UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2016
___________________
FLAMEL TECHNOLOGIES S.A.
(Exact name of registrant as specified in its charter)
___________________
Republic of France (State or Other Jurisdiction of Incorporation) | 000-28508 (Commission File Number) | 98-0639540 (I.R.S. Employer Identification No.) | ||||
Parc Club du Moulin à Vent 33, avenue du Docteur Georges Levy 69200 Vénissieux France (Address of Principal Executive Offices) | Not Applicable (Zip Code) | |||||
Registrant's telephone number, including area code: 011 +33 472 78 34 34
___________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On November 7, 2016, Flamel Technologies S.A. (the “Company”) issued a press release announcing its earnings for the quarter ended September 30, 2016. That press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On November 7, 2016, the Company posted to its website a set of presentation materials that it will use during its earnings call and webcast to assist participants with understanding the Company’s financial results for the quarter ended September 30, 2016. A copy of this presentation is attached hereto as Exhibit 99.2.
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Limitation of Incorporation by Reference
The information in this current report on Form 8-K (including Exhibit 99.1 and Exhibit 99.2) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section, nor shall such information be incorporated by reference into any registration statement or other filing pursuant to the Securities Act of 1933, except as may be expressly set forth by specific reference in such filing.
______________________
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits relating to Item 2.02 and Item 7.01 shall be deemed to be furnished, and not filed:
99.1 | Press release dated November 7, 2016, issued by Flamel Technologies S.A. | |
99.2 | Presentation materials | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FLAMEL TECHNOLOGIES S.A.
By: /s/ Phillandas T. Thompson
Phillandas T. Thompson
Senior Vice President, General Counsel and Corporate Secretary
Date: November 7, 2016
Exhibit Index
99.1 | Press release dated November 7, 2016, issued by Flamel Technologies S.A. | |
99.2 | Presentation materials | |
Flamel Technologies Reports Third Quarter 2016 Results
Total Revenues Were $32.1 Million
2016 Revenue Guidance Increased to $133 to $143 Million
REST-ON Phase III Trial of Micropump Sodium Oxybate Initiated
Lyon, France – November 7, 2016 - Flamel Technologies (NASDAQ: FLML) today announced its financial results for the third quarter 2016.
Third Quarter Highlights Include:
• | Total revenues for third quarter 2016 were $32.1 million, compared to $47.3 million during the same period last year. |
• | GAAP net loss for the third quarter was $22.3 million, or $(0.54) per diluted share, compared to GAAP net loss of $28.1 million, or $(0.69) per diluted share, during the same period last year. |
• | Adjusted operating income was $2.5 million, compared to $24.4 million in the prior year.* |
• | Adjusted net loss for the third quarter was $3.5 million, or $(0.11) per diluted share, compared to an adjusted net loss of $13.1 million, or $0.32 per diluted share, during the same period last year. * |
• | Cash and marketable securities at September 30, 2016 were $149.7 million, compared to $154.9 million at June 30, 2016 and $144.8 million at December 31, 2015. |
• | Protocol for REST-ON Phase III trial of once-nightly Micropump sodium oxybate approved by the U.S. Food & Drug Administration (FDA) through a Special Protocol Assessment (SPA) and trial initiated in Europe and Canada. |
Michael Anderson, Flamel’s Chief Executive Officer, commented, “Our base business, consisting of Bloxiverz® (neostigmine methylsulfate), Vazculep® (phenylephrine hydrochloride) and Akovaz™ (ephedrine sulfate), remained strong during the third quarter with revenues coming in just above top line consensus. Although we were able to maintain strong share in the neostigmine market at about forty percent (40%) during the third quarter, the overall market volume slightly declined. This, in addition to a small loss in price, resulted in lower quarter over quarter sales of Bloxiverz, at $15.6 million for the quarter. The phenylephrine business remained stable with third quarter 2016 sales of $9.3 million, relatively in line with the previous quarter ___________________________
* | Non-GAAP financial measure. Descriptions of Flamel’s non-GAAP financial measures are included under the caption “Non-GAAP Disclosures and Adjustments” included within this document and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the “Supplemental Information” section within this document. |
after adjusting for our change in revenue recognition. As expected in the third quarter, we launched Akovaz, the first FDA-approved ephedrine sulfate injection. Akovaz added $5.6 million in revenues, partially offsetting some weakness in the neostigmine market which, as we outlined at the beginning of the year, was expected with increased competition. I am very pleased with the on-time and successful launch of Akovaz as it once again demonstrates our ability to identify, develop and launch commercially viable pharmaceutical products. Given that we launched later in the quarter, we are off to a good start.”
Mr. Anderson continued, “In addition to our solid base business, we were pleased to host our first investor and analyst day in September, at which we announced the initiation of our Phase III trial of once nightly sodium oxybate in Canada. We have since initiated sites in Europe and received SPA approval from the FDA, which has given us further confidence as we proceed with our trial. We look forward to providing more updates on trial progress as we begin to dose patients."
Third Quarter 2016 Results
The Company generated revenues during the third quarter 2016 of $32.1 million, compared to $47.3 million during the same period last year. On a GAAP basis, the Company recorded a net loss of $22.3 million during the third quarter 2016, or $(0.54) per diluted share, compared to a net loss of $28.1 million, or $(0.69) per diluted share, for the same period last year. Included in the net loss for the third quarter 2016 were $22.7 million of charges related to changes in the fair value of related party contingent consideration and related party payables. The Company recognized a foreign currency exchange loss of $1.1 million in the third quarter 2016, compared to a foreign currency exchange gain of $0.2 million the prior year quarter. Adjusted net loss for the third quarter was $3.5 million, or $(0.08) per diluted share, compared to an adjusted net income of $13.1 million, or $0.32 per diluted share, during the same period last year. The decline in adjusted net income and adjusted diluted EPS from the previous year was due to lower product sales resulting from increased competition for neostigmine and higher SG&A from increased headcount. Please see the Supplemental Information section within this document for a reconciliation of adjusted net income and adjusted diluted EPS to the respective GAAP amounts.
For the nine months ended September 30, 2016, cash flow from operations was $11.2 million, compared to $58.0 million in the same period last year. Cash and marketable securities at September 30, 2016 were $149.7 million, compared to $154.9 million at June 30, 2016.
2016 Guidance
As a result of the stable market to date for both Bloxiverz and Vazculep, in addition to a strong market for Akovaz, the Company is increasing its full year 2016 revenue guidance to the range of $133 to $143 million from its previous guidance range of $125 to $140 million. The Company expects to allocate a substantial amount of its R&D expenses to its REST-ON trial and is reiterating its full year 2016 guidance in the range of $30 to $40 million.
Conference Call
A conference call to discuss these results and other updates is scheduled for 10:00 a.m. ET on Monday, November 7, 2016. A question and answer period will follow management’s prepared remarks. To participate in the conference call, investors are invited to dial 800-765-0709 (U.S. and Canada) or 913-312-0726 (international). The conference ID number is 9865797. A live audio webcast and accompanying slides can be accessed by visiting the Events & Presentations page of the Company’s Investor website at http://www.flamel.com/investors. A replay of the webcast will be archived on Flamel’s website for 90 days following the event.
About Flamel Technologies
Flamel Technologies SA (NASDAQ: FLML) is a specialty pharmaceutical company utilizing its core competencies in formulation development and drug delivery to develop safer and more efficacious pharmaceutical products, addressing unmet medical needs and/or reducing overall healthcare costs. Flamel currently markets three branded, sterile injectable products in the United States, Bloxiverz® (neostigmine methylsulfate injection), Vazculep® (phenylephrine hydrochloride injection), and Akovaz™ (ephedrine sulfate injection). The Company also develops products utilizing its proprietary drug delivery platforms, Micropump® (oral sustained release microparticles platform), along with its tangent technologies, LiquiTime® (a Micropump-derivative platform for liquid oral products) and Trigger Lock™ (a Micropump-derivative platform for abuse-resistant opioids). Additionally, the Company has developed a long acting injectable platform, Medusa™, a hydrogel depot technology, particularly suited to the development of subcutaneously administered formulations. Applications of Flamel’s drug delivery products include sodium oxybate (Micropump®), currently being studied in a Phase III trial to assess the safety and efficacy of a once nightly dose for treatment of excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy, and extended-release of liquid medicines (LiquiTime®) through a license arrangement with Elan Pharma International Limited for the U.S. Over-the-Counter market. Additionally, the Company’s Trigger Lock™ technology is currently being studied with hydromorphone, and several proof of concept studies of exenatide utilizing the Medusa™ technology were completed in 2016. In February 2016, Flamel acquired FSC Pediatrics, a company that markets three pediatric pharmaceutical products - Cefaclor for oral suspension, Karbinal™ ER, and AcipHex® Sprinkle™ (rabeprazole sodium). FSC also received 510(k) clearance from the FDA in October 2014 for Flexichamber™, a collapsible holding chamber used in the administration of aerosolized medication using pressurized Metered Dose Inhalers (pMDIs) for the treatment of asthma. The Company is headquartered in Lyon, France and has operations in Dublin, Ireland and in St. Louis, Missouri. Additional information may be found at www.flamel.com.
Safe Harbor
This release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "believe," "expect," "estimate," "plan,"
"will," "may," and the negative of these and similar expressions generally identify forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond Flamel's control and could cause actual results to differ materially from the results contemplated in such forward-looking statements. These risks, uncertainties and contingencies include the risks relating to: our dependence on a small number of products and customers for the majority of our revenues; the possibility that our Bloxiverz®, Vazculep® and Akovaz™ products, which are not patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge for those products; the possibility that we could fail to successfully complete the research and development for the pipeline product we are evaluating for potential application to the FDA pursuant to our "unapproved-to-approved" strategy, or that competitors could complete the development of such product and apply for FDA approval of such product before us; our dependence on the performance of third parties in partnerships or strategic alliances for the commercialization of some of our products; the possibility that our products may not reach the commercial market or gain market acceptance; our need to invest substantial sums in research and development in order to remain competitive; our dependence on certain single providers for development of several of our drug delivery platforms and products; our dependence on a limited number of suppliers to manufacture our products and to deliver certain raw materials used in our products; the possibility that our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do; the challenges in protecting the intellectual property underlying our drug delivery platforms and other products; our dependence on key personnel to execute our business plan; the amount of additional costs we will incur to comply with U.S. securities laws as a result of our ceasing to qualify as a foreign private issuer; and the other risks, uncertainties and contingencies described in the Company's filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2015, all of which filings are also available on the Company's website. Flamel undertakes no obligation to update its forward-looking statements as a result of new information, future events or otherwise, except as required by law.
Non GAAP Disclosures and Adjustments
Flamel discloses certain non-GAAP financial measures, including adjusted net income and loss and adjusted net income and loss per diluted share and earnings before interest, taxes, depreciation and amortization (EBITDA) as management believes that a comparison of its current and historical results would be difficult if the disclosures were limited to financial measures prepared only in accordance with generally accepted accounting principles (GAAP) in the U.S. In addition to reporting its financial results in accordance with GAAP, Flamel reports certain non-GAAP results that exclude, if any, fair value remeasurements of its contingent consideration, impairment of intangible assets, amortization of intangible assets, effects of accelerated reimbursement of certain debt instruments, foreign exchange gains and losses on assets and liabilities denominated in foreign currency, the net income (loss) from discontinued operations and related tax effects, but includes
the operating cash flows plus any unpaid accrued amounts associated with the contingent consideration, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance. The Company's management uses these non-GAAP measures internally for forecasting, budgeting and measuring its operating performance. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. The table provided within the following “Supplemental Information” section reconciles GAAP net income and loss and diluted earnings or loss per share to the corresponding adjusted amounts.
*******
Contacts: Michael F. Kanan
Chief Financial Officer
Phone: (636) 449-1844
Email : kanan@flamel.com
Lauren Stival
Sr. Director, Investor Relations & Corporate Communications
Phone: (636) 449-5866
Email: stival@flamel.com
FLAMEL TECHNOLOGIES S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(In thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Product sales and services | $ | 31,340 | $ | 47,313 | $ | 104,858 | $ | 128,441 | |||||||
License and research revenue | 747 | — | 2,303 | — | |||||||||||
Total | 32,087 | 47,313 | 107,161 | 128,441 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of products and services sold | 2,844 | 2,087 | 10,657 | 8,473 | |||||||||||
Research and development expenses | 8,143 | 7,221 | 21,135 | 20,447 | |||||||||||
Selling, general and administrative expenses | 12,740 | 4,568 | 33,491 | 14,904 | |||||||||||
Intangible asset amortization | 3,702 | 3,141 | 10,918 | 9,423 | |||||||||||
Changes in fair value of related party contingent consideration | 20,848 | 44,782 | 52,989 | 82,036 | |||||||||||
Total | 48,277 | 61,799 | 129,190 | 135,283 | |||||||||||
Operating loss | (16,190 | ) | (14,486 | ) | (22,029 | ) | (6,842 | ) | |||||||
Investment income, net | 490 | 197 | 1,080 | 1,171 | |||||||||||
Interest expense, net | (264 | ) | — | (702 | ) | — | |||||||||
Other expense - changes in fair value of related party payable | (1,828 | ) | (6,644 | ) | (6,135 | ) | (9,629 | ) | |||||||
Foreign exchange gain (loss) | (1,054 | ) | 160 | (2,315 | ) | 8,096 | |||||||||
Loss before income taxes | (18,846 | ) | (20,773 | ) | (30,101 | ) | (7,204 | ) | |||||||
Income tax provision | 3,451 | 7,302 | 18,212 | 24,516 | |||||||||||
Net loss | $ | (22,297 | ) | $ | (28,075 | ) | $ | (48,313 | ) | $ | (31,720 | ) | |||
Net loss per share - basic | $ | (0.54 | ) | $ | (0.69 | ) | $ | (1.17 | ) | $ | (0.79 | ) | |||
Net loss per share - diluted | $ | (0.54 | ) | $ | (0.69 | ) | $ | (1.17 | ) | $ | (0.79 | ) | |||
Weighted average number of shares outstanding - basic | 41,241 | 40,625 | 41,241 | 40,397 | |||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 40,625 | 41,241 | 40,397 | |||||||||||
FLAMEL TECHNOLOGIES S.A.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,780 | $ | 65,064 | |||
Marketable securities | 130,887 | 79,738 | |||||
Accounts receivable | 15,395 | 7,487 | |||||
Inventories | 3,909 | 3,666 | |||||
Research and development tax credit receivable | — | 2,382 | |||||
Prepaid expenses and other current assets | 8,883 | 8,064 | |||||
Total current assets | 177,854 | 166,401 | |||||
Property and equipment, net | 3,186 | 2,616 | |||||
Goodwill | 19,134 | 18,491 | |||||
Intangible assets, net | 25,508 | 15,825 | |||||
Research and development tax credit receivable | 4,240 | — | |||||
Income tax deferred charge | 11,243 | 11,581 | |||||
Other | 6,820 | 167 | |||||
Total assets | $ | 247,985 | $ | 215,081 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 286 | $ | 434 | |||
Current portion of long-term related party payable | 33,359 | 25,204 | |||||
Accounts payable | 8,966 | 5,048 | |||||
Deferred revenue | 3,115 | 5,121 | |||||
Accrued expenses | 13,032 | 9,308 | |||||
Other | 427 | 133 | |||||
Total current liabilities | 59,185 | 45,248 | |||||
Long-term debt, less current portion | 734 | 684 | |||||
Long-term related party payable, less current portion | 146,926 | 97,489 | |||||
Other | 4,307 | 2,526 | |||||
Total liabilities | 211,152 | 145,947 | |||||
Shareholders' equity: | |||||||
Ordinary shares, nominal value of 0.122 euro per share; 53,178 shares authorized; 41,241 issued and outstanding at September 30, 2016 and December 31, 2015 | 6,331 | 6,331 | |||||
Additional paid-in capital | 374,724 | 363,984 | |||||
Accumulated deficit | (326,837 | ) | (278,524 | ) | |||
Accumulated other comprehensive loss | (17,385 | ) | (22,657 | ) | |||
Total shareholders' equity | 36,833 | 69,134 | |||||
Total liabilities and shareholders' equity | $ | 247,985 | $ | 215,081 | |||
FLAMEL TECHNOLOGIES S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (48,313 | ) | $ | (31,718 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,555 | 9,800 | |||||
Loss on disposal of property and equipment | 110 | — | |||||
Loss on sale of marketable securities | 666 | 635 | |||||
Unrealized exchange loss (gain) | 2,315 | (7,248 | ) | ||||
Grants recognized in research and development expenses | (70 | ) | (1,086 | ) | |||
Remeasurement of related party acquisition-related contingent consideration | 52,989 | 82,036 | |||||
Remeasurement of related party financing-related contingent consideration | 6,135 | 9,628 | |||||
Change in deferred tax and income tax deferred charge | (5,680 | ) | (714 | ) | |||
Stock-based compensation expense | 10,541 | 5,485 | |||||
Increase (decrease) in cash from: | |||||||
Accounts receivable | (7,594 | ) | (1,553 | ) | |||
Inventories | 2,080 | 1,543 | |||||
Prepaid expenses and other current assets | 671 | (4,293 | ) | ||||
Research and development tax credit receivable | (1,794 | ) | 2,481 | ||||
Accounts payable & other current liabilities | 1,291 | (4,231 | ) | ||||
Deferred revenue | (2,198 | ) | (1,317 | ) | |||
Accrued expenses | 2,700 | (1,094 | ) | ||||
Accrued income taxes | — | (490 | ) | ||||
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value | (14,488 | ) | — | ||||
Royalty payments for related party payable in excess of original fair value | (1,790 | ) | — | ||||
Other long-term assets and liabilities | 2,033 | 131 | |||||
Net cash provided by operating activities | 11,159 | 57,995 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (1,000 | ) | (1,065 | ) | |||
Acquisitions of businesses | 628 | — | |||||
Proceeds from sales of marketable securities | 46,483 | 23,995 | |||||
Purchase of marketable securities | (96,199 | ) | (36,210 | ) | |||
Net cash used in investing activities | (50,088 | ) | (13,280 | ) | |||
Cash flows from financing activities: | |||||||
Earn-out payments for related party contingent consideration | (6,834 | ) | (15,497 | ) | |||
Royalty payments for related party payable | (1,117 | ) | (2,099 | ) | |||
Repayment of debt | — | (4,965 | ) | ||||
Reimbursement of conditional grants | (61 | ) | (681 | ) | |||
Cash proceeds from issuance of ordinary shares and warrants | — | 6,990 | |||||
Net cash used in financing activities | (8,012 | ) | (16,252 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 657 | (2,358 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (46,284 | ) | 26,105 | ||||
Cash and cash equivalents at January 1 | 65,064 | 39,760 | |||||
Cash and cash equivalents at September 30 | $ | 18,780 | $ | 65,865 | |||
FLAMEL TECHNOLOGIES S.A.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Revenues | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Bloxiverz | $ | 15,591 | $ | 41,243 | $ | 65,958 | $ | 114,074 | ||||||||
Vazculep | 9,340 | 5,605 | 29,167 | 12,757 | ||||||||||||
Akovaz | 5,568 | — | 5,568 | — | ||||||||||||
Other | 841 | 465 | 4,165 | 1,610 | ||||||||||||
Total product sales and services | 31,340 | 47,313 | 104,858 | 128,441 | ||||||||||||
License and research revenue | 747 | — | 2,303 | — | ||||||||||||
Total revenues | $ | 32,087 | $ | 47,313 | $ | 107,161 | $ | 128,441 | ||||||||
Adjustments for the three months ended, September 30, 2016 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 31,340 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 31,340 | ||||||||||||||
License and research revenue | 747 | — | — | — | — | — | 747 | |||||||||||||||||||||
Total | 32,087 | — | — | — | — | — | 32,087 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 2,844 | — | — | — | — | — | 2,844 | |||||||||||||||||||||
Research and development expenses | 8,143 | — | — | — | — | — | 8,143 | |||||||||||||||||||||
Selling, general and administrative expenses | 12,740 | — | — | — | — | — | 12,740 | |||||||||||||||||||||
Intangible asset amortization | 3,702 | (3,702 | ) | — | — | — | (3,702 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 20,848 | — | — | (20,848 | ) | 5,884 | (14,964 | ) | 5,884 | |||||||||||||||||||
Total | 48,277 | (3,702 | ) | — | (20,848 | ) | 5,884 | (18,666 | ) | 29,611 | ||||||||||||||||||
Operating (loss) income | (16,190 | ) | 3,702 | — | 20,848 | (5,884 | ) | 18,666 | 2,476 | |||||||||||||||||||
Investment income, net | 490 | — | — | — | — | — | 490 | |||||||||||||||||||||
Interest expense, net | (264 | ) | — | — | — | — | — | (264 | ) | |||||||||||||||||||
Other expense - changes in fair value of related party payable | (1,828 | ) | — | — | 1,828 | (785 | ) | 1,043 | (785 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | (1,054 | ) | — | 1,054 | — | — | 1,054 | — | ||||||||||||||||||||
(Loss) income before income taxes | (18,846 | ) | 3,702 | 1,054 | 22,676 | (6,669 | ) | 20,763 | 1,917 | |||||||||||||||||||
Income tax provision (benefit) | 3,451 | 1,329 | — | 1,021 | (385 | ) | 1,965 | 5,416 | ||||||||||||||||||||
Net (loss) income | $ | (22,297 | ) | $ | 2,373 | $ | 1,054 | $ | 21,655 | $ | (6,284 | ) | $ | 18,798 | $ | (3,499 | ) | |||||||||||
Net (loss) income per share - diluted | $ | (0.54 | ) | 0.06 | 0.03 | 0.53 | (0.15 | ) | 0.46 | (0.08 | ) | |||||||||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | |||||||||||||||||||||
Adjustments for the three months ended, September 30, 2015 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 47,313 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 47,313 | ||||||||||||||
License and research revenue | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 47,313 | — | — | — | — | — | 47,313 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 2,087 | — | — | — | — | — | 2,087 | |||||||||||||||||||||
Research and development expenses | 7,221 | — | — | — | — | — | 7,221 | |||||||||||||||||||||
Selling, general and administrative expenses | 4,568 | — | — | — | — | — | 4,568 | |||||||||||||||||||||
Intangible asset amortization | 3,141 | (3,141 | ) | — | — | — | (3,141 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 44,782 | — | — | (44,782 | ) | 9,027 | (35,755 | ) | 9,027 | |||||||||||||||||||
Total | 61,799 | (3,141 | ) | — | (44,782 | ) | 9,027 | (38,896 | ) | 22,903 | ||||||||||||||||||
Operating (loss) income | (14,486 | ) | 3,141 | — | 44,782 | (9,027 | ) | 38,896 | 24,410 | |||||||||||||||||||
Investment income, net | 197 | — | — | — | — | — | 197 | |||||||||||||||||||||
Interest expense, net | — | — | — | — | — | — | — | |||||||||||||||||||||
Other expense - changes in fair value of related party payable | (6,644 | ) | — | — | 6,644 | (1,211 | ) | 5,433 | (1,211 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | 160 | — | (160 | ) | — | — | (160 | ) | — | |||||||||||||||||||
(Loss) income before income taxes | (20,773 | ) | 3,141 | (160 | ) | 51,426 | (10,238 | ) | 44,169 | 23,396 | ||||||||||||||||||
Income tax provision (benefit) | 7,302 | 1,099 | (48 | ) | 2,325 | (424 | ) | 2,952 | 10,254 | |||||||||||||||||||
Net (loss) income | $ | (28,075 | ) | $ | 2,042 | $ | (112 | ) | $ | 49,101 | $ | (9,814 | ) | $ | 41,217 | $ | 13,142 | |||||||||||
Net (loss) income per share - diluted | $ | (0.69 | ) | $ | 0.05 | $ | — | $ | 1.21 | $ | (0.24 | ) | $ | 1.01 | $ | 0.32 | ||||||||||||
Weighted average number of shares outstanding - diluted | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 | |||||||||||||||||||||
Adjustments for the nine months ended, September 30, 2016 | ||||||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Purchase accounting adjustments - FSC | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Product sales and services | $ | 104,858 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 104,858 | ||||||||||||||||
License and research revenue | 2,303 | — | — | — | — | — | — | 2,303 | ||||||||||||||||||||||||
Total | 107,161 | — | — | — | — | — | — | 107,161 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Cost of products and services sold | 10,657 | — | — | (1,525 | ) | — | — | (1,525 | ) | 9,132 | ||||||||||||||||||||||
Research and development expenses | 21,135 | — | — | — | — | — | — | 21,135 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 33,491 | — | — | — | — | — | — | 33,491 | ||||||||||||||||||||||||
Intangible asset amortization | 10,918 | (10,918 | ) | — | — | — | — | (10,918 | ) | — | ||||||||||||||||||||||
Changes in fair value of related party contingent consideration | 52,989 | — | — | — | (52,989 | ) | 19,321 | (33,668 | ) | 19,321 | ||||||||||||||||||||||
Total | 129,190 | (10,918 | ) | — | (1,525 | ) | (52,989 | ) | 19,321 | (46,111 | ) | 83,079 | ||||||||||||||||||||
Operating (loss) income | (22,029 | ) | 10,918 | — | 1,525 | 52,989 | (19,321 | ) | 46,111 | 24,082 | ||||||||||||||||||||||
Investment income, net | 1,080 | — | — | — | — | — | — | 1,080 | ||||||||||||||||||||||||
Interest expense, net | (702 | ) | — | — | — | — | — | — | (702 | ) | ||||||||||||||||||||||
Other expense - changes in fair value of related party payable | (6,135 | ) | — | — | — | 6,135 | (2,618 | ) | 3,517 | (2,618 | ) | |||||||||||||||||||||
Foreign exchange gain (loss) | (2,315 | ) | — | 2,315 | — | — | — | 2,315 | — | |||||||||||||||||||||||
(Loss) income before income taxes | (30,101 | ) | 10,918 | 2,315 | 1,525 | 59,124 | (21,939 | ) | 51,943 | 21,842 | ||||||||||||||||||||||
Income tax provision (benefit) | 18,212 | 3,920 | — | 533 | 2,986 | (1,165 | ) | 6,274 | 24,486 | |||||||||||||||||||||||
Net (loss) income | $ | (48,313 | ) | $ | 6,998 | $ | 2,315 | $ | 992 | $ | 56,138 | $ | (20,774 | ) | $ | 45,669 | $ | (2,644 | ) | |||||||||||||
Net (loss) income per share - diluted | $ | (1.17 | ) | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 1.36 | $ | (0.50 | ) | $ | 1.11 | $ | (0.06 | ) | |||||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | ||||||||||||||||||||||||
Adjustments for the nine months ended, September 30, 2015 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 128,441 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 128,441 | ||||||||||||||
License and research revenue | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 128,441 | — | — | — | — | — | 128,441 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 8,473 | — | — | — | — | — | 8,473 | |||||||||||||||||||||
Research and development expenses | 20,447 | — | — | — | — | — | 20,447 | |||||||||||||||||||||
Selling, general and administrative expenses | 14,904 | — | — | — | — | — | 14,904 | |||||||||||||||||||||
Intangible asset amortization | 9,423 | (9,423 | ) | — | — | — | (9,423 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 82,036 | — | — | (82,036 | ) | 23,923 | (58,113 | ) | 23,923 | |||||||||||||||||||
Total | 135,283 | (9,423 | ) | — | (82,036 | ) | 23,923 | (67,536 | ) | 67,747 | ||||||||||||||||||
Operating (loss) income | (6,842 | ) | 9,423 | — | 82,036 | (23,923 | ) | 67,536 | 60,694 | |||||||||||||||||||
Investment income, net | 1,171 | — | — | — | — | — | 1,171 | |||||||||||||||||||||
Interest expense, net | — | — | — | — | — | — | — | |||||||||||||||||||||
Other expense - changes in fair value of related party payable | (9,629 | ) | — | — | 9,629 | (3,291 | ) | 6,338 | (3,291 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | 8,096 | — | (8,096 | ) | — | — | (8,096 | ) | — | |||||||||||||||||||
(Loss) income before income taxes | (7,204 | ) | 9,423 | (8,096 | ) | 91,665 | (27,214 | ) | 65,778 | 58,574 | ||||||||||||||||||
Income tax provision (benefit) | 24,516 | 3,298 | (2,429 | ) | 3,370 | (1,152 | ) | 3,087 | 27,603 | |||||||||||||||||||
Net (loss) income | $ | (31,720 | ) | $ | 6,125 | $ | (5,667 | ) | $ | 88,295 | $ | (26,062 | ) | $ | 62,691 | $ | 30,971 | |||||||||||
Net (loss) income per share - diluted | $ | (0.79 | ) | $ | 0.15 | $ | (0.14 | ) | $ | 2.19 | $ | (0.65 | ) | $ | 1.55 | $ | 0.77 | |||||||||||
Weighted average number of shares outstanding - diluted | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 | |||||||||||||||||||||
November 7, 2016 Third Quarter 2016 Earnings Conference Call 1
Third Quarter 2016 Earnings
Conference Call
November 7, 2016 Third Quarter 2016 Earnings Conference Call 2
Forward Looking Statements
This presentation may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of
1995. All statements herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume,"
"believe," "expect," "estimate," "plan," "will," "may," and the negative of these and similar expressions generally identify forward-
looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond
Flamel's control and could cause actual results to differ materially from the results contemplated in such forward-looking
statements. These risks, uncertainties and contingencies include the risks relating to: our dependence on a small number of
products and customers for the majority of our revenues; the possibility that our Bloxiverz® and Vazculep® products, which are not
patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge
for those products; the possibility that we could fail to successfully complete the research and development for the two pipeline
products we are evaluating for potential application to the FDA pursuant to our "unapproved-to-approved" strategy, or that
competitors could complete the development of such products and apply for FDA approval of such products before us; our
dependence on the performance of third parties in partnerships or strategic alliances for the commercialization of some of our
products; the possibility that our products may not reach the commercial market or gain market acceptance; our need to invest
substantial sums in research and development in order to remain competitive; our dependence on certain single providers for
development of several of our drug delivery platforms and products; our dependence on a limited number of suppliers to
manufacture our products and to deliver certain raw materials used in our products; the possibility that our competitors may
develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market
such technologies or products before we do; the challenges in protecting the intellectual property underlying our drug delivery
platforms and other products; our dependence on key personnel to execute our business plan; the amount of additional costs we
will incur to comply with U.S. securities laws as a result of our ceasing to qualify as a foreign private issuer; and the other risks,
uncertainties and contingencies described in the Company's filings with the U.S. Securities and Exchange Commission, including our
annual report on Form 10-K for the year ended December 31, 2015, all of which filings are also available on the Company's
website. Flamel undertakes no obligation to update its forward-looking statements as a result of new information, future events or
otherwise, except as required by law.
November 7, 2016 Third Quarter 2016 Earnings Conference Call 3
Call Outline
Phase III Trial Initiation – REST-ON
Sodium Oxybate Patent Landscape
Base Business Overview
Akovaz™
Bloxiverz®
Vazculep®
Business Development Status
Cross-Border Merger & Name Change
Overview of Income Statement
Revenue
Expenses
Tax
Non-GAAP Results
Revenue by Business Segment
Guidance
November 7, 2016 Third Quarter 2016 Earnings Conference Call 4
REST-ON Phase III Trial
Initiation of Phase III Pivotal Trial (REST-ON) announced (Sept 26th)
Special Protocol Assessment process completed (Oct 6th)
Sites in Canada and Germany have started screening and enrollment
Expect to dose first patient before year end
First U.S. site expected to initiate patient enrollment January 2017
Goal to complete patient enrollment by 4Q 2017
November 7, 2016 Third Quarter 2016 Earnings Conference Call 5
Sodium Oxybate IP Landscape
JAZZ – 6 of 7 REMS patents overturned by PTAB
Settled with Wockhardt & Ranbaxy for 2026 generic entry
Yet to settle with other filers – including first to file, Roxane (Hikma)
‘306 patent for concomitant dosing of sodium oxybate and valproate /
divalproex sodium still in place (exp. 2033)
‘306 patent to be evaluated again during trial with Roxane
Label requirements for NDA filers are not the same as for ANDAs, even
through 505(b)(2)
Flamel will have unique REMS & strong patent strategy for ‘306
November 7, 2016 Third Quarter 2016 Earnings Conference Call 6
Base Business
• Akovaz launched Aug
2016
• $5.6 million in revenues
3Q 2016
• On target to exit 2016 with
20-30% market share
• Averaged 40% neostigmine
market during 3Q 2016
• $15.6 million in revenues 3Q
2016
• Smaller overall market volume
and increased competition
resulted in lower revenues –
anticipate stable market Q4
• Share remained stable in 3Q
2016
• $9.3 million in revenues 3Q
2016
• Expect market to remain
stable going forward
Akovaz™ Bloxiverz® Vazculep®
November 7, 2016 Third Quarter 2016 Earnings Conference Call 7
Business Development
4th Unapproved Marketed Drug identified – awaiting
feedback from FDA on potential clinical work
Looking to grow inorganically – searching for accretive
commercial stage products to fold into FSC
Actively seeking licensing deal for Trigger Lock™
Actively seeking licensing or sale of Medusa™
November 7, 2016 Third Quarter 2016 Earnings Conference Call 8
Coming soon…
Avadel Pharmaceuticals plc (NASDAQ: AVDL)
“AdVAnced DELivery”
Cross-border merger from France to Ireland effective January
1, 2017
No changes to capital structure or share count
COMPANY WILL CONTINUE TO OPERATE AS FLAMEL TECHNOLOGIES SA
UNTIL JANUARY 1, 2017
November 7, 2016 Third Quarter 2016 Earnings Conference Call 9
GAAP Financial Results
(in $000s)
Q3 2016 Q2 2016 Q3 2015
Q3 2016
vs.
Q2 2016
Q3 2016
vs.
Q3 2015
Revenue 32,087$ 38,858$ 47,313$ (6,771)$ (15,226)$
Cost of products and services sold 2,844 3,907 2,087 (1,063) 757
Research and development expenses 8,143 7,604 7,221 539 922
Selling, general and admin expenses 12,740 11,290 4,568 1,450 8,172
Intangible asset amortization 3,702 3,702 3,141 - 561
Fair value adjustments of contingent consideration 20,848 23,898 44,782 (3,050) (23,934)
Operating Expenses 48,277 50,401 61,799 (2,124) (13,522)
Operating income (loss) (16,190) (11,543) (14,486) (4,647) (1,704)
Interest & Other Expense (net) (2,656) (966) (6,287) (1,690) 3,631
Income (loss) before income taxes (18,846) (12,509) (20,773) (6,337) 1,927
Income tax provision 3,451 7,449 7,302 (3,998) (3,851)
Net loss (22,297)$ (19,958)$ (28,075)$ (2,339)$ 5,778$
Diluted loss per share (0.54)$ (0.48)$ (0.69)$ (0.06)$ 0.15$
Difference - Inc./(Dec.)
November 7, 2016 Third Quarter 2016 Earnings Conference Call 10
Non-GAAP Financial Results
(in $000s)
Q3 2016 Q2 2016 Q3 2015
Q3 2016
vs.
Q2 2016
Q3 2016
vs.
Q3 2015
Revenue 32,087$ 38,858$ 47,313$ (6,771)$ (15,226)$
Cost of products and services sold 2,844 3,145 2,087 (301) 757
Research and development expenses 8,143 7,604 7,221 539 922
Selling, general and admin expenses 12,740 11,290 4,568 1,450 8,172
Intangible asset amortization - - - - -
Fair value adjustments of contingent consideration 5,884 6,992 9,027 (1,108) (3,143)
Operating Expenses 29,611 29,031 22,903 580 6,708
Operating income (loss) 2,476 9,827 24,410 (7,351) (21,934)
Interest & Other Expense (net) (559) (814) (1,014) 255 455
Income (loss) before income taxes 1,917 9,013 23,397 (7,096) (21,480)
Income tax provision 5,416 9,998 10,255 (4,581) (4,839)
Net loss (3,499)$ (985)$ 13,142$ (2,515)$ (16,641)$
Diluted loss per share (0.08)$ (0.02)$ 0.32$ (0.06)$ (0.40)$
Difference - Inc./(Dec.)
*Reconciliations from GAAP to Non-GAAP can be found in the appendix
November 7, 2016 Third Quarter 2016 Earnings Conference Call 11
(in $000s)
Q3 2016 Q2 2016 Q3 2015
Q3 2016
vs.
Q2 2016
Q3 2016
vs.
Q3 2015
Bloxiverz 15,591$ 25,620$ 41,243$ (10,029)$ (25,652)$
Vazculep 9,340 10,421 5,605 (1,081) 3,735
Akovaz 5,568 - - 5,568 5,568
Other 841 2,124 465 (1,283) 376
Total product sales and services 31,340$ 38,165$ 47,313$ (6,825)$ (15,973)$
License and research revenue 747$ 693$ -$ 54$ 747$
Total revenues 32,087$ 38,858$ 47,313$ (6,771)$ (15,226)$
Difference - Inc./(Dec.)
Product Sales
November 7, 2016 Third Quarter 2016 Earnings Conference Call 12
Cash Flow Summary
(in $000s)
2016 2015
TOTAL Cash and Marketable Securities
Beginning Balance 144,802$ 92,834$
Operating Cash Flows (excluding tax and earnout/royalty payments) 47,154 92,377
Tax Payments (22,200) (34,382)
Earnout/Royalty Payments (24,229) (17,596)
Repayment of Debt - (4,965)
Issuance of Ordinary Shares and Warrants - 6,990
Other 915 (4,528)
FX 3,225 (2,358)
Change in Total 4,865 35,538
Ending Balance 149,667$ 128,372$
Nine Months Ended September 30,
November 7, 2016 Third Quarter 2016 Earnings Conference Call 13
Full-Year 2016 Guidance
Current PREVIOUS
Revenue $133M - $143M $125M - $140M
Research & Development Expenses $30M - $40M $30M - $40M
November 7, 2016 Third Quarter 2016 Earnings Conference Call 14
Question & Answer
November 7, 2016 Third Quarter 2016 Earnings Conference Call 15
Appendix
November 7, 2016 Third Quarter 2016 Earnings Conference Call 16
GAAP to Non-GAAP Reconciliations
Three Months Ended September 30, 2016:
(in thousands - USD$) Include
GAAP
Intangible asset
amortization
Foreign
exchange
(gain)/loss
Contingent
related party
payable
fair value
remeasurements
Contingent
related party
payable
paid/accrued
Total
Adjustments NON-GAAP
Product sales and services 31,340$ -$ -$ -$ -$ -$ 31,340$
License and research revenue 747 - - - - - 747
Total revenue 32,087 - - - - - 32,087
Cost of products and services sold 2,844 - - - - - 2,844
Research and development expenses 8,143 - - - - - 8,143
Selling, general and administrative expenses 12,740 - - - - - 12,740
Intangible asset amortization 3,702 (3,702) - - - (3,702) -
Changes in fair value of related party contingent
consideration 20,848 - - (20,848) 5,884 (14,964) 5,884
Total operating expenses 48,277 (3,702) - (20,848) 5,884 (18,666) 29,611
Operating income (loss) (16,190) 3,702 - 20,848 (5,884) 18,666 2,476
Investment Income 490 - - - - - 490
Interest Expense (264) - - - - - (264)
Other Expense - changes in fair value of related party
payable (1,828) - - 1,828 (785) 1,043 (785)
Foreign exchange gain (loss) (1,054) - 1,054 - - 1,054 -
Income (loss) before income taxes (18,846) 3,702 1,054 22,676 (6,669) 20,763 1,917
I come tax provision 3,451 1,329 - 1,021 (385) 1,965 5,416
Income Tax Rate (18%) 36% - 5% 6% 9% 283%
Net Loss (22,297)$ 2,373$ 1,054$ 21,655$ (6,284)$ 18,798$ (3,499)$
Net loss per share - Diluted (0.54)$ 0.06$ 0.03$ 0.52$ (0.15)$ 0.46$ (0.08)$
Weighted average number of shares outstanding - Diluted 41,241 41,241 41,241 41,241 41,241 41,241 41,241
Adjustments
Exclude
November 7, 2016 Third Quarter 2016 Earnings Conference Call 17
GAAP to Non-GAAP Reconciliations
Three Months Ended June 30, 2016:
(in thousands - USD$) Include
GAAP
Intangible asset
amortization
Foreign
exchange
(gain)/loss
Purchase
accounting
adjustments -
FSC
Contingent
related party
payable
fair value
remeasurements
Contingent
related party
payable
paid/accrued
Total
Adjustments NON-GAAP
Product sales and services 38,165$ -$ -$ -$ -$ -$ -$ 38,165$
License and research revenue 693 - - - - - - 693
Total revenue 38,858 - - - - - - 38,858
Cost of products and services sold 3,907 - - (762) - - (762) 3,145
Research and development expenses 7,604 - - - - - - 7,604
Selling, general and administrative expenses 11,290 - - - - - - 11,290
Intangible asset amortization 3,702 (3,702) - - - - (3,702) -
Changes in fair value of related party contingent
consideration 23,898 - - - (23,898) 6,992 (16,906) 6,992
Total operating expenses 50,401 (3,702) - (762) (23,898) 6,992 (21,370) 29,031
Operating income (loss) (11,543) 3,702 - 762 23,898 (6,992) 21,370 9,827
Investment Income 390 - - - - - - 390
Interest Expense (263) - - - - - - (263)
Other Expense - changes in fair value of related party
payable (2,773) - - - 2,773 (941) 1,832 (941)
Foreign exchange gain (loss) 1,680 - (1,680) - - - (1,680) -
Income (loss) before income taxes (12,509) 3,702 (1,680) 762 26,671 (7,933) 21,522 9,013
I come tax provision 7,449 1,329 - 266 1,414 (460) 2,549 9,998
Income Tax Rate (60%) 36% - 35% 5% 6% 12% 111%
Net Loss (19,958)$ 2,373$ (1,680)$ 496$ 25,257$ (7,473)$ 18,973$ (985)$
Net loss per share - Diluted (0.48)$ 0.06$ (0.04)$ 0.01$ 0.61$ (0.18)$ 0.46$ (0.02)$
Weighted average number of shares outstanding - Diluted 41,241 41,241 41,241 41,241 41,241 41,241 41,241 41,241
Adjustments
Exclude
November 7, 2016 Third Quarter 2016 Earnings Conference Call 18
GAAP to Non-GAAP Reconciliations
Three Months Ended September 30, 2015:
(in thousands - USD$) Include
GAAP
Intangible asset
amortization
Foreign
exchange
(gain)/loss
Contingent
related party
payable
fair value
remeasurements
Contingent
related party
payable
paid/accrued
Total
Adjustments NON-GAAP
Product sales and services 47,313$ -$ -$ -$ -$ -$ 47,313$
License and research revenue - - - - - - -
Total revenue 47,313 - - - - - 47,313
Cost of products and services sold 2,087 - - - - - 2,087
Research and development expenses 7,221 - - - - - 7,221
Selling, general and administrative expenses 4,568 - - - - - 4,568
Intangible asset amortization 3,141 (3,141) - - - (3,141) -
Changes in fair value of related party contingent
consideration 44,782 - - (44,782) 9,027 (35,755) 9,027
Total operating expenses 61,799 (3,141) - (44,782) 9,027 (38,896) 22,903
Operating income (loss) (14,486) 3,141 - 44,782 (9,027) 38,896 24,410
Investment Income 197 - - - - - 197
Interest Expense - - - - - - -
Other Expense - changes in fair value of related party
payable (6,644) - - 6,644 (1,211) 5,433 (1,211)
Foreign exchange gain (loss) 160 - (160) - - (160) -
Income (loss) before income taxes (20,773) 3,141 (160) 51,426 (10,237) 44,170 23,397
I come tax provision 7,302 1,099 (48) 2,325 (424) 2,953 10,255
Income Tax Rate (35%) 35% 30% 5% 4% 7% 44%
Net Loss (28,075)$ 2,042$ (112)$ 49,101$ (9,814)$ 41,217$ 13,142$
Net loss per share - Diluted (0.69)$ 0.05$ -$ 1.20$ (0.24)$ 1.01$ 0.32$
Weighted average number of shares outstanding - Diluted 40,625 40,625 40,625 40,625 40,625 40,625 40,625
Adjustments
Exclude