ObsEva Announces Third Quarter 2022 Financial Results and Provides a Business Update
December 01 2022 - 4:01PM
Ad hoc announcement pursuant to Art. 53 LR of the SIX Swiss
Exchange
GENEVA, Switzerland –
December 1,
2022 – ObsEva SA (NASDAQ: OBSV; SIX: OBSN)
(“ObsEva” or the “Company”), a biopharmaceutical company developing
novel therapies for women’s health, today reported financial
results for the third quarter ended September 30, 2022 and provided
a business update.
“We are pleased to have neared the completion of
a restructuring process that allowed us to generate an important
influx of capital, positioned us to resolve our over-indebted
position, and streamlined our cost structure,” said Brian
O’Callaghan, CEO of ObsEva. “We are now well-positioned to support
the development of nolasiban, a novel, oral oxytocin receptor
antagonist being developed to improve clinical pregnancy and live
birth rates in women undergoing in vitro fertilization, and we look
forward to the initiation of our partner’s (Yuyuan BioScience)
clinical trial following the recent approval of their IND in
China.”
Recent Business
Highlights:
- IND Acceptance
for Nolasiban in China: Nolasiban is a novel, oral oxytocin
receptor antagonist being developed to improve clinical pregnancy
and live birth rates in women undergoing in vitro fertilization.
ObsEva retains worldwide, exclusive, commercial rights for
nolasiban, except for the People’s Republic of China where it has
been sub-licensed to Yuyuan BioScience (“Yuyuan”). Yuyuan’s IND
application for a Phase 1 clinical trial of nolasiban has been
accepted by the Center for Drug Evaluation at the Chinese National
Medical Products Administration. Yuyuan plans to initiate a
single-center, randomized, double-blind, placebo-controlled Phase 1
clinical trial in China to evaluate the safety, tolerability,
pharmacokinetics and pharmacodynamic characteristics of nolasiban
in healthy adult female subjects.
- Sale of
Ebopiprant Rights to XOMA: On November 22, 2022, ObsEva announced
the sale of the Ebopiprant royalty and milestone license to XOMA
Corporation (“XOMA”) for an upfront payment of $15 million and
future milestone payments of up to approximately $98 million. Sale
proceeds have positioned ObsEva to resolve its over-indebtedness
position, and ObsEva has been granted until December 15, 2022 to
provide Swiss statutory financial information to the Swiss courts,
at which time it intends to withdraw its previously announced
moratorium proceedings. The Ebopiprant sale proceeds are also
anticipated to position ObsEva to regain compliance with the
minimum stockholders’ equity requirement for continued listing of
the Company’s common shares on The Nasdaq Stock Market (“Nasdaq”).
Following the transaction, ObsEva now expects it has cash runway
through Q4 2023, providing strategic optionality.
- Assignment of
linzagolix contracts to Kissei: Transition of the linzagolix
program to Kissei Pharmaceutical Co., Ltd. (“Kissei”) is complete
following the assignment of clinical, manufacturing, and scientific
contracts related to the development of linzagolix. These
assignments represent savings of approximately $16.0 million in
contractual commitments, including $5.0 million of accounts payable
and accrued expenses recognized as assignment income during Q3 and
expected to be recognized as assignment income during Q4 2022.
-
Reduction-in-force: Termination of approximately 70% of employees
has been substantially completed, with expected savings of
approximately $7.6 million on an annual basis, which represents
estimated cash compensation related to salary, bonus, and benefits
to affected employees.
- Debt
restructuring: The Company restructured its debt owed to certain
funds and accounts managed by JGB Management, Inc. (“JGB”) via the
early retirement of debt and certain reductions in the conversion
price such that approximately $6.5 million of convertible notes are
currently outstanding as of December 1, 2022, compared with
approximately $41 million outstanding at June 30, 2022.
Financial Results for the
Third Quarter Ended
September
30, 2022
- ObsEva had cash
and cash equivalents of $9.7 million at September 30, 2022 compared
to $54.7 million at December 31, 2021. Subsequent to September 30,
2022, the Company received $15 million from XOMA related to the
sale of all rights related to Ebopiprant, and estimates that it has
approximately $16.0 million of cash, restricted cash, and cash
equivalents on hand as of November 30, 2022 following the payment
of substantially all accounts payable currently due.
- Operating income
other than revenue was $3.7 million for the quarter ended September
30, 2022 compared to $20.1 million in the prior year period. The
$3.7 million in assignment income was recognized following the
assignment of linzagolix contractual obligations to Kissei in the
current period as compared to the net proceeds of $20.1 million
received from the Organon License Agreement in the prior period.
Subsequent to September 30, 2022, the Company recognized an
additional $1.3 million in assignment income from the further
assignment of linzagolix contracts.
- Research and
development expenses were approximately $0.7 million for the
quarter ended September 30, 2022, compared to approximately $11.5
million in the prior year period, representing a decrease of
approximately $10.8 million. The decrease was primarily due to
transfer of development activities for the linzagolix program
following the termination of the Kissei license arrangement and
related vendor contracts, as well as lower salaries, bonus
estimates, and share based compensation expense resulting from the
termination of approximately 70% of our employees as announced in
September 2022 and other actions related to the planned corporate
restructuring.
- General and
administrative expenses were $3.6 million for the quarter ended
September 30, 2022 compared to $7.0 million in the prior year
period, a decrease of $3.4 million. The decrease was primarily due
to decreased professional fees resulting from the reduction of
consulting services following the termination of the Kissei License
Agreement, as well as decreased salary and share based compensation
expenses resulting from the corporate restructuring.
- Finance expense,
net was approximately $11.5 million for the quarter ended September
30, 2022, compared to $0.7 million for the prior year period. The
decrease was primarily due to a loss on the event of default under
the current outstanding notes, partially offset by a gain
recognized on the extinguishment of debt resulting from the
Amendment and Forbearance Agreement with JGB executed in July 2022
and other finance income recognized upon the release of a portion
of the prepayment penalty upon conversion of a portion of the
outstanding principal balance under the current outstanding notes
during the three months ended September 30, 2022.
- Net loss for the
quarter ended September 30, 2022 was approximately $12.1 million,
or $0.13 net loss per share, compared to net income of $0.8 million
in the prior year period, or $0.01 net income per share.
The third quarter 2022 financial statements can
be accessed in the financial reports section here of the Company’s
website, or directly here.
About Nolasiban
Nolasiban is a novel, oral oxytocin receptor
antagonist being developed to improve clinical pregnancy and live
birth rates in women undergoing in vitro fertilization. ObsEva
retains worldwide, exclusive, commercial rights for nolasiban,
except for the People’s Republic of China where it has been
sub-licensed to Yuyuan. Under the sublicense agreement with Yuyuan
for nolasiban, ObsEva is entitled to receive aggregate milestone
payments of up to $17 million upon the achievement of specified
development, regulatory, and first sales milestones, and aggregate
milestone payments of up to $115 million upon the achievement of
additional, tiered sales milestones. In addition, Yuyuan has agreed
to pay tiered royalties on net sales at percentages ranging from
high-single digit to low-second digits.
About ObsEva
ObsEva is a biopharmaceutical company developing
novel therapies to improve women’s reproductive health and
pregnancy. Through strategic in-licensing and disciplined drug
development, ObsEva has established a development program focused
on improving clinical pregnancy and live birth rates in women
undergoing in vitro fertilization. ObsEva is listed on the Nasdaq
Global Select Market and is traded under the ticker symbol “OBSV”
and on the SIX Swiss Exchange where it is traded under the ticker
symbol “OBSN”. For more information, please
visit www.ObsEva.com.
Cautionary Note Regarding
Forward-Looking Statements
Any statements contained in this press release
that do not describe historical facts may constitute
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements may be
identified by words such as “anticipate”, “believe”, “continue”,
“could”, “estimate”, “expect”, “intend”, “may”, “might”, “ongoing”,
“objective”, “plan”, “potential”, “predict”, “should”, “will”,
“would”, or the negative of these and similar expressions, and are
based on ObsEva’s current beliefs and expectations. These
forward-looking statements include statements regarding the status
of ObsEva’s restructuring process, expected benefits from the sale
of rights to ebopiprant to XOMA , ObsEva’s cash runway and
indebtedness position, the ability of ObsEva to support the
development of nolasiban, the receipt of potential milestone
payments under the agreement with XOMA, the receipt of potential
milestone and royalty payments under the sublicense agreement with
YuYuan, Yuyuan’s plans to initiate a Phase 1 clinical trial for
nolasiban as designed, expected savings from the workforce
reduction, the timing, outcome and potential impact of ObsEva’s
intended withdrawal of the pending moratorium proceedings before
Swiss courts, and ObsEva’s plans for and ability to regain
compliance with Nasdaq’s continued listing requirements. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those reflected in such
statements. Risks and uncertainties that may cause actual results
to differ materially include uncertainties in the ability of the
proceeds from the sale of rights to ebopiprant to XOMA to provide
the expected benefits, ObsEva’s cash requirements and ability to
resolve its current indebtedness position, the achievement of
milestones under the agreement with XOMA, the achievement of
milestones under the sublicense agreement with YuYuan, the ability
of Yuyuan to conduct a Phase 1 clinical trial for nolasiban as
designed, the workforce reduction to provide the anticipated
savings, the outcome and potential impact of ObsEva’s intended
withdrawal of the pending moratorium proceedings before Swiss
courts, including with respect to ObsEva’s agreements with third
parties and outstanding debt obligations, ObsEva’s ability to
successfully restructure its operations, ObsEva’s ability to regain
compliance with the continued listing rules of Nasdaq and the
potential for Nasdaq to use its discretionary authority to delist
ObsEva’s common shares in connection with the pending Swiss
moratorium proceedings if ObsEva is not able to withdraw such
proceedings, the conduct of clinical trials and clinical
development, including the risk that the results of earlier
clinical trials may not be predictive of the results of later stage
clinical trials, ObsEva’s reliance on third parties over which it
may not always have full control, and the capabilities of such
third parties, the impact of the ongoing novel coronavirus outbreak
and other geopolitical events, and other risks and uncertainties
that are described in the Risk Factors section of ObsEva’s Annual
Report on Form 20-F for the year ended December 31, 2021 filed with
Securities and Exchange Commission (the “SEC”) on March 10, 2022,
in the Reports on Form 6-K filed with the SEC on May 17, 2022,
August 17, 2022 and December 1, 2022 and other filings ObsEva makes
with the SEC. These documents are available on the Investors page
of ObsEva’s website at www.ObsEva.com. Any forward-looking
statements speak only as of the date of this press release and are
based on information available to ObsEva as of the date of this
release, and, except as required by law, ObsEva assumes no
obligation to, and does not intend to, update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
For further information, please contact:
CEO Administrative Contact
Shauna Dillon
shauna.dillon@obseva.ch
+41 22 552 1550
Investor Contact
Will Brown
will.brown@obseva.com
+1 (334) 313-2319
Unaudited Condensed Consolidated
Statements of Comprehensive Loss
(in USD ’000, except per
share data) |
|
|
Three-month periodended
September 30, |
|
|
Nine-month periodended
September 30, |
|
|
Notes |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
OPERATING INCOME OTHER
THAN REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income |
8 |
|
|
3 |
|
|
|
20,098 |
|
|
|
4,852 |
|
|
|
20,108 |
|
Assignment income |
8 |
|
|
3,709 |
|
|
|
— |
|
|
|
3,709 |
|
|
|
— |
|
Total operating income
other than revenue |
|
|
|
3,712 |
|
|
|
20,098 |
|
|
|
8,561 |
|
|
|
20,108 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
9 |
|
|
(692 |
) |
|
|
(11,531 |
) |
|
|
(13,411 |
) |
|
|
(41,532 |
) |
General and administrative
expenses |
|
|
|
(3,649 |
) |
|
|
(7,035 |
) |
|
|
(18,393 |
) |
|
|
(15,114 |
) |
Impairment of intangible
asset |
5 |
|
|
— |
|
|
|
— |
|
|
|
(19,400 |
) |
|
|
— |
|
Total operating
expenses |
|
|
|
(4,341 |
) |
|
|
(18,566 |
) |
|
|
(51,204 |
) |
|
|
(56,646 |
) |
OPERATING (LOSS)
INCOME |
|
|
|
(629 |
) |
|
|
1,532 |
|
|
|
(42,643 |
) |
|
|
(36,538 |
) |
Finance income |
|
|
|
2,885 |
|
|
|
128 |
|
|
|
2,385 |
|
|
|
702 |
|
Finance expense |
|
|
|
(2,494 |
) |
|
|
(822 |
) |
|
|
(4,472 |
) |
|
|
(2,423 |
) |
Loss on event of default |
6 |
|
|
(17,586 |
) |
|
|
— |
|
|
|
(17,586 |
) |
|
|
— |
|
Gain on debt extinguishment |
6 |
|
|
5,713 |
|
|
|
— |
|
|
|
5,713 |
|
|
|
— |
|
NET (LOSS) INCOME BEFORE
TAX |
|
|
|
(12,111 |
) |
|
|
838 |
|
|
|
(56,603 |
) |
|
|
(38,259 |
) |
Income tax income (expense) |
11 |
|
|
54 |
|
|
|
(19 |
) |
|
|
(53 |
) |
|
|
(70 |
) |
NET (LOSS) INCOME FOR THE
PERIOD |
|
|
|
(12,057 |
) |
|
|
819 |
|
|
|
(56,656 |
) |
|
|
(38,329 |
) |
Net (loss) income per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
12 |
|
|
(0.13 |
) |
|
|
0.01 |
|
|
|
(0.65 |
) |
|
|
(0.52 |
) |
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be
reclassified to profit and loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements on post-employment
benefit plans, net of tax |
14 |
|
|
5,581 |
|
|
|
— |
|
|
|
5,581 |
|
|
|
— |
|
TOTAL OTHER
COMPREHENSIVE INCOME |
|
|
|
5,581 |
|
|
|
— |
|
|
|
5,581 |
|
|
|
— |
|
TOTAL COMPREHENSIVE
(LOSS) INCOME FOR THE PERIOD |
|
|
|
(6,476 |
) |
|
|
819 |
|
|
|
(51,075 |
) |
|
|
(38,329 |
) |
Unaudited Condensed Consolidated Balance
Sheets
(In USD
’000) |
Notes |
|
September 30,2022 |
|
|
December 31,2021 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
4 |
|
|
9,684 |
|
|
|
54,734 |
|
Other receivables |
|
|
|
174 |
|
|
|
3,560 |
|
Prepaid expenses |
|
|
|
1,705 |
|
|
|
5,223 |
|
Total current
assets |
|
|
|
11,563 |
|
|
|
63,517 |
|
Non-current
assets |
|
|
|
|
|
|
|
|
|
Right-of-use assets |
|
|
|
313 |
|
|
|
625 |
|
Furniture, fixtures, and
equipment |
|
|
|
45 |
|
|
|
58 |
|
Intangible assets |
5 |
|
|
4,503 |
|
|
|
24,503 |
|
Other long-term assets |
|
|
|
383 |
|
|
|
288 |
|
Total non-current
assets |
|
|
|
5,244 |
|
|
|
25,474 |
|
Total
assets |
|
|
|
16,807 |
|
|
|
88,991 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
Other payables and current
liabilities |
|
|
|
7,213 |
|
|
|
9,038 |
|
Accrued expenses |
10 |
|
|
2,353 |
|
|
|
13,783 |
|
Current borrowings |
6 |
|
|
8,902 |
|
|
|
— |
|
Current lease liabilities |
|
|
|
367 |
|
|
|
686 |
|
Total current
liabilities |
|
|
|
18,835 |
|
|
|
23,507 |
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
|
Non-current lease
liabilities |
|
|
|
— |
|
|
|
240 |
|
Non-current borrowings |
6 |
|
|
— |
|
|
|
25,733 |
|
Post-employment obligations |
14 |
|
|
568 |
|
|
|
6,581 |
|
Other long-term liabilities |
|
|
|
553 |
|
|
|
591 |
|
Total non-current
liabilities |
|
|
|
1,121 |
|
|
|
33,145 |
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
8,467 |
|
|
|
6,489 |
|
Share premium |
|
|
|
441,306 |
|
|
|
430,630 |
|
Reserves |
|
|
|
35,129 |
|
|
|
32,195 |
|
Accumulated losses |
|
|
|
(488,051 |
) |
|
|
(436,975 |
) |
Total shareholders’
equity |
7 |
|
|
(3,149 |
) |
|
|
32,339 |
|
Total liabilities and
shareholders’ equity |
|
|
|
16,807 |
|
|
|
88,991 |
|
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