Cerecor Reports Third Quarter 2019 Results
November 14 2019 - 6:30AM
Cerecor Inc. (NASDAQ: CERC), a biopharmaceutical company focused on
becoming a leader in development and commercialization of
treatments for orphan diseases and neurology, announced today
its financial results for the third quarter ended September 30,
2019 and provided additional corporate highlights.
“It’s been a transformational start to the back-half of the year
for Cerecor. We continue to execute on our plan to increase
shareholder value by advancing our clinical pipeline and executing
transformative business development deals. CERC-802 achieved
several regulatory milestones and had encouraging results from its
Phase I Safety Study in Healthy Volunteers. CERC-301 final results
were reported from its neurogenic Orthostatic Hypotension (nOH)
trial in patients with Parkinson’s disease and is preparing to
advance into a proof-of-concept trial investigating its use in
Orthostatic Hypotension (OH) associated with Diabetes.
Diabetic OH is a significantly larger patient population (15-fold
greater than nOH with ~3 million U.S. patients) ; and there are no
approved therapies. Additionally, the sale of the Pediatric
Portfolio strengthens our balance sheet by providing non-dilutive
capital for R&D helping us to advance CERC-801 towards NDA
approval, allowing us to obtain a PRV for potential monetization.,”
said Dr. Simon Pedder, Executive Chairman of the Board.
Corporate Update
- On October 10, 2019, the Company entered into, and subsequently
closed on, an asset purchase agreement with Aytu BioScience, Inc.
(Aytu) to sell its Pediatric Portfolio with the overall deal valued
in excess of $43 millionº The Pediatric Portfolio includes the
following five product lines: Aciphex® Sprinkle™, Cefaclor for Oral
Suspension, Karbinal® ER, Flexichamber™, Poly-Vi-Flor® and
Tri-Vi-Flor™º Composite of $17 million in cash and preferred
stock ($4.5 in cash & 12.5 million of Aytu stock)º
Assumption of Cerecor’s outstanding payment obligations payable to
Deerfield CSF, LLC (“Deerfield Note”) and other liabilities in
excess of $15 millionº Elimination of existing royalty
obligations & various commercial accruals of $11 millionº
Estimated annual expense reduction of $7 to $9 million associated
with Commercial Sales organization transfer to Aytuº The
Company retained all rights to Millipred®, which is the Company’s
most profitable product. Millipred® profits will assist the
Company in funding its pipeline assets and may provide future
optionality towards monetization and further pipeline funding
- James Harrell, EVP of Marketing and Investor Relations, was
promoted to Chief Commercial Officer
- Private Placement of ~$3.7 million from Armistice Capital in
September 2019
Research and Development Update
Orphan Pipeline
- The CDG FIRST trial enrolled its first patient in July
2019. The purpose of the trial is to investigate the natural
course of disease and current treatment approaches for Congenital
Disorders of Glycosylation (CDGs). The data acquired through the
CDG FIRST study is expected to be used to support regulatory
filings for the CERC-800s series (CERC-801, CERC-802 and CERC-803),
and may help to expedite the first approved treatment(s) for
CDGs
- The U.S. Food and Drug Administration (“FDA”) communicated that
the Company may proceed under the IND for CERC-802 in
MPI-CDG (Mannose-Phosphate Isomerase)
- CERC-802 obtained fast-track designation (FTD) from the
FDA. Both CERC-801 and CERC-802 now have fast-track
designation from the FDA
- CERC-802 completed its Phase I Safety Study in healthy
volunteers. The single-center, US-based safety, tolerability
and pharmacokinetic study was an open-label, randomized,
single-dose, 4-way crossover study in 16 healthy adult volunteers.
Pharmacokinetic (PK) data is expected in early 2020
Neurological Pipeline
- CERC-301 completed and reported its final results from its
Phase I trial in nOHº The 20mg dose group (the highest dose
tested) demonstrated rapid, robust and sustained increases in blood
pressure over baseline and placebo with a maximum improvement of
29.1 mmHg throughout the study º Additionally, there was
strong dose-related consistency of plasma concentrations across all
doses studied. We believe this data may support a single
daily dose and has the potential to be used in a broader
Orthostatic Hypotension patient population
- Initiated a Phase I Proof-of-Concept trial in diabetic
orthostatic hypotension (DOH)º The purpose of this study is
to assess the single dose effects of CERC-301 in patients with
symptomatic DOHº This study is a randomized, double-blind,
placebo-controlled, two-way cross-over trial over two 24-hour
in-clinic visits. At each visit, subjects will receive a single 20
mg dose of CERC-301 or placebo then undergo a series of orthostatic
challenge tests over the 24 hour in-clinic periodº Patients
will also complete an OH symptomatic assessment following each
orthostatic challenge. Safety, tolerability, PK data will also be
collected. As part of the routine laboratory tests, particular
interest will be paid to the patient’s plasma glucose levels
over the course of the study
Third Quarter 2019 Financial Results
Net product revenue increased $1.4 million
to $5.5 million for the three months ended September 30, 2019 as
compared to the same period in 2018. The increase was due to
improved product mix and higher sales volume during the current
period.
Total operating expenses were $9.3 million for the three months
ended September 30, 2019, compared to operating expenses of $28.4
million for the three months ended September 30, 2018. The
significant decrease was due to $18.7 million of in-process
research and development costs as a result of the Ichorion
acquisition in 2018.
Net loss for the three months ended September 30, 2019 was $4.0
million compared to net loss of $24.6 million for the three months
ended September 30, 2018. The significant decrease was
largely a result of the 2018 in-process research and development
costs highlighted above.
The cash balance was $5.3 million for the quarter ended
September 30, 2019. The company received $4.5 million in cash
from Aytu from the sale of the pediatric portfolio in the fourth
quarter of 2019.
Unaudited Condensed Consolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2019 (a), (b) |
|
2018 (a) |
|
2019 (a), (b) |
|
2018 (a) |
|
|
|
(in
thousands, except per share data) |
|
(in
thousands, except per share data) |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
|
$ |
5,513 |
|
|
$ |
4,075 |
|
|
$ |
15,374 |
|
|
$ |
13,046 |
|
|
License and other revenue |
|
|
100 |
|
|
|
— |
|
|
|
100 |
|
|
|
— |
|
|
Sales force revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
297 |
|
|
Total
revenues, net |
|
|
5,613 |
|
|
|
4,075 |
|
|
|
15,474 |
|
|
|
13,343 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
|
1,435 |
|
|
|
3,111 |
|
|
|
3,241 |
|
|
|
5,398 |
|
|
Research and development |
|
|
1,743 |
|
|
|
1,048 |
|
|
|
8,857 |
|
|
|
3,780 |
|
|
Acquired in-process research and development |
|
|
— |
|
|
|
18,724 |
|
|
|
— |
|
|
|
18,724 |
|
|
General and administrative |
|
|
2,679 |
|
|
|
1,884 |
|
|
|
7,779 |
|
|
|
7,834 |
|
|
Sales and marketing |
|
|
2,631 |
|
|
|
2,311 |
|
|
|
8,676 |
|
|
|
5,889 |
|
|
Amortization expense |
|
|
1,037 |
|
|
|
1,065 |
|
|
|
3,195 |
|
|
|
3,316 |
|
|
Impairment of intangible assets |
|
|
— |
|
|
|
160 |
|
|
|
1,449 |
|
|
|
1,861 |
|
|
Change in fair value of contingent consideration |
|
|
(197 |
) |
|
|
85 |
|
|
|
(1,009 |
) |
|
|
361 |
|
|
Total operating expenses |
|
|
9,328 |
|
|
|
28,388 |
|
|
|
32,188 |
|
|
|
47,163 |
|
|
Loss from
operations |
|
|
(3,715 |
) |
|
|
(24,313 |
) |
|
|
(16,714 |
) |
|
|
(33,820 |
) |
|
Other
(expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
fair value of warrant liability and unit purchase option
liability |
|
|
35 |
|
|
|
(3 |
) |
|
|
7 |
|
|
|
(23 |
) |
|
Other
(expense) income, net |
|
|
(15 |
) |
|
|
— |
|
|
|
(24 |
) |
|
|
19 |
|
|
Interest
expense, net |
|
|
(206 |
) |
|
|
(235 |
) |
|
|
(614 |
) |
|
|
(578 |
) |
|
Total other
expense, net |
|
|
(186 |
) |
|
|
(238 |
) |
|
|
(631 |
) |
|
|
(582 |
) |
|
Net loss
before taxes |
|
|
(3,901 |
) |
|
|
(24,551 |
) |
|
|
(17,345 |
) |
|
|
(34,402 |
) |
|
Income tax
expense |
|
|
115 |
|
|
|
52 |
|
|
|
349 |
|
|
|
92 |
|
|
Net
loss |
|
$ |
(4,016 |
) |
|
$ |
(24,603 |
) |
|
$ |
(17,694 |
) |
|
$ |
(34,494 |
) |
|
Net loss per
share of common stock, basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.31 |
) |
|
$ |
(1.05 |
) |
|
Net loss per
share of preferred stock, basic and diluted |
|
$ |
(0.35 |
) |
|
$ |
— |
|
|
$ |
(1.56 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The unaudited
condensed consolidated statements of operations for the three and
nine months ended September 30, 2019 and 2018 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. |
|
(b) The unaudited
condensed consolidated statements of operations for the three and
nine months ended September 30, 2019 do not include the impact of
the Aytu transaction because the transaction was entered into and
subsequently closed in the fourth quarter of 2019. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
September
30 |
|
December
31, |
|
|
|
2019 (a), (b) |
|
2018 (a) |
|
|
|
(unaudited) |
|
|
|
|
|
|
(in
thousands) |
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,251 |
|
|
$ |
10,646 |
|
|
Accounts receivable, net |
|
|
4,956 |
|
|
|
3,158 |
|
|
Other receivables |
|
|
208 |
|
|
|
5,469 |
|
|
Inventory, net |
|
|
402 |
|
|
|
1,111 |
|
|
Prepaid expenses and other current assets |
|
|
1,670 |
|
|
|
1,529 |
|
|
Restricted cash, current portion |
|
|
102 |
|
|
|
19 |
|
|
Total
current assets |
|
|
12,589 |
|
|
|
21,932 |
|
|
Property and
equipment, net |
|
|
1,497 |
|
|
|
587 |
|
|
Intangible
assets, net |
|
|
26,595 |
|
|
|
31,239 |
|
|
Goodwill |
|
|
16,411 |
|
|
|
16,411 |
|
|
Restricted
cash, net of current portion |
|
|
102 |
|
|
|
82 |
|
|
Total
assets |
|
$ |
57,194 |
|
|
$ |
70,251 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
826 |
|
|
$ |
1,446 |
|
|
Accrued expenses and other current liabilities |
|
|
13,134 |
|
|
|
19,731 |
|
|
Income taxes payable |
|
|
1,015 |
|
|
|
2,032 |
|
|
Long-term debt, current portion |
|
|
1,050 |
|
|
|
1,050 |
|
|
Contingent consideration, current portion |
|
|
1,237 |
|
|
|
1,957 |
|
|
Total
current liabilities |
|
|
17,262 |
|
|
|
26,216 |
|
|
Long-term
debt, net of current portion |
|
|
14,255 |
|
|
|
14,328 |
|
|
Contingent
consideration, net of current portion |
|
|
6,236 |
|
|
|
7,094 |
|
|
Deferred tax
liability, net |
|
|
98 |
|
|
|
69 |
|
|
License
obligations |
|
|
— |
|
|
|
1,250 |
|
|
Other
long-term liabilities |
|
|
1,122 |
|
|
|
386 |
|
|
Total
liabilities |
|
|
38,973 |
|
|
|
49,343 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Common
stock—$0.001 par value; 200,000,000 shares authorized at September
30, 2019 and December 31, 2018; 44,106,794 and 40,804,189 shares
issued and outstanding at September 30, 2019 and December 31, 2018,
respectively |
|
|
44 |
|
|
|
41 |
|
|
Preferred
stock—$0.001 par value; 5,000,000 shares authorized at September
30, 2019 and December 31, 2018; 2,857,143 shares issued and
outstanding at September 30, 2019 and December 31, 2018 |
|
|
3 |
|
|
|
3 |
|
|
Additional
paid-in capital |
|
|
134,086 |
|
|
|
119,082 |
|
|
Accumulated
deficit |
|
|
(115,912 |
) |
|
|
(98,218 |
) |
|
Total
stockholders’ equity |
|
|
18,221 |
|
|
|
20,908 |
|
|
Total
liabilities and stockholders’ equity |
|
$ |
57,194 |
|
|
$ |
70,251 |
|
|
|
|
|
|
|
|
|
|
(a) The condensed consolidated balance sheets as of September 30,
2019 and December 31, 2018 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. |
|
(b) The condensed consolidated balance sheets as of September 30,
2019 do not include the impact of the Aytu transaction because the
transaction was entered into and subsequently closed in the fourth
quarter of 2019. |
|
|
|
|
|
|
|
|
|
Outlook
Cerecor was on track to achieve its 2019 revenue guidance in a
range of $20 to $22 million. However, as a result of the sale
of the Pediatric Portfolio to Aytu, Cerecor will no longer be
providing revenue guidance.
About Cerecor Cerecor is a biopharmaceutical
company focused on becoming a leader in development and
commercialization of treatments for orphan diseases and
neurological conditions. The Company is building a robust pipeline
of innovative therapies in orphan diseases and neurology. The
Company’s pediatric rare disease pipeline is led by CERC-801,
CERC-802 and CERC-803 (“CERC-800 programs”), which are therapies
for inborn errors of metabolism, specifically disorders known as
Congenital Disorders of Glycosylation. The FDA granted Rare
Pediatric Disease Designation and Orphan Drug Designation (“ODD”)
to all three CERC-800 compounds, thus qualifying the Company to
receive a Priority Review Voucher (“PRV”) upon approval of a new
drug application (“NDA”). The PRV may be sold or transferred an
unlimited number of times. The Company plans to leverage the
505(b)(2) NDA pathway for all three compounds to accelerate
development and approval. The Company is also developing one
other preclinical pediatric orphan rare disease compound, CERC-913,
for the treatment of mitochondrial DNA Depletion Syndrome.
The Company’s neurology pipeline is led by CERC-301, a Glutamate
NR2B selective, NMDA Receptor antagonist, which Cerecor is
currently exploring as a novel treatment for orthostatic
hypotension. The Company is also developing CERC-406, a
CNS-targeted COMT inhibitor for Parkinson’s Disease. The
Company also has one marketed product, Millipred®, an oral
prednisolone indicated across a wide variety of inflammatory
conditions and indications.
For more information about Cerecor, please visit
www.cerecor.com.
Forward-Looking StatementsThis 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: the development of product
candidates or products; timing and success of trial results and
regulatory review; potential attributes and benefits of product
candidates; the expansion of Cerecor’s drug portfolio; 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: drug
development costs, timing and other risks, including reliance on
investigators and enrollment of patients in clinical trials;
regulatory risks; reliance on and the need to attract, integrate
and retain key personnel; Cerecor’s cash position and the potential
need for it to raise additional capital; 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.
For Media and Investor InquiriesJames Harrell,
Chief Commercial OfficerCerecor
Inc.jharrell@cerecor.com623.439.2220 office
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