-- Reports Neurology Franchise Annual Net Sales
of $110.3 million, at the High End of Guidance Range --
Assertio Therapeutics, Inc. (NASDAQ: ASRT) today reported financial
results for the fourth quarter and year ended December 31,
2018, and provided an update on its business performance and
strategic initiatives.
|
|
|
|
| Financial
Highlights:(unaudited) |
|
|
|
|
|
|
Fourth-Quarter 2018 |
Full-Year 2018 |
|
|
|
|
|
|
|
(in millions, except earnings per share) |
GAAP |
Non-GAAP (3) |
GAAP |
Non-GAAP (3) |
|
Total Revenues (1) (2) |
42.6 |
62.8 |
311.8 |
278.0 |
|
Net Income/(Loss) |
(24.1) |
23.1 |
36.9 |
93.2 |
|
Earnings/(Loss) Per Share |
$(0.38) |
$0.30 |
$0.57 |
$1.22 |
|
Adjusted EBITDA |
— |
41.0 |
— |
155.3 |
| (1) Fourth-quarter 2018
includes a $21.3 million adjustment reversal for the non-cash value
assigned to inventory transferred to Collegium. |
| (2) Full-year 2018 includes a
($25.2) million adjustment reversal for the non-cash value assigned
to inventory transferred to Collegium. |
| (3) All non-GAAP measures included in
this earnings news release are reconciled to the corresponding GAAP
measures in the schedules attached. |
| |
“Assertio’s 2018 financial performance met, or exceeded, our
goals for the full year,” said Arthur Higgins, President and CEO of
Assertio. “We delivered adjusted EBITDA at the high end of our
current guidance range, and ahead of our original target, as well
as neurology franchise sales at the high end of our current
guidance range. In addition, we made significant progress
throughout the year advancing our strategic, financial and
operational goals, including the NDA filing of our long-acting
cosyntropin. We look forward to another productive year ahead as we
continue the transformation of Assertio into a biopharma company
with sustainable growth and a promising pipeline."
Business Highlights:
- FDA Accepted Filing of 505(b)(2) NDA Filing for
Cosyntropin: On February 19, 2019, the Company received
notification of acceptance for filing from the U.S. Food and Drug
Administration for its 505(b)(2) New Drug Application for its
injectable formulation of long-acting cosyntropin (synthetic
adrenocorticotropic hormone, or ACTH). The Company, together with
its partner West Therapeutic Development, LLC, seeks approval for
the use of long-acting cosyntropin as a diagnostic drug in the
screening of patients presumed to have adrenocortical
insufficiency. The PDUFA date is October 19, 2019.
- Strong Cash Generation and Debt Reduction: In
2018, the Company secured $97.0 million in non-dilutive cash
through strategic transactions, of which approximately $65.0
million was received in 2018; the balance of $32 million was
received on January 30, 2019. These cash inflows, as well as the
Company’s own cash-flow generation, reduced total secured debt by
$82.5 million from $365.0 million as of December 31, 2017 to $282.5
million as of December 31, 2018. As of December 31, 2018, the
Company had cash and cash equivalents of $110.9 million.
- Amended Senior Secured Credit Facility: On
January 8, 2019, the Company amended its Senior Secured Credit
Facility, replacing the previous fixed adjusted EBITDA covenant
with a trailing 12-month debt-to-adjusted EBITDA ratio that
declines over time. The amendment gives the Company greater
flexibility to continue to pay down debt and invest in the core
business, including potential business development
transactions.
- Strengthened NUCYNTA Collaboration with Collegium
- Extends Minimum Term; Annual Royalty Payments Through
2021: On November 8, 2018, the Company announced an
amendment to the Commercialization Agreement with Collegium
Pharmaceutical, Inc. relating to the NUCYNTA® franchise. The
amendment strengthens the collaboration and further aligns the
parties’ mutual interest in growing the franchise. The amendment
secures a minimum term of the Commercialization Agreement through
at least December 31, 2021, prior to which Collegium may not
terminate.
- Completed Previously Announced Corporate Restructuring
and HQ Relocation: In 2018, the Company completed its
reincorporation from California to Delaware and changed its name
from “Depomed, Inc.” to “Assertio Therapeutics, Inc.” In connection
with the reincorporation and name change, the Company’s common
stock began trading under a new ticker symbol “ASRT” and a new
CUSIP number, 04545L 107, on August 15, 2018.On August 15, 2018,
the Company completed the relocation of its corporate headquarters
from Newark, CA, to Lake Forest, IL. The relocation is consistent
with the Company’s strategy to attract new pharmaceutical talent
based in the Chicagoland area.Additionally, the Company has sublet
the entirety of its Newark facility.
| |
|
|
|
| Revenue
Summary(in thousands, unaudited) |
|
|
|
| |
|
|
|
| |
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
| Product sales,
net: |
|
|
|
|
|
|
|
|
Gralise |
$ |
14,805 |
|
|
$ |
20,208 |
|
|
$ |
58,077 |
|
|
$ |
77,034 |
|
|
CAMBIA |
10,933 |
|
|
7,749 |
|
|
35,803 |
|
|
31,597 |
|
|
Zipsor |
3,212 |
|
|
4,415 |
|
|
16,387 |
|
|
16,700 |
|
| Total
neurology product sales, net |
28,950 |
|
|
32,372 |
|
|
110,267 |
|
|
125,331 |
|
| |
|
|
|
|
|
|
|
| Nucynta
products (1) |
162 |
|
|
60,018 |
|
|
18,944 |
|
|
239,539 |
|
| Lazanda
(2) |
227 |
|
|
1,770 |
|
|
755 |
|
|
15,010 |
|
| Total
product sales, net |
29,339 |
|
|
94,160 |
|
|
129,966 |
|
|
379,880 |
|
| |
|
|
|
|
|
|
|
| Commercialization
agreement: (3) |
|
|
|
|
|
|
|
|
Commercialization rights and facilitation services, net |
12,983 |
|
|
— |
|
|
100,038 |
|
|
— |
|
| Revenue
from transfer of inventory |
— |
|
|
— |
|
|
55,705 |
|
|
— |
|
| Royalties and milestone
revenue |
277 |
|
|
248 |
|
|
26,061 |
|
|
844 |
|
| |
|
|
|
|
|
|
|
| Total
revenues |
$ |
42,599 |
|
|
$ |
94,408 |
|
|
$ |
311,770 |
|
|
$ |
380,724 |
|
___________________
(1) The Company transitioned the commercial rights to sell
NUCYNTA to Collegium on January 9, 2018. NUCYNTA product sales
for the three months ended December 31, 2018 relate to sales
reserve estimate adjustments. NUCYNTA product sales for the twelve
months ended December 31, 2018 reflect the Company's sales of
NUCYNTA during a stub period between January 1st and
January 8th, and also includes a $12.5 million benefit related
to the release of sales reserves for which the Company is no longer
financially responsible.
(2) The Company divested Lazanda in November 2017.
Product sales for the three and twelve months ended
December 31, 2018 relate to sales reserve estimate
adjustments.
(3) The Commercialization Agreement revenues for the
twelve months ended December 31, 2018 includes $100.0 million
related to the commercialization rights and facilitation services
provided to Collegium and $55.7 million related to the fair value
of inventory transferred to Collegium. During the fourth quarter of
2018, the Company amended the Commercialization Agreement and
agreed upon a variable revenue stream to take the place of the
existing fixed revenue stream. As such, as of the date of the
amendment, on November 8, 2018, the Company ceased recognition of
fixed revenues and will begin recognition of variable revenues when
they become due beginning in January 2019. Cash collected
during the fourth quarter remained in-line with the
pre-modification agreement amount of $33.8 million.
2019 Financial GuidanceThe Company is providing
the following 2019 financial guidance:
| |
|
2019
Guidance |
|
| |
Neurology Franchise Net Sales |
Low-to Mid-Single Digit Growth |
|
|
|
GAAP Net (Loss)/Income(1) |
($71) to ($61) million |
|
| |
Non-GAAP Adjusted EBITDA(1) |
$115 to $125 million |
|
| |
(1) Guidance includes: (a) $2.8 million of
non-cash Collegium warrant-related income and excludes (b) any
future mark-to-market adjustments related to those warrants,
which cannot be estimated at this time. |
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| |
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|
Conference Call and WebcastAssertio will host a
conference call today, Wednesday, March 6, 2019 beginning at 4:30
p.m. ET to discuss its results. This event can be accessed in three
ways:
- From the Assertio website: http://investor.assertiotx.com.
Please access the website 15 minutes prior to the start of the
call to download and install any necessary audio software.
- By telephone: Participants can access the call by dialing (877)
550-3745 (United States) or (281) 973-6277 (International)
referencing Conference ID 3784827.
- By replay: A replay of the webcast will be located under the
Investor Relations section of Assertio's website approximately two
hours after the conclusion of the live call.
About Assertio Therapeutics, Inc.Assertio
Therapeutics is committed to providing responsible solutions to
advance patient care in the Company’s core areas of neurology,
orphan and specialty medicines. Assertio currently markets three
FDA-approved products and continues to identify, license and
develop new products that offer enhanced options for patients that
may be under served by existing therapies. To learn more about
Assertio, visit www.assertiotx.com.
“Safe Harbor” Statement under the Private Securities
Litigation Reform Act of 1995The statements that are not
historical facts contained in this release are forward-looking
statements that involve risks and uncertainties including, but not
limited to, the commercialization of Gralise, CAMBIA, and Zipsor,
royalties associated with Collegium’s commercialization of NUCYNTA
and NUCYNTA ER, regulatory approval and clinical development of
long-acting cosyntropin, loan agreements, including our senior
secured debt facility, Assertio’s financial outlook for 2019 and
expectations regarding financial results and potential business
opportunities and other risks detailed in the Company’s Securities
and Exchange Commission filings, including the Company’s most
recent Annual Report on Form 10-K and most recent Quarterly Report
on Form 10-Q. The inclusion of forward-looking statements should
not be regarded as a representation that any of the Company’s plans
or objectives will be achieved. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company undertakes no obligation to
publicly release the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Investor and Media Contact:John B. ThomasSenior
Vice President, Investor Relations and Corporate
Communicationsjthomas@assertiotx.com
Non-GAAP Financial MeasuresTo supplement the
Company’s financial results presented on a U.S. generally accepted
accounting principles (GAAP) basis, the Company has included
information about non-GAAP revenue, non-GAAP adjusted earnings,
non-GAAP adjusted diluted earnings per share, non-GAAP adjusted
EBITDA and other non-GAAP financial measures as useful operating
metrics. The Company believes that the presentation of these
non-GAAP financial measures, when viewed with results under GAAP
and the accompanying reconciliation, provides supplementary
information to analysts, investors, lenders, and the Company’s
management in assessing the Company’s performance and results from
period to period. The Company uses these non-GAAP measures
internally to understand, manage and evaluate the Company’s
performance, and in part, in the determination of bonuses for
executive officers and employees. These non-GAAP financial measures
should be considered in addition to, and not a substitute for, or
superior to, net income or other financial measures calculated in
accordance with GAAP. Non-GAAP financial measures used by us may be
calculated differently from, and therefore may not be comparable
to, non-GAAP measures used by other companies.
Specified ItemsNon-GAAP measures presented
within this release exclude specified items. The Company considers
specified Items to be significant income/expense items not
indicative of current operations, including the related tax effect.
Specified items include non-cash adjustment to Collegium agreement
revenue and cost of sales, release of NUCYNTA and Lazanda sales
reserves for products the Company is no longer selling, interest
income, interest expense, amortization, acquired in-process
research and development and non-cash adjustments related to
product acquisitions, stock-based compensation expense, non-cash
interest expense related to debt, depreciation, taxes, transaction
costs, CEO transition, restructuring costs, adjustments to net
sales related to reserves recorded prior to the Company’s exit of
opioid commercialization activities, legal costs and expenses
incurred in connection with opioid-related litigation,
investigations and regulations pertaining to the company’s
historical commercialization of opioid products, certain types of
legal settlements, disputes, fees and costs, and to adjust for the
tax effect related to each of the non-GAAP adjustments.
| |
|
|
|
| CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
amounts)(unaudited) |
| |
|
|
|
| |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
| |
(unaudited) |
|
(unaudited) |
| Revenues: |
|
|
|
|
|
|
|
| Product
sales, net |
$ |
29,339 |
|
|
$ |
94,160 |
|
|
$ |
129,966 |
|
|
$ |
379,880 |
|
|
Commercialization agreement, net |
12,983 |
|
|
— |
|
|
155,743 |
|
|
— |
|
| Royalties
and milestones |
277 |
|
|
248 |
|
|
26,061 |
|
|
844 |
|
| Total revenues |
42,599 |
|
|
94,408 |
|
|
311,770 |
|
|
380,724 |
|
| |
|
|
|
|
|
|
|
| Costs and expenses: |
|
|
|
|
|
|
|
| Cost of
sales (excluding amortization of intangible assets) |
704 |
|
|
17,704 |
|
|
18,476 |
|
|
72,598 |
|
| Research and
development expenses |
2,207 |
|
|
1,259 |
|
|
8,042 |
|
|
13,718 |
|
| Acquired
in-process research and development |
— |
|
|
24,900 |
|
|
— |
|
|
24,900 |
|
| Selling,
general and administrative expenses |
25,468 |
|
|
48,318 |
|
|
119,218 |
|
|
195,696 |
|
| Amortization
of intangible assets |
25,443 |
|
|
25,541 |
|
|
101,774 |
|
|
102,745 |
|
|
Restructuring charges |
1,859 |
|
|
9,372 |
|
|
20,601 |
|
|
13,247 |
|
| Total costs and
expenses |
55,681 |
|
|
127,094 |
|
|
268,111 |
|
|
422,904 |
|
| |
|
|
|
|
|
|
|
| Income/(loss) from
operations |
(13,082 |
) |
|
(32,685 |
) |
|
43,659 |
|
|
(42,180 |
) |
| Litigation settlement |
— |
|
|
— |
|
|
62,000 |
|
|
— |
|
| Gain on divestiture of
Lazanda |
— |
|
|
17,064 |
|
|
— |
|
|
17,064 |
|
| Interest and other
income |
224 |
|
|
77 |
|
|
1,197 |
|
|
681 |
|
| Loss on prepayment of
Senior Notes |
— |
|
|
(573 |
) |
|
— |
|
|
(5,938 |
) |
| Interest expense |
(16,613 |
) |
|
(17,857 |
) |
|
(68,881 |
) |
|
(73,552 |
) |
| Income tax (expense)
benefit |
5,333 |
|
|
870 |
|
|
(1,067 |
) |
|
1,429 |
|
| Net income/(loss) |
$ |
(24,138 |
) |
|
$ |
(33,104 |
) |
|
$ |
36,908 |
|
|
$ |
(102,496 |
) |
| |
|
|
|
|
|
|
|
| Basic net (loss) income
per share |
$ |
(0.38 |
) |
|
$ |
(0.52 |
) |
|
$ |
0.58 |
|
|
$ |
(1.63 |
) |
| Diluted net income (loss)
per share |
$ |
(0.38 |
) |
|
$ |
(0.52 |
) |
|
$ |
0.57 |
|
|
$ |
(1.63 |
) |
| Basic shares used in
calculation |
64,004 |
|
|
63,137 |
|
|
63,794 |
|
|
62,702 |
|
| Diluted shares used in
calculation |
64,004 |
|
|
63,137 |
|
|
64,208 |
|
|
62,702 |
|
| |
|
|
|
| CONSOLIDATED CONDENSED BALANCE
SHEETS(in
thousands)(unaudited) |
| |
|
|
|
| |
December 31,2018 |
|
December 31,2017 |
| |
|
|
|
| Cash, cash equivalents and
marketable securities |
$ |
110,949 |
|
|
$ |
128,089 |
|
| Accounts receivable,
net |
37,211 |
|
|
72,482 |
|
| Inventories |
3,396 |
|
|
13,042 |
|
| Property and equipment,
net |
13,064 |
|
|
13,024 |
|
| Intangible assets,
net |
692,099 |
|
|
793,873 |
|
| Investments |
11,784 |
|
|
— |
|
| Prepaid and other
assets |
64,363 |
|
|
18,107 |
|
| Total
assets |
$ |
932,866 |
|
|
$ |
1,038,617 |
|
| |
|
|
|
| Accounts payable |
$ |
6,138 |
|
|
$ |
14,732 |
|
| Income tax payable |
— |
|
|
126 |
|
| Interest payable |
11,645 |
|
|
13,220 |
|
| Accrued liabilities |
31,361 |
|
|
60,496 |
|
| Accrued rebates, returns
and discounts |
75,759 |
|
|
135,828 |
|
| Senior notes |
278,309 |
|
|
357,220 |
|
| Convertible notes |
287,798 |
|
|
269,510 |
|
| Contingent consideration
liability |
1,038 |
|
|
1,613 |
|
| Other liabilities |
20,483 |
|
|
16,364 |
|
| Shareholders’ equity |
220,335 |
|
|
169,508 |
|
| Total
liabilities and shareholders’ equity |
$ |
932,866 |
|
|
$ |
1,038,617 |
|
| |
|
|
|
| RECONCILIATION OF GAAP NET INCOME (LOSS) TO
NON-GAAP ADJUSTED EBITDA(in
thousands)(unaudited) |
| |
|
|
|
| |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
| |
(unaudited) |
|
(unaudited) |
| |
|
|
|
|
|
|
|
| GAAP net
income/(loss) |
$ |
(24,138 |
) |
|
$ |
(33,104 |
) |
|
$ |
36,908 |
|
|
$ |
(102,496 |
) |
|
Commercialization agreement revenues (1) |
21,262 |
|
|
— |
|
|
(25,164 |
) |
|
— |
|
|
Commercialization agreement cost of sales (2) |
— |
|
|
— |
|
|
6,200 |
|
|
— |
|
| Nucynta
sales reserve (3) |
— |
|
|
— |
|
|
(10,711 |
) |
|
— |
|
| Nucynta
and Lazanda revenue reserves (4) |
(1,024 |
) |
|
— |
|
|
(1,562 |
) |
|
— |
|
| Expenses
for opioid-related litigation, investigations and regulations
(5) |
3,537 |
|
|
— |
|
|
7,897 |
|
|
— |
|
| Intangible
amortization related to product acquisitions |
25,443 |
|
|
25,541 |
|
|
101,774 |
|
|
102,745 |
|
| Contingent
consideration related to product acquisitions |
143 |
|
|
(104 |
) |
|
(515 |
) |
|
(6,629 |
) |
| Stock-based
compensation |
2,549 |
|
|
3,095 |
|
|
10,439 |
|
|
12,965 |
|
| Purdue
litigation settlement |
— |
|
|
— |
|
|
(62,000 |
) |
|
— |
|
| Interest and
other income |
(224 |
) |
|
(77 |
) |
|
(1,197 |
) |
|
(410 |
) |
| Interest
expense |
16,613 |
|
|
18,361 |
|
|
68,881 |
|
|
78,190 |
|
|
Depreciation |
254 |
|
|
918 |
|
|
1,931 |
|
|
2,757 |
|
| Provision
for (benefit from) income taxes |
(5,333 |
) |
|
(870 |
) |
|
1,067 |
|
|
(1,429 |
) |
|
Restructuring and related costs (6) |
1,881 |
|
|
9,817 |
|
|
21,264 |
|
|
16,834 |
|
| Acquired in
process research and development |
— |
|
|
24,900 |
|
|
— |
|
|
24,900 |
|
| Gain on
divestiture of Lazanda |
— |
|
|
(17,064 |
) |
|
— |
|
|
(17,064 |
) |
| Managed
care dispute reserve |
— |
|
|
— |
|
|
— |
|
|
4,742 |
|
| Transaction
and other costs |
— |
|
|
1,435 |
|
|
123 |
|
|
1,435 |
|
| Non-GAAP adjusted
EBITDA |
$ |
40,963 |
|
|
$ |
32,848 |
|
|
$ |
155,335 |
|
|
$ |
116,540 |
|
___________________
(1) For the period from January 8, 2018 through November 8,
2018, the adjustment relates to the non-cash value assigned to
inventory transferred to Collegium. As of the date of the
amendment, on November 8, 2018, the Company ceased recognition of
fixed revenues and will begin recognition of variable revenues when
they become due beginning in January 2019. Cash collected
during the fourth quarter remained in-line with the
pre-modification agreement amount of $33.8 million. The adjustment
for the three months ended December 31, 2018 relates to the cash
received in excess of the GAAP revenue recognized. The
Company has consistently shown non-GAAP revenue for the
Commercialization Agreement on a cash basis.
(2) Represents the cash received for inventory transferred to
Collegium at the commencement of the Commercialization
Agreement.
(3) Represents a $12.5 million benefit related to the release of
sales reserves for which the Company is no longer financially
responsible, net of $1.8 million in royalties payable to a third
party.
(4) Removal of the impact of revenue adjustment estimates
related to products that we are no longer commercializing.
(5) Legal costs/expenses related to opioid-related litigation,
investigations and regulations pertaining to the Company’s
historical commercialization of opioid products.
(6) Restructuring and other costs represents non-recurring costs
associated with the Company’s restructuring, reincorporation,
headquarters relocation and CEO transition.
| |
|
|
|
| RECONCILIATION OF GAAP NET INCOME/(LOSS) TO
NON-GAAP ADJUSTED EARNINGS(in thousands, except per share
amounts)(unaudited) |
| |
|
|
|
| |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
| |
(unaudited) |
|
(unaudited) |
| |
|
|
|
|
|
|
|
| GAAP net
income/(loss) |
$ |
(24,138 |
) |
|
$ |
(33,104 |
) |
|
$ |
36,908 |
|
|
$ |
(102,496 |
) |
|
Commercialization agreement revenues (1) |
21,262 |
|
|
— |
|
|
(25,164 |
) |
|
— |
|
|
Commercialization agreement cost of sales (2) |
— |
|
|
— |
|
|
6,200 |
|
|
— |
|
| Nucynta
sales reserve (3) |
— |
|
|
— |
|
|
(10,711 |
) |
|
— |
|
| Nucynta
and Lazanda revenue reserves (4) |
(1,024 |
) |
|
— |
|
|
(1,562 |
) |
|
— |
|
| Expenses
for opioid-related litigation, investigations and regulations
(5) |
3,537 |
|
|
— |
|
|
7,897 |
|
|
— |
|
|
Intangible amortization related to product acquisitions |
25,443 |
|
|
25,541 |
|
|
101,774 |
|
|
102,745 |
|
|
Contingent consideration related to product acquisitions |
143 |
|
|
(104 |
) |
|
(515 |
) |
|
(6,629 |
) |
|
Stock-based compensation |
2,549 |
|
|
3,095 |
|
|
10,439 |
|
|
12,965 |
|
|
Restructuring and related costs (6) |
1,881 |
|
|
9,817 |
|
|
21,264 |
|
|
16,834 |
|
| Acquired
in process research and development |
— |
|
|
24,900 |
|
|
— |
|
|
24,900 |
|
| Gain on
divestiture of Lazanda |
— |
|
|
(17,064 |
) |
|
— |
|
|
(17,064 |
) |
| Purdue
litigation settlement |
— |
|
|
— |
|
|
(62,000 |
) |
|
— |
|
| Non-cash
interest expense on debt |
5,579 |
|
|
5,340 |
|
|
21,877 |
|
|
20,953 |
|
| Managed
care dispute reserve |
— |
|
|
— |
|
|
— |
|
|
4,742 |
|
| Valuation
allowance on deferred tax assets |
— |
|
|
11,017 |
|
|
— |
|
|
30,291 |
|
| Other
costs |
— |
|
|
— |
|
|
123 |
|
|
— |
|
| Income
tax effect of non-GAAP adjustments (7) |
(12,147 |
) |
|
(18,626 |
) |
|
(13,305 |
) |
|
(56,875 |
) |
| Non-GAAP adjusted
earnings |
$ |
23,085 |
|
|
$ |
10,813 |
|
|
$ |
93,225 |
|
|
$ |
30,366 |
|
| Add interest expense of
convertible debt, net of tax (8) |
1,704 |
|
|
1,348 |
|
|
6,814 |
|
|
5,390 |
|
| Numerator |
$ |
24,789 |
|
|
$ |
12,160 |
|
|
$ |
100,039 |
|
|
$ |
35,756 |
|
| Shares used in
calculation (8) |
81,935 |
|
|
81,360 |
|
|
82,139 |
|
|
81,619 |
|
| Non-GAAP adjusted
earnings per share |
$ |
0.30 |
|
|
$ |
0.15 |
|
|
$ |
1.22 |
|
|
$ |
0.44 |
|
___________________
(1) For the period from January 8, 2018 through November 8,
2018, the adjustment relates to the non-cash value assigned to
inventory transferred to Collegium. As of the date of the
amendment, on November 8, 2018, the Company ceased recognition of
fixed revenues and will begin recognition of variable revenues when
they become due beginning in January 2019. Cash collected
during the fourth quarter remained in-line with the
pre-modification agreement amount of $33.8 million. The adjustment
for the three months ended December 31, 2018 relates to the cash
received in excess of the GAAP revenue recognized. The
Company has consistently shown non-GAAP revenue for the
Commercialization Agreement on a cash basis.
(2) Represents the cash received for inventory transferred to
Collegium at the commencement of the Commercialization
Agreement.
(3) Represents a $12.5 million benefit related to the
release of sales reserves for which the Company is no longer
financially responsible, net of $1.8 million in royalties payable
to a third party.
(4) Removal of the impact of revenue adjustment estimates
related to products that we are no longer commercializing.
(5) Legal costs/expenses related to opioid-related
litigation, investigations and regulations pertaining to the
Company’s historical commercialization of opioid products.
(6) Restructuring and other costs represents non-recurring costs
associated with the Company’s restructuring, reincorporation,
headquarters relocation and CEO transition.
(7) Calculated by taking the pre-tax non-GAAP adjustments
and applying the statutory tax rate.
(8) The Company uses the if-converted method to compute
diluted earnings per share with respect to its convertible
debt.
| |
|
|
|
| RECONCILIATION OF GAAP NET INCOME (LOSS) PER
SHARE TONON-GAAP ADJUSTED EARNINGS PER
SHARE(unaudited) |
| |
|
|
|
| |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
| GAAP net income/(loss)
per share |
(0.38 |
) |
|
(0.52 |
) |
|
0.57 |
|
|
(1.63 |
) |
|
Conversion from basic shares to diluted shares |
0.09 |
|
|
0.12 |
|
|
(0.13 |
) |
|
0.38 |
|
|
Commercialization agreement revenues |
0.26 |
|
|
— |
|
|
(0.30 |
) |
|
— |
|
|
Commercialization agreement cost of sales |
— |
|
|
— |
|
|
0.08 |
|
|
— |
|
| Nucynta
sales reserve |
— |
|
|
— |
|
|
(0.13 |
) |
|
— |
|
| Non-cash
interest expense on debt |
0.07 |
|
|
0.07 |
|
|
0.27 |
|
|
0.26 |
|
| Nucynta
and Lazanda revenue reserves |
— |
|
|
— |
|
|
(0.01 |
) |
|
— |
|
| Managed
care dispute reserve |
— |
|
|
— |
|
|
— |
|
|
0.06 |
|
| Expenses
for opioid-related litigation, investigations and regulations |
0.04 |
|
|
— |
|
|
0.09 |
|
|
— |
|
| Purdue
litigation settlement |
— |
|
|
— |
|
|
(0.75 |
) |
|
— |
|
|
Intangible amortization related to product acquisitions |
0.31 |
|
|
0.31 |
|
|
1.23 |
|
|
1.25 |
|
|
Contingent consideration related to product acquisitions |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
(0.08 |
) |
| Stock
based compensation |
0.03 |
|
|
0.04 |
|
|
0.13 |
|
|
0.16 |
|
|
Restructuring and related costs |
0.03 |
|
|
0.12 |
|
|
0.26 |
|
|
0.21 |
|
| Acquired
in process research and development |
— |
|
|
0.30 |
|
|
— |
|
|
0.30 |
|
| Gain on
divestiture of Lazanda |
— |
|
|
(0.21 |
) |
|
— |
|
|
(0.21 |
) |
| Valuation
allowance on deferred tax assets |
— |
|
|
0.14 |
|
|
— |
|
|
0.37 |
|
| Income
tax effect of non-GAAP adjustments |
(0.16 |
) |
|
(0.23 |
) |
|
(0.16 |
) |
|
(0.70 |
) |
| Add
interest expense of convertible debt, net of tax |
0.02 |
|
|
0.02 |
|
|
0.08 |
|
|
0.07 |
|
| Non-GAAP adjusted
diluted earnings per share |
0.30 |
|
|
0.15 |
|
|
1.22 |
|
|
0.44 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP
ADJUSTED INFORMATIONFor the three months ended
December 31, 2018(in
thousands)(unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Commercializationagreement
revenues |
|
Product Sales |
|
Royalties andmilestones |
|
Total Revenue |
|
Cost of sales |
|
Research anddevelopmentexpense |
|
Selling, general
andadministrativeexpense |
| GAAP as reported |
|
$ |
12,983 |
|
|
$ |
29,339 |
|
|
$ |
277 |
|
|
$ |
42,599 |
|
|
$ |
704 |
|
|
$ |
2,207 |
|
|
$ |
25,468 |
|
| Commercialization
agreement revenues and cost of sales |
|
21,262 |
|
|
— |
|
|
— |
|
|
21,262 |
|
|
— |
|
|
— |
|
|
— |
|
| Nucynta sales
reserve |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Third party
royalties |
|
(82 |
) |
|
— |
|
|
— |
|
|
(82 |
) |
|
82 |
|
|
— |
|
|
— |
|
| Nucynta and Lazanda
revenue reserves |
|
— |
|
|
(1,024 |
) |
|
— |
|
|
(1,024 |
) |
|
— |
|
|
— |
|
|
— |
|
| Expenses for
opioid-related litigation, investigations and regulations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,537 |
) |
| Contingent
consideration related to product acquisitions |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(143 |
) |
| Stock based
compensation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(109 |
) |
|
(2,440 |
) |
| Restructuring and other
costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(22 |
) |
| Non-GAAP adjusted
EBITDA |
|
$ |
34,163 |
|
|
$ |
28,315 |
|
|
$ |
277 |
|
|
$ |
62,755 |
|
|
$ |
786 |
|
|
$ |
2,098 |
|
|
$ |
19,326 |
|
For non-GAAP adjusted EBITDA purposes, the company adjusts the
full costs of restructuring, amortization of intangible assets,
interest expense and taxes.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP
ADJUSTED INFORMATIONFor the twelve months ended
December 31, 2018(in
thousands)(unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Commercializationagreement
revenues |
|
Product Sales |
|
Royalties andmilestones |
|
Total Revenue |
|
Cost of sales |
|
Research anddevelopmentexpense |
|
Selling, general
andadministrativeexpense |
| GAAP as reported |
|
$ |
155,743 |
|
|
$ |
129,966 |
|
|
$ |
26,061 |
|
|
$ |
311,770 |
|
|
$ |
18,476 |
|
|
$ |
8,042 |
|
|
$ |
119,218 |
|
| Commercialization
agreement revenues and cost of sales |
|
(25,164 |
) |
|
— |
|
|
— |
|
|
(25,164 |
) |
|
— |
|
|
— |
|
|
— |
|
| Nucynta sales
reserve |
|
— |
|
|
(10,711 |
) |
|
— |
|
|
(10,711 |
) |
|
— |
|
|
— |
|
|
— |
|
| Third party
royalties |
|
3,659 |
|
|
— |
|
|
— |
|
|
3,659 |
|
|
(3,659 |
) |
|
— |
|
|
— |
|
| Nucynta and Lazanda
revenue reserves |
|
— |
|
|
(1,562 |
) |
|
— |
|
|
(1,562 |
) |
|
— |
|
|
— |
|
|
— |
|
| Expenses for
opioid-related litigation, investigations and regulations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,897 |
) |
| Contingent
consideration related to product acquisitions |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
515 |
|
| Stock based
compensation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(30 |
) |
|
(446 |
) |
|
(9,963 |
) |
| Restructuring and other
costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(661 |
) |
| Other costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(123 |
) |
| Non-GAAP adjusted
EBITDA |
|
$ |
134,238 |
|
|
$ |
117,693 |
|
|
$ |
26,061 |
|
|
$ |
277,992 |
|
|
$ |
14,787 |
|
|
$ |
7,596 |
|
|
$ |
101,089 |
|
For non-GAAP adjusted EBITDA purposes, the company adjusts the
full costs of restructuring, amortization of intangible assets,
interest expense and taxes.
| |
|
|
| |
|
|
| FULL-YEAR 2019 NON-GAAP GUIDANCE
RECONCILIATION(in
millions)(unaudited) |
| |
|
|
|
|
|
|
|
|
|
| |
|
Earnings(1) |
|
| |
|
Low End |
|
High End |
|
| |
GAAP |
($71 |
) |
|
($61 |
) |
|
| |
Specified
Items(2) |
$ |
186 |
|
|
$ |
186 |
|
|
| |
Non-GAAP |
$ |
115 |
|
|
$ |
125 |
|
|
___________________
(1) GAAP net income guidance refers to GAAP net income and
non-GAAP earnings guidance refers to non-GAAP adjusted EBITDA.
(2) For purposes of this forward-looking reconciliation, a
description of the categories of specified items included in this
reconciliation are detailed in the tables above.
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