Aerie Pharmaceuticals Reports Fourth Quarter and Full Year 2017 Financial Results and Provides Business Update and 2018 Guidance
Aerie Highlights and Guidance
- Rhopressa® (netarsudil ophthalmic solution) 0.02% commercial launch planned for mid-second quarter 2018. All regional sales directors and district managers have been hired, as well as over 30 of an expected 100 territory managers.
- Aerie expects to gain preferred formulary coverage for the majority of commercial payers for Rhopressa® by late 2018, with most of the Medicare Part D coverage expected to commence in 2019.
- Adequate Rhopressa® commercial product and sample inventory currently on hand to cover more than one full year of expected demand.
- Preparation of the RoclatanTM (netarsudil/latanoprost ophthalmic solution) 0.02%/0.005% NDA (New Drug Application) is progressing on schedule with an expected submission to the FDA (U.S. Food and Drug Administration) in the second quarter of 2018.
- International expansion activities remain on track with the commencement of the RoclatanTM Phase 3 trial named Mercury 3 in the third quarter of 2017 to prepare for regulatory submission in Europe, and the initiation of the Rhopressa® Phase 2 clinical trial in the fourth quarter of 2017 to prepare for a potential regulatory submission in Japan.
- Pre-IND activities are well underway for the development of Aerie’s retina program, including AR-13503 (Rho kinase inhibitor implant) and AR-1105 (dexamethasone steroid implant).
- As of December 31, 2017, Aerie had approximately $250 million in cash, cash equivalents and investments. In January 2018, Aerie raised an additional approximately $136 million in equity offering net proceeds from the issuance of 2,313,824 shares, resulting in a pro forma cash, cash equivalents and investment balance of approximately $386 million and a pro forma number of shares outstanding of 39,261,461. Cash burn for the full year ended December 31, 2017 was nearly $120 million, in line with previous guidance.
- Aerie expects full year 2018 Rhopressa® net revenues in the range of $20 million to $30 million, on a U.S. generally accepted accounting principles (GAAP) basis. Additionally, Aerie expects cash burn for the full year 2018 in the range of $200 million to $210 million, which includes adjusted total operating expenses in the range of $155 million to $160 million, and capital and inventory build expenditures in the range of $45 million to $50 million. Aerie’s 2018 guidance reflects investments in the sales force and other Rhopressa® commercial launch activities, ongoing clinical activities for Europe and Japan markets, continued build-out of the manufacturing plant in Ireland, and preclinical activities in support of Aerie’s pipeline, including development of its retina program. Aerie’s adjusted total operating expense guidance excludes non-cash stock-based compensation expense, which is expected to be approximately $45 million for the full year 2018.
“We are all very proud of our 2017 accomplishments, especially the early FDA approval of Rhopressa®. Our energy is now focused on managing a successful Rhopressa® launch. With that, we are delighted to provide our net revenue guidance for full-year 2018, which reflects the tremendous efforts we have made thus far in preparing for commercialization, including excellent progress regarding market access. We expect to have our sales force of 100 territory managers in place and fully trained for our anticipated mid-second quarter 2018 launch of Rhopressa®,” said Vicente Anido, Jr., Ph.D., Chairman and Chief Executive Officer. “We are entering the year very well financed, allowing us to continue to build this company into what we believe will become a major ophthalmic pharmaceutical company with global reach.”
Fourth Quarter 2017 Financial Results
As of December 31, 2017, Aerie had cash, cash equivalents and investments of $249.7 million. For the fourth quarter ended December 31, 2017, Aerie reported a GAAP net loss of $58.5 million, or $1.60 loss per share, compared to a net loss of $29.3 million and $0.87 loss per share for the fourth quarter of 2016. The weighted average number of shares outstanding utilized in the calculation of net loss per share was 36,487,669 and 33,613,375 for the fourth quarters of 2017 and 2016, respectively. Total shares outstanding as of December 31, 2017 were 36,947,637.
The $58.5 million net loss for the fourth quarter of 2017 is comprised of $60.3 million in total operating expenses, including $38.1 million in research and development expenses, which reflects $24.8 million of expense resulting from the acquisition of assets from Envisia Therapeutics Inc. (Envisia) in the fourth quarter of 2017, and $22.2 million in selling, general and administrative expenses. Excluding $8.0 million of non-cash stock-based compensation expense, adjusted total operating expenses for the fourth quarter of 2017 were $52.3 million, with adjusted research and development expenses of $36.0 million and adjusted selling, general and administrative expenses of $16.3 million. Total adjusted net loss for the fourth quarter of 2017 was $50.5 million, and adjusted net loss per share was $1.38.
The $29.3 million net loss for the fourth quarter of 2016 is comprised of $28.8 million in total operating expenses, including $14.1 million in research and development expenses and $14.7 million in selling, general and administrative expenses. Excluding $5.3 million of non-cash stock-based compensation expense, adjusted total operating expenses for the fourth quarter of 2016 were $23.5 million, with adjusted research and development expenses of $12.5 million and adjusted selling, general and administrative expenses of $10.9 million. Total adjusted net loss for the fourth quarter of 2016 was $24.0 million, and adjusted net loss per share was $0.72.
The higher operating expenses in the fourth quarter of 2017 as compared to the fourth quarter 2016 primarily reflect increased activities associated with the expansion of our employee base to support the growth of our operations, and preparatory activities associated with our Rhopressa® commercialization efforts, as well as $24.8 million of research and development expense related to the Envisia asset acquisition.
Conference Call / Webcast Information
Aerie management will host a live conference call and webcast at 5:00 p.m. Eastern Time today to discuss Aerie’s financial results and provide a general business update and 2018 guidance.
The live webcast and a replay may be accessed by visiting the Company's website at http://investors.aeriepharma.com. Please connect to the Company's website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. Alternatively, please call (888) 734-0328 (U.S.) or (678) 894-3054 (international) to listen to the live conference call. The conference ID number for the live call is 8393359. Please dial in approximately 10 minutes prior to the call. Telephone replay will be available approximately two hours after the call. To access the replay, please call (855) 859-2056 (U.S.) or (404) 537-3406 (international). The conference ID number for the replay is 8393359. The telephone replay will be available until March 8, 2018.