Neos Therapeutics Reports Fourth Quarter and Year-End 2018 Financial Results
- New commercial strategy including optimized salesforce structure, new distribution network and focus on improving net margins expected to accelerate path to profitability –
- Company to host conference call today at
Commercial Product Highlights
Neos’ three commercial attention deficit hyperactivity disorder (ADHD) products are Adzenys XR-ODT®, Cotempla XR-ODT® and Adzenys ER®, which launched in
* As reported by
Additional Commercial Product Highlights
- Focus on Increasing Net Revenue Per Pack: For the three months ended
December 31, 2018, the company’s net revenue per pack for Adzenys XR-ODT was $97and for Cotempla XR-ODT was $95, respectively. With the adoption of the new revenue standard ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), the high deductibles from insurance plan year rollovers begin to negatively affect net revenue per pack in the three months ended December 31. Net revenue per pack for the fiscal year ended December 31, 2018averaged $97for Adzenys XR-ODT and $90for Cotempla XR-ODT.
- Continued Expansion of ADHD Prescriber Base: For the three months ended
December 31, 2018, the company’s prescriber base grew to greater than 11,000, an increase of 8.4% compared to the third quarter of 2018.
- Increasing Productivity Among Prescriber Base: In the three months ended
December 31, 2018, the average number of prescriptions written per portfolio prescriber was 9.7 TRx. This compares to 8.2 TRx per portfolio prescriber during the three months ended December 31, 2017, an increase of 18.3%.
- Clarity on Brand Exclusivity for ADHD Products Secured: On
December 26, 2018, Neosannounced that it had entered into a confidential settlement and licensing agreement with Teva Pharmaceuticals USA, Inc.(Teva) to resolve all ongoing litigation involving Neos'patents protecting its Cotempla XR-ODT and Teva's Abbreviated New Drug Application (ANDA) filed with the U.S. Food and Drug Administrationto market a generic version of that product. Under the settlement and license agreement, Neoshas granted Teva the right to manufacture and market its generic version of Cotempla XR-ODT under the Teva ANDA beginning on July 1, 2026, or earlier under certain circumstances. The company previously secured brand exclusivity for Adzenys XR-ODT until September 1, 2025following a settlement and licensing agreement with Actavis Laboratories FL, Inc.to resolve all ongoing litigation involving Neos'patents.
- ADHD Product Portfolio Poised for Continued Growth: On
November 30, 2018, the company announced a new commercial strategy including a plan to optimize its salesforce structure with the goal of better focusing on those geographies and physician targets that have the highest potential to support the long-term growth and profitability of its ADHD business.
- Strengthened Balance Sheet with
$43.4 MillionFinancing Setting Path to Cash Self-Sufficiency: On November 8, 2018, the Company closed an underwritten public offering under the Shelf of 19,999,999 shares of its common stock at a public offering price of $2.30per share, which includes the exercise in full by the underwriters of their option to purchase up to an additional 2,608,695 shares of common stock. The net proceeds to the company from this offering, after deducting underwriting discounts and commissions and offering expenses payable by the company and taking into account of certain reimbursement by the underwriters, were approximately $43.4 million. Simultaneous with this financing, the company amended its term loan from Deerfield Management.
- In-Licensed NT0502, an NCE for the Treatment of Sialorrhea (Excessive Drooling): In
October 2018, Neosannounced that it licensed NT0502, formerly referred to as NT0501, a drug candidate for the treatment of sialorrhea from NeuRx Pharmaceuticals LLC. This drug candidate is a new chemical entity and a selective muscarinic receptor antagonist that will utilize Neos’ microparticle technology, which is used in the company’s four on-market products. NT0502 will be developed to address the significant unmet medical needs for the treatment of chronic sialorrhea in adult and pediatric patients with neurological conditions including cerebral palsy, Parkinson’s disease, mental retardation and amyotrophic lateral sclerosis (ALS). Investigational New Drug (IND)-enabling studies are ongoing and the company anticipates initiating a Phase 1 trial in the first half of 2020.
Select Financial Results for the Fourth Quarter Ended
- Total product revenues were
$15.4 millionfor the three months ended December 31, 2018, compared to $9.2 millionfor the same period in 2017, and for the fiscal year ended December 31, 2018, total product revenues were $50.0 million, compared with $27.1 millionfor the same period in 2017.
|Q4 2018||Q4 2017||% Change||FY 2018||FY 2017||% Change|
|*Adzenys ER revenue was negligible in Q4 and FY 2018|
- The Company reported a gross profit of
$7.6 millionfor the three months ended December 31, 2018, compared to a gross profit of $5.6 millionfor the same period in 2017, and for the fiscal year ended December 31, 2018, gross profit was $23.1 millionas compared to a gross profit of $13.1 millionfor the same period of 2017.
- Research and development expenses for the three months ended
December 31, 2018, were $2.4 millioncompared to $1.8 millionfor the same period in 2017, and for the fiscal year ended December 31, 2018, research and development expenses were $8.5 millioncompared to $9.0 millionfor the same period of 2017. The increase in the fourth quarter was primarily due to clinical trial expenses associated with post-marketing commitment studies of Adzenys XR-ODT and Cotempla XR-ODT as well as a license fee paid for NT0502.
- Selling and marketing expenses were
$9.1 million for the three months ended December 31, 2018, compared to $11.9 millionfor the same period in 2017, and for the fiscal year ended December 31, 2018, selling and marketing expenses were $44.1 millioncompared to $46.9 millionfor the same period in 2017. Selling and marketing expenses in the three months ended December 31, 2018included approximately $1.0 millionin charges associated with the restructuring of the commercial team.
- General and administrative expenses for the three months ended
December 31, 2018, were $3.3 millioncompared to $3.0 millionfor the same period in 2017, and for the fiscal year ended December 31, 2018, general and administrative expenses were $13.9 millioncompared to $13.8 millionfor the same period in 2017.
- The Company reported a net loss of
$9.3 million, or $0.23per share, for the three months ended December 31, 2018, compared to a net loss of $13.7 million, or $0.47per share, for the same period in 2017. For the fiscal year ended December 31, 2018, the Company reported a net loss of $51.7 million, or $1.60per share, compared to a net loss of $65.8 million, or $2.66per share for the fiscal year ended December 31, 2017.
December 31, 2018, the Company held $46.5 millionin cash and cash equivalents and short-term investments.
Conference Call Details
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the commercialization of Adzenys XR-ODT, Cotempla XR-ODT™ and Adzenys ER, the prescription growth for our products, our marketing plans, the therapeutic potential of our products, the strategic expansion of our product pipeline and commercial product portfolio, the research and development plan for our potential product candidates, including licensed product candidates, the terms of our amended senior debt facility, our financial position and cash runway, and the growth and profitability of our business. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements reflect our current views about our expectations, strategy, plans, prospects or intentions, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to market and sell our products, the inherent uncertainty of drug research and development and commercialization, that we may use our cash resources more quickly than anticipated, and other risks set forth under the caption “Risk Factors” in our most recently filed Annual Report on Form 10-K as updated by our subsequently filed other
|Neos Therapeutics, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
|Cash and cash equivalents||$46,478||$31,969|
|Accounts receivable, net of allowances for charge backs and cash discounts of
$1,865 and $1,154, respectively
|Other current assets||4,032||3,575|
|Total current assets||88,678||79,395|
|Property and equipment, net||7,914||8,203|
|Intangible assets, net||14,616||16,348|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Current portion of long‑term debt||8,557||896|
|Total current liabilities||57,105||33,300|
|Long‑term debt, net of current portion||43,217||58,938|
|Other long-term liabilities||184||180|
|Total long‑term liabilities||46,407||61,861|
|Stockholders’ Equity (Deficit):|
|Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or
outstanding at December 31, 2018 and December 31, 2017
|Common stock, $0.001 par value, 100,000,000 authorized at December 31, 2018 and
December 31, 2017; 49,710,104 and 49,676,303 issued and outstanding,
respectively, at December 31, 2018; 29,030,757 and
28,996,956 issued and outstanding, respectively, at December 31, 2017
|Treasury stock, at cost, 33,801 shares at December 31, 2018 and December 31, 2017||(352)||(352)|
|Additional paid‑in capital||325,130||274,584|
|Accumulated other comprehensive loss||—||(6)|
|Total stockholders’ equity||7,845||8,947|
|Total liabilities and stockholders’ equity||$111,357||$104,108|
| Neos Therapeutics, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
|Three Months Ended
|Net product sales||$||15,393||$||9,222||$||49,988||$||27,132|
|Cost of goods sold||7,762||3,640||26,928||14,030|
|Research and development||2,399||1,784||8,508||8,957|
|Selling and marketing expenses||9,140||11,851||44,133||46,881|
|General and administrative expenses||3,328||3,039||13,915||13,805|
|Loss from operations||(7,236||)||(11,092||)||(43,496||)||(56,541||)|
|Other income, net||161||276||795||854|
|Weighted average common shares outstanding used to
compute net loss per share, basic and diluted
|Net loss per share of common stock, basic and diluted||$||(0.23||)||$||(0.47||)||$||(1.60||)||$||(2.66||)|
Chief Financial Officer
Stern Investor Relations, Inc.