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Avadel Pharmaceuticals Reports First Quarter 2020 Financial Results
- Reported positive topline data from the pivotal Phase 3 REST-ON study
- Strengthened balance sheet with
$190 million in gross proceeds from a private placement inFebruary 2020 and public equity offering inMay 2020
- Reported revenue of
$12.2 million for the first quarter of 2020
- Management to host a conference call today at
8:30 a.m. ET
“During the first quarter of 2020, we made significant progress advancing the development program for once-nightly FT218 with the completion of the pivotal Phase 3 REST-ON study. In April, we delivered positive topline data from the study, which showed that all three dose levels of once-nightly FT218 demonstrated statistically significant (p<0.001) and clinically meaningful improvement for all three co-primary endpoints compared to placebo,” said
“Looking ahead, we have a multi-pronged strategy to continue advancing towards achieving our objective of bringing once-nightly FT218, if approved, to patients. Our strategic priorities include finalizing the New Drug Application (NDA), compiling additional supporting scientific data to position FT218 in the market and expanding our capabilities to prepare for product launch. We look forward to keeping patients, healthcare providers, and shareholders updated on our progress. If approved, FT218 could be the first once-nightly therapy to address both excessive daytime sleepiness and cataplexy in patients with narcolepsy. As such, we believe once-nightly FT218 could offer a meaningful alternative for patients in the approximate
First quarter and recent company highlights
- Announced positive topline data for the pivotal Phase 3 REST-ON trial of FT218 for excessive daytime sleepiness and cataplexy in patients with narcolepsy:
° Once-nightly FT218 at the 9 g dose demonstrated highly statistically significant (p<0.001) and clinically meaningful improvement across all three co-primary endpoints (Maintenance of Wakefulness Test, Clinical Global Impression-Improvement and Mean Weekly Cataplexy Attacks) compared to placebo.
° Once-nightly FT218 at the 9 g dose was generally well-tolerated, with commonly known sodium oxybate adverse reactions occurring at low rates (nausea 1.3%, vomiting 5.2%, decreased appetite 2.6%, dizziness 5.2%, somnolence 3.9%, tremor 1.3%, enuresis 9%; discontinuation rate due to adverse reactions 3.9%).
° Once-nightly FT218 at the 7.5 g and 6 g dose levels also achieved highly statistically significant (p<0.001), clinically meaningful improvements across all three co-primary endpoints compared to placebo, as soon as 3 weeks after initiating FT218.
- Raised
$190 million of gross proceeds to strengthen the Company’s balance sheet and provide the capital to support its strategic priorities to bring FT218 to market:
° Completed a private placement in
° Completed a public equity offering in
- Reported revenues of
$12.2 million for the first quarter of 2020.
Overview of first quarter 2020 financial results
Revenues for the first quarter of 2020 were $12.2 million, compared to $16.4 million in the first quarter of 2019. The decline on a year-over-year basis was primarily attributed to lower overall sales volume across the Company’s hospital products as a result of increased market competition.
R&D expenses were $5.5 million in the first quarter of 2020, compared to
SG&A expenses were
Income tax benefit was
Net loss for the first quarter of 2020 was
Cash, cash equivalents and marketable securities were
Conference Call:
A conference call to discuss these results has been scheduled for Monday, May 11, 2020 at 8:30 a.m. ET. To access the conference call, investors are invited to dial (877) 407-9716 (
Footnote:
1. Annualized Xyrem revenues from the Jazz Pharmaceuticals Full Year and Fourth Quarter 2019 Financial Results press release dated
About FT218
FT218 is an investigational, once-nightly formulation of Micropump™ controlled-release (CR) sodium oxybate. The Company recently completed the REST-ON study, a pivotal, double-blind, randomized, placebo-controlled Phase 3 trial, to assess the efficacy and safety of FT218 in the treatment of excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy. FT218 has been granted Orphan Drug Designation from the
About
Cautionary Disclosure Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements relate to our future expectations, beliefs, plans, strategies, objectives, results, conditions, financial performance, prospects, or other events. Such forward-looking statements include, but are not limited to, the planned submission of the FT218 NDA to the FDA and commercial launch of FT218, if approved. In some cases, forward-looking statements can be identified by the use of words such as “will,” “may,” “could,” “believe,” “expect,” “look forward,” “on track,” “guidance,” “anticipate,” “estimate,” “project,” “next steps” and similar expressions, and the negatives thereof (if applicable).
Our forward-looking statements are based on estimates and assumptions that are made within the bounds of our knowledge of our business and operations and that we consider reasonable. However, our business and operations are subject to significant risks, and, as a result, there can be no assurance that actual results of our research, development and commercialization activities and the results of our business and operations will not differ materially from the results contemplated in such forward-looking statements. Factors that could cause actual results to differ from expectations in our forward-looking statements include the risk that the impact of the current COVID-19 pandemic on our financial results and results of operations could be greater than we anticipate and the risks and uncertainties described in the “Risk Factors” section of Part I, Item 1A of our Annual Report on Form 10-K for the year ended
Forward-looking statements speak only as of the date they are made and are not guarantees of future performance. Accordingly, you should not place undue reliance on forward-looking statements. We do not undertake any obligation to publicly update or revise our forward-looking statements, except as required by law.
Contacts:
Chief Financial Officer
Phone: (636) 449-1843
Email: tmchugh@avadel.com
Phone: (212) 915.2564
Email: tim@lifesciadvisors.com
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(In thousands, except per share data)
(Unaudited)
Three Months Ended |
||||||||
2020 | 2019 | |||||||
Product sales | $ | 12,243 | $ | 16,437 | ||||
Operating expenses: | ||||||||
Cost of products | 2,457 | 3,266 | ||||||
Research and development expenses | 5,530 | 7,329 | ||||||
Selling, general and administrative expenses | 7,913 | 10,446 | ||||||
Intangible asset amortization | 203 | 201 | ||||||
Changes in fair value of contingent consideration | 2,478 | 2,134 | ||||||
Restructuring costs | 159 | 1,228 | ||||||
Total operating expenses | 18,740 | 24,604 | ||||||
Operating loss | (6,497 | ) | (8,167 | ) | ||||
Investment and other income, net | (378 | ) | 817 | |||||
Interest expense | (3,190 | ) | (3,062 | ) | ||||
Loss on deconsolidation of subsidiary | — | (2,673 | ) | |||||
Other expense - changes in fair value of contingent consideration payable | (310 | ) | (307 | ) | ||||
Loss before income taxes | (10,375 | ) | (13,392 | ) | ||||
Income tax benefit | (9,510 | ) | (374 | ) | ||||
Net loss | $ | (865 | ) | $ | (13,018 | ) | ||
Net loss per share - basic | $ | (0.02 | ) | $ | (0.35 | ) | ||
Net loss per share - diluted | (0.02 | ) | (0.35 | ) | ||||
Weighted average number of shares outstanding - basic | 41,057 | 37,354 | ||||||
Weighted average number of shares outstanding - diluted | 41,057 | 37,354 | ||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 73,506 | $ | 9,774 | ||||
Marketable securities | 39,977 | 54,384 | ||||||
Accounts receivable | 8,797 | 8,281 | ||||||
Inventories | 3,523 | 3,570 | ||||||
Research and development tax credit receivable | 1,835 | 2,107 | ||||||
Prepaid expenses and other current assets | 3,337 | 4,264 | ||||||
Total current assets | 130,975 | 82,380 | ||||||
Property and equipment, net | 472 | 544 | ||||||
Operating lease right-of-use assets | 3,365 | 3,612 | ||||||
18,491 | 18,491 | |||||||
Intangible assets, net | 610 | 813 | ||||||
Research and development tax credit receivable | 6,288 | 6,322 | ||||||
Other non-current assets | 47,524 | 39,274 | ||||||
Total assets | $ | 207,725 | $ | 151,436 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Current portion of long-term contingent consideration payable | $ | 5,855 | $ | 5,554 | ||||
Current portion of operating lease liability | 604 | 645 | ||||||
Accounts payable | 6,790 | 6,100 | ||||||
Accrued expenses | 14,858 | 19,810 | ||||||
Income taxes | 2,297 | 43 | ||||||
Other current liabilities | 1,932 | 3,832 | ||||||
Total current liabilities | 32,336 | 35,984 | ||||||
Long-term debt | 123,258 | 121,686 | ||||||
Long-term contingent consideration payable, less current portion | 12,195 | 11,773 | ||||||
Long-term operating lease liability | 2,205 | 2,319 | ||||||
Other non-current liabilities | 5,664 | 8,873 | ||||||
Total liabilities | 175,658 | 180,635 | ||||||
Shareholders’ equity (deficit): | ||||||||
Preferred shares, nominal value of |
5 | — | ||||||
Ordinary shares, nominal value of |
518 | 429 | ||||||
(49,998 | ) | (49,998 | ) | |||||
Additional paid-in capital | 497,249 | 434,391 | ||||||
Accumulated deficit | (392,080 | ) | (391,215 | ) | ||||
Accumulated other comprehensive loss | (23,627 | ) | (22,806 | ) | ||||
Total shareholders’ equity (deficit) | 32,067 | (29,199 | ) | |||||
Total liabilities and shareholders’ equity (deficit) | $ | 207,725 | $ | 151,436 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended |
||||||||
2020 | 2019 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (865 | ) | $ | (13,018 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 456 | 369 | ||||||
Remeasurement of acquisition-related contingent consideration | 2,478 | 2,134 | ||||||
Remeasurement of financing-related contingent consideration | 310 | 307 | ||||||
Amortization of debt discount and debt issuance costs | 1,573 | 1,445 | ||||||
Change in deferred tax and income tax deferred charge | (8,440 | ) | (222 | ) | ||||
Stock-based compensation expense | 742 | 351 | ||||||
Loss on deconsolidation of subsidiary | — | 1,750 | ||||||
Other adjustments | 573 | (541 | ) | |||||
Net changes in assets and liabilities | ||||||||
Accounts receivable | (517 | ) | (1,021 | ) | ||||
Inventories | 47 | 467 | ||||||
Prepaid expenses and other current assets | 899 | (3,228 | ) | |||||
Research and development tax credit receivable | 160 | (449 | ) | |||||
Accounts payable & other current liabilities | (1,187 | ) | 752 | |||||
Accrued expenses | (4,905 | ) | (4,750 | ) | ||||
Accrued income taxes | 2,253 | (46 | ) | |||||
Earn-out payments for contingent consideration in excess of acquisition-date fair value | (1,774 | ) | (3,181 | ) | ||||
Royalty payments for contingent consideration payable in excess of original fair value | (291 | ) | (507 | ) | ||||
Other assets and liabilities | (3,148 | ) | (1,818 | ) | ||||
Net cash used in operating activities | (11,636 | ) | (21,206 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | — | (30 | ) | |||||
Proceeds from sales of marketable securities | 14,788 | 34,864 | ||||||
Purchases of marketable securities | (1,562 | ) | (13,444 | ) | ||||
Net cash provided by investing activities | 13,226 | 21,390 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from |
60,733 | — | ||||||
Proceeds from stock option exercises and ESPP | 1,477 | 92 | ||||||
Net cash provided by financing activities | 62,210 | 92 | ||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (68 | ) | 29 | |||||
Net change in cash and cash equivalents | 63,732 | 305 | ||||||
Cash and cash equivalents at |
9,774 | 9,325 | ||||||
Cash and cash equivalents at |
$ | 73,506 | $ | 9,630 | ||||
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per share data)
(Unaudited)
Three Months Ended |
||||||||
Revenues by Product: | 2020 | 2019 | ||||||
Bloxiverz | $ | 1,401 | $ | 2,568 | ||||
Vazculep | 5,514 | 9,473 | ||||||
Akovaz | 5,349 | 3,792 | ||||||
Other | (21 | ) | 604 | |||||
Total product sales | $ | 12,243 | $ | 16,437 |
Source: Avadel Pharmaceuticals plc