenues; risk of eroding
market share for Suboxone and risk of a sunsetting product; risks
related to the outsourcing of certain marketing and other
operational and staff functions to third parties; risk of the rate
and degree of market acceptance of our product and product
candidates; the success of any competing products, including
generics; risk of the size and growth of our product markets; risks
of compliance with all FDA and other governmental and customer
requirements for our manufacturing facilities; risks associated
with intellectual property rights and infringement claims relating
to the Company's products; risk of unexpected patent developments;
the impact of existing and future legislation and regulatory
provisions on product exclusivity; legislation or regulatory
actions affecting pharmaceutical product pricing, reimbursement or
access; claims and risks that may arise regarding the safety or
efficacy of the Company's products and product candidates; risk of
loss of significant customers; risks related to legal proceedings,
including patent infringement, securities, investigative and
antitrust litigation matters; changes in government laws and
regulations; risk of product recalls and withdrawals; uncertainties
related to general economic, political, business, industry,
regulatory and market conditions and other unusual items; and other
uncertainties affecting the Company described in the “Risk Factors”
section and in other sections included in our Annual Report on Form
10-K, in our Quarterly Reports on Form 10-Q, and in our Current
Reports on Form 8-K filed with the Securities Exchange Commission
(SEC). Given those uncertainties, you should not place undue
reliance on these forward-looking statements, which speak only as
of the date made. All subsequent forward-looking statements
attributable to us or any person acting on our behalf are expressly
qualified in their entirety by this cautionary statement. The
Company assumes no obligation to update forward-looking statements
or outlook or guidance after the date of this press release whether
as a result of new information, future events or otherwise, except
as may be required by applicable law.
______________________________________________________________________________________________________
PharmFilm®, Sympazan® and the Aquestive logo are registered
trademarks of Aquestive Therapeutics, Inc. All other registered
trademarks referenced herein are the property of their respective
owners.
Investor inquiries:Westwicke, an ICR CompanyStephanie
Carringtonstephanie.carrington@westwicke.com646-277-1282
AQUESTIVE THERAPEUTICS,
INC.Condensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)(Unaudited)
|
March 31,2021 |
|
December 31,2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
27,498 |
|
|
$ |
31,807 |
|
Trade and other receivables, net |
10,209 |
|
|
6,955 |
|
Inventories, net |
2,799 |
|
|
2,461 |
|
Prepaid expenses and other current assets |
3,937 |
|
|
3,402 |
|
Total current assets |
44,443 |
|
|
44,625 |
|
Property and equipment,
net |
6,279 |
|
|
6,873 |
|
Right-of-use assets, net |
3,277 |
|
|
3,448 |
|
Intangible assets, net |
89 |
|
|
102 |
|
Other non-current assets |
7,835 |
|
|
7,836 |
|
Total assets |
$ |
61,923 |
|
|
$ |
62,884 |
|
|
|
|
|
Liabilities and
stockholders’ deficit |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
6,687 |
|
|
$ |
7,089 |
|
Accrued expenses |
6,371 |
|
|
8,569 |
|
Lease liabilities, current |
787 |
|
|
728 |
|
Deferred revenue, current |
437 |
|
|
693 |
|
Liability related to the sale of future revenue, current |
1,905 |
|
|
1,450 |
|
Loans payable, current |
3,863 |
|
|
2,575 |
|
Total current liabilities |
20,050 |
|
|
21,104 |
|
Loans payable, net |
34,193 |
|
|
34,329 |
|
Liability related to the sale
of future revenue, net |
50,383 |
|
|
47,524 |
|
Lease liabilities |
2,635 |
|
|
2,846 |
|
Deferred revenue, net of
current portion |
4,699 |
|
|
3,633 |
|
Other non-current
liabilities |
1,761 |
|
|
1,945 |
|
Total liabilities |
113,721 |
|
|
111,381 |
|
|
|
|
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
Common stock, $.001 par value. Authorized 250,000,000 shares;
36,241,358 and34,569,254 shares issued and outstanding at March 31,
2021 and December 31, 2020,respectively |
36 |
|
|
35 |
|
Additional paid-in capital |
149,095 |
|
|
137,725 |
|
Accumulated deficit |
(200,929 |
) |
|
(186,257 |
) |
Total stockholders’ deficit |
(51,798 |
) |
|
(48,497 |
) |
Total liabilities and stockholders’ deficit |
$ |
61,923 |
|
|
$ |
62,884 |
|
AQUESTIVE THERAPEUTICS,
INC.Condensed Consolidated Statements of
Operations and Comprehensive Loss(In thousands,
except share and per share data
amounts)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
Revenues |
$ |
11,122 |
|
|
|
$ |
8,765 |
|
|
|
Costs and expenses: |
|
|
|
|
Manufacture and supply |
2,757 |
|
|
|
3,659 |
|
|
|
Research and development |
3,659 |
|
|
|
4,354 |
|
|
|
Selling, general and administrative |
13,231 |
|
|
|
14,613 |
|
|
|
Total costs and expenses |
19,647 |
|
|
|
22,626 |
|
|
|
Loss from operations |
(8,525 |
) |
|
|
(13,861 |
) |
|
|
Other income/(expenses): |
|
|
|
|
Interest expense |
(2,761 |
) |
|
|
(2,771 |
) |
|
|
Interest expense related to the sale of future revenue, net |
(3,334 |
) |
|
|
— |
|
|
|
Interest income and other income (expense), net |
(52 |
) |
|
|
102 |
|
|
|
Net loss before income
taxes |
(14,672 |
) |
|
|
(16,530 |
) |
|
|
Income taxes |
— |
|
|
|
— |
|
|
|
Net loss |
$ |
(14,672 |
) |
|
|
$ |
(16,530 |
) |
|
|
Comprehensive loss |
$ |
(14,672 |
) |
|
|
$ |
(16,530 |
) |
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.41 |
) |
|
|
$ |
(0.49 |
) |
|
|
Weighted-average number of
common shares outstanding - basic and diluted |
35,563,275 |
|
|
|
33,569,694 |
|
|
|
AQUESTIVE THERAPEUTICS,
INC.Reconciliation of Non-GAAP Adjustments - Net
Loss to Adjusted EBITDA(In
Thousands)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
GAAP net loss |
$ |
(14,672 |
) |
|
$ |
(16,530 |
) |
|
Share-based Compensation Expense |
1,507 |
|
|
1,860 |
|
|
Interest expense |
2,761 |
|
|
2,771 |
|
|
Interest expense related to the sale of future revenue, net |
3,334 |
|
|
— |
|
|
Interest income and other income (expense), net |
52 |
|
|
(102 |
) |
|
Depreciation and Amortization |
755 |
|
|
766 |
|
|
Income Taxes |
— |
|
|
— |
|
|
Total non-GAAP
adjustments |
$ |
8,409 |
|
|
$ |
5,295 |
|
|
Adjusted EBITDA |
$ |
(6,263 |
) |
|
$ |
(11,235 |
) |
|
AQUESTIVE THERAPEUTICS,
INC.Reconciliation of Non-GAAP Adjustments - GAAP
Expenses to Adjusted Expenses(In
Thousands)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
Total costs and expenses |
$ |
19,647 |
|
|
$ |
22,626 |
|
|
Non-GAAP adjustments: |
|
|
|
|
Share-based compensation expense |
(1,507 |
) |
|
(1,860 |
) |
|
Depreciation and amortization |
(755 |
) |
|
(766 |
) |
|
Adjusted costs and
expenses |
$ |
17,385 |
|
|
$ |
20,000 |
|
|
AQUESTIVE THERAPEUTICS,
INC.Reconciliation of Non-GAAP Adjustments - GAAP
Manufacture & Supply Expense to Adjusted Manufacture and Supply
Expense(In Thousands, except
percentages)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
Manufacture and Supply
Expense |
$ |
2,757 |
|
|
$ |
3,659 |
|
|
Gross Margin on total revenue |
75 |
% |
|
58 |
% |
|
Non-GAAP adjustments: |
|
|
|
|
Share-based compensation expense |
(82 |
) |
|
(63 |
) |
|
Depreciation and amortization |
(585 |
) |
|
(627 |
) |
|
Adjusted manufacture and
supply expense |
$ |
2,090 |
|
|
$ |
2,969 |
|
|
Non-GAAP Gross Margin on total revenue |
81 |
% |
|
66 |
% |
|
AQUESTIVE THERAPEUTICS,
INC.Reconciliation of Non-GAAP Adjustments - GAAP
Research and Development Expense to Adjusted Research and
Development Expense(In
Thousands)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
Research and Development
Expense |
$ |
3,659 |
|
|
$ |
4,354 |
|
|
Non-GAAP adjustments: |
|
|
|
|
Share-based compensation expense |
(232 |
) |
|
(182 |
) |
|
Depreciation and amortization |
(57 |
) |
|
(60 |
) |
|
Adjusted research and
development expense |
$ |
3,370 |
|
|
$ |
4,112 |
|
|
AQUESTIVE THERAPEUTICS,
INC.Reconciliation of Non-GAAP Adjustments - GAAP
Selling, General and Administrative Expenses to Adjusted Selling,
General andAdministrative
Expenses(In
Thousands)(Unaudited)
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
Selling, General and
Administrative Expenses |
$ |
13,231 |
|
|
$ |
14,613 |
|
|
Non-GAAP adjustments: |
|
|
|
|
Share-based compensation expense |
(1,193 |
) |
|
(1,615 |
) |
|
Depreciation and amortization |
(113 |
) |
|
(79 |
) |
|
Adjusted selling, general and
administrative expenses |
$ |
11,925 |
|
|
$ |
12,919 |
|
|
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