Cerecor Inc. (NASDAQ:CERC) (“Cerecor” or the “Company”) today
announced financial results for the first quarter of 2018. Net
revenues for the first quarter of 2018 were $4.5 million. As
of March 31, 2018, the Company had $65.4 million in total assets
including cash and cash equivalents of $2.5 million, accounts
receivable of $2.8 million, and escrowed receivable of $3.8
million. Total liabilities were $40.8 million, which included $14.8
million of current liabilities and $14.6 million of long-term debt,
and total stockholder’s equity was $24.6 million.
First Quarter 2018 Corporate & Commercial
Highlights
- In March 2018, Cerecor announced the appointment of Peter
Greenleaf as Chief Executive Officer. Mr. Greenleaf brings to
Cerecor over two decades of biopharmaceutical experience, having
most recently served as Chairman and CEO of Sucampo
Pharmaceuticals, which was recently acquired by Mallinckrodt
Pharmaceuticals. He also served as CEO or President with
Histogenics, a regenerative medicine company, MedImmune LLC, the
global biologics arm of AstraZeneca and MedImmune Ventures, a
wholly owned venture capital fund within AstraZeneca Group.
Prior to these positions, he held strategic commercial roles with a
number of other biopharmaceutical companies.
- In February 2018, Cerecor acquired all rights to Avadel's
marketed pediatric products, Karbinal™ ER, AcipHex® Sprinkle™,
Cefaclor for Oral Suspension, and Flexichamber™. Additionally,
Avadel Ireland will develop and provide Cerecor with four stable
product formulations of Cerecor's choosing utilizing its
proprietary LiquiTime™ and Micropump® technology. Three of these
development projects are already underway.
- Q1 2018 was our first full quarter of product sales of
Poly-Vi-Flor® and Tri-Vi-Flor®. Additionally, Cerecor began
shipping Karbinal™ ER to wholesalers in the last week of March and
anticipates shipping the other Avadel acquired commercial products
beginning in the second quarter of 2018.
- In March 2018, Cerecor gained clearance of its Investigational
New Drug (“IND”) application from the U.S. Food & Drug
Administration to initiate clinical studies of CERC-301 in
Neurogenic Orthostatic Hypotension (“nOH”). nOH is a rare
neurologic disorder that is characterized by low blood pressure
that occurs upon standing. Cerecor anticipates dosing the first
patient in the second quarter of 2018.
- In April 2018, Cerecor appointed Dr. Simon Pedder to its Board
of Directors. Dr. Pedder played key roles of the development of
Northera® in nOH and tolcapone in Parkinson’s.
“The first quarter reflects an exciting pivot of Cerecor to an
integrated biopharmaceutical company with a recently established
and growing portfolio of pediatric commercial products as well as
an equally important and growing pipeline of transformational
assets,” said Peter Greenleaf, Chief Executive Officer of
Cerecor. “We are pleased with the results of our investment
in Cerecor’s development platform highlighted by the critical
milestone of obtaining clearance for our CERC-301 IND
application. We have made good progress toward the
integration of our recently acquired pediatric focused companies
and product lines and we believe we are positioned well to further
leverage assets such as our sales team through both organic and
inorganic growth. Looking ahead, we remain focused on
executing our key business objectives to continue the aggressive
transformation of the company.”
First Quarter 2018 Financial Results
Net revenues were $4.5 million for the first quarter ended March
31, 2018, which primarily resulted from a full quarter of product
sales. We did not have product sales in the first quarter of
2017. Grant revenue was $0.4 million for the quarter ended March
31, 2017 as a result of our research and development grants awarded
by the National Institute on Alcohol Abuse and Alcoholism at the
National Institutes of Health in 2016.
Research and development ("R&D") expenses increased to $1.6
million for the first quarter of 2018, compared to $1.0 million for
the first quarter of 2017. This increase resulted from the Company
preparing CERC-301 for nOH clinical trials and toxicology studies
in support of clinical development.
General and administrative expenses increased to $2.9 million
for the first quarter of 2018, compared to $1.3 million for the
first quarter of 2017. This increase was driven by professional
fees and integration costs associated with our recent
acquisitions.
Cerecor reported a net loss of $3.9 million, or ($0.12) per
share, for the first quarter of 2018, compared to a net loss of
$2.0 million, or ($0.19) per share, for the first quarter of
2017.
First Quarter 2018 EBITDA
Cerecor reported Adjusted EBITDA (as defined below) of ($1.4)
million for the first quarter of 2018, compared to ($1.6) million
for the first quarter of 2017. Cerecor reported EBITDA (as
defined below) of ($2.7) million for the first quarter of 2018
compared to ($1.9) million for the first quarter of 2017. A
table to reconcile the GAAP net loss to Non-GAAP Adjusted EBITDA
for the respective periods follows:
|
Reconcilation of GAAP Net Loss to Adjusted
EBITDA |
(in thousands) |
|
|
Three Months Ended |
|
March 31, |
|
2018 |
|
2017 |
|
|
|
|
GAAP Net
loss |
$ |
(3,883 |
) |
|
$ |
(1,961 |
) |
Adjustments: |
|
|
|
Income tax expense |
|
23 |
|
|
|
- |
|
Interest expense,
net |
|
100 |
|
|
|
58 |
|
Amortization of
intangibles |
|
1,017 |
|
|
|
- |
|
Depreciation |
|
6 |
|
|
|
6 |
|
Inventory step-up
adjustment |
|
45 |
|
|
|
- |
|
EBITDA |
$ |
(2,692 |
) |
|
$ |
(1,897 |
) |
Non-GAAP
Adjustments: |
|
|
|
Stock-based
compensation |
|
243 |
|
|
|
332 |
|
Restructuring
costs |
|
213 |
|
|
|
- |
|
Acquisition and
integration related expenses |
|
378 |
|
|
|
- |
|
Lachlan legal
arbitration costs |
|
423 |
|
|
|
- |
|
Total
Non-GAAP Adjustments |
|
1,257 |
|
|
|
332 |
|
Adjusted
EBITDA |
$ |
(1,435 |
) |
|
$ |
(1,565 |
) |
|
|
|
|
Non-GAAP Financial Measures
This press release contains two financial metrics (EBITDA
and Adjusted EBITDA) that are considered “non-GAAP” financial
metrics under applicable Securities and Exchange
Commission rules and regulations. These non-GAAP financial
metrics should be considered supplemental to and not a substitute
for financial information prepared in accordance with generally
accepted accounting principles. The Company’s definition of these
non-GAAP metrics may differ from similarly titled metrics used by
companies. EBITDA reflects net income excluding the impact of
provision for income taxes, interest expense, net, depreciation,
amortization of intangibles and inventory step-up adjustment.
Adjusted EBITDA adjusts EBITDA for specified items that can be
highly variable or difficult to predict, and various non-cash
items, including share based compensation, restructuring costs,
acquisition and integration related expenses, legal settlements and
reserves, impairments and Lachlan legal arbitration costs.
The Company views these non-GAAP financial metrics as a means to
facilitate management’s financial and operational decision-making,
including evaluation of the Company’s historical operating results
and comparison to competitors’ operating results. These non-GAAP
financial metrics reflect an additional way of viewing aspects of
the Company’s operations that, when viewed with GAAP results, may
provide a more complete understanding of factors and trends
affecting the Company’s business.
The determination of the amounts that are excluded from these
non-GAAP financial metrics is a matter of management judgment and
depends upon, among other factors, the nature of the underlying
expense or income amounts. Because non-GAAP financial metrics
exclude the effect of items that will increase or decrease the
Company’s reported results of operations, management strongly
encourages investors to review the Company’s consolidated financial
statements and publicly-filed reports in their entirety.
Outlook
Based upon our current performance, the Company has increased
its full-year 2018 net revenue guidance to $16 to $18 million and
projects its 2018 adjusted EBITDA to be approximately break-even.
The Company expects to incur acquisition and integration expenses
and restructuring costs in 2018 of approximately $1.2
million. These estimates reflect management’s current
expectations for Cerecor’s 2018 performance. Actual
results may vary, whether as a result of market conditions, or
other factors.
About Cerecor
Cerecor is an integrated biopharmaceutical company focused on
pediatric healthcare and developing innovative therapies that make
a difference in the lives of patients. The Company’s pipeline is
led by CERC-301, which Cerecor currently intends to explore as an
adjunctive treatment for Neurogenic Orthostatic Hypotension (nOH)
and other potential orphan and neurological indications.
Cerecor intends to initiate a Phase I safety study in 2018. Cerecor
is also developing two pre-clinical stage compounds, CERC-611 and
CERC-406. The Company’s R&D efforts are supported by profits
from its franchise of commercial medications led by prescribed
dietary supplements Poly-Vi-Flor® (multivitamin and fluoride
supplement tablet, chewable) and Tri-Vi-Flor® (multivitamin and
fluoride supplement suspension/drops) as well as its prescribed
drugs Karbinal™ ER, AcipHex® Sprinkle™, and Cefaclor for Oral
Suspension.
For more information about Cerecor, please visit
www.cerecor.com.
Mariam MorrisChief Financial Officermmorris@cerecor.com
Forward-Looking Statements
This press release may include forward-looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical
facts. Such forward-looking statements are subject to significant
risks and uncertainties that are subject to change based on various
factors (many of which are beyond Cerecor’s control), which could
cause actual results to differ from the forward-looking statements.
Such statements may include, without limitation, statements with
respect to Cerecor’s plans, objectives, projections, expectations
and intentions and other statements identified by words such as
“projects,” “may,” “will,” “could,” “would,” “should,” “continue,”
“seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,”
“estimates,” “intends,” “plans,” “potential,” or similar
expressions (including their use in the negative), or by
discussions of future matters such as: our 2018 outlook; the
development of product candidates or products; potential attributes
and benefits of product candidates; the expansion of Cerecor’s drug
portfolio, Cerecor’s ability to identify new indications for its
current portfolio; and new product candidates that could be
in-licensed, and other statements that are not historical. These
statements are based upon the current beliefs and expectations of
Cerecor’s management but are subject to significant risks and
uncertainties, including: risks associated with acquisitions,
including the need to quickly and successfully integrate acquired
assets and personnel; Cerecor’s cash position and the potential
need for it to raise additional capital; reliance on key personnel,
including Mr. Greenleaf; drug development costs and timing; and
those other risks detailed in Cerecor’s filings with the Securities
and Exchange Commission. Actual results may differ from those set
forth in the forward-looking statements. Except as required by
applicable law, Cerecor expressly disclaims any obligations or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Cerecor’s expectations with respect thereto or any change in
events, conditions or circumstances on which any statement is
based.
|
|
Cerecor Inc. Unaudited
Condensed Consolidated Statements of Operations (in
thousands, except share and per share amounts) |
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2018 (a) |
|
2017 (a) |
Revenues |
|
|
|
|
|
|
Product
and sales force revenue, net |
|
|
4,483 |
|
|
|
— |
|
Grant
revenue |
|
|
— |
|
|
|
384 |
|
Total
revenues, net |
|
$ |
4,483 |
|
|
$ |
384 |
|
Operating expenses: |
|
|
|
|
|
|
Cost of
product sales |
|
|
864 |
|
|
|
— |
|
Research
and development |
|
|
1,650 |
|
|
|
953 |
|
General
and administrative |
|
|
2,919 |
|
|
|
1,330 |
|
Sales and
marketing |
|
|
1,525 |
|
|
|
— |
|
Amortization expense |
|
|
1,017 |
|
|
|
— |
|
Total
operating expenses |
|
|
7,975 |
|
|
|
2,283 |
|
Loss
from operations |
|
|
(3,492 |
) |
|
|
(1,899 |
) |
Other
expense, net: |
|
|
|
|
|
|
Change
in fair value of warrant liability, unit purchase option liability
and contingent consideration |
|
|
(286 |
) |
|
|
(4 |
) |
Interest
expense, net |
|
|
(82 |
) |
|
|
(58 |
) |
Total
other expense |
|
|
(368 |
) |
|
|
(62 |
) |
Net loss
before taxes |
|
|
(3,860 |
) |
|
|
(1,961 |
) |
Income
tax expense |
|
|
23 |
|
|
|
— |
|
Net
loss |
|
$ |
(3,883 |
) |
|
$ |
(1,961 |
) |
Net loss
per share of common stock, basic and diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.19 |
) |
Weighted-average shares of common stock outstanding, basic |
|
|
31,316,246 |
|
|
|
10,216,014 |
|
Weighted-average shares of common stock outstanding, diluted |
|
|
31,316,246 |
|
|
|
10,216,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The consolidated condensed statements of operations for the
quarters ended March 31, 2018 and 2017 have been derived from the
reviewed financial statements but do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. |
|
|
Cerecor Inc. Condensed
Consoldiated Balance Sheets(in thousands) |
|
|
|
March 31, |
|
December 31, |
|
|
2018 |
|
2017 (a) |
|
|
(unaudited) |
|
|
|
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,524 |
|
$ |
2,472 |
Accounts
receivable, net |
|
|
2,830 |
|
|
2,935 |
Escrowed
cash receivable |
|
|
3,754 |
|
|
3,752 |
Inventory, net |
|
|
3,440 |
|
|
382 |
Prepaid
expenses and other current assets |
|
|
789 |
|
|
706 |
Other
receivables |
|
|
56 |
|
|
427 |
Total
current assets |
|
|
13,393 |
|
|
10,674 |
Intangible assets, net |
|
|
33,100 |
|
|
17,664 |
Goodwill |
|
|
18,678 |
|
|
14,293 |
Property
and equipment, net |
|
|
59 |
|
|
45 |
Restricted cash, net of current portion |
|
|
131 |
|
|
131 |
Total
assets |
|
$ |
65,361 |
|
$ |
42,807 |
Liabilities and stockholders’ equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
10,906 |
|
$ |
8,830 |
Income
taxes payable |
|
|
2,267 |
|
|
2,259 |
Long term
debt, current portion |
|
|
788 |
|
|
— |
Contingent consideration |
|
|
829 |
|
|
— |
|
|
|
14,790 |
|
|
11,089 |
Long
term debt, net of current portion |
|
|
14,590 |
|
|
— |
Contingent consideration, long term |
|
|
9,821 |
|
|
— |
Deferred
tax liability, net |
|
|
23 |
|
|
|
Other
long term liabilities |
|
|
1,554 |
|
|
3,858 |
Total
liabilities |
|
|
40,778 |
|
|
14,947 |
Stockholders’ equity |
|
|
24,583 |
|
|
27,860 |
Total
liabilities and stockholders’ equity |
|
$ |
65,361 |
|
$ |
42,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The consolidated condensed balance sheets as of March 31,
2018 and December 31, 2017 have been derived from the reviewed and
audited financial statements but do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. |
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