Intersect ENT Reports Fourth Quarter and Full Year 2017 Results
Recent Business Highlights
- In December 2017, the U.S. Food and Drug Administration (FDA) approved the SINUVA™ (mometasone furoate) Sinus Implant, a new targeted approach to treating recurrent nasal polyp disease in patients who have had previous ethmoid sinus surgery.
- In November 2017, the company commenced the ENCORE study, a 50-patient prospective, multicenter, open-label study focused on evaluation of the safety of repeat placement of SINUVA in chronic sinusitis patients with nasal polyps. Patient enrollment was completed in January 2018.
- In November 2017, the Journal of the American Medical Association – Otolaryngology-Head & Neck Surgery published a pivotal study of PROPEL® Contour steroid releasing sinus implant, concluding that frontal sinus surgery followed by placement of PROPEL Contour significantly minimizes scarring and inflammation, reducing the need for post-operative surgical and medical interventions compared to standard frontal sinus surgery.
- In October 2017, at the 4th Congress of European ORL-HNS, the co-principal investigator presented the results from RESOLVE II, a randomized, blinded, sham-controlled pivotal phase III trial which assessed the safety and efficacy of SINUVA. As previously reported, the study met the co-primary efficacy endpoints and four pre-specified secondary efficacy endpoints. The study was published in the International Forum of Allergy & Rhinology in January 2018.
Fourth Quarter Financial Results
Total revenue grew to $29.5 million for the fourth quarter of 2017 compared to $24.2 million for the same period of 2016, an increase of 22%. The increase in revenue was attributable primarily to growth in adoption of the PROPEL® family of products.
Gross profit for the fourth quarter of 2017 was $24.4 million, representing an 83% gross margin, compared to $20.3 million in the same period of the prior year, representing an 84% gross margin. The decrease in gross margin was attributable primarily to inefficiencies associated with ramping up production of PROPEL Contour, which received FDA approval in early 2017.
Operating expenses for the fourth quarter of 2017 were $27.9 million compared to $25.4 million in the same period of the prior year, an increase of 10%. R&D expenses were consistent at $5.6 million for both periods. SG&A expenses increased to $22.3 million from $19.8 million, primarily driven by an increase in headcount.
Full Year 2017 Financial Results
Total revenue grew to $96.3 million for 2017 compared to $78.7 million for 2016, an increase of 22%. The increase in revenue was attributable primarily to growth in adoption of the PROPEL family of products.
Gross profit for 2017 was $80.8 million, representing an 84% gross margin, compared to $65.7 million in 2016, representing an 83% gross margin. The increase in gross margin was attributable primarily to an increase in average selling price.
Operating expenses for 2017 were $98.4 million compared to $91.8 million for 2016, an increase of 7%. R&D expenses decreased to $18.4 million from $18.9 million primarily due to a decrease in clinical trial costs offset in part by an increase in personnel costs. SG&A expenses increased to $80.0 million from $72.9 million, primarily driven by an increase in headcount.
Cash, cash equivalents and short-term investments totaled $102.3 million as of December 31, 2017, compared with $103.9 million as of December 31, 2016.
The company continues to forecast full year 2018 revenue of $111 to $116 million, including an estimated 8% contribution from SINUVA product sales, and first quarter 2018 revenue of $23.2 to $23.7 million. The company continues to expect to launch SINUVA commercially in the second quarter of 2018.
The company expects full year 2018 gross margin of approximately 81% to 82% and operating expenses for the year of $113 to $115 million.
Webcast and Conference Call Information
Intersect ENT will host a conference call today at 4:30 p.m. ET to discuss the company’s fourth quarter and full year 2017 results and business outlook. To access the conference call via the internet, go to the “Investor Relations” page of the company’s web site at www.intersectENT.com. To access the live conference call via phone, dial 1-844-850-0548 and ask to join the Intersect ENT call. International callers may access the live call by dialing 1-412-317-5205. Participants may expedite telephone access by pre-registering for the call using the following link: http://dpregister.com/10116624.
A replay of the conference call may be accessed that same day after 8:00 p.m. ET at www.intersectENT.com or via phone at 1-877-344-7529 or 1-412-317-0088 for international callers. The reference number to enter the replay of the call is 10116624. The dial-in replay will be available for a week after the call and via the internet for approximately one month.