Novelion Therapeutics Inc. (NASDAQ: NVLN), a biopharmaceutical
company dedicated to developing and commercializing therapies for
individuals living with rare diseases (“Novelion” or the
“Company”), today reported financial results for the third quarter
and nine months ended September 30, 2018. In a separate press
release on November 8, 2018, Novelion announced a comprehensive
business update.
Novelion’s Chief Financial Officer Michael Price
commented, “In the third quarter we saw a positive impact from the
cost reduction initiatives that we implemented throughout 2018,
reflecting significant improvements in our operating expenses and
bottom line, with GAAP net loss improving by approximately 50% and
non-GAAP net loss improving by approximately 79% when compared to
the same period in 2017. Additionally, we are pleased that our
operating subsidiary, Aegerion Pharmaceuticals, Inc. (“Aegerion”),
was able to secure the bridge financing that we announced
yesterday, which we believe positions Aegerion to achieve a more
comprehensive capital restructuring - our primary near-term
goal.”
Third Quarter 2018 Financial
Results
JUXTAPID®: Novelion reported
net revenues of JUXTAPID of $14.3 million in the third quarter of
2018, $8.1 million, or 57%, of which were from prescriptions
written in the U.S. and $0.6 million of which was royalty revenue
from sales of JUXTAPID in the EMEA region.
MYALEPT®: Novelion reported net
revenues of MYALEPT of $16.1 million in the third quarter of 2018,
$12.3 million, or 76%, of which were from prescriptions written in
the U.S.
GAAP total net revenues for the third quarter of
2018 were $30.3 million compared to $28.7 million for the same
period of 2017. Revenue growth in Japan, Brazil and other foreign
markets as well as growth of U.S. MYALEPT sales offset the decline
of JUXTAPID sales in the U.S.
GAAP net revenues for JUXTAPID in the third
quarter of 2018 were $14.3 million compared to $15.2 million for
the same period in 2017.
GAAP net revenues for MYALEPT in the third
quarter of 2018 were $16.1 million compared to $13.5 million for
the same period in 2017. MYALEPT revenue growth in the third
quarter was driven by increased sales in all key markets.
GAAP total operating expenses for the third
quarter of 2018 were $29.5 million compared to total operating
expenses of $38.6 million, a 23% reduction compared to the same
period in 2017. GAAP SG&A expenses were $18.3 million in the
third quarter of 2018 compared to $21.4 million for the same period
in 2017. GAAP R&D expenses were $9.0 million in the third
quarter of 2018 compared to $17.1 million for the same period in
2017. Restructuring charges for the third quarter of 2018 were $2.2
million compared to $0.1 million in the same period of 2017.
On a pro forma basis, during the third quarter
of 2018, SG&A expenses were $16.2 million compared to $20.2
million for the same period in 2017. The 20% decrease in pro forma
SG&A expenses in the third quarter of 2018 compared with the
same period in 2017 was primarily related to cost reduction
programs initiated throughout 2018.
On a pro forma basis, during the third quarter
of 2018, R&D expenses decreased 47% to $8.9 million compared to
$16.9 million for the same period in 2017, reflecting cost
reduction initiatives.
GAAP net loss in the third quarter of 2018 was
$24.8 million, an improvement of approximately 50% compared to GAAP
net loss of $49.7 million during the same period in 2017.
On a pro forma basis, net loss in the third
quarter of 2018 improved by approximately 79% to $3.5 million,
compared to a net loss of $16.6 million for the same period in
2017.
A full reconciliation of the GAAP financial
results to non-GAAP financial results is included in the financial
information tables below.
First Nine Months of 2018 Financial Results
GAAP total net revenues for the first nine
months of 2018 were $89.7 million compared to $99.5 million for the
same period of 2017. Named patient sales in Brazil totaled $1.9
million in the first nine months of 2018, as compared to the first
nine months of 2017, which benefitted from $11.0 million of named
patient sales in Brazil.
GAAP net revenues for JUXTAPID for the first
nine months of 2018 were $43.9 million compared to $51.9 million in
same period in 2017. There were no named patient sales of JUXTAPID
in the first nine months of 2018, as compared to the first nine
months of 2017, which benefitted from $5.9 million of JUXTAPID
named patient sales in Brazil. Revenue growth in Japan helped
offset the decrease in the U.S. and other markets.
GAAP net revenues for MYALEPT for the first nine
months of 2018 were $45.8 million compared to $47.6 million for the
same period in 2017. MYALEPT sales benefitted from $2.3 million of
deferred revenue recognition in the first nine months of 2017.
MYALEPT revenues in Brazil totaled $5.1 million in the first nine
months of 2017 compared to $1.9 million in the first nine months of
2018.
GAAP total operating expenses for the first nine
months of 2018 were $99.1 million compared to total operating
expenses of $112.1 million for the same period in 2017. GAAP
SG&A expenses were $65.8 million in the first nine months of
2018 compared to $72.4 million for the same period in 2017. GAAP
R&D expenses were $31.2 million for the first nine months of
2018 compared to $37.2 million for the same period in 2017.
On a pro forma basis, for the first nine months
of 2018, SG&A expenses decreased 13% to $59.4 million compared
to $68.2 million for the same period in 2017, primarily as a result
of cost reduction programs initiated throughout 2018. Restructuring
charges in the first nine months of 2018 were $2.2 million,
compared with restructuring charges of $2.5 million for the same
period in 2017. The 2017 restructuring charges were related to the
consolidation of similar positions during the integration of the
business subsequent to the acquisition of Aegerion.
On a pro forma basis, for the first nine months
of 2018, R&D expenses decreased 16% to $30.7 million compared
to $36.6 million for the same period in 2017 due to cost reduction
initiatives.
GAAP net loss for the first nine months of 2018
was $88.9 million compared to GAAP net loss of $102.1 million
during the same period in 2017.
Net loss on a pro forma basis for the first nine
months of 2018 was $28.2 million, compared to $26.7 million for the
same period in 2017.
As of September 30, 2018, the Company’s
consolidated unrestricted cash balance was $27.4 million, compared
to $55.4 million at December 31, 2017.
Other Financial Information
Novelion expects total net product sales in 2018
to be between $130 and $140 million and total net product sales in
2019 to be between $145 and $160 million.
As of September 30, 2018, Novelion had
approximately $27.4 million in cash on a consolidated basis,
including $13.7 million at Novelion and $13.7 million at the
Aegerion subsidiary level. After giving effect to the
consummation of the new secured financing by Aegerion and the
application of proceeds from such financing and the payment of
related fees and expenses, Novelion and Aegerion are anticipated to
have approximately $15.7 million and $37.5 million, respectively,
of cash as of November 8, 2018.
About Novelion Therapeutics
Novelion Therapeutics is a global
biopharmaceutical company dedicated to developing and
commercializing therapies that deliver new standards of care for
people living with rare and underserved metabolic diseases. Our
goal is to develop and bring to market transformational therapies
that have the potential to significantly change the treatment
paradigm for patients affected by a variety of rare and metabolic
diseases, including diseases associated with low leptin, such as
low-leptin associated obesity. With a global footprint and an
established commercial portfolio, including MYALEPT® (metreleptin)
and JUXTAPID® (lomitapide), our business is supported by
differentiated treatments that treat severe and rare diseases.
Novelion is the parent company of Aegerion, our
operating subsidiary. References to “we,” “our” and the
“Company” refer to the entire enterprise, whose assets and
operations reside at Aegerion, whose interests may not always be
aligned with those of Novelion or its shareholders.
Non-GAAP (“pro forma”)
Results
The non-GAAP results in this press release,
including, without limitation, non-GAAP operating expenses,
non-GAAP R&D expenses, non-GAAP SG&A expenses and non-GAAP
net loss, are provided as a complement to results provided in
accordance with GAAP because management believes, when considered
together with the GAAP information, these non-GAAP financial
measures help indicate underlying trends in the Company's business,
are important in comparing current results with prior period
results and provide additional information regarding the Company’s
financial performance. Management also uses these non-GAAP
financial measures to establish budgets and operational goals that
are communicated internally and externally, and to manage the
Company's business and evaluate its performance. The non-GAAP
financial measures have no standardized meaning under GAAP and
therefore may not be comparable to similar measures presented by
other companies. The non-GAAP financial measures are not intended
to be considered in isolation or as a substitute for, or superior
to, the financial measures prepared and presented in accordance
with GAAP and should be reviewed in conjunction with the relevant
GAAP financial measures. A reconciliation of the GAAP financial
results to non-GAAP financial results is included in the attached
financial information.
Forward-Looking Statements
Certain statements in this press release
constitute "forward-looking statements" within the meaning of
applicable laws and regulations and constitute "forward-looking
information" within the meaning of applicable Canadian securities
laws. Any statements contained herein which do not describe
historical facts, including statements regarding beliefs about the
impact of cost reduction initiatives, including that such
initiatives have led to significant improvements in operating
expenses and bottom line; beliefs that the new loan arrangement
positions us to achieve a more comprehensive capital restructuring;
and expectations for 2018 and 2019 revenues are forward-looking
statements which involve risks and uncertainties that could cause
actual results to differ materially from those discussed in such
forward-looking statements.
Such risks and uncertainties include, among
others, Novelion’s and Aegerion’s ability to meet immediate
operational needs and obligations, as well as long-term
obligations; the possibility that the restrictions in and other
terms of the new bridge facility and the related documents could
have a negative impact on Novelion’s business and its shareholders
(whose interests may not be aligned with those of Aegerion’s
holders of convertible notes and other lenders); whether Novelion
and/or Aegerion will be able to undertake a wholesale
recapitalization, which is likely to include a debt for equity
swap, and Novelion and/ or Aegerion may be forced to use the
protections of the bankruptcy laws to effectuate such
recapitalization or other alternative; Novelion’s and Aegerion’s
ability to identify, pursue and consummate any financial or
strategic alternatives; Novelion’s ability to maintain its listing
status on Nasdaq; Novelion’s and Aegerion’s ability to continue as
a going concern; the risks inherent in the development and
commercialization of pharmaceutical products, as well as those
identified in Novelion’s filings with the U.S. Securities and
Exchange Commission (the “Commission”), including under the heading
“Risk Factors” in Novelion’s Annual Report on Form 10-K filed on
March 16, 2018 and subsequent filings with the Commission
(including Novelion’s upcoming Quarterly Report on Form 10-Q for
the quarter ended September 30, 2018 and Novelion’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2018), available
on the Commission’s website at www.sec.gov. Any such risks
and uncertainties could materially and adversely affect our results
of operations, cash flows, and our ability to maintain our
operations, any of which would have a significant and adverse
impact on our stock price. We caution you not to place undue
reliance on any forward-looking statements, which speak only as of
the date they are made. Except as required by law, we undertake no
obligation to update or revise the information contained in this
press release, whether as a result of new information, future
events or circumstances or otherwise.
This press release also contains
“forward-looking information” that constitutes “financial outlooks”
within the meaning of applicable Canadian securities laws. This
information is provided to give investors general guidance on
management’s current expectations of certain factors affecting our
business, including our financial results. Given the uncertainties,
assumptions and risk factors associated with this type of
information, including those described above, investors are
cautioned that the information may not be an appropriate subject of
reliance for other purposes.
Investors and others should note that we
communicate with our investors and the public using our company
website www.novelion.com, including, but not limited to, company
disclosures, investor presentations and FAQs, Commission filings,
press releases, public conference call transcripts and webcast
transcripts. The information that we post on this website could be
deemed to be material information. As a result, we encourage
investors, the media and others interested to review the
information that we post there on a regular basis. The contents of
our website shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended.
U.S. INDICATIONS AND IMPORTANT SAFETY
INFORMATION
JUXTAPID® (lomitapide) capsules is a microsomal
triglyceride transfer protein inhibitor indicated as an adjunct to
a low-fat diet and other lipid-lowering treatments, including
low-density lipoprotein (LDL) apheresis where available, to reduce
LDL cholesterol, total cholesterol, apolipoprotein B, and
non-high-density lipoprotein cholesterol in patients with
homozygous familial hypercholesterolemia (HoFH). LIMITATIONS OF
USE: The safety and effectiveness of JUXTAPID have not been
established in patients with hypercholesterolemia who do not have
HoFH, including those with heterozygous familial
hypercholesterolemia (HeFH). The effect of JUXTAPID on
cardiovascular morbidity and mortality has not been determined.
JUXTAPID can cause elevations in transaminases,
as well as increases in hepatic fat, with or without concomitant
increases in transaminases. Because of the risk of hepatotoxicity,
JUXTAPID is available only through a restricted distribution
program called the JUXTAPID REMS PROGRAM. For more detailed
information, please see additional Important Safety
Information and the Prescribing Information for
JUXTAPID.
MYALEPT® (metreleptin) for injection is a
leptin analog indicated as an adjunct to diet as replacement
therapy to treat the complications of leptin deficiency in patients
with congenital or acquired generalized lipodystrophy. LIMITATIONS
OF USE: The safety and effectiveness of MYALEPT for the
treatment of complications of partial lipodystrophy or for the
treatment of liver disease, including nonalcoholic steatohepatitis
(NASH), have not been established.
Anti-metreleptin antibodies with neutralizing
activity have been identified in patients treated with MYALEPT.
T-cell lymphoma has been reported in patients with acquired
generalized lipodystrophy, both treated and not treated with
MYALEPT. For more detailed information, please see
additional Important Safety Information and
the Prescribing Information for MYALEPT.
CONTACT:
Amanda Murphy, Director, Investor Relations
& Corporate CommunicationsNovelion
Therapeutics857-242-5024amanda.murphy@novelion.com
|
|
|
|
Novelion Therapeutics
Inc.Unaudited Condensed Consolidated Statements of
Operations(in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net revenues |
$ |
30,334 |
|
|
$ |
28,669 |
|
|
$ |
89,722 |
|
|
$ |
99,530 |
|
Cost of product
sales |
12,531 |
|
|
29,505 |
|
|
41,739 |
|
|
60,227 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative |
18,348 |
|
|
21,395 |
|
|
65,773 |
|
|
72,360 |
|
Research and
development |
9,031 |
|
|
17,112 |
|
|
31,157 |
|
|
37,236 |
|
Restructuring
charges |
2,151 |
|
|
56 |
|
|
2,151 |
|
|
2,541 |
|
Total operating
expenses |
29,530 |
|
|
38,563 |
|
|
99,081 |
|
|
112,137 |
|
Loss from
operations |
(11,727 |
) |
|
(39,399 |
) |
|
(51,098 |
) |
|
(72,834 |
) |
Interest expense,
net |
(12,022 |
) |
|
(9,897 |
) |
|
(34,501 |
) |
|
(28,722 |
) |
Other (expense) income,
net |
(926 |
) |
|
49 |
|
|
(1,961 |
) |
|
176 |
|
Loss before provision
for income taxes |
(24,675 |
) |
|
(49,247 |
) |
|
(87,560 |
) |
|
(101,380 |
) |
Provision for income
taxes |
(133 |
) |
|
(497 |
) |
|
(1,338 |
) |
|
(762 |
) |
Net loss |
$ |
(24,808 |
) |
|
$ |
(49,744 |
) |
|
$ |
(88,898 |
) |
|
$ |
(102,142 |
) |
Net loss per common
share—basic and diluted |
$ |
(1.32 |
) |
|
$ |
(2.67 |
) |
|
$ |
(4.74 |
) |
|
$ |
(5.49 |
) |
Weighted-average common
shares outstanding—basic and diluted |
18,854 |
|
|
18,648 |
|
|
18,772 |
|
|
18,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Novelion Therapeutics
Inc.Unaudited Condensed Consolidated Balance
Sheets(in thousands) |
|
|
|
|
|
September 30, 2018 |
|
December 31, 2017 |
Cash and cash
equivalents |
$ |
27,378 |
|
|
$ |
55,430 |
|
Accounts receivable,
net |
21,560 |
|
|
22,191 |
|
Inventories |
51,078 |
|
|
49,826 |
|
Prepaid expenses and
other current assets |
15,204 |
|
|
11,436 |
|
Property and equipment,
net |
1,967 |
|
|
2,920 |
|
Intangible assets,
net |
206,450 |
|
|
225,272 |
|
Other non-current
assets |
1,349 |
|
|
2,247 |
|
Total assets |
$ |
324,986 |
|
|
$ |
369,322 |
|
|
|
|
|
Accounts payable and
accrued liabilities |
$ |
57,296 |
|
|
$ |
55,638 |
|
Short-term debt |
16,367 |
|
|
— |
|
Convertible notes,
net |
287,030 |
|
|
258,538 |
|
Provision for legal
settlement |
32,845 |
|
|
39,612 |
|
Other non-current
liabilities |
636 |
|
|
596 |
|
Total liabilities |
394,174 |
|
|
354,384 |
|
Total shareholders’
(deficit) equity |
(69,188 |
) |
|
14,938 |
|
Total liabilities and
shareholders’ (deficit) equity |
$ |
324,986 |
|
|
$ |
369,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Novelion Therapeutics
Inc.Reconciliation of GAAP to Non-GAAP Financial
Information(in thousands, except per share
amounts)(unaudited) |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net loss
reconciliation: |
|
|
|
|
|
|
|
GAAP net loss |
$ |
(24,808 |
) |
|
$ |
(49,744 |
) |
|
$ |
(88,898 |
) |
|
$ |
(102,142 |
) |
Stock-based
compensation |
618 |
|
|
926 |
|
|
2,461 |
|
|
3,419 |
|
Amortization of
acquired intangible assets |
6,274 |
|
|
6,274 |
|
|
18,822 |
|
|
18,778 |
|
Amortization of debt
discount and debt issuance costs |
9,996 |
|
|
8,399 |
|
|
28,728 |
|
|
24,205 |
|
Inventory fair value
step-up |
2,227 |
|
|
17,472 |
|
|
8,543 |
|
|
26,500 |
|
Restructuring
charge |
2,151 |
|
|
56 |
|
|
2,151 |
|
|
2,541 |
|
Non-GAAP net loss |
$ |
(3,542 |
) |
|
$ |
(16,617 |
) |
|
$ |
(28,193 |
) |
|
$ |
(26,699 |
) |
|
|
|
|
|
|
|
|
GAAP net loss per
common share - basic and diluted |
$ |
(1.32 |
) |
|
$ |
(2.67 |
) |
|
$ |
(4.74 |
) |
|
$ |
(5.49 |
) |
|
|
|
|
|
|
|
|
Non-GAAP net loss per
common share - basic and diluted |
$ |
(0.19 |
) |
|
$ |
(0.89 |
) |
|
$ |
(1.50 |
) |
|
$ |
(1.44 |
) |
|
|
|
|
|
|
|
|
GAAP and Non-GAAP
weighted-average common shares outstanding — basic and diluted |
18,854 |
|
|
18,648 |
|
|
18,772 |
|
|
18,599 |
|
|
|
|
|
|
|
|
|
Cost of product
sales reconciliation: |
|
|
|
|
|
|
|
GAAP cost of product
sales |
$ |
12,531 |
|
|
$ |
29,505 |
|
|
$ |
41,739 |
|
|
$ |
60,227 |
|
Amortization of
acquired intangible assets |
(6,274 |
) |
|
(6,274 |
) |
|
(18,822 |
) |
|
(18,778 |
) |
Inventory fair value
step-up |
(602 |
) |
|
(16,989 |
) |
|
(4,338 |
) |
|
(25,195 |
) |
Non-GAAP cost of
product sales |
$ |
5,655 |
|
|
$ |
6,242 |
|
|
$ |
18,579 |
|
|
$ |
16,254 |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
reconciliation: |
|
|
|
|
GAAP selling, general
and administrative expenses |
$ |
18,348 |
|
|
$ |
21,395 |
|
|
$ |
65,773 |
|
|
$ |
72,360 |
|
Stock-based
compensation |
(454 |
) |
|
(710 |
) |
|
(1,969 |
) |
|
(2,814 |
) |
Inventory fair value
step-up |
(1,625 |
) |
|
(483 |
) |
|
(4,205 |
) |
|
(1,305 |
) |
Amortization of debt
issuance costs |
(109 |
) |
|
|
0 |
|
|
(235 |
) |
|
|
0 |
|
Non-GAAP selling,
general and administrative expenses |
$ |
16,160 |
|
|
$ |
20,202 |
|
|
$ |
59,364 |
|
|
$ |
68,241 |
|
|
|
|
|
|
|
|
|
Research and development expense
reconciliation: |
|
|
|
|
GAAP research and
development expenses |
$ |
9,031 |
|
|
$ |
17,112 |
|
|
$ |
31,157 |
|
|
$ |
37,236 |
|
Stock-based
compensation |
(164 |
) |
|
(216 |
) |
|
(492 |
) |
|
(605 |
) |
Non-GAAP research and
development expenses |
$ |
8,867 |
|
|
$ |
16,896 |
|
|
$ |
30,665 |
|
|
$ |
36,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Novelion Therapeutics (NASDAQ:NVLN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Novelion Therapeutics (NASDAQ:NVLN)
Historical Stock Chart
From Apr 2023 to Apr 2024