KemPharm, Inc. (NASDAQ: KMPH), a specialty pharmaceutical company
focused on the discovery and development of proprietary prodrugs,
today reported its financial results for the second quarter ended
June 30, 2021.
“The second quarter of 2021 and recent weeks
continued what has been a period of unprecedented growth and
opportunity for KemPharm, highlighted by the U.S. commercial launch
of AZSTARYS,” said Travis C. Mickle, Ph.D., President and Chief
Executive Officer of KemPharm. “AZSTARYS, previously KP415, was
conceived based on the vision that our LAT® technology was
well-suited to developing a prodrug of d-methylphenidate (d-MPH)
that could address key patient and prescriber demands that were
underserved by ADHD products on the market at the time. Today that
vision is a reality, and as the commercial rollout of AZSTARYS by
Corium continues, ADHD patients and their caregivers will have the
opportunity to benefit from the unique attributes inherent only to
AZSTARYS. It is a truly exciting time for KemPharm and, we believe,
for the millions of patients seeking a better treatment option for
their ADHD symptoms.”
Dr. Mickle continued, “In addition to the
commercial launch of AZSTARYS, the second quarter was highlighted
by the classification of serdexmethylphenidate (SDX) as a Schedule
IV controlled substance by the Drug Enforcement Administration
(DEA). SDX comprises 70% of the active pharmaceutical ingredient
(API) in AZSTARYS, which is classified as a Schedule II controlled
substance. Importantly, the classification of SDX as a Schedule IV
controlled substance and the unique properties of SDX, we believe,
provide us the opportunity to develop an SDX-based product
candidate or candidates that could potentially address disease
indications for which no therapy currently exists. We have recently
initiated a clinical trial with SDX, and in the coming months we
expect to report clinical data together with an SDX development
plan. Based on the results of the clinical trial, this plan may
involve one or more potential product candidates that have the
potential to generate substantial near-term and longer-range value
for the Company.”
Q2 2021 Financial Results:
For Q2 2021, KemPharm reported revenue of $12.0
million, which was comprised of a $10.0 million milestone payment
earned upon the DEA scheduling of SDX, and service fee revenue of
$2.0 million, as compared to Q2 2020 revenue of $6.9 million, which
was derived primarily from a $5.0 million milestone payment earned
upon U.S. Food and Drug Administration (FDA) acceptance of the
AZSTARYS New Drug Application (NDA) and service fee revenue. The
service fee revenue is being earned under consulting arrangements
which contractually continue through March 2022.
KemPharm’s net income for Q2 2021 was $6.2
million, or $0.18 per basic share. Recognition of a non-cash deemed
dividend of $16.9 million related to the warrant exercise
inducement transaction in June 2021 led to a ($10.7) million net
loss attributable to common stockholders and diluted shares, or
($0.40) per basic share attributable to common stockholders and
diluted share for Q2 2021, compared to net income of $0.9 million,
or $0.21 per basic and diluted share for the same period in 2020.
Net income for Q2 2021 was driven primarily by operating income of
$5.8 million and a non-cash gain on extinguishment of debt of $0.8
million related to the forgiveness of the PPP loan, partially
offset by non-cash fair value adjustment loss of $0.4 million
related to derivative and warrant liability. The net operating
income of $5.8 million for Q2 2021 was a change of $3.2 million
compared to net operating income of $2.6 million in the same period
in 2020, which was primarily due to an increase in revenue of $5.1
million and a net increase in operating expenses of $1.8 million
period over period. The net increase in operating expenses was
primarily due to increases in research and development expense of
$0.9 million, general and administrative expenses of $0.6 million
and royalty and direct contract acquisition costs of $0.4
million.
As of June 30, 2021, total cash and cash
equivalents was $132.3 million, which was an increase of $56.4
million compared to March 31, 2021.
As of June 30, 2021, total shares of common
stock outstanding was 34,977,923 shares, and fully diluted common
shares outstanding was 46,546,998 shares, which included 4,584,889
shares issuable upon exercise of warrants. In addition, no
preferred stock is outstanding as of June 30, 2021.
Conference Call
Information:
KemPharm will host a conference call and live
audio webcast on Thursday, August 12, 2021, at 4:30 p.m. ET, to
discuss its corporate and financial results for Q2 2021.
Telephone Access: |
To access the conference call telephonically, interested
participants and investors are required to register via the
following online form:
http://www.directeventreg.com/registration/event/2069253 Once
registered, all individuals will be provided with participant
dial-in numbers, a passcode and a registrant ID, which can then be
used to access the conference call. Participants may register at
any time. It is recommended that the registration process be
completed at least 15 minutes prior to the start of the call. |
Webcast Access: |
The live audio webcast with slide presentation will be accessible
via the Investor Relations section of KemPharm’s
website, http://investors.kempharm.com/. An archive of the
webcast and presentation will be available for 90 days beginning at
approximately 5:30 p.m. ET, on August 12, 2021. |
About AZSTARYS™:
AZSTARYS is an FDA-approved, once-daily product
for the treatment of attention deficit hyperactivity disorder
(ADHD) in patients age six years or older. AZSTARYS consists of
SDX, KemPharm’s prodrug of d-methylphenidate (d-MPH), co-formulated
with immediate release d-MPH.
The complete approved prescribing information
for AZSTARYS may be downloaded in PDF format here:
https://kempharm.com/wp-content/uploads/2021/03/AZSTARYS-Master-Label-Final_20210302.pdf
About KemPharm:
KemPharm is a specialty pharmaceutical company
focused on the discovery and development of proprietary prodrugs to
treat serious medical conditions through its proprietary LAT®
(Ligand Activated Therapy) technology. KemPharm utilizes its
proprietary LAT® technology to generate improved prodrug versions
of FDA-approved drugs as well as to generate prodrug versions of
existing compounds that may have applications for new disease
indications. KemPharm’s prodrug product candidate pipeline is
focused on the high need areas of attention deficit hyperactivity
disorder, or ADHD, stimulant use disorder (SUD) and CNS rare
diseases, including idiopathic hypersomnia (IH). KemPharm’s lead
clinical development candidate for the treatment of SUD, KP879, is
based on its prodrug of d-methylphenidate, known as
serdexmethylphenidate (SDX). In addition, KemPharm has received FDA
approval for AZSTARYSTM, a new once-daily treatment for ADHD in
patents age six years and older, and for APADAZ®, an
immediate-release combination product containing benzhydrocodone, a
prodrug of hydrocodone, and acetaminophen. For more information on
KemPharm and its pipeline of prodrug product candidates visit
www.kempharm.com or connect with us on Twitter, LinkedIn, Facebook
and YouTube.
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. Forward-looking statements are not guarantees of
future actions or performance. These forward-looking statements,
including the potential benefits of AZSTARYS, and the potential
commercial success of AZSTARYS, 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. Risks concerning KemPharm’s
business are described in detail in KemPharm’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2021, and KemPharm’s
other filings 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 Contacts:
Jason Rando / Maureen McEnroeTiberend Strategic
Advisors, Inc.(212) 375-2665 /
2664jrando@tiberend.commmcenroe@tiberend.com
KEMPHARM, INC.UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS(in thousands,
except share and per share amounts)
|
|
Three months endedJune 30, |
|
|
Six months endedJune 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenue |
|
$ |
11,986 |
|
|
$ |
6,908 |
|
|
$ |
24,103 |
|
|
$ |
8,997 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty and direct contract acquisition costs |
|
|
1,000 |
|
|
|
642 |
|
|
|
2,000 |
|
|
|
1,305 |
|
Research and development |
|
|
2,848 |
|
|
|
1,954 |
|
|
|
5,113 |
|
|
|
4,080 |
|
General and administrative |
|
|
2,305 |
|
|
|
1,719 |
|
|
|
4,197 |
|
|
|
3,964 |
|
Severance expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
830 |
|
Total operating expenses |
|
|
6,153 |
|
|
|
4,315 |
|
|
|
11,310 |
|
|
|
10,179 |
|
Income (loss) from
operations |
|
|
5,833 |
|
|
|
2,593 |
|
|
|
12,793 |
|
|
|
(1,182 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on extinguishment
of debt |
|
|
789 |
|
|
|
— |
|
|
|
(16,096 |
) |
|
|
— |
|
Interest expense related to amortization of debt issuance costs and
discount |
|
|
— |
|
|
|
(574 |
) |
|
|
(150 |
) |
|
|
(1,145 |
) |
Interest expense on principal |
|
|
(16 |
) |
|
|
(1,197 |
) |
|
|
(215 |
) |
|
|
(2,457 |
) |
Fair value adjustment related to derivative and warrant
liability |
|
|
(394 |
) |
|
|
(3 |
) |
|
|
(424 |
) |
|
|
72 |
|
Interest and other (expense) income, net |
|
|
(9 |
) |
|
|
40 |
|
|
|
(1 |
) |
|
|
(183 |
) |
Total other income (expense) |
|
|
370 |
|
|
|
(1,734 |
) |
|
|
(16,886 |
) |
|
|
(3,713 |
) |
Income (loss) before income
taxes |
|
|
6,203 |
|
|
|
859 |
|
|
|
(4,093 |
) |
|
|
(4,895 |
) |
Income tax benefit
(expense) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) |
|
$ |
6,203 |
|
|
$ |
859 |
|
|
$ |
(4,093 |
) |
|
$ |
(4,895 |
) |
Deemed dividend |
|
|
(16,898 |
) |
|
|
— |
|
|
|
(54,342 |
) |
|
|
— |
|
Net (loss) income attributable
to common stockholders |
|
$ |
(10,695 |
) |
|
$ |
859 |
|
|
$ |
(58,435 |
) |
|
$ |
(4,895 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
0.18 |
|
|
$ |
0.21 |
|
|
$ |
(0.17 |
) |
|
$ |
(1.41 |
) |
Net income (loss) attributable to common stockholders |
|
$ |
(0.40 |
) |
|
$ |
0.21 |
|
|
$ |
(2.42 |
) |
|
$ |
(1.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders |
|
$ |
(0.40 |
) |
|
$ |
0.21 |
|
|
$ |
(2.42 |
) |
|
$ |
(1.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
29,174,565 |
|
|
|
3,947,656 |
|
|
|
24,187,484 |
|
|
|
3,476,107 |
|
Diluted |
|
|
29,174,565 |
|
|
|
3,947,728 |
|
|
|
24,187,484 |
|
|
|
3,476,107 |
|
KEMPHARM, INC.CONDENSED
BALANCE SHEETS(in thousands, except share and par
value amounts)
|
|
June 30, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
132,295 |
|
|
$ |
4,213 |
|
Accounts and other receivables |
|
|
1,888 |
|
|
|
2,579 |
|
Prepaid expenses and other current assets |
|
|
1,998 |
|
|
|
1,481 |
|
Restricted cash |
|
|
— |
|
|
|
109 |
|
Total current assets |
|
|
136,181 |
|
|
|
8,382 |
|
Property and equipment,
net |
|
|
992 |
|
|
|
1,039 |
|
Operating lease right-of-use
assets |
|
|
1,187 |
|
|
|
1,350 |
|
Other long-term assets |
|
|
437 |
|
|
|
438 |
|
Total assets |
|
$ |
138,797 |
|
|
$ |
11,209 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity (deficit) |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,973 |
|
|
$ |
6,647 |
|
Current portion of operating lease liabilities |
|
|
342 |
|
|
|
327 |
|
Current portion of loans payable |
|
|
— |
|
|
|
390 |
|
Other current liabilities |
|
|
2,644 |
|
|
|
172 |
|
Total current liabilities |
|
|
5,959 |
|
|
|
7,536 |
|
Convertible notes, less
current portion, net |
|
|
— |
|
|
|
67,658 |
|
Derivative and warrant
liability |
|
|
728 |
|
|
|
304 |
|
Operating lease liabilities,
less current portion |
|
|
1,413 |
|
|
|
1,587 |
|
Loans payable |
|
|
— |
|
|
|
391 |
|
Other long-term
liabilities |
|
|
34 |
|
|
|
145 |
|
Total liabilities |
|
|
8,134 |
|
|
|
77,621 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(Note D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
(deficit): |
|
|
|
|
|
|
|
|
Undesignated preferred stock, $0.0001 par value, 10,000,000
sharesauthorized, no shares issued or outstanding as of June 30,
2021 (unaudited);9,961,846 shares authorized, no shares issued or
outstanding as of December31, 2020 |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000,000 shares authorized,
34,977,923shares issued and outstanding as of June 30, 2021
(unaudited); 4,537,321 sharesissued and outstanding as of December
31, 2020 |
|
|
3 |
|
|
|
0 |
|
Additional paid-in capital |
|
|
393,227 |
|
|
|
192,062 |
|
Accumulated deficit |
|
|
(262,567 |
) |
|
|
(258,474 |
) |
Total stockholders' equity (deficit) |
|
|
130,663 |
|
|
|
(66,412 |
) |
Total liabilities and
stockholders' equity (deficit) |
|
$ |
138,797 |
|
|
$ |
11,209 |
|
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