LEAWOOD, Kan., March 12, 2019 /PRNewswire/ -- Aratana
Therapeutics, Inc. (NASDAQ: PETX), a pet therapeutics company
focused on the development and commercialization of innovative
therapeutics for dogs and cats, announced its fourth quarter and
full year 2018 financial results and recent business
highlights.
"Our primary focus for 2019 is to increase our net product
revenues and advance our development programs," stated Craig Tooman, President and Chief Executive
Officer of Aratana Therapeutics. "Our greatest opportunity to grow
revenues is to continue to educate our customers about the benefits
of our scientifically differentiated therapeutics."
Financial Results
The fourth quarter of 2018 net loss
was $8.6 million or $0.18 diluted loss per share compared to a net
loss of $15.6 million or $0.37 diluted loss per share for the
corresponding quarter ended December
31, 2017. For the year ended December 31, 2018, Aratana reported a net loss of
$14.7 million or $0.32 diluted loss per share compared to a net
loss of $47.5 million or $1.17 diluted loss per share in 2017.
Aratana reported $4.9 million in
net revenues for the fourth quarter 2018 compared to $10.5 million in net revenues in the fourth
quarter of 2017. The fourth quarter of 2017 included $6.0 million in sales of GALLIPRANT finished
goods to Elanco Animal Health, Inc. The Company recorded
$35.4 million in net revenues for the
full year 2018 compared to $25.6
million in net revenues for the full year 2017. The
Company's full year 2018 revenues include $7.5 million in NOCITA net product sales and
$4.6 million in ENTYCE net product
sales. Aratana also reported $23.3
million in GALLIPRANT licensing and collaboration revenues,
which included a $15.0 million
milestone payment for achieving a sales threshold of at least
$35 million in U.S. net sales of
GALLIPRANT by Elanco in 2018. In 2017, the Company recognized
$5.9 million in licensing and
collaboration revenues and $19.7
million in products sales, which included $15.5 million in product sales of GALLIPRANT
finished goods to Elanco, $2.8
million in NOCITA net product sales and $1.3 million in ENTYCE net product
sales.
The cost of product sales totaled $2.8
million in the fourth quarter of 2018 in comparison to
$5.9 million in the corresponding
period in 2017. The Company's cost of product sales for the full
year 2018 totaled $6.8 million, which
included inventory valuation adjustments of approximately
$2.7 million. In 2017, Aratana
reported $16.4 million in cost of
product sales, which largely consisted of cost of finished goods of
GALLIPRANT sold to Elanco. The decrease year-over-year is
primarily due to Elanco's assumption of manufacturing
responsibility for GALLIPRANT in the third quarter of 2017.
Research and development expenses totaled $1.6 million in the fourth quarter ended
December 31, 2018 compared to
$3.6 million for the quarter ended
December 31, 2017. For the full year
2018, research and development expenses totaled $6.9 million compared to $15.1 million in 2017. The decrease in research
and development expenses in 2018 was due primarily to fewer
on-going pivotal studies and pre-launch manufacturing activities
compared to the corresponding period in 2017. However,
Aratana anticipates research and development expenses may increase
slightly in 2019 as pipeline programs progress.
Selling, general and administrative expenses totaled
$7.4 million for the fourth quarter
ended December 31, 2018 compared to
$7.6 million for the same period in
2017. For the full year 2018, selling, general and administrative
expenses were $28.8 million versus
$28.9 million for 2017. Aratana
expects selling, general and administrative expenses for 2019 to
remain relatively consistent compared to 2018, as the Company
continues to focus on supporting further adoption and awareness of
its marketed therapeutics.
Financial Guidance
As of December 31, 2018, Aratana had approximately
$43.0 million in cash, cash
equivalents, restricted cash and short-term investments on a
debt-free basis. In the fourth quarter of 2018, the Company paid
approximately $25.8 million toward
outstanding indebtedness and was permanently released from all
security interests, commitments and obligations under its Loan and
Security Agreement.
"Due to the successful achievement of the GALLIPRANT sales
milestone, we were able to repay our outstanding debt early and in
full," stated Rhonda Hellums, Chief
Financial Officer of Aratana Therapeutics. "In 2019, we aim to
drive our commercial momentum and be prudent with our cash
utilization."
In 2019, the Company expects a net decrease of cash of
approximately $20.0 million to be
used to support its current activities. We believe our current
cash, cash equivalents, restricted cash and short-term investments
will be sufficient to fund our current operating plan through at
least the first quarter of 2020.
Business Highlights
- NOCITA® (bupivacaine liposome injectable
suspension): In 2018, NOCITA net product sales increased
sequentially quarter-over-quarter as a result of the approximately
60 percent increase in the number of new accounts ordering NOCITA.
The average monthly order for those accounts ordering is
approximately $1,800. Additionally,
the Company has also commenced the regulatory process for a
smaller, 10 mL vial size, which if approved, may allow Aratana to
expand the account base from mainly specialty clinics to general
practice clinics.
- NOCITA for Cats: 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 over 72 hours and was well-tolerated.
- ENTYCE® (capromorelin oral solution): In
2018, ENTYCE was ordered by more than 13,000 veterinary
clinics with re-order rates of more than 70 percent. Market
research among veterinarians also showed strong ENTYCE awareness
and satisfaction with the therapeutic's efficacy. While canine
inappetence is a market that the Company expects will take time to
build, the Company remains confident in its ability to grow the
market and increase ENTYCE revenues. The Company plans to focus on
growing use by existing customers, driving usage in chronic
conditions and increasing days of therapy.
- Capromorelin for Cats: On February 27, 2019, the Company received a
technical section complete letter for safety from FDA's Center for
Veterinary Medicine (CVM) for capromorelin (AT-002) in cats. In
December 2018, Aratana submitted the
technical section for chemistry, manufacturing and controls (CMC)
to CVM. Additionally, the Company's pivotal field effectiveness
study evaluating the therapeutic candidate for weight management in
cats with chronic kidney disease is anticipated to complete target
enrollment mid-2019.
- GALLIPRANT® (grapiprant tablets): According
to third-party data, GALLIPRANT is second in market share
(approximately 15%) within the competitive NSAID market and
dispensed by more clinics than any other oral NSAID. Elanco
reported that market demand for GALLIPRANT continues to grow and in
the fourth quarter of 2018, the product exceeded supply capacity
impacting the fourth quarter results, which resulted in GALLIPRANT
backorders primarily in the distribution channel. Elanco
anticipates backorders will clear by the end of the first quarter
or early second quarter of 2019.
- AT-019: In February 2018,
Aratana licensed exclusive, worldwide rights from AskAt Inc. to
develop and commercialize AT-019, a potent and innovative EP4
receptor antagonist therapeutic candidate for pain, inflammation
and other indications. In early-2019, Aratana started transferring
the manufacturing process of the active pharmaceutical ingredient
(API) and early formulation work.
Webcast & Conference Call Details
The Company
will host a live conference call on Tuesday,
March 12, 2019 at 4:30 p.m. ET
to discuss financial results from the fourth quarter and full year
ended December 31, 2018.
Interested participants and investors may access the live 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 fourth quarter and full year 2018 results
teleconference will be available within several hours of the event
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 10128673:
1 (877) 344-7529 (U.S.)
1 (855) 669-9658 (Canada)
1 (412) 317-0088 (International)
About Aratana Therapeutics
Aratana Therapeutics is a
pet therapeutics company focused on 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.
Contacts
For investor inquires:
Rhonda Hellums
ir@aratana.com
(913) 353-1026
For media inquiries:
Rachel Reiff
media@aratana.com
(913) 353-1050
IMPORTANT SAFETY 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 use in dogs and cats only. Do not use in dogs or cats
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.
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.
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. Click here for full prescribing
information.
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; our anticipated use of cash in
the remainder of 2019; 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; expectations regarding trends in
selling, general and administrative expenses; and statements
regarding the Company's efforts, plans and opportunities,
including, without limitation, expanding account bases, 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 legal proceedings, including stockholder class action lawsuits;
unstable market and economic conditions; restrictions on our
financial flexibility due to the terms of future financing
arrangements, including credit facilities; 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
collaboration partners, including with respect to adequate quality
control and compliance with regulatory requirements, difficulties
with complex and unique manufacturing processes, their ability to
obtain raw materials and the conduct of our target animal studies;
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,
quality 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; risks relating to customer exposure to rising costs and
reduced customer income; risks relating to a highly competitive
health industry; 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 or our
licensors' 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; the additional
compliance requirements now that we are no longer an emerging
growth company; 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 most
recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission, or SEC, along with our other reports filed
with the SEC, including our Quarterly Reports on Form 10-Q, 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.
ARATANA
THERAPEUTICS, INC.
Consolidated
Statements of Operations
(Amounts in
thousands, except share and per share data)
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December 31,
(unaudited)
|
|
December
31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing and
collaboration revenue
|
|
$
|
1,344
|
|
$
|
2,014
|
|
$
|
23,326
|
|
$
|
5,913
|
Product
sales
|
|
|
3,562
|
|
|
8,443
|
|
|
12,086
|
|
|
19,660
|
Total
revenues
|
|
|
4,906
|
|
|
10,457
|
|
|
35,412
|
|
|
25,573
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
|
2,770
|
|
|
5,912
|
|
|
6,783
|
|
|
16,387
|
Royalty
expense
|
|
|
798
|
|
|
704
|
|
|
3,865
|
|
|
1,821
|
Research and
development
|
|
|
1,567
|
|
|
3,552
|
|
|
6,855
|
|
|
15,126
|
Selling, general and
administrative
|
|
|
7,362
|
|
|
7,574
|
|
|
28,780
|
|
|
28,897
|
Amortization of
intangible assets
|
|
|
129
|
|
|
115
|
|
|
517
|
|
|
350
|
Impairment of
intangible assets
|
|
|
—
|
|
|
7,448
|
|
|
—
|
|
|
7,448
|
In-process research and
development
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
Total costs and
expenses
|
|
|
12,626
|
|
|
25,305
|
|
|
47,300
|
|
|
70,029
|
Loss from
operations
|
|
|
(7,720)
|
|
|
(14,848)
|
|
|
(11,888)
|
|
|
(44,456)
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
225
|
|
|
138
|
|
|
666
|
|
|
449
|
Interest
expense
|
|
|
(1,034)
|
|
|
(880)
|
|
|
(3,391)
|
|
|
(3,481)
|
Other expense,
net
|
|
|
(105)
|
|
|
(8)
|
|
|
(109)
|
|
|
(22)
|
Total other
expense
|
|
|
(914)
|
|
|
(750)
|
|
|
(2,834)
|
|
|
(3,054)
|
Net
loss
|
|
$
|
(8,634)
|
|
$
|
(15,598)
|
|
$
|
(14,722)
|
|
$
|
(47,510)
|
Net loss per share,
basic and diluted
|
|
$
|
(0.18)
|
|
$
|
(0.37)
|
|
$
|
(0.32)
|
|
$
|
(1.17)
|
Weighted average
shares outstanding,
basic and diluted
|
|
|
48,027,220
|
|
|
42,493,514
|
|
|
46,606,855
|
|
|
40,494,301
|
ARATANA
THERAPEUTICS, INC.
Consolidated
Balance Sheets
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash, cash equivalents
and short-term investments
|
|
$
|
42,671
|
|
$
|
67,615
|
Accounts receivable,
net and prepaid expenses and other
current assets
|
|
|
4,031
|
|
|
4,048
|
Inventories
|
|
|
11,425
|
|
|
13,576
|
Total current
assets
|
|
|
58,127
|
|
|
85,239
|
Property and
equipment, net
|
|
|
693
|
|
|
1,166
|
Goodwill
|
|
|
40,846
|
|
|
41,295
|
Intangible assets,
net
|
|
|
6,099
|
|
|
6,616
|
Restricted
cash
|
|
|
351
|
|
|
350
|
Other long-term
assets
|
|
|
320
|
|
|
526
|
Total
assets
|
|
$
|
106,436
|
|
$
|
135,192
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other current
liabilities
|
|
$
|
5,557
|
|
$
|
11,163
|
Licensing and
collaboration commitment
|
|
|
—
|
|
|
7,000
|
Current portion –
loans payable
|
|
|
—
|
|
|
17,333
|
Total current
liabilities
|
|
|
5,557
|
|
|
35,496
|
Loans payable,
net
|
|
|
—
|
|
|
19,492
|
Other long-term
liabilities
|
|
|
57
|
|
|
70
|
Total
liabilities
|
|
|
5,614
|
|
|
55,058
|
Total stockholders'
equity
|
|
|
100,822
|
|
|
80,134
|
Total liabilities and
stockholders' equity
|
|
$
|
106,436
|
|
$
|
135,192
|
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SOURCE Aratana Therapeutics, Inc.