neos_Current_Folio_8K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8‑K


CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2019


NEOS THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware

(State or other jurisdiction of incorporation)

 

 

 

001‑37508

    

27‑0395455

(Commission File No.)

 

(IRS Employer Identification No.)

 


2940 N. Highway 360

Grand Prairie, TX 75050

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (972) 408‑1300

Not applicable

(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

 

 

 

 

 

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common stock, par value $0.001 per share

 

NEOS

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).  Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

 

 

 

Item 2.02.            Results of Operations and Financial Condition.

The information under this caption and contained in the press release attached hereto as Exhibit 99.1 is furnished by Neos Therapeutics, Inc. (the “Company”) in accordance with Securities Exchange Commission Release No. 33‑8216. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act whether made before or after the date of this Current Report, except as shall be expressly set forth by specific reference in such a filing.

On November 8, 2019, the Company issued a press release announcing its financial results for the quarter ended September 30, 2019.  A copy of the press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.            Financial Statements and Exhibits.

(d)              Exhibits

 

 

 

Number

    

Description

 

 

 

99.1

 

Press Release dated November 8, 2019

 

EXHIBIT INDEX

 

 

 

Exhibit

 

 

Number

    

Description

 

 

 

99.1

 

Press Release dated November 8, 2019

 

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

NEOS THERAPEUTICS, INC.

 

 

 

 

 

 

Date: November 8, 2019

By:

/s/ Richard Eisenstadt

 

 

Richard Eisenstadt

 

 

Chief Financial Officer

 

3

neos_Ex99_1

Exhibit 99.1

Neos Therapeutics Reports Third Quarter 2019 Financial Results

— Company to host conference call today at 8:30am EDT —

DALLAS and FORT WORTH, Texas, November 8, 2019 — Neos Therapeutics, Inc. (Nasdaq: NEOS), a commercial-stage pharmaceutical company utilizing its novel microparticle delivery technology to develop and manufacture central nervous system-focused products, today reported financial results for the third quarter ended September 30, 2019 and provided a business update.

“During the third quarter of 2019, we reported 40 percent year-over-year revenue growth, which, combined with our continued improvement in quarterly operating net loss, highlights the strong progress we have made toward our goal of achieving profitability,” said Jerry McLaughlin, President and Chief Executive Officer. “In addition, we continued to increase the number of pharmacies included in our Neos RxConnect patient assistance program, and believe the further expansion of this network will be an important future growth driver for our business. We are also very excited about the progress we have made with our lead pipeline candidate, NT0502, which we expect to enter Phase 1 clinical trials shortly. There is a large unmet need for new treatments for sialorrhea, and we believe that we can uniquely meet this need with a novel mechanism that leverages our microparticle technology. We believe NT0502 has the potential to become the standard of treatment for sialorrhea and truly improve the lives of patients and their caregivers.”

ADHD Commercial Franchise

·

Growth in Net Revenue Per Pack Reflects Successful Shift to More Profitable Business Channels and Market Segments: Neos reported growth in net product sales and net revenue per pack for its two core commercial attention deficit hyperactivity disorder (ADHD) products, Adzenys XR-ODT® and Cotempla XR-ODT®,  for the three months ended September 30, 2019 compared to the same period in 2018.

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue per Pack

 

 

 

Q3 2019

 

Q3 2018

 

% Change

 

Adzenys XR-ODT

 

$

122

 

$

108

 

13

%

Cotempla XR-ODT

 

$

128

 

$

108

 

19

%

 

·

Executing on Back-to-School Commercial Strategy and Expanding Availability of Neos RxConnect Network Pharmacies: During the third quarter of 2019, the Company actively deployed new marketing campaigns for its two core products and substantially expanded the number of participating pharmacies in the Neos RxConnect network. With the pending addition of a large regional grocery store chain, the Company expects that there will be approximately 460 pharmacies in the network at the end of November 2019, representing more than a 200% increase since the end of the third quarter of 2019.

·

Prescriptions for ADHD Products: In the third quarter of 2019, as reported by IQVIA, aggregate prescriptions for Adzenys XR-ODT and Cotempla XR-ODT decreased by 6 percent compared to the third quarter of 2018, consistent with the change in commercial strategy the Company unveiled in late 2018. Specifically, Adzenys XR-ODT and Cotempla XR-ODT prescriptions totaled 52,321 and 36,174, respectively, in the third quarter of 2019 compared to 58,873 and 35,690, respectively, in the third quarter of 2018.

Financial and Pipeline Highlights

·

Substantial Progress Toward Operational Profitability: For the fifth consecutive fiscal quarter, the Company reduced its quarterly net loss. For the third quarter of 2019, net loss narrowed to $2.1 million, down from $12.7 million in the third quarter of 2018, reflecting the evolution of the commercial strategy from volume-based to profitable growth and the Company’s focus on both operational productivity and expense management.

·

NT0502 to Enter Phase 1 Clinical Trials Near-Term: The Company’s lead pipeline candidate, NT0502, is a new chemical entity and a selective muscarinic receptor antagonist that utilizes the same microparticle

technology used in the Company’s four commercial products. NT0502 is being developed to address the significant unmet medical need for the treatment of chronic sialorrhea (excessive drooling) in adult and pediatric patients with neurological conditions, including Parkinson’s disease, cerebral palsy, mental retardation and amyotrophic lateral sclerosis. The Company plans to initiate a Phase 1 trial in the first quarter of 2020.

Select Financial Results for the Third Quarter Ended September 30, 2019

·

Total product revenues were $17.5 million for the three months ended September 30, 2019, compared to $12.5 million for the same period in 2018.

 

 

 

 

 

 

 

 

 

 

 

    

Q3 2019

    

Q3 2018

    

% Change

 

Adzenys XR-ODT

 

$

8.8MM

 

$

7.0MM

 

26

%

Cotempla XR-ODT

 

$

7.2MM

 

$

4.9MM

 

48

%

Adzenys ER

 

$

0.2MM

 

$

*

 

N/A

 

Generic Tussionex

 

$

1.3MM

 

$

0.6MM

 

117

%

Total

 

$

17.5MM

 

$

12.5MM

 

40

%


*Adzenys ER revenue was negligible in Q3 2018.

·

The Company reported a gross profit of $11.1 million for the three months ended September 30, 2019, compared to a gross profit of $5.5 million for the same period in 2018.

·

Research and development expenses were $1.6 million for the three months ended September 30, 2019, compared to $2.0 million for the same period in 2018.

·

Selling and marketing expenses were $7.1 million for the three months ended September 30, 2019, compared to $10.4 million for the same period in 2018.

·

General and administrative expenses were $2.8 million for the three months ended September 30, 2019, compared to $3.5 million for the same period in 2018.

·

The Company reported a net loss of $2.1 million, or $0.04 per share, for the three months ended September 30, 2019, compared to a net loss of $12.7 million, or $0.43 per share, for the same period in 2018.

·

At September 30, 2019, the Company held $25.3 million in cash and cash equivalents and short-term investments. As previously announced, on October 2, 2019, the Company entered into a senior secured credit agreement with certain lenders that provides the Company with up to $25.0 million in loans based on accounts receivables.

Conference Call Details

Neos management will host a conference call and live audio webcast to discuss results and provide a Company update at 8:30 a.m. EDT 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 1674997. 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 utilizing its novel microparticle delivery technology to develop and manufacture central nervous system (CNS)-focused products. 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, are three

approved products utilizing the Company’s novel microparticle delivery technology. 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 net sales, profitability, and growth of the Company’s commercial products, including whether the Company’s third quarter 2019 revenue growth compared to the third quarter of 2018 highlights strong progress towards achieving profitability and whether the continued expansion of the Neos RxConnect network will be an important future growth driver for the Company’s business; the status, timing, costs, results and interpretation of the Company’s clinical trials or any future trials, including whether the Company will commence a  Phase 1 study of NT0502 in the first half of 2020 and whether NT0502 has the potential to become the standard of treatment for sialorrhea and truly improve the lives of patients and caregivers; 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 will continue to make progress towards its goal of achieving profitability; 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, 

 

 

2019

 

2018

ASSETS

 

 

  

 

 

  

Current Assets:

 

 

  

 

 

  

Cash and cash equivalents

 

$

23,284

 

$

46,478

Short-term investments

 

 

1,992

 

 

 —

Accounts receivable, net of allowances for chargebacks and cash discounts of $3,986 and $1,865, respectively

 

 

28,877

 

 

27,801

Inventories

 

 

11,676

 

 

10,367

Other current assets

 

 

1,757

 

 

4,032

Total current assets

 

 

67,586

 

 

88,678

 

 

 

 

 

 

 

Property and equipment, net

 

 

7,517

 

 

7,914

Operating lease right-of-use assets

 

 

3,161

 

 

 —

Intangible assets, net

 

 

13,187

 

 

14,616

Other assets

 

 

304

 

 

149

Total assets

 

$

91,755

 

$

111,357

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

  

 

 

  

 

 

 

 

 

 

 

Current Liabilities:

 

 

  

 

 

  

Accounts payable

 

$

6,548

 

$

12,730

Accrued expenses

 

 

37,848

 

 

35,818

Current portion of operating lease liabilities

 

 

638

 

 

 —

Current portion of long-term debt

 

 

16,108

 

 

8,557

Total current liabilities

 

 

61,142

 

 

57,105

 

 

 

 

 

 

 

Long-Term Liabilities:

 

 

  

 

 

  

Long-term debt, net of current portion

 

 

28,788

 

 

43,217

Operating lease liabilities

 

 

3,434

 

 

 —

Derivative liability

 

 

1,239

 

 

2,017

Deferred rent

 

 

 —

 

 

989

Other long-term liabilities

 

 

180

 

 

184

Total long-term liabilities

 

 

33,641

 

 

46,407

 

 

 

 

 

 

 

Stockholders' (Deficit) Equity:

 

 

  

 

 

  

Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at September 30, 2019 and December 31, 2018

 

 

 —

 

 

 —

Common stock, $0.001 par value, 100,000,000 shares authorized at September 30, 2019 and December 31, 2018; 49,764,909 and 49,731,108 shares issued and outstanding, respectively, at September 30, 2019; 49,710,104 and 49,676,303 shares issued and outstanding, respectively, at December 31, 2018

 

 

50

 

 

50

Treasury stock, at cost, 33,801 shares at September 30, 2019 and December 31, 2018

 

 

(352)

 

 

(352)

Additional paid-in capital

 

 

327,671

 

 

325,130

Accumulated deficit

 

 

(330,397)

 

 

(316,983)

Total stockholders' (deficit) equity

 

 

(3,028)

 

 

7,845

Total liabilities and stockholders' (deficit) equity

 

$

91,755

 

$

111,357

 

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, 

 

    

2019

    

2018

    

2019

    

2018

Revenues:

 

 

  

 

 

  

 

 

  

 

 

  

Net product sales

 

$

17,540

 

$

12,503

 

$

47,817

 

$

34,595

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

6,447

 

 

6,957

 

 

17,942

 

 

19,165

Gross profit

 

 

11,093

 

 

5,546

 

 

29,875

 

 

15,430

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

 

1,551

 

 

2,037

 

 

6,757

 

 

6,109

Selling and marketing expenses

 

 

7,125

 

 

10,446

 

 

21,463

 

 

34,993

General and administrative expenses

 

 

2,850

 

 

3,537

 

 

10,355

 

 

10,588

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(433)

 

 

(10,474)

 

 

(8,700)

 

 

(36,260)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,869)

 

 

(2,260)

 

 

(5,971)

 

 

(6,712)

Other income, net

 

 

251

 

 

39

 

 

1,257

 

 

634

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,051)

 

$

(12,695)

 

$

(13,414)

 

$

(42,338)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used to compute net loss per share, basic and diluted

 

 

49,730,755

 

 

29,625,792

 

 

49,720,780

 

 

29,212,856

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock, basic and diluted

 

$

(0.04)

 

$

(0.43)

 

$

(0.27)

 

$

(1.45)

 

Contacts:

Richard Eisenstadt

Chief Financial Officer

Neos Therapeutics

(972) 408‑1389

reisenstadt@neostx.com 

 

Sarah McCabe

Stern Investor Relations, Inc.

(212) 362‑1200

sarah.mccabe@sternir.com