Neos Therapeutics Reports Third Quarter 2020 Financial Results

Company to host conference call today at 8:30 a.m. EDT

DALLAS and FORT WORTH, Texas, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Neos Therapeutics, Inc. (Nasdaq: NEOS), a commercial-stage pharmaceutical company developing and manufacturing central nervous system-focused products, today reported financial results for the third quarter ended September 30, 2020 and provided a business update.

“During the third quarter, we saw Neos ADHD prescription volumes and the overall ADHD market begin to rebound from the profound impact of the COVID-19 pandemic in the second quarter of 2020, with continued prescription volume strength for the adult segment and a gradual recovery of the pediatric segment. We are pleased with the market rebound, and I am happy to report that, compared to the second quarter, third quarter prescription growth for Neos’ ADHD medications was nearly double the overall ADHD market,” said Jerry McLaughlin, President and Chief Executive Officer. “In addition, we are seeing continued sequential growth of Neos commercial ADHD prescriptions being filled through Neos RxConnect, our best in class patient support program.”

ADHD Commercial Portfolio

  • Neos brands outperforming the ADHD market: During the third quarter of 2020, the ADHD market saw sequential growth of 4.1% following the immediate and elongated impact of the ongoing COVID-19 pandemic, which began during the second quarter of 2020. Over this same period, Neos brands outperformed the overall market, with Adzenys XR-ODT growing by 9.9% and Cotempla XR-ODT growing by 6.5%.
  • Neos RxConnect program continues to support prescription growth: During the third quarter of 2020, Neos commercial ADHD prescriptions filled through the Neos RxConnect pharmacy network grew sequentially by 17.7% and made up more than 40% of total Neos prescriptions filled. The program, which aims to simplify the process of gaining access to Neos ADHD medicines for both patients and healthcare providers, continues to be a key long-term growth driver for the Neos ADHD franchise.
  • New strategy targeting adults with ADHD driving Adzenys XR-ODT growth: During the third quarter of 2020, Neos deployed new strategies for Adzenys XR-ODT focused on adults with ADHD. As a result, adult prescriptions for Adzenys XR-ODT grew sequentially by 10.7%. Overall ADHD market adult prescriptions grew by 4.1% during this same time period.

Development Pipeline

  • NT0502 Phase 1 single ascending and multiple ascending dose trial plans to initiate in 1H2021: The Company now plans to initiate a Phase 1 clinical trial for NT0502, for the treatment of sialorrhea in patients with neurological conditions in the first half of 2021. The multi-part study includes single ascending and multiple ascending dose cohorts.

Financial Highlights and Select Third Quarter 2020 Financial Results

  • Total product revenues were $12.5 million for the three months ended September 30, 2020, compared to $17.5 million for the three months ended September 30, 2019.
  Q3 2020 Q3 2019 % Change
vs. 2019
Adzenys XR-ODT $6.2MM $8.8MM (29.5)%
Cotempla XR-ODT $5.6MM $7.2MM (22.2)%
Adzenys ER* - $0.2MM -
Generic Tussionex $0.7MM $1.3MM (46.2)%
Total $12.5MM $17.5MM (28.5)%

* Adzenys ER revenue was negligible in Q3 2020.

  • Gross profit was $7.4 million for the three months ended September 30, 2020, compared to a gross profit of $11.1 million for the same period in 2019.
  • Research and development expenses were $1.3 million for the three months ended September 30, 2020, compared to $1.6 million for the same period in 2019.
  • Selling and marketing expenses were $4.8 million for the three months ended September 30, 2020, compared to $7.1 million for the same period in 2019.
  • General and administrative expenses were $4.1 million for the three months ended September 30, 2020, compared to $2.8 million for the same period in 2019.
  • For the third quarter of 2020, net loss was $4.9 million, or ($0.10) per share, compared to $2.1 million, or ($0.04) per share, in the third quarter of 2019. Loss from operations was $2.9 million for the three months ended September 30, 2020, compared to $0.4 million for the same period in 2019.
  • At September 30, 2020, the Company held $12.7 million in cash and cash equivalents.

Conference Call Details
Neos management will host a conference call and live audio webcast to discuss these results and provide a company update at 8:30 a.m. ET today. The live call may be accessed by dialing (877) 388-8985 for domestic calls, or +1 (562) 912-2654 for international callers, and referencing conference ID number 8053068. A live audio webcast for the conference call will be available on the Investor Relations page of the Company’s website at http://investors.neostx.com/. Following the conclusion of the call, the webcast will be available for replay for 30 days.

About Neos Therapeutics
Neos Therapeutics, Inc. (NASDAQ: NEOS) is a commercial-stage pharmaceutical company developing and manufacturing central nervous system (CNS)-focused products. The Company markets Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), and Adzenys-ER® (amphetamine) extended-release oral suspension (see Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD. The Company also has a development candidate, NT0502, for the treatment of sialorrhea in patients with neurological conditions. Additional information about Neos is available at www.neostx.com.

Forward-Looking Statements
Any statements in this press release about future expectations, plans and prospects for the Company, including statements about the Company’s strategy, future operations, commercial products, clinical development of its therapeutic candidates, plans for potential future product candidates, financial condition and outlook, and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “suggest,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the impact of COVID-19 on prescriptions for the Company’s products and on the Company’s business, revenues, results of operations and financial condition, including whether ADHD prescription volumes and the overall ADHD market are beginning to rebound from the impact of COVID-19; the net sales, profitability, and growth of the Company’s commercial products; the Neos RxConnect network, including whether it will continue to be a key long-term growth driver for the Neos ADHD franchise; the status, timing, costs, results and interpretation of the Company’s clinical trials or any future trials, including whether the Company will initiate a Phase 1 single ascending and multiple ascending dose study of NT0502 in the first half of 2021; the uncertainties inherent in conducting clinical trials; expectations for regulatory interactions, submissions and approvals; the financial condition and outlook for the Company, including whether the Company is on track to becoming operational cash flow positive and to maximize the financial contribution of the ADHD franchise over the next several years; availability of funding sufficient for the Company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements; uncertainties related to the Company’s intellectual property; other matters that could affect the availability or commercial potential of the Company’s commercial products or therapeutic candidates; and other factors discussed in the Risk Factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and in other filings the Company makes with the SEC from time to time. In addition, the forward-looking statements included in this press release represent the Company’s views only as of the date hereof. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, except as may be required by law.

Neos Therapeutics, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(unaudited)

               
    September 30,   December 31,  
    2020     2019    
ASSETS              
Current Assets:              
Cash and cash equivalents   $ 12,744     $ 16,830    
Short-term investments           8,064    
Accounts receivable, net of allowances for chargebacks and cash discounts of $1,899 and $4,848 at September 30, 2020 and December 31, 2019, respectively     20,386       26,563    
Inventories, net     8,436       11,010    
Prepaid expenses and other current assets     2,443       4,092    
Total current assets     44,009       66,559    
               
Property and equipment, net     5,824       7,345    
Operating lease right-of-use assets     2,655       3,044    
Intangible assets, net     11,074       12,543    
Other assets     1,022       1,382    
Total assets   $ 64,584     $ 90,873    
               
LIABILITIES AND STOCKHOLDERS' DEFICIT              
               
Current Liabilities:              
Accounts payable   $ 8,443     $ 6,650    
Accrued expenses     31,233       40,188    
Current portion of operating lease liabilities     693       681    
Short-term line of credit     7,320          
Current portion of long-term debt     19,472       15,836    
Total current liabilities     67,161       63,355    
               
Long-Term Liabilities:              
Long-term debt, net of current portion     13,720       29,099    
Operating lease liabilities     2,741       3,254    
Derivative liability     1,456       1,135    
Other long-term liabilities     58       160    
Total long-term liabilities     17,975       33,648    
               
Stockholders' Deficit:              
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at September 30, 2020 and December 31, 2019              
Common stock, $0.001 par value, 100,000,000 shares authorized at September 30, 2020 and December 31, 2019; 49,788,895 and 49,755,094 shares issued and outstanding, respectively, at September 30, 2020; 49,766,472 and 49,732,671 shares issued and outstanding, respectively, at December 31, 2019     50       50    
Treasury stock, at cost, 33,801 shares at September 30, 2020 and December 31, 2019     (352 )     (352 )  
Additional paid-in capital     332,004       328,056    
Accumulated deficit     (352,254 )     (333,885 )  
Accumulated other comprehensive income           1    
Total stockholders' deficit     (20,552 )     (6,130 )  
Total liabilities and stockholders' deficit   $ 64,584     $ 90,873    

 

Neos Therapeutics, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(unaudited)

                           
    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
    2020     2019     2020     2019    
Revenues:                          
Net product sales   $ 12,535     $ 17,540     $ 40,161     $ 47,817    
                           
Cost of goods sold     5,120       6,447       17,387       17,942    
Gross profit     7,415       11,093       22,774       29,875    
                           
Research and development expenses     1,310       1,551       4,668       6,757    
Selling and marketing expenses     4,844       7,125       17,650       21,463    
General and administrative expenses     4,177       2,850       12,135       10,355    
                           
Loss from operations     (2,916 )     (433 )     (11,679 )     (8,700 )  
                           
Interest expense     (2,005 )     (1,869 )     (6,131 )     (5,971 )  
Other income (expense), net     12       251       (557 )     1,257    
                           
Loss before income taxes     (4,909 )     (2,051 )     (18,367 )     (13,414 )  
Income tax expense     2             2          
Net loss   $ (4,911 )   $ (2,051 )   $ (18,369 )   $ (13,414 )  
                           
Weighted average common shares outstanding used to compute net loss per share, basic and diluted     49,755,094       49,730,755       49,747,076       49,720,780    
                           
Net loss per share of common stock, basic and diluted   $ (0.10 )   $ (0.04 )   $ (0.37 )   $ (0.27 )  

Contacts:

Richard Eisenstadt
Chief Financial Officer
Neos Therapeutics, Inc.
(972) 408‑1389
reisenstadt@neostx.com

Sarah McCabe
Stern Investor Relations, Inc.
(212) 362‑1200
sarah.mccabe@sternir.com

 

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