Neos Therapeutics Reports Third Quarter 2019 Financial Results
November 08 2019 - 7:00AM
Neos Therapeutics, Inc. (Nasdaq: NEOS), a commercial-stage
pharmaceutical company utilizing its novel microparticle delivery
technology to develop and manufacture central nervous
system-focused products, today reported financial results for the
third quarter ended September 30, 2019 and provided a business
update.
“During the third quarter of 2019, we reported
40 percent year-over-year revenue growth, which, combined with our
continued improvement in quarterly operating net loss, highlights
the strong progress we have made toward our goal of achieving
profitability,” said Jerry McLaughlin, President and Chief
Executive Officer. “In addition, we continued to increase the
number of pharmacies included in our Neos RxConnect patient
assistance program, and believe the further expansion of this
network will be an important future growth driver for our business.
We are also very excited about the progress we have made with our
lead pipeline candidate, NT0502, which we expect to enter Phase 1
clinical trials shortly. There is a large unmet need for new
treatments for sialorrhea, and we believe that we can uniquely meet
this need with a novel mechanism that leverages our microparticle
technology. We believe NT0502 has the potential to become the
standard of treatment for sialorrhea and truly improve the lives of
patients and their caregivers.”
ADHD Commercial Franchise
- Growth in Net Revenue Per Pack Reflects Successful
Shift to More Profitable Business Channels and Market
Segments: Neos reported growth in net product sales and
net revenue per pack for its two core commercial attention deficit
hyperactivity disorder (ADHD) products, Adzenys XR-ODT® and
Cotempla XR-ODT®, for the three months ended September 30, 2019
compared to the same period in 2018.
|
Net Revenue per Pack |
Q3 2019 |
Q3 2018 |
% Change |
Adzenys XR-ODT |
$122 |
$108 |
13% |
Cotempla XR-ODT |
$128 |
$108 |
19% |
- Executing on Back-to-School
Commercial Strategy and Expanding Availability of Neos RxConnect
Network Pharmacies: During the third quarter of 2019, the
Company actively deployed new marketing campaigns for its two core
products and substantially expanded the number of participating
pharmacies in the Neos RxConnect network. With the pending addition
of a large, regional grocery store chain, the Company expects that
there will be approximately 460 pharmacies in the network at the
end of November 2019, representing more than a 200% increase since
the end of the third quarter of 2019.
- Prescriptions for ADHD
Products: In the third quarter of 2019, as reported by
IQVIA, aggregate prescriptions for Adzenys XR-ODT and Cotempla
XR-ODT decreased by 6 percent compared to the third quarter of
2018, consistent with the change in commercial strategy the Company
unveiled in late 2018. Specifically, Adzenys XR-ODT and Cotempla
XR-ODT prescriptions totaled 52,321 and 36,174, respectively, in
the third quarter of 2019 compared to 58,873 and 35,690,
respectively, in the third quarter of 2018.
Financial and Pipeline
Highlights
- Substantial Progress Toward
Operational Profitability: For the fifth consecutive
fiscal quarter, the Company reduced its quarterly net loss. For the
third quarter of 2019, net loss narrowed to $2.1 million, down from
$12.7 million in the third quarter of 2018, reflecting the
evolution of the commercial strategy from volume-based to
profitable growth and the Company’s focus on both operational
productivity and expense management.
- NT0502 to Enter Phase 1
Clinical Trials Near-Term: The Company’s lead pipeline
candidate, NT0502, is a new chemical entity and a selective
muscarinic receptor antagonist that utilizes the same microparticle
technology used in the Company’s four commercial products. NT0502
is being developed to address the significant unmet medical need
for the treatment of chronic sialorrhea (excessive drooling) in
adult and pediatric patients with neurological conditions,
including Parkinson’s disease, cerebral palsy, mental retardation
and amyotrophic lateral sclerosis. The Company plans to initiate a
Phase 1 trial in the first quarter of 2020.
Select Financial Results for the Third
Quarter Ended September 30, 2019
- Total product revenues were $17.5 million for the three months
ended September 30, 2019, compared to $12.5 million for the same
period in 2018.
|
Q3 2019 |
|
Q3 2018 |
|
% Change |
|
Adzenys XR-ODT |
$8.8MM |
|
$7.0MM |
|
26% |
|
Cotempla XR-ODT |
$7.2MM |
|
$4.9MM |
|
48% |
|
Adzenys ER |
$0.2MM |
|
* |
|
N/A |
|
Generic Tussionex |
$1.3MM |
|
$0.6MM |
|
117% |
|
Total |
$17.5MM |
|
$12.5MM |
|
40% |
|
|
|
|
|
|
|
|
*Adzenys ER revenue was negligible in Q3 2018. |
|
|
|
|
|
|
- The Company reported a gross profit of $11.1 million for the
three months ended September 30, 2019, compared to a gross profit
of $5.5 million for the same period in 2018.
- Research and development expenses were $1.6 million for the
three months ended September 30, 2019, compared to $2.0 million for
the same period in 2018.
- Selling and marketing expenses were $7.1 million for the three
months ended September 30, 2019, compared to $10.4 million for the
same period in 2018.
- General and administrative expenses were $2.8 million for the
three months ended September 30, 2019, compared to $3.5 million for
the same period in 2018.
- The Company reported a net loss of $2.1 million, or $0.04 per
share, for the three months ended September 30, 2019, compared to a
net loss of $12.7 million, or $0.43 per share, for the same period
in 2018.
- At September 30, 2019, the Company held $25.3 million in cash
and cash equivalents and short-term investments. As previously
announced, on October 2, 2019, the Company entered into a senior
secured credit agreement with certain lenders that provides the
Company with up to $25.0 million in loans based on accounts
receivables.
Conference Call Details
Neos management will host a conference call and
live audio webcast to discuss results and provide a Company update
at 8:30 a.m. EST today. The live call may be accessed by dialing
(877) 388-8985 for domestic calls, or +1 (562) 912-2654 for
international callers, and referencing conference ID number
1674997. A live audio webcast for the conference call will be
available on the Investor Relations page of the Company’s website
at http://investors.neostx.com/. Following the conclusion of the
call, the webcast will be available for replay for 30 days.
About Neos Therapeutics
Neos Therapeutics, Inc. (NASDAQ: NEOS) is a
commercial-stage pharmaceutical company utilizing its novel
microparticle delivery technology to develop and manufacture
central nervous system (CNS)-focused products. Adzenys XR-ODT®
(amphetamine) extended-release orally disintegrating tablets (see
Full Prescribing Information, including Boxed WARNING), Cotempla
XR-ODT® (methylphenidate) extended-release orally disintegrating
tablets (see Full Prescribing Information, including Boxed
WARNING), and Adzenys-ER® (amphetamine) extended-release oral
suspension (see Full Prescribing Information, including Boxed
WARNING), all for the treatment of ADHD, are three approved
products utilizing the Company’s novel microparticle delivery
technology. Additional information about Neos is available at
www.neostx.com.
Forward-Looking Statements
Any statements in this press release about
future expectations, plans and prospects for the Company, including
statements about the Company’s strategy, future operations,
commercial products, clinical development of its therapeutic
candidates, plans for potential future product candidates,
financial condition and outlook, and other statements containing
the words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“may,” “plan,” “predict,” “project,” “suggest,” “target,”
“potential,” “will,” “would,” “could,” “should,” “continue,” and
similar expressions, constitute forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those indicated by
such forward-looking statements as a result of various important
factors, including: the net sales, profitability, and growth of the
Company’s commercial products, including whether the Company’s
third quarter 2019 revenue growth compared to the third quarter of
2018 highlights strong progress towards achieving profitability and
whether the continued expansion of the Neos RxConnect network will
be an important future growth driver for the Company’s business;
the status, timing, costs, results and interpretation of the
Company’s clinical trials or any future trials, including whether
the Company will commence a Phase 1 study of NT0502 in the first
half of 2020 and whether NT0502 has the potential to become the
standard of treatment for sialorrhea and truly improve the lives of
patients and caregivers; the uncertainties inherent in conducting
clinical trials; expectations for regulatory interactions,
submissions and approvals; the financial condition and outlook for
the Company, including whether the Company will continue to make
progress towards its goal of achieving profitability; availability
of funding sufficient for the Company’s foreseeable and
unforeseeable operating expenses and capital expenditure
requirements; uncertainties related to the Company’s intellectual
property; other matters that could affect the availability or
commercial potential of the Company’s commercial products or
therapeutic candidates; and other factors discussed in the Risk
Factors set forth in the Company’s Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission (SEC) and in other filings the Company makes
with the SEC from time to time. In addition, the forward-looking
statements included in this press release represent the Company’s
views only as of the date hereof. The Company anticipates that
subsequent events and developments may cause the Company’s views to
change. However, while the Company may elect to update these
forward-looking statements at some point in the future, it
specifically disclaims any obligation to do so, except as may be
required by law.
Neos Therapeutics, Inc. and
SubsidiariesCONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands, except share and per share data)(unaudited)
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
23,284 |
|
|
$ |
46,478 |
|
Short-term investments |
|
|
1,992 |
|
|
|
— |
|
Accounts receivable, net of allowances for chargebacks and cash
discounts of $3,986 and $1,865, respectively |
|
|
28,877 |
|
|
|
27,801 |
|
Inventories |
|
|
11,676 |
|
|
|
10,367 |
|
Other current assets |
|
|
1,757 |
|
|
|
4,032 |
|
Total current assets |
|
|
67,586 |
|
|
|
88,678 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
7,517 |
|
|
|
7,914 |
|
Operating lease right-of-use
assets |
|
|
3,161 |
|
|
|
— |
|
Intangible assets, net |
|
|
13,187 |
|
|
|
14,616 |
|
Other assets |
|
|
304 |
|
|
|
149 |
|
Total assets |
|
$ |
91,755 |
|
|
$ |
111,357 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
6,548 |
|
|
$ |
12,730 |
|
Accrued expenses |
|
|
37,848 |
|
|
|
35,818 |
|
Current portion of operating lease liabilities |
|
|
638 |
|
|
|
— |
|
Current portion of long-term debt |
|
|
16,108 |
|
|
|
8,557 |
|
Total current liabilities |
|
|
61,142 |
|
|
|
57,105 |
|
|
|
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
|
|
|
Long-term debt, net of current portion |
|
|
28,788 |
|
|
|
43,217 |
|
Operating lease liabilities |
|
|
3,434 |
|
|
|
— |
|
Derivative liability |
|
|
1,239 |
|
|
|
2,017 |
|
Deferred rent |
|
|
— |
|
|
|
989 |
|
Other long-term liabilities |
|
|
180 |
|
|
|
184 |
|
Total long-term liabilities |
|
|
33,641 |
|
|
|
46,407 |
|
|
|
|
|
|
|
|
Stockholders' (Deficit)
Equity: |
|
|
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no
shares issued or outstanding at September 30, 2019 and
December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value, 100,000,000 shares authorized at
September 30, 2019 and December 31, 2018;
49,764,909 and 49,731,108 shares issued and outstanding,
respectively, at September 30, 2019; 49,710,104 and
49,676,303 shares issued and outstanding, respectively, at
December 31, 2018 |
|
|
50 |
|
|
|
50 |
|
Treasury stock, at cost, 33,801 shares at
September 30, 2019 and December 31, 2018 |
|
|
(352 |
) |
|
|
(352 |
) |
Additional paid-in capital |
|
|
327,671 |
|
|
|
325,130 |
|
Accumulated deficit |
|
|
(330,397 |
) |
|
|
(316,983 |
) |
Total stockholders' (deficit) equity |
|
|
(3,028 |
) |
|
|
7,845 |
|
Total liabilities and stockholders' (deficit)
equity |
|
$ |
91,755 |
|
|
$ |
111,357 |
|
Neos Therapeutics, Inc. and
SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share and per share
data)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Net product sales |
|
$ |
17,540 |
|
|
$ |
12,503 |
|
|
$ |
47,817 |
|
|
$ |
34,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
6,447 |
|
|
|
6,957 |
|
|
|
17,942 |
|
|
|
19,165 |
|
Gross profit |
|
|
11,093 |
|
|
|
5,546 |
|
|
|
29,875 |
|
|
|
15,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
|
|
1,551 |
|
|
|
2,037 |
|
|
|
6,757 |
|
|
|
6,109 |
|
Selling and marketing
expenses |
|
|
7,125 |
|
|
|
10,446 |
|
|
|
21,463 |
|
|
|
34,993 |
|
General and administrative
expenses |
|
|
2,850 |
|
|
|
3,537 |
|
|
|
10,355 |
|
|
|
10,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(433 |
) |
|
|
(10,474 |
) |
|
|
(8,700 |
) |
|
|
(36,260 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,869 |
) |
|
|
(2,260 |
) |
|
|
(5,971 |
) |
|
|
(6,712 |
) |
Other income, net |
|
|
251 |
|
|
|
39 |
|
|
|
1,257 |
|
|
|
634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,051 |
) |
|
$ |
(12,695 |
) |
|
$ |
(13,414 |
) |
|
$ |
(42,338 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding used to compute net loss per share, basic and
diluted |
|
|
49,730,755 |
|
|
|
29,625,792 |
|
|
|
49,720,780 |
|
|
|
29,212,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share of
common stock, basic and diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.27 |
) |
|
$ |
(1.45 |
) |
Contacts:
Richard EisenstadtChief Financial OfficerNeos
Therapeutics(972) 408-1389reisenstadt@neostx.com
Sarah McCabeStern Investor Relations, Inc.(212)
362-1200sarah.mccabe@sternir.com
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