Egalet Reports Fourth Quarter and Full Year 2017 Financial Results

Published: Mar 12, 2018

WAYNE, Pa., March 12, 2018 /PRNewswire/ -- Egalet Corporation (Nasdaq: EGLT) ("Egalet"), a fully integrated specialty pharmaceutical company focused on developing, manufacturing and commercializing innovative treatments for pain and other conditions, today reported financial results for the fourth quarter and year ended December 31, 2017, including updates on its commercial products: SPRIX® (ketorolac tromethamine) Nasal Spray, OXAYDO® (oxycodone HCI, USP) tablets for oral use only -CII and ARYMO® ER (morphine sulfate) extended-release tablets for oral use --CII.

"The fourth quarter of 2017 demonstrated continued momentum for SPRIX, OXAYDO and ARYMO ER with combined prescriptions growing more than 35 percent over the third quarter 2017 and revenue of $7.8 million," said Bob Radie, president and chief executive officer of Egalet. "We believe that with our strong cash position, expected revenue growth through our own efforts and those of our partners coupled with expense reductions, Egalet is well positioned for 2018."

2017 Highlights

  • Outperformed analyst consensus with 2017 net product sales of $26.1 million;
  • Prescriptions for SPRIX Nasal Spray grew to over 33,000 in 2017 representing growth of more than 100 percent over 2016;
  • Prescribers of SPRIX grew to almost 6,000 since launch, including nearly 800 new prescribers in the fourth quarter of 2017 representing 80 percent growth over the same period in 2016;
  • Secured coverage of ARYMO ER by a large payer providing commercial coverage for over 24 million member lives and Medicare Part D coverage for over 1.4 million member lives; and
  • Partner Ascend Therapeutics began promotion of SPRIX Nasal Spray to its target women's healthcare providers.

2017 Fourth Quarter and Full-Year Financial Results

  • Cash Position: As of December 31, 2017, Egalet had cash and marketable securities totaling $91.0 million. Cash used in operating activities for the fourth quarter of 2017 was $10.0 million down from $15.8 million in the same period of 2016.
  • Net Product Sales: There were net product sales of $26.1 million for the year ended December 31, 2017 compared to $16.9 million for the year ended December 31, 2016. There were net product sales of $7.8 million for the quarter ended December 31, 2017 compared to $6.1 million for the same period in 2016. The increase in both periods was due to continued growth in SPRIX Nasal Spray and OXAYDO sales and the fact that ARYMO ER was launched at the end of the first quarter of 2017.
  • Cost of Sales (excluding product rights amortization): Cost of sales was $5.2 million for the year ended December 31, 2017 compared to $3.7 million for the year ended December 31, 2016. Cost of sales was $1.5 million for the quarter ended December 31, 2017 and $1.1 million for the same period in 2016. Cost of sales for the quarter and the year ended 2017 is related to the sales of Egalet's three commercially available products. Cost of sales for the quarter and the year ended 2016 related to the sales of SPRIX Nasal Spray and OXAYDO.
  • G&A Expenses: General and administrative expenses were $34.1 million for the year ended December 31, 2017 compared to $30.7 million for year ended December 31, 2016. The increase was primarily attributable to FDA-mandated post-marketing studies and increases in annual regulatory filing fees. General and administrative expenses for the quarter ended December 31, 2017 were $6.3 million compared to $7.9 million for the quarter ended December 31, 2016. The decrease was primarily attributable to decreases in depreciation of assets retired in 2016.
  • S&M Expenses: Sales and marketing expenses were $35.5 million for the year ended December 31, 2017 compared to $27.9 million for the year ended December 31, 2016. The increase in the period was related to the launch of ARYMO ER in the beginning of 2017. Sales and marketing expenses for the quarter ended December 31, 2017 were $8.1 million compared to $8.4 million for the quarter ended December 31, 2016.
  • R&D Expenses: Research and development expenses were $14.7 million for the year ended December 31, 2017 compared to $33.8 million for the year ended December 31, 2016. Research and development expenses for the quarter ended December 31, 2017 were $1.6 million compared to $6.9 million for the same period in 2016. The decrease in both periods was driven primarily by decrease in our development program expenses related to ARYMO ER, Egalet-002 and OXAYDO clinical trials.
  • Interest Expense: Interest expense was $17.7 million for the year ended December 31, 2017 compared to $12.1 million for the year ended December 31, 2016. Interest expense for the quarter ended December 31, 2017 was $3.7 million compared to interest expense of $3.9 million for the same period in 2016. Interest expense for 2017 primarily consisted of interest expense related to the 5.50% convertible notes and the 13.0% senior secured notes and interest expense for 2016 primarily consisted of interest expense related to the Hercules Loan Agreement, the 5.50% convertible notes and the 13.0% senior secured notes. Of the interest expense for the year ended December 31, 2017, $5.2 million was non-cash interest while there was $7.3 million of non-cash interest for the year ended December 31, 2016.
  • Gain on Extinguishment of Debt: Gain on the extinguishment of debt of $13.2 million for the quarter and year ended December 31, 2017 was attributable to the note exchange for a portion of the Company's 5.50% convertible notes in December 2017.
  • Net Income (Loss): Net loss for the year ended December 31, 2017 was $69.4 million, or $2.05 per share, compared to a net loss of $90.6 million, or $3.70 per share, for the year ended December 31, 2016. Net income for the quarter ended December 31, 2017 was $1.5 million, or $0.03 per share, compared to a net loss of $21.4 million, or $0.87 per share, for the quarter ended December 31, 2016. The net income for the fourth quarter 2017 was primarily driven by the $13.2 million gain on the extinguishment of the debt associated with the 5.50% convertible notes exchanged in December 2017.

Earnings Conference Call Information

Egalet's management will host a conference call to discuss the fourth quarter and year-end 2017 financial results today:

    Date:                       Monday, March 12, 2018

    Time:                       8:30 a.m. EDT

    Webcast (live and archive):  egalet.com  (Events & Webcasts,
                                 Investor page)

    Dial-in numbers:            1-888-346-2615 (domestic)

                                1-412-902-4253 (international)

    Replay numbers:             1-877-344-7529 (domestic)

                                1-412-317-0088 (international)

    Conference number:                                    10117571

About Egalet
Egalet, a fully integrated specialty pharmaceutical company, is focused on developing, manufacturing and commercializing innovative treatments for pain and other conditions. Egalet has three approved products: ARYMO® ER (morphine sulfate) extended-release tablets for oral use --CII, developed using Egalet's proprietary Guardian™ Technology, OXAYDO® (oxycodone HCI, USP) tablets for oral use only --CII and SPRIX® (ketorolac tromethamine) Nasal Spray. Using Guardian Technology, Egalet has developed a pipeline of clinical-stage, product candidates for which we are seeking partners including Egalet-002, an abuse-deterrent, extended-release, oral oxycodone formulation for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Guardian Technology can be applied broadly across different classes of pharmaceutical products and can be used to develop combination products that include multiple active pharmaceutical ingredients with similar or different release profiles.

For full prescribing information on ARYMO ER, including the boxed warning and medication guide, please visit arymoer.com. For full prescribing information on SPRIX, including the boxed warning and medication guide, please visit sprix.com. For full prescribing information on OXAYDO, including the boxed warning and medication guide, please visit oxaydo.com.

Safe Harbor
Statements included in this press release (including but not limited to upcoming milestones) that are not historical in nature and contain the words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "suggest," "target," "potential," "will," "would," "could," "should," "continue," "look forward to" and other similar expressions are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to known and unknown uncertainties and risks. Actual results could differ materially from those discussed due to a number of factors, including, but not limited to: Egalet's ability to continue as a going concern, which is expected to result in the inclusion of a going concern qualification in the report of Egalet's independent registered public accounting firm accompanying Egalet's 2017 financial statements; Egalet's ability to remain listed on the Nasdaq; the potential impact of strengthening the ARYMO ER label; the success of Egalet's clinical trials, including the timely recruitment of trial subjects and meeting the timelines therefor; Egalet's ability to obtain and maintain regulatory approval of Egalet's products and product candidates and the labeling claims that Egalet believes are necessary or desirable for successful commercialization of its products and product candidates; the impact of strengthening any of the labels for Egalet's products; Egalet's ability to maintain the intellectual property position of Egalet's products and product candidates; Egalet's ability to identify and reliance upon qualified third parties to manufacture its products; Egalet's ability to commercialize its products, and to do so successfully; the costs of commercialization activities, including marketing, sales and distribution; the size and growth potential of the markets for Egalet's products and product candidates, and Egalet's ability to service those markets; Egalet's ability to obtain reimbursement and third-party payor contracts for its products; Egalet's ability to service its debt obligations; Egalet's ability to raise additional funds to execute its business plan and growth strategy on terms acceptable to Egalet, if at all; Egalet's ability to find and hire qualified sales professionals; the rate and degree of receptivity in the marketplace and among physicians to Egalet's products; the success of products that compete with Egalet's that are or become available; the regulatory environment and social concerns about limiting the use of opioids; general market conditions; and other risk factors set forth in Egalet's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the United States Securities and Exchange Commission (SEC) and in other filings Egalet makes with the SEC from time to time. While Egalet may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to update or revise any forward-looking-statements contained in this press release whether as a result of new information or future events, except as may be required by law.

Media and Investor Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: ir@egalet.com
Tel: 484-259-7370

                                                                     Egalet Corporation and Subsidiaries

                                                              Consolidated Statements of Operations (Unaudited)

                                                               (in thousands, except share and per share data)


                                                  Year Ended                            Three Months Ended
                                                 December 31,                              December 31,
                                                 ------------                              ------------

                                                         2016                     2017                                     2016 2017
                                                         ----                     ----                                     ---- ----

    Revenues

    Net product sales                                            $16, 864                                        $26, 136               $6,140      $7,803

    Collaboration revenues                                            100                                                -                    -          -

    Related party revenues                                              -                                               -                    -          -
                                                                      ---                                             ---                  ---        ---

    Total revenue                                                  16,964                                           26,136                 6,140       7,803


    Cost and Expenses

    Cost of sales (excluding amortization of                        3,660                                            5,153                 1,080       1,507
    product rights)

    Amortization of product rights                                  2,006                                            2,082                   500         529

    General and administrative                                     30,670                                           34,065                 7,868       6,254

    Sales and marketing                                            27,892                                           35,532                 8,438       8,131

    Research and development                                       33,759                                           14,744                 6,872       1,557

    Restructuring charges                                               -                                           2,760                     -      (223)

    Total costs and expenses                                       97,987                                           94,336                24,758      17,755
                                                                   ------                                           ------                ------      ------

    Loss from operations                                         (81,023)                                        (68,200)             (18,618)    (9,952)


    Other (income) expense:

    Change in fair value of derivative liability                    (644)                                         (2,546)                  (2)    (1,034)

    Interest expense, net                                          12,109                                           17,666                 3,884       3,708

    Other gain                                                      (797)                                           (750)                (851)      (857)

    Gain on extinguishment of debt                                      -                                        (13,221)                    -   (13,221)

    Loss on foreign currency exchange                                   2                                               10                     2          11

                                                                   10,670                                            1,152                 3,033    (11,393)
                                                                   ------                                            -----                 -----     -------

    Income (loss) before benefit for income                      (91,693)                                        (69,359)             (21,651)      1,441
    taxes


    Benefit for income taxes                                      (1,061)                                               -                (281)          -
                                                                   ------                                              ---                 ----         ---

    Net income (loss)                                           $(90,632)                                       $(69,359)            $(21,370)     $1,441
                                                                 ========                                         ========              ========      ======

    Per share information:

    Net income (loss) per share of common                         $(3.70)                                         $(2.05)              $(0.87)      $0.03
    stock, basic

    Weighted-average shares outstanding,                       24,514,645                                       33,755,462            24,616,354  43,363,921
    basic

    Net income (loss) per share of common                         $(3.70)                                         $(2.05)               (0.87)      $0.03
    stock, diluted

    Weighted-average shares outstanding,                       24,514,645                                       33,755,462            24,616,354  43,438,267
    diluted

 

                                                                                   Egalet Corporation and Subsidiaries

                                                                                       Consolidated Balance Sheets

                                                                             (in thousands, except share and per share data)


                                                                                                                             December 31,           December 31,
                                                                                                                                     2016                    2017
                                                                                                                                                    (Unaudited)
                                                                                                                                                     ----------


    Assets

    Current assets:

    Cash and cash equivalents                                                                                                               $44,355                  $31,090

    Marketable securities, available for sale                                                                                                42,471                   59,953

    Accounts receivable                                                                                                                       1,108                    4,120

    Inventory                                                                                                                                 1,700                    3,225

    Prepaid expenses and other current assets                                                                                                 2,537                    2,672

    Other receivables                                                                                                                         1,001                      893
                                                                                                                                              -----                      ---

    Total current assets                                                                                                                     93,172                  101,953

    Intangible assets, net                                                                                                                    8,350                    6,583

    Restricted cash                                                                                                                               -                     400

    Property and equipment, net                                                                                                              12,709                    9,911

    Deposits and other assets                                                                                                                   627                    1,011
                                                                                                                                                ---                    -----

    Total assets                                                                                                                           $114,858                 $119,858
                                                                                                                                           ========                 ========

    Liabilities and stockholders' equity (deficit)

    Current liabilities:

    Accounts payable                                                                                                                          2,392                   10,160

    Accrued expenses                                                                                                                         18,147                   16,104

    Deferred revenue                                                                                                                          3,975                    7,456

    Debt - current                                                                                                                              381                    1,081

    Warrant liability                                                                                                                             -                   8,166
                                                                                                                                                ---                   -----

    Total current liabilities                                                                                                                24,895                   42,967

    Debt - non-current portion, net                                                                                                          83,711                   98,890

    Deferred income tax liability                                                                                                                23                       26

    Derivative liabilities                                                                                                                       12                   16,623

    Other liabilities                                                                                                                           891                      727
                                                                                                                                                ---                      ---

    Total liabilities                                                                                                                       109,532                  159,233


    Stockholders' equity (deficit)

    Common stock--$0.001 par value; 75,000,000 shares authorized at December                                                                     25                       46
    31, 2016 and December 31, 2017; 25,189,125 and 45,939,663 shares issued
    and outstanding at December 31, 2016 and December 31, 2017, respectively

    Additional paid-in capital                                                                                                              230,379                  254,871

    Accumulated other comprehensive income                                                                                                      100                    1,008

    Accumulated deficit                                                                                                                   (225,178)               (295,300)
                                                                                                                                           --------                 --------

    Total stockholders' equity (deficit)                                                                                                      5,326                 (39,375)
                                                                                                                                              -----                  -------

    Total liabilities and stockholders' equity (deficit)                                                                                   $114,858                 $119,858
                                                                                                                                           ========                 ========

 

 

 

 

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SOURCE Egalet Corporation

     
 
Company Codes: NASDAQ-NMS:EGLT
 

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