LEAWOOD, Kan., Nov. 1, 2018 /PRNewswire/ -- Aratana
Therapeutics, Inc. (Nasdaq: PETX), a pet therapeutics company
focused on the licensing, development and commercialization of
innovative therapeutics for dogs and cats, announced its third
quarter 2018 financial results. For the third quarter ended
September 30, 2018, Aratana reported
total net revenues of $21.6 million
and net income of $8.8 million or
$0.19 diluted earnings per share. The
net revenues for the quarter included a $15.0 million commercial milestone, which
resulted in profitability for the quarter.
"It's evident there is significant enthusiasm among our
customers in the pet therapeutics segment of the animal health
industry. We believe a majority of U.S. veterinary clinics have
already purchased two or more of our therapeutics," stated
Steven St. Peter, M.D., President
and Chief Executive Officer of Aratana Therapeutics. "We are
especially pleased with the strong performance of Galliprant, which
in addition to gaining market share, also earned Aratana its first
commercial milestone."
Business Updates
- Aratana recorded ENTYCE® (capromorelin oral
solution) net product sales of $1.3
million in the third quarter of 2018. While ENTYCE net
product sales to distributors remained consistent with net product
sales generated in the prior quarter, in target accounts served by
Aratana's sales team, purchases have increased sequentially
quarter-over-quarter. Approximately half of the approximately
25,000 veterinary clinics in the United
States have ordered ENTYCE, an appetite stimulant for dogs,
although nearly half of net product sales are from the clinics
where Aratana's sales team has had direct interactions. The Company
plans to continue its efforts to build the inappetence market
through education and extending duration of ENTYCE therapy.
- In the third quarter of 2018, the Company reported $1.9 million of NOCITA® (bupivacaine
liposome injectable suspension) net product sales compared to
$0.7 million in the third quarter of
2017. NOCITA provides local post-operative analgesia for certain
canine and feline surgeries and continues to show sequential growth
primarily due to strong re-order rates. Aratana believes the
sequential growth is also correlated to strong brand awareness and
satisfaction among surgeons.
- In August 2018, the Company
received FDA approval expanding the NOCITA label as a peripheral
nerve block to provide regional post-operative analgesia following
onychectomy in cats. Results from a study in client-owned cats
showed NOCITA demonstrated a statistically significant improvement
in pain evaluation success rates and was well-tolerated. NOCITA is
currently available in a 20 mL vial size and Aratana anticipates
commencing the regulatory process to add a 10 mL vial size. If
approved, the 10 mL vial size could be available to veterinarians
in the fall of 2019.
- Aratana recorded $18.4 million in
licensing and collaboration revenue in the third quarter of 2018
for GALLIPRANT® (grapiprant tablets) from Elanco Animal
Health, Inc., which included a $15.0
million commercial milestone for GALLIPRANT net product
sales exceeding $35.0 million.
Licensing and collaboration revenue also included $3.4 million of revenue generated from Elanco's
net product sales of GALLIPRANT of approximately $18.0 million. During the third quarter of 2018,
Elanco introduced re-supply of the 100mg SKUs. According to
third-party market research conducted through August 2018, GALLIPRANT continues to grow market
share in a competitive category and is the leading branded NSAID
prescribed by veterinarians. Under the collaboration agreement with
Elanco, the Company is entitled to two additional payments totaling
up to $60 million upon the
achievement of certain sales milestones.
- In August 2018, Aratana submitted
the Target Animal Safety technical section to the FDA's Center for
Veterinary Medicine for AT-002 (capromorelin) for cats. Target
enrollment for the pivotal field effectiveness study evaluating the
therapeutic candidate for weight management in cats with chronic
kidney disease is anticipated to be completed in mid-2019. Aratana
anticipates submitting the technical section for chemistry,
manufacturing and controls (CMC) in 2018.
Financial Results
The Company recorded net income of
$8.8 million for the third quarter of
2018 or $0.19 diluted earnings per
share compared to a net loss of $8.9
million or $0.21 diluted net
loss per share for the corresponding quarter of 2017. Aratana
reported $21.6 million in net
revenues for the quarter ended September 30,
2018 compared to $6.2 million
in net revenues in the third quarter of 2017. In the third quarter
of 2018, net revenues included a $15.0
million one-time GALLIPRANT commercial milestone;
$3.4 million in licensing and
collaboration revenue for net product sales of GALLIPRANT by
Elanco; $1.9 million in net product
sales of NOCITA; and $1.3 million in
net product sales of ENTYCE. In comparison, in the third quarter of
2017, the Company recognized $3.2
million in product sales of GALLIPRANT related to the sale
of finished goods to Elanco; $1.2
million in GALLIPRANT licensing and collaboration revenue; a
one-time payment of $1.0 million for
the manufacturing transfer of GALLIPRANT to Elanco; and
$0.7 million in net product sales of
NOCITA.
The cost of product sales totaled $2.2
million in the third quarter of 2018 compared to
$3.7 million in the corresponding
period in 2017. The decrease year-over-year in cost of product
sales was primarily due to Elanco assuming responsibility for
GALLIPRANT manufacturing.
Research and development expenses totaled $1.5 million in the third quarter of 2018
compared to $3.2 million for the
corresponding period in 2017. The decrease in research and
development expenses was primarily due to fewer on-going pivotal
studies compared to the corresponding period in 2017.
Selling, general and administrative expenses totaled
$7.0 million for the third quarter
ended September 30, 2018 compared to
$6.9 million for the same period in
2017.
As of September 30, 2018, Aratana
had approximately $56.4 million in
cash, cash equivalents, restricted cash and short-term investments,
which includes net proceeds in the third quarter from its
at-the-market sales agreement of approximately $4.9 million. The one-time $15.0 million GALLIPRANT commercial milestone
earned from Elanco is expected to be paid to Aratana in the fourth
quarter of 2018. The Company continues to make its scheduled
principal debt payments, which are approximately $5.3 million for the remainder of 2018.
Webcast & Conference Call Details
The Company will
host a live conference call on Friday,
November 2, 2018 at 8:30 a.m.
ET to discuss financial results from the third quarter ended
September 30, 2018.
Interested participants and investors may access the audio
webcast or use the conference call dial-in:
1 (866) 364-3820 (U.S.)
1 (855) 669-9657 (Canada)
1 (412) 902-4210 (International)
A replay of the third quarter 2018 results teleconference will
be available the same day of the event by approximately
11 a.m. ET and an audio webcast will
be accessible for 90 days in the Aratana Investor Room. For a
replay of the call, use the below dial-in and conference ID
10125816:
1 (877) 344-7529 (U.S.)
1 (855) 669-9658 (Canada)
1 (412) 317-0088 (International)
Aratana anticipates its cash, cash equivalents, restricted cash
and short-term investments to be approximately $60.0 million at 2018 year-end.
About Aratana Therapeutics
Aratana Therapeutics is a
pet therapeutics company focused on licensing, developing and
commercializing innovative therapeutics for dogs and cats. As a
pioneer in pet therapeutics, Aratana's mission is to deliver safe
and effective therapeutics that elevate the standard of care in
veterinary medicine. We work with companion animal veterinarians to
bring new therapeutics to market that support the needs of pets and
their owners. For more information, please visit
www.aratana.com.
IMPORTANT SAFETY INFORMATION
GALLIPRANT®
(grapiprant tablets) is not for use in humans. For use in dogs
only. Keep this and all medications out of reach of children and
pets. Store out of reach of dogs and other pets in a secured
location in order to prevent accidental ingestion or overdose. Do
not use in dogs that have a hypersensitivity to grapiprant. If
Galliprant is used long term, appropriate monitoring is
recommended. Concomitant use of Galliprant with other
anti-inflammatory drugs, such as COX-inhibiting NSAIDs or
corticosteroids, should be avoided. Concurrent use with other
anti-inflammatory drugs or protein-bound drugs has not been
studied. The safe use of Galliprant has not been evaluated in dogs
younger than 9 months of age and less than 8 lbs (3.6 kg), dogs
used for breeding, pregnant or lactating dogs, or dogs with cardiac
disease. The most common adverse reactions were vomiting, diarrhea,
decreased appetite, and lethargy. Please see full product label or
call 1-888-545-5973 for full prescribing information.
ENTYCE® (capromorelin oral solution) is for use in
dogs only. Do not use in breeding, pregnant or lactating dogs. Use
with caution in dogs with hepatic dysfunction or renal
insufficiency. Adverse reactions in dogs may include diarrhea,
vomiting, polydipsia, and hypersalivation. Should not be used in
dogs that have a hypersensitivity to capromorelin. Please see the
full Prescribing Information for more detail.
NOCITA® (bupivacaine liposome injectable suspension)
is for local infiltration injection in dogs only. Do not use in
dogs younger than 5 months of age, dogs that are pregnant,
lactating or intended for breeding. Do not administer by
intravenous or intra‐arterial injection. Adverse reactions in dogs
may include discharge from incision, incisional inflammation and
vomiting. Avoid concurrent use with bupivacaine HCl, lidocaine or
other amide local anesthetics. Please see the full Prescribing
Information for more detail.
NOCITA® (bupivacaine liposome injectable
suspension) is for use as a peripheral nerve block in cats only. Do
not use in cats younger than 5 months of age, that are pregnant,
lactating, or intended for breeding. Do not administer by
intravenous or intra‐arterial injection. Adverse reactions in cats
may include elevated body temperature, infection or chewing/licking
at the surgical site. Avoid concurrent use with bupivacaine HCl,
lidocaine or other amide local anesthetics. Please see the
full Prescribing Information for more detail.
Forward-Looking Statements Disclaimer
This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All
statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking
statements, including without limitation statements with respect to
anticipated financial performance; the expected timing of payment
of the $15.0 million commercial
milestone earned in the third quarter of 2018; potential future
milestone payments; our anticipated use of cash in the remainder of
2018; our ability to bring innovative therapeutics to the market;
steps necessary for and timing of regulatory submissions and
approvals of therapeutic candidates; study, development and
commercialization of therapeutics or therapeutic candidates; timing
of anticipated study results; increased market recognition of and
demand for our therapeutics; efforts to build the inappetence
market; potential use and timing of availability of the 10 mL vial
size of NOCITA; and statements regarding the Company's efforts,
plans and opportunities, including, without limitation, advancing
our therapeutic candidates and offering safe and effective
therapeutics that elevate the standard of care in veterinary
medicine.
These forward-looking statements are based on management's
current expectations. These statements are neither promises nor
guarantees, but involve known and unknown risks, uncertainties and
other important factors that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements, including, but not limited to, the
following: our history of operating losses and our expectation that
we will continue to incur losses for the foreseeable future;
failure to obtain sufficient capital to fund our operations; risks
relating to the impairment of intangible assets; risks pertaining
to stockholder class action lawsuits; unstable market and economic
conditions; restrictions on our financial flexibility due to the
terms of our credit facility; our substantial dependence upon the
commercial success of our therapeutics; development of our biologic
therapeutic candidates is dependent upon relatively novel
technologies and uncertain regulatory pathways, and biologics may
not be commercially viable; denial or delay of regulatory approval
for our existing or future therapeutic candidates; failure of our
therapeutic candidates that receive regulatory approval to achieve
market acceptance or achieve commercial success; product liability
lawsuits that could cause us to incur substantial liabilities and
limit commercialization of current and future therapeutics; failure
to realize anticipated benefits of our acquisitions and
difficulties associated with integrating the acquired businesses;
development of pet therapeutics is a lengthy and expensive process
with an uncertain outcome; competition in the pet therapeutics
market, including from generic alternatives to our therapeutic
candidates, and failure to compete effectively; failure to
identify, license or acquire, develop and commercialize additional
therapeutic candidates; failure to attract and retain senior
management and key scientific personnel; our reliance on
third-party manufacturers, suppliers and partners; regulatory
restrictions on the marketing of our approved therapeutics and
therapeutic candidates; our small commercial sales organization,
and any failure to create a sales force or collaborate with
third-parties to commercialize our approved therapeutics and
therapeutic candidates; difficulties in managing the growth of our
company; significant costs of being a public company; risks related
to the effectiveness of our internal controls; changes in
distribution channels for pet therapeutics; consolidation of our
veterinarian customers; limitations on our ability to use our net
operating loss carryforwards; the impact of tax reform legislation;
impacts of generic products; safety or efficacy concerns with
respect to our therapeutic candidates; effects of system failures
or security breaches; delay or termination of the development of
grapiprant therapeutic candidates and commercialization of
grapiprant products that may arise from termination of or failure
to perform under the collaboration agreement and/or the
co-promotion agreement with Elanco; failure to obtain ownership of
issued patents covering our therapeutic candidates or failure to
prosecute or enforce licensed patents; failure to comply with our
obligations under our license agreements; effects of patent or
other intellectual property lawsuits; failure to protect our
intellectual property; changing patent laws and regulations;
non-compliance with any legal or regulatory requirements;
litigation resulting from the misuse of our confidential
information; the uncertainty of the regulatory approval process and
the costs associated with government regulation of our therapeutic
candidates; failure to obtain regulatory approvals in foreign
jurisdictions; effects of legislative or regulatory reform with
respect to pet therapeutics; the volatility of the price of our
common stock; our status as an emerging growth company, which could
make our common stock less attractive to investors; dilution of our
common stock as a result of future financings; the influence of
certain significant stockholders over our business; and provisions
in our charter documents and under Delaware law could delay or prevent a change
in control. These and other important factors discussed under the
caption "Risk Factors" in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission, or SEC, on
March 14, 2018, along with our other
reports filed with the SEC could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. Any such forward-looking statements
represent management's estimates as of the date of this press
release. While we may elect to update such forward-looking
statements at some point in the future, we disclaim any obligation
to do so, even if subsequent events cause our views to change,
except as required under applicable law. These forward-looking
statements should not be relied upon as representing our views as
of any date subsequent to the date of this press release.
Contacts
For investor inquires:
Craig Tooman
ctooman@aratana.com
(913) 353-1026
For media inquiries:
Rachel
Reiff
rreiff@aratana.com
(913) 353-1050
ARATANA
THERAPEUTICS, INC.
Consolidated
Statements of Operations (Unaudited)
(Amounts in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing and
collaboration revenue
|
|
$
|
18,385
|
|
$
|
2,192
|
|
$
|
21,982
|
|
$
|
3,899
|
Product
sales
|
|
|
3,170
|
|
|
3,971
|
|
|
8,524
|
|
|
11,217
|
Total
revenues
|
|
|
21,555
|
|
|
6,163
|
|
|
30,506
|
|
|
15,116
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
|
2,172
|
|
|
3,690
|
|
|
4,013
|
|
|
10,475
|
Royalty
expense
|
|
|
1,346
|
|
|
441
|
|
|
3,067
|
|
|
1,117
|
Research and
development
|
|
|
1,507
|
|
|
3,220
|
|
|
5,288
|
|
|
11,574
|
Selling, general and
administrative
|
|
|
7,010
|
|
|
6,910
|
|
|
21,418
|
|
|
21,323
|
Amortization of
intangible assets
|
|
|
129
|
|
|
85
|
|
|
388
|
|
|
235
|
In-process research and
development
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
Total costs and
expenses
|
|
|
12,164
|
|
|
14,346
|
|
|
34,674
|
|
|
44,724
|
Income (loss) from
operations
|
|
|
9,391
|
|
|
(8,183)
|
|
|
(4,168)
|
|
|
(29,608)
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
159
|
|
|
138
|
|
|
441
|
|
|
311
|
Interest
expense
|
|
|
(716)
|
|
|
(870)
|
|
|
(2,357)
|
|
|
(2,601)
|
Other expense,
net
|
|
|
(1)
|
|
|
(5)
|
|
|
(4)
|
|
|
(14)
|
Total other
expense
|
|
|
(558)
|
|
|
(737)
|
|
|
(1,920)
|
|
|
(2,304)
|
Net income
(loss)
|
|
$
|
8,833
|
|
$
|
(8,920)
|
|
$
|
(6,088)
|
|
$
|
(31,912)
|
Net income (loss) per
share, basic and diluted
|
|
$
|
0.19
|
|
$
|
(0.21)
|
|
$
|
(0.13)
|
|
$
|
(0.80)
|
Weighted average
shares outstanding, basic
|
|
|
47,310,408
|
|
|
42,445,553
|
|
|
46,128,197
|
|
|
39,820,573
|
Weighted average
shares outstanding, diluted
|
|
|
47,485,384
|
|
|
42,445,553
|
|
|
46,128,197
|
|
|
39,820,573
|
ARATANA
THERAPEUTICS, INC.
Consolidated
Balance Sheets (Unaudited)
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash, cash equivalents
and short-term investments
|
|
$
|
56,021
|
|
$
|
67,615
|
Accounts receivable,
net and prepaid expenses and other current assets
|
|
|
21,315
|
|
|
4,048
|
Inventories
|
|
|
13,732
|
|
|
13,576
|
Total current
assets
|
|
|
91,068
|
|
|
85,239
|
Property and
equipment, net
|
|
|
811
|
|
|
1,166
|
Goodwill
|
|
|
40,846
|
|
|
41,295
|
Intangible assets,
net
|
|
|
6,228
|
|
|
6,616
|
Restricted
cash
|
|
|
351
|
|
|
350
|
Other long-term
assets
|
|
|
499
|
|
|
526
|
Total
assets
|
|
$
|
139,803
|
|
$
|
135,192
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
$
|
5,905
|
|
$
|
11,163
|
Licensing and
collaboration commitment
|
|
|
200
|
|
|
7,000
|
Current portion –
loans payable
|
|
|
22,583
|
|
|
17,333
|
Total current
liabilities
|
|
|
28,688
|
|
|
35,496
|
Loans payable,
net
|
|
|
2,660
|
|
|
19,492
|
Other long-term
liabilities
|
|
|
60
|
|
|
70
|
Total
liabilities
|
|
|
31,408
|
|
|
55,058
|
Total stockholders'
equity
|
|
|
108,395
|
|
|
80,134
|
Total liabilities and
stockholders' equity
|
|
$
|
139,803
|
|
$
|
135,192
|
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SOURCE Aratana Therapeutics