Aratana Therapeutics Reports Fourth Quarter and Full Year 2017 Financial Results
Published: Mar 13, 2018
LEAWOOD, Kan., March 13, 2018 /PRNewswire/ -- Aratana Therapeutics Inc. (NASDAQ: PETX), a pet therapeutics company focused on the licensing, development and commercialization of innovative therapeutics for dogs and cats, announced its fourth quarter and full year 2017 financial results. For the quarter ended December 31, 2017, Aratana reported total net revenues of $10.4 million and a net loss of $15.6 million or $0.37 diluted loss per share. The fourth quarter 2017 net loss included $7.4 million of impairment charges for intangible assets. For the full year 2017, Aratana reported total net revenues of $25.6 million and a net loss of $47.5 million or $1.17 diluted loss per share. The full year 2017 net loss included the intangible assets impairment charges from the fourth quarter, as well as an inventory valuation adjustment loss of $0.7 million for the year.
"During the course of 2017, two of Aratana's innovative FDA-approved therapeutics, GALLIPRANT and ENTYCE, first became available to veterinarians," stated Steven St. Peter, M.D., President and Chief Executive Officer of Aratana Therapeutics. "In 2018, we continue to execute on our commercial model in pet therapeutics while also working to advance and expand our pipeline of therapeutic candidates."
2017 Highlights and Recent Updates
- In October 2017, Aratana made ENTYCE® (capromorelin oral solution) commercially available for appetite stimulation in dogs. As of December 31, 2017, approximately two months after the commercial launch of ENTYCE, Aratana had recorded $1.3 million in ENTYCE net product sales, which were primarily distributor orders. Initial uptake in the fourth quarter exceeded Aratana's original objective of placement in 1,800 clinics in the quarter by more than double. In 2018, Aratana plans to focus on continuing to drive clinic placement while increasing clinics' use of ENTYCE.
- In the full year 2017, NOCITA® (bupivacaine liposome injectable suspension) net product sales were $2.8 million compared to $147 thousand in the fourth quarter of 2016. As of December 31, 2017, sales of NOCITA have increased sequentially in each quarter since launch. Aratana believes the sequential increase in sales is primarily a result of strong re-order rates, with approximately two-thirds of accounts re-ordering in 2017.
- In collaboration with Elanco, Aratana made GALLIPRANT® (grapiprant tablets) commercially available in January 2017 for the control of pain and inflammation in dogs with osteoarthritis. Aratana recorded $20.9 million in total revenues related to GALLIPRANT in 2017. The $20.9 million included $5.4 million in licensing and collaboration revenue from Elanco, which included a one-time non-recurring $1.0 million manufacturing payment, and prior to the manufacturing transfer to Elanco, $15.5 million in product sales of finished goods to Elanco. Additionally, in January 2018, the European Medicine Agency granted marketing authorization of GALLIPRANT in the European Union.
- In December 2017, the United States Department of Agriculture (USDA) Center for Veterinary Biologics granted Aratana conditional licensure for Canine Osteosarcoma Vaccine, Live Listeria Vector (AT-014) for the treatment of dogs diagnosed with osteosarcoma, one year of age or older. As required by USDA to progress from conditional licensure to full licensure, Aratana has commenced an extended field study at approximately two dozen veterinary oncology practice groups across the United States as of the first quarter of 2018.
- Aratana submitted results to the Food and Drug Administration's (FDA) Center for Veterinary Medicine (CVM) from both the pivotal safety and pivotal field effectiveness studies for AT-003 in cats for post-operative pain in the second and third quarters of 2017, respectively. In December 2017, the Company received the target animal safety technical section complete letter. If CVM approves the effectiveness technical section, Aratana anticipates filing the supplemental New Animal Drug Application (NADA) in the second quarter of 2018 and if approved, the NOCITA label would be expanded to include cats.
- In February 2018, Aratana announced an animal health research and development collaboration with AskAt Inc. The collaboration includes an option agreement for multiple therapeutic candidates with potential in pain, allergy and cancer, as well as exclusive, worldwide rights to develop and commercialize AT-019, a potent and innovative EP4 receptor antagonist therapeutic candidate with potential in pain, inflammation and other indications.
The fourth quarter of 2017 net loss was $15.6 million or $0.37 diluted loss per share compared to a net loss of $23.3 million or $0.64 diluted loss per share for the corresponding quarter ended December 31, 2016. For the year ended December 31, 2017, Aratana reported a net loss of $47.5 million or $1.17 diluted loss per share compared to a net loss of $33.6 million or $0.95 diluted loss per share in 2016. In the fourth quarter of 2017, Aratana recorded non-cash intangible assets impairment charges of $7.4 million related to AT-006 and AT-008. During 2017, the Company received a one-time non-recurring $1.0 million manufacturing payment and had $15.5 million in product sales of GALLIPRANT finished goods prior to the assumption of manufacturing by Elanco. In 2016, results included $38.0 million of licensing and collaboration revenue from the collaboration agreement with Elanco, inventory valuation and firm purchase commitment losses of $7.2 million, and non-cash intangible assets impairment charges of $7.9 million.
Aratana reported $10.4 million in net revenues for the quarter ended December 31, 2017 compared to $292 thousand in net revenues in the fourth quarter of 2016, which were primarily related to NOCITA product sales. The fourth quarter of 2017 included $2.0 million in licensing and collaboration revenues and $8.4 million in product sales, of which, approximately $6.0 million was related to product sales of GALLIPRANT finished goods to Elanco. The Company recorded $25.6 million in net revenues for the full year 2017 compared to $38.6 million in net revenues for the full year 2016. In 2017, the Company recognized $19.7 million in products sales, which included $15.5 million in product sales of GALLIPRANT finished goods to Elanco, and $5.9 million in licensing and collaboration revenue, of which $5.4 million was related to GALLIPRANT. Net revenues for 2016 were generated largely from the upfront payment related to the collaboration agreement with Elanco.
The cost of product sales totaled $5.9 million in the fourth quarter of 2017 in comparison to $1.1 million in the corresponding period in 2016. The Company's cost of product sales for the full year 2017 totaled $16.4 million compared to $3.1 million in 2016. The increase year-over-year was primarily due to GALLIPRANT supply sold to Elanco, and cost of product sales of NOCITA.
Selling, general and administrative expenses totaled $7.6 million for the fourth quarter ended December 31, 2017 compared to $7.7 million for the same period in 2016. For the full year 2017, selling, general and administrative expenses were $28.9 million versus $27.3 million for 2016. Aratana expects selling, general and administrative expenses for 2018 to grow slightly to support further adoption and awareness of our marketed therapeutics.
Research and development expenses totaled $3.6 million in the fourth quarter ended December 31, 2017 compared to $9.1 million for the quarter ended December 31, 2016. For the full year 2017, research and development expenses totaled $15.1 million compared to $30.5 million in 2016. The decrease in research and development expenses in 2017 was due primarily to lower milestone payments related to GALLIPRANT, ENTYCE and NOCITA, as well as fewer on-going pivotal studies compared to the corresponding period in 2016.
As of December 31, 2017, Aratana had approximately $68.0 million in cash, cash equivalents, restricted cash and short-term investments. In January 2018, Aratana received net proceeds from its at-the-market sales agreement of approximately $11.7 million.
The Company expects approximately $35.0 million of cash to be used for on-going operations in 2018, as well as $17.3 million of cash to cover its existing debt principal obligations during the year. Aratana believes its current cash, cash equivalents, restricted cash and short-term investments of approximately $68.0 million as of December 31, 2017, together with the aggregate net proceeds of approximately $11.7 million from the sale of shares of the Company's common stock under its at-the-market sales agreement in January 2018, will be sufficient to fund its current operating plan and debt obligations through at least March 31, 2019.
Webcast & Conference Call Details
The Company will host a live conference call on Wednesday, March 14, 2018 at 8:30 a.m. ET to discuss financial results from the fourth quarter and full year ended December 31, 2017.
Interested participants and investors may access the audio webcast or use the conference call dial-in:
1 (866) 364-3820 (U.S.)
1 (855) 669-9657 (Canada)
1 (412) 902-4210 (International)
A replay of the fourth quarter and full year 2017 results teleconference will be available the same day of the event by approximately 11 a.m. ET and an audio webcast will be accessible for 90 days in the Aratana Investor Room. For a replay of the call, use the below dial-in and conference ID 10117254:
1 (877) 344-7529 (U.S.)
1 (855) 669-9658 (Canada)
1 (412) 317-0088 (International)