KemPharm, Inc. (NasdaqGS: KMPH) (KemPharm, or the Company), a
specialty pharmaceutical company focused on the discovery,
development and commercialization of novel treatments for rare
central nervous system (CNS), neurodegenerative and lysosomal
storage diseases, today reported its financial results for the
second quarter ended June 30, 2022.
“KemPharm’s recent acquisition of arimoclomol,
along with substantially all of Orphazyme’s assets and operations,
provided an exclamation point to the first half of 2022 as we
shifted our strategic focus to the development of therapies
targeting rare central nervous system (CNS), neurodegenerative, and
lysosomal storage diseases,” stated Travis Mickle, Ph.D., President
and Chief Executive Officer of KemPharm. “We believe this
orientation towards rare disease classification with limited
treatment options and no approved treatments in the U.S. provides a
significant opportunity for KemPharm to make an impact in an area
of high-need and to validate the potential of our strategy to
create both near and longer-term shareholder value.”
Dr. Mickle continued, “The acquisition of
arimoclomol is a unique and potentially game-changing opportunity
for KemPharm. Arimoclomol is an NDA-stage product candidate being
developed for the treatment of Niemann-Pick disease type C (NPC), a
rare neurodegenerative disease for which no approved therapy exists
in the U.S. We acquired this asset for total consideration of $18.0
million, which included a cash payment of $12.8 million and the
assumption of an estimated reserve liability equal to approximately
$5.2 million. The cash payment was funded through a line of credit
secured by our balance sheet, making this transaction very capital
efficient. Another important part of this transaction is
maintaining the early access programs in the U.S. and the E.U.
while we support the ongoing work of seeking regulatory approval.
KemPharm is concentrating more of our resources towards the
resubmission of the arimoclomol NDA with the U.S. Food and Drug
Administration (FDA), which we expect to complete as early as the
first quarter of 2023.”
Dr. Mickle continued, “In parallel with our work
on arimoclomol is the ongoing development of KP1077, our lead
clinical candidate, which we are advancing as a treatment for
idiopathic hypersomnia (IH) and narcolepsy. As announced in May,
the Investigational New Drug (IND) application to initiate a
clinical program investigating KP1077 for the treatment of IH has
been successfully filed with the FDA. We expect to initiate the
Phase 2 trial of KP1077 in IH by the end of 2022, with a second
trial focused on narcolepsy commencing soon thereafter.
Additionally, we expect to report topline results from the
cardiovascular safety study involving serdexmethylphenidate (SDX)
as soon as Q3 2022. We believe that demonstrating an improved
cardiovascular safety profile compared to current stimulants could
be a key potential differentiator for KP1077.”
Dr. Mickle continued, “The execution of our
strategy is continuing as KemPharm seeks to build a diverse and
unique product portfolio combining an NDA-stage product with a
rapidly advancing clinical-stage pipeline targeting multiple
disease indications. Additionally, KemPharm continues to be excited
by the commercialization of AZSTARYS® by Corium. We are pleased
that Perry Sternberg, Corium’s President and CEO, will join our
second quarter results conference call to discuss ongoing
commercialization activities and review the substantial progress
made, including the recent national expansion of the launch of
AZSTARYS.”
Dr. Mickle concluded, “Looking ahead, we believe
KemPharm is well positioned for growth on multiple fronts, while
possessing a strong operational and financial foundation, including
$114.5 million in cash, cash equivalents and investments as of June
30, 2022. We believe these attributes, combined with the numerous
milestone opportunities anticipated for 2022 and beyond, position
KemPharm for continued growth despite current macroeconomic and
global equity market challenges. This is a very exciting time for
KemPharm.”
Q2 2022 Financial Results:
KemPharm’s net revenue for Q2 2022 was $1.3
million, as compared to Q2 2021 net revenue of $12.0 million. The
Q2 2021 net revenue included a one-time regulatory payment of $10
million for the DEA scheduling of AZSTARYS.
Research and development expenses were $4.8
million for Q2 2022, as compared to $2.8 million in Q2 2021, driven
primarily by spending on the KP1077 clinical development program
and, increased compensation costs, including non-cash stock-based
compensation expense.
General and administrative expenses were $3.6
million for Q2 2022, as compared to $2.3 million in Q2 2021. The
period-over-period increase was primarily driven by increased
compensation costs, including non-cash stock-based compensation
expense.
In addition, KemPharm recognized $17.7 million
of expense during Q2 2022 related to acquired in-process research
and development from the arimoclomol asset acquisition during the
quarter, which was immediately expensed.
Net loss attributable to common stockholders for
Q2 2022 was ($24.0) million, or ($0.70) per basic and diluted
share, compared to a net loss attributable to common stockholders
of ($10.7) million, or ($0.40) per basic and diluted share for the
same period in 2021. Net loss for Q2 2022 was driven primarily by
the one-time non-cash expense recognized in Q2 2022 for the
arimoclomol asset acquisition of $17.7 million, research and
development expense of $4.8 million, and general and administrative
expense of $3.6 million, partially offset by an income tax benefit
of $0.7 million. Excluding the one-time $17.7 million of non-cash
expense related to the arimoclomol asset acquisition recognized
during Q2 2022, adjusted net loss was ($6.4) million, or ($0.19)
per basic and diluted share.
As of June 30, 2022, total cash, cash
equivalents and investments were $114.5 million, which was a
decrease of $4.6 million compared to $119.1 million as of March 31,
2022, driven in part by increased spending on third-party research
and development costs related to the KP1077 clinical trial program,
and other expenses related to the arimoclomol asset acquisition.
Based on the Company’s current operating forecast, existing cash,
cash equivalents and investments are expected to be sufficient to
continue operations beyond 2025.
Conference Call
Information:
KemPharm will host a conference call and live
audio webcast with a slide presentation today at 5:00 p.m. ET, to
discuss its corporate and financial results for the second quarter
of 2022.
The audio webcast with slide presentation will
be accessible via the Investor Relations section of the Company’s
website, http://investors.kempharm.com/. An archive of the webcast
and presentation will be available for 90 days beginning at
approximately 6:00 p.m. ET, on August 11, 2022.
Additionally, interested participants and
investors may access conference call by dialing either:
- (800) 245-3047 (U.S.)
- (203) 518-9765 (International)
- Conference ID: KMPHQ222
About KemPharm:
KemPharm is a specialty pharmaceutical company
focused on the discovery, development and commercialization of
novel treatments for rare central nervous system (CNS),
neurodegenerative and lysosomal storage diseases. KemPharm has a
diverse product portfolio, combining a clinical-stage development
pipeline with NDA-stage and commercial assets. The pipeline
includes arimoclomol, an orally-delivered, first-in-class
investigational product candidate for Niemann-Pick disease type C
(NPC), and KP1077, which the Company is developing as a treatment
for idiopathic hypersomnia (IH), a rare neurological sleep
disorder, and narcolepsy. In addition, the U.S. Food and Drug
Administration (FDA) has approved AZSTARYS®, a once-daily treatment
for ADHD in patients age six years and older containing KemPharm’s
prodrug, serdexmethylphenidate (SDX), which is being commercialized
by Corium, Inc. in the U.S., and APADAZ®, an immediate-release
combination product containing benzhydrocodone, KemPharm’s prodrug
of hydrocodone, and acetaminophen, which is being commercialized by
KVK-Tech, Inc. in the U.S. For more information on KemPharm and its
pipeline of product candidates visit www.kempharm.com or connect
with us on Twitter, LinkedIn, Facebook and YouTube.
Caution Concerning Forward Looking
Statements:
This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current
facts, including without limitation and which can be identified by
the use of words such as “may,” “will,” “expect,” “project,”
“estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,”
“continue,” “could,” “intend,” “target,” “predict,” or the negative
versions of those words or other comparable words or expressions,
although not all forward-looking statements contain these
identifying words or expressions. Forward-looking statements are
not guarantees of future actions or performance. These
forward-looking statements include statements regarding the promise
and potential impact of our preclinical or clinical trial data,
including without limitation the timing and results of any clinical
trials or readouts, the timing or results of any IND applications
and NDA submissions, including the resubmission of the NDA for
arimoclomol, the potential uses or benefits of arimoclomol, KP1077,
SDX or any other product candidates for any specific disease
indication or at any dosage, the potential benefits of any of
KemPharm’s product candidates, the success or timing of the launch
or commercialization of AZSTARYS or any other products or related
sales milestones, the sufficiency of cash to fund operations, our
plans or ability to seek funding, and our strategic and product
development objectives. These forward-looking statements are based
on information currently available to KemPharm and its current
plans or expectations and are subject to a number of known and
unknown uncertainties, risks 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. These and other important factors are described in
detail in the “Risk Factors” section of KemPharm’s Annual Report on
Form 10-K for the year ended December 31, 2021, as updated by the
Quarterly Report on Form 10-Q for the three months ended June 30,
2022, and KemPharm’s other filings with the Securities and Exchange
Commission. While we may elect to update such forward-looking
statements at some point in the future, except as required by law,
we disclaim any obligation to do so, even if subsequent events
cause our views to change. Although we believe the expectations
reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct.
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.
KemPharm Contacts:
Tiberend Strategic Advisors, Inc.Jason
Rando/Daniel Kontoh-Boateng
jrando@tiberend.comdboateng@tiberend.com
KEMPHARM, INC.UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share
amounts)
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenue, net |
$ |
1,300 |
|
|
$ |
11,986 |
|
|
$ |
5,265 |
|
|
$ |
24,103 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
51 |
|
|
|
1,000 |
|
|
|
59 |
|
|
|
2,000 |
|
Research and development |
|
4,795 |
|
|
|
2,848 |
|
|
|
7,877 |
|
|
|
5,113 |
|
General and administrative |
|
3,558 |
|
|
|
2,305 |
|
|
|
6,292 |
|
|
|
4,197 |
|
Acquired in-process research and development |
|
17,663 |
|
|
|
— |
|
|
|
17,663 |
|
|
|
— |
|
Total operating expenses |
|
26,067 |
|
|
|
6,153 |
|
|
|
31,891 |
|
|
|
11,310 |
|
(Loss) income from
operations |
|
(24,767 |
) |
|
|
5,833 |
|
|
|
(26,626 |
) |
|
|
12,793 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on extinguishment of debt |
|
— |
|
|
|
789 |
|
|
|
— |
|
|
|
(16,096 |
) |
Interest expense related to amortization of debt issuance costs and
discount |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(150 |
) |
Interest expense on principal |
|
(36 |
) |
|
|
(16 |
) |
|
|
(41 |
) |
|
|
(215 |
) |
Fair value adjustment related to derivative and warrant
liability |
|
32 |
|
|
|
(394 |
) |
|
|
273 |
|
|
|
(424 |
) |
Interest and other income (expense), net |
|
14 |
|
|
|
(9 |
) |
|
|
(231 |
) |
|
|
(1 |
) |
Total other income (expense) |
|
10 |
|
|
|
370 |
|
|
|
1 |
|
|
|
(16,886 |
) |
(Loss) income before income
taxes |
|
(24,757 |
) |
|
|
6,203 |
|
|
|
(26,625 |
) |
|
|
(4,093 |
) |
Income tax benefit |
|
715 |
|
|
|
— |
|
|
|
719 |
|
|
|
— |
|
Net (loss) income |
$ |
(24,042 |
) |
|
$ |
6,203 |
|
|
$ |
(25,906 |
) |
|
$ |
(4,093 |
) |
Deemed dividend |
|
— |
|
|
|
(16,898 |
) |
|
|
— |
|
|
|
(54,342 |
) |
Net loss attributable to
common stockholders |
$ |
(24,042 |
) |
|
$ |
(10,695 |
) |
|
$ |
(25,906 |
) |
|
$ |
(58,435 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders |
$ |
(0.70 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.75 |
) |
|
$ |
(2.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
34,447,206 |
|
|
|
29,174,565 |
|
|
|
34,476,737 |
|
|
|
24,187,484 |
|
KEMPHARM, INC.UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS(in
thousands, except share and par value amounts)
|
June 30, |
|
December 31, |
|
2022 |
|
2021 |
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
76,779 |
|
|
$ |
112,346 |
|
Short-term investments |
|
4,199 |
|
|
|
— |
|
Accounts and other receivables |
|
2,820 |
|
|
|
1,528 |
|
Prepaid expenses and other current assets |
|
3,637 |
|
|
|
1,182 |
|
Total current assets |
|
87,435 |
|
|
|
115,056 |
|
Inventories |
|
779 |
|
|
|
— |
|
Property and equipment,
net |
|
904 |
|
|
|
884 |
|
Operating lease right-of-use
assets |
|
1,165 |
|
|
|
1,141 |
|
Long-term investments |
|
33,535 |
|
|
|
15,422 |
|
Other long-term assets |
|
440 |
|
|
|
438 |
|
Total assets |
$ |
124,258 |
|
|
$ |
132,941 |
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
3,600 |
|
|
$ |
3,038 |
|
Current portion of operating lease liabilities |
|
469 |
|
|
|
356 |
|
Current portion of discount and rebate liabilities |
|
1,796 |
|
|
|
— |
|
Other current liabilities |
|
1,294 |
|
|
|
836 |
|
Total current liabilities |
|
7,159 |
|
|
|
4,230 |
|
Line of credit payable |
|
12,800 |
|
|
|
— |
|
Derivative and warrant
liability |
|
57 |
|
|
|
330 |
|
Operating lease liabilities,
less current portion |
|
1,082 |
|
|
|
1,232 |
|
Discount and rebate
liabilities, less current portion |
|
3,900 |
|
|
|
— |
|
Other long-term
liabilities |
|
27 |
|
|
|
31 |
|
Total liabilities |
|
25,025 |
|
|
|
5,823 |
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Preferred stock: |
|
|
|
|
|
|
|
Undesignated preferred stock, $0.0001 par value, 10,000,000 shares
authorized, no shares issued or outstanding as of June 30, 2022
(unaudited) or December 31, 2021 |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000,000 shares authorized,
35,399,267 shares issued and 34,489,314 shares outstanding as of
June 30, 2022 (unaudited); 35,325,801 shares issued and 35,005,640
shares outstanding as of December 31, 2021 |
|
3 |
|
|
|
4 |
|
Additional paid-in capital |
|
399,701 |
|
|
|
396,957 |
|
Treasury stock, at cost |
|
(7,536 |
) |
|
|
(2,814 |
) |
Accumulated deficit |
|
(292,935 |
) |
|
|
(267,029 |
) |
Total stockholders' equity |
|
99,233 |
|
|
|
127,118 |
|
Total liabilities and
stockholders' equity |
$ |
124,258 |
|
|
$ |
132,941 |
|
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