Egalet Reports Fourth Quarter and Full Year 2015 Financial Results

Mar 08, 2016, 06:00 ET from Egalet Corporation

WAYNE, Pa., March 8, 2016 /PRNewswire/ -- Egalet Corporation (Nasdaq: EGLT) ("Egalet"), a fully integrated specialty pharmaceutical company focused on developing, manufacturing and marketing innovative treatments for pain and other conditions, today reported financial results for the fourth quarter and year ended December 31, 2015.  

"In the fourth quarter Egalet submitted an NDA for ARYMO ER, an abuse-deterrent, extended-release morphine product candidate developed using our proprietary Guardian™ Technology," said Bob Radie, Egalet's president and chief executive officer. "The recent acceptance of the ARYMO ER file by the FDA takes us one step closer to adding to our portfolio of treatment options for patients suffering from pain."

Fourth Quarter and Full Year Financial Results:

  • Cash Position: As of December 31, 2015, Egalet had cash and marketable securities totaling $145.7 million.
  • Revenue: There were net product sales of $4.2 million for the year ended December 31, 2015 compared to $0 for the year ended December 31, 2014. For the fourth quarter ended December 31, 2015, there were net product sales of $2.1 million compared to $0 for the fourth quarter of 2014. The increase was due to the launch of SPRIX® (ketorolac tromethamine) Nasal Spray and OXAYDO™ (oxycodone HCI, USP) tablets for oral use only –CII. Related party revenues increased from $1.9 million for the year ended December 31, 2014 to $18.6 million for the year ended December 31, 2015. The increase was due to the termination of the collaboration agreement with Shionogi which resulted in the recognition of $16.9 million in related party revenues that otherwise would have been classified as deferred revenue as of December 31, 2015 and recognized as revenue over the life of the agreement.
  • Cost of Sales: Cost of sales was $3.3 million for the year ended December 31, 2015 and $2.6 million for the fourth quarter of 2015 related to the sales of SPRIX and OXAYDO, which began in 2015. Of the cost of sales in 2015, $1.7 million is related to an inventory write down predominantly due to SPRIX product expiration which was purchased from Luitpold as part of the initial acquisition of the product. The cost of sales for SPRIX (excluding product amortization rights) reflects the fair value of finished goods inventory that was acquired as part of the acquisition and was dispensed to patients during the period. The cost of sales for OXAYDO (excluding product amortization rights) reflects the average costs of inventory dispensed to patients during the period.
  • G&A Expenses: General and administrative expenses increased to $26.5 million for the year ended December 31, 2015 compared to $15.7 million for 2014. General and administrative expenses for the fourth quarter ended December 31, 2015 were $10.3 million compared to $4.0 million for fourth quarter ended December 31, 2014. This was primarily attributable to FDA regulatory fees and increases in salary and benefits due to an increase in headcount, as well as an increase in professional and administrative fees as Egalet expanded operations in 2015. These increases were offset by a decrease in stock compensation expense.
  • S&M Expenses: Sales and marketing expenses increased to $16.3 million for the year ended December 31, 2015 from $946,000 in the year ended December 31, 2014 and sales and marketing expenses increased to $5.2 million for the fourth quarter ended December 31, 2015 compared to $420,000 for the fourth quarter ended December 31, 2014. The increase in sales and marketing expenses was related to the establishment of the commercial operations in the United States and launch activities for SPRIX and OXAYDO. Expenses for the year ended December 31, 2015 consisted primarily of salary, benefits and costs related to the contract sales force, as well as sales and marketing operations for SPRIX and OXAYDO.
  • R&D Expenses: Research and development expenses increased to $27.1 million for the year ended December 31, 2015 from $22.4 million for the year ended December 31, 2014. Research and development expenses for the fourth quarter ended December 31, 2015 were $7.3 million compared to research and development expenses of $5.9 million for the same period in 2014. The increase was driven primarily by an increase in development costs for Egalet-002 offset by a decrease in ARYMO ER development expenses and a decrease in stock compensation expense.
  • Interest Expense: Interest expense increased to $7.5 million for the year ended December 31, 2015 from $7.1 million for the same period in 2014. Interest expense for the fourth quarter ended December 31, 2015 was $2.3 million compared to interest income of $4,000 for the same period in 2014. Interest expense for the year ended December 31, 2014 was primarily attributable to the recognition of the unamortized premium upon conversion of related party senior convertible debt in connection with Egalet's initial public offering in February 2014. Interest expense for the year ended December 31, 2015 was primarily attributable to the interest expense on the 5.50% convertible notes and the Hercules loan.
  • Net Loss: Net loss for the year ended December 31, 2015 was $57.9 million, or $2.94 per share, compared to a net loss of $43.2 million, or $2.97 per share, for the year ended December 31, 2014. The net loss for the fourth quarter ended December 31, 2015 was $6.8 million, or $0.28 per share, compared to a net loss of $8.5 million, or $0.52 per share, for the quarter ended December 31, 2014. 

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 two approved products: OXAYDO™ (oxycodone HCI, USP) tablets for oral use only –CII and SPRIX® (ketorolac tromethamine) Nasal Spray. In addition, using its proprietary Guardian™ Technology, Egalet is developing a pipeline of clinical-stage, opioid-based product candidates that are specifically designed to deter abuse by physical and chemical manipulation. The lead programs, ARYMO ER ER®, formerly known as Egalet-001, an abuse-deterrent, extended-release, oral morphine formulation, and Egalet-002, an abuse-deterrent, extended-release, oral oxycodone formulation, are in late-stage clinical development for the management of pain severe enough to require daily, around-the-clock opioid treatment and for which alternative treatments are inadequate. Egalet's 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. Full additional information on Egalet, please visit egalet.com. For full prescribing information on SPRIX, please visit sprix.com and for OXAYDO please visit oxaydo.com. For full prescribing information on SPRIX, including the black box warning, please visit sprix.com. For full prescribing information on OXAYDO, 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 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: the success of Egalet's clinical trials, including the timely recruitment of trial subjects and meeting the timelines therefor; Egalet's ability to obtain regulatory approval of Egalet's product candidates; 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 service its debt obligations; Egalet's ability to find and hire qualified sales professionals; the receptivity in the marketplace and among physicians to Egalet's products; the success of products which compete with Egalet's that are or become available; general market conditions; and other risk factors described in Egalet's filings with the United States Securities and Exchange Commission. Egalet assumes no 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.

Investor and Media Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: bcs@egalet.com
Tel: 917-432-9275

Tables Follow


 


Egalet Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)









(in thousands)


December 31, 



2014


2015

Assets







Current assets:







Cash and cash equivalents


$

52,738


$

46,665

Marketable securities, available for sale



-



99,042

Accounts receivable



-



295

Related party receivable



679



57

Inventory



-



1,837

Prepaid expenses and other current assets



698



1,295

Other receivables



1,011



1,047

Total current assets



55,126



150,238

Intangible assets, net



184



10,380

Property and equipment, net



4,417



7,801

Deposits and other assets



843



3,997

Total assets


$

60,570


$

172,416

Liabilities and stockholders' equity







Current liabilities:







Accounts payable


$

4,209


$

7,417

Accrued expenses



2,554



7,616

Deferred revenue



588



10,128

Debt - current



-



3,320

Other current liabilities



78



183

Total current liabilities



7,429



28,664

Debt - non-current portion, net



-



52,442

Deferred income tax liability



25



1,084

Deferred revenue - non-current portion



8,855



-

Derivative liability



-



656

Other liabilities



-



346

Total liabilities



16,309



83,192















Stockholders' equity







Common stock--$0.001 par value at December 31, 2014 and 2015; 75,000,000 shares authorized at December 31, 2014 and 2015; 17,283,663 and 25,085,554 shares issued and outstanding at December 31, 2014 and 2015, respectively



17



25

Additional paid-in capital



121,028



223,784

Accumulated other comprehensive loss



(171)



(41)

Accumulated deficit



(76,613)



(134,544)

Total stockholders' equity



44,261



89,224

Total liabilities and stockholders' equity


$

60,570


$

172,416

 

 

Egalet Corporation and Subsidiaries

Consolidated Statements of Operations (Unaudited)








































(in thousands)


Year Ended


Three months ended



December 31, 


December 31, 



2014


2015


2014


2015

Revenues













Net product sales


$


$

4,184


$


$

2,119

Related party revenues



1,920



18,646



826



17,261

Total revenue



1,920



22,830



826



19,380














Cost and Expenses













Cost of sales (excluding amortization of product rights)





3,271





2,621

Amortization of product rights





1,958





490

General and administrative



15,715



26,474



4,037



10,294

Sales and marketing



946



16,289



420



5,154

Research and development



22,395



27,054



5,908



7,298

  Total costs and expenses



39,056



75,046



10,365



25,857

Loss from operations



(37,136)



(52,216)



(9,539)



(6,477)














Other (income) expense:













Change in fair value of derivative liability





(260)





(441)

Interest expense, net



7,079



7,477



(4)



2,340

Other gain



(1,045)



(864)



(1,028)



(862)

(Gain) loss on foreign currency exchange



(3)



82



(3)



(5)




6,031



6,435



(1,035)



1,032

Loss before provision (benefit) for income taxes



(43,167)



(58,651)



(8,504)



(7,509)

Provision (benefit) for income taxes



47



(718)



(37)



(722)

Net loss


$

(43,214)


$

(57,933)


$

(8,467)


$

(6,787)

Per share information:













Net loss per share of common stock, basic and diluted


$

(2.97)


$

(2.94)


$

(0.52)


$

(0.28)

Weighted-average shares outstanding, basic and diluted



14,556,927



19,738,042



16,402,952



24,353,109

 

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SOURCE Egalet Corporation



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