-- Paratek Raises Full Year 2020 Revenue Guidance; Total Revenue guidance expected to be Between $78 and $83 Million Driven by Strong NUZYRA Net Revenue
-- Company Lowering 2020 R&D and SG&A Expense Guidance to approximately $135 million Driven by Continued Focus on Operational Efficiencies
-- FDA Pre-EUA Review Remains Ongoing; NUZYRA Procurement by BARDA for the Strategic National Stockpile Anticipated by year-end 2020
-- Company Strengthens Long-term Cash Position through Amendment to Hercules Loan Agreement
BOSTON, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Paratek Pharmaceuticals, Inc. PRTK, a commercial-stage biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases or other public health threats for civilian, government and military use, today reported financial results and provided an update on corporate activities for the quarter ended June 30, 2020.
"Demand for NUZYRA was strong in the first half of 2020 with the momentum continuing into the third quarter," said Evan Loh, M.D., Chief Executive Officer. "I am particularly pleased that these results were achieved despite a healthcare environment where the unprecedented global pandemic temporarily closed many healthcare practices and eliminated essentially all face to face access for our sales representatives. Our results reinforce our continued belief and confidence that NUZYRA is well-positioned to help address current and future unmet medical needs at a time when antibiotic resistance is a growing global threat."
"BARDA and Paratek continue to effectively execute on the anthrax development program and U.S. onshoring activities for NUZYRA," Dr. Loh continued. "The FDA review of the pre-EUA application remains ongoing and BARDA continues to be fully committed to procuring NUZYRA for the Strategic National Stockpile once the FDA review process is completed. We appreciate BARDA's confidence in Paratek and their significant investment in this innovative, long-term public-private partnership for the development of NUZYRA in the fight against bioterrorism and antimicrobial resistance in order to save lives and protect Americans."
Recent NUZYRA Commercial Highlights
- NUZYRA generated $8.1 million in net revenue in the second quarter of 2020, an 11% increase over the prior quarter and 378% increase over the second quarter of 2019. NUZYRA revenue growth continues to validate the Company's initial launch strategy with 90% of demand being generated from hospitals and adjacent sites of care.
Other Highlights
- The initial NUZYRA procurement by Biomedical Advanced Research and Development Authority (BARDA) for the Strategic National Stockpile (SNS) valued at approximately $38 million is now anticipated to be secured by year end 2020.
° The Food and Drug Administration (FDA) review of the pre-Emergency Use Authorization (pre-EUA) application, which was submitted in February, remains ongoing. The Company believes the review was delayed due to internal resourcing at FDA caused by the COVID-19 pandemic and other review priorities at FDA unrelated to NUZYRA. As part of the ongoing review, FDA has requested supplemental mouse pharmacokinetic data to support the human dose recommendation in case of an immediate anthrax outbreak. This work has been initiated and expected to be completed in 8 to 10 weeks.
- In July 2020, the supplemental NDA to support an oral-only dosing label for Community-Acquired Bacterial Pneumonia (CABP) was submitted to FDA with an approval expected during the 2020-2021 pneumonia season.
- In August 2020, Paratek modified its outstanding loan agreement with Hercules Capital.
° Under the terms of the agreement, Paratek repaid $10 million of the principal $70 million loan balance reducing the outstanding loan to $60 million.
° The interest-only period under the new loan agreement is now extended through December 2021, with further extension of the interest-only period of up to an additional 12 months, contingent on Paratek achieving certain performance-based milestones.
Second Quarter 2020 Financial Results
Paratek reported a net loss of $23.1 million, or ($0.53) per share, for the second quarter of 2020, compared to a net loss of $33.2 million, or ($1.02) per share, for the same period in 2019.
Total revenue was $9.3 million for the second quarter of 2020, an increase of 18% versus the prior quarter and 356% versus the same quarter in the prior year.
- U.S. NUZYRA net revenue of $8.1 million for the second quarter of 2020 grew 11% versus the prior quarter and 378% versus the same quarter in the prior year.
- Government contract service and grant revenue was $0.9 million for the second quarter of 2020 versus $0.3 million in the prior quarter. No revenue was generated from the BARDA contract in 2019.
- Second quarter 2020 collaboration and royalty revenue was $0.3 million, which is consistent with both the prior quarter and the same quarter in prior year.
Research and development (R&D) expenses were $4.6 million for the second quarter of 2020, compared to $10.7 million for the second quarter of 2019. The $6.1 million decrease is primarily the result of lower personnel-related costs, lower clinical study costs associated with our Phase 2 UTI program and other operational efficiencies.
Selling, general and administrative (SG&A) expenses were $21.0 million for the second quarter of 2020, compared to $20.9 million for the second quarter of 2019.
As of June 30, 2020, Paratek had $186.8 million in cash, cash equivalents and marketable securities.
Financial Guidance
Paratek is raising its full year 2020 revenue guidance primarily based on the stronger than anticipated U.S. NUZYRA net product revenue modestly offset by lower than anticipated royalty revenue from SEYSARA.
- Paratek now estimates 2020 total revenue to be between $78 and $83 million, an increase from our prior guidance of $75 and $80 million.
° The Company now anticipates the initial BARDA procurement of 2,500 anthrax treatment courses valued at approximately $38 million to occur by the end of 2020 contingent on the completion of the pre-EUA application review by FDA.
- 2020 R&D and SG&A expense is now expected to be approximately $135 million compared to the prior guidance of $140 million, driven by an increased focus on operational efficiencies and other favorability driven by the COVID-19 pandemic. Excluding the BARDA R&D and onshoring cost reimbursement, R&D and SG&A expense is expected to be modestly lower when compared to 2019.
° Based upon our current operating plan, which includes estimated NUZYRA U.S. product revenue and cost reimbursement under the BARDA contract, we anticipate that our existing cash, cash equivalents and marketable securities of $186.8 million, as of June 30, 2020, provide for a cash runway through the end of 2023 with a pathway to cash flow break even. This anticipated pathway assumes the Company will be able to fund all company operating expenses, anticipated capital expenditures, and debt service, including repayment in full of the Hercules Loan and Security Agreement.
Company performance and unanticipated events could cause actual results to vary from this forward-looking guidance.
Call and Webcast
Paratek's earnings conference call for the quarter ended June 30, 2020 will be broadcast at 8:30 a.m. EDT on August 10, 2020. The live webcast can be accessed under "Events and Presentations" in the Investor Relations section of Paratek's website at www.ParatekPharma.com.
Domestic investors wishing to participate in the call should dial: 888-256-1007 and international investors should dial: 323-994-2093. The conference ID is 8856661. Investors can also access the call at http://public.viavid.com/index.php?id=141013.
Website Information
Paratek routinely posts important information for investors on the Investor Relations section of its website at www.ParatekPharma.com. Paratek intends to use this website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of Paratek's website, in addition to following its press releases, U.S. Securities and Exchange Commission (SEC) filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, Paratek's website is not incorporated by reference into, and is not a part of, this document.
About Paratek Pharmaceuticals, Inc.
Paratek Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases or other public health threats for civilian, government and military use.
The Company's lead commercial product, NUZYRA® (omadacycline), is a once-daily oral and intravenous antibiotic available in the U.S. for the treatment of adults with community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections. Paratek has a collaboration agreement with Zai Lab for the development and commercialization of omadacycline in the greater China region and retains all remaining global rights.
Paratek exclusively licensed U.S. rights and rights to the greater China territory for SEYSARA® (sarecycline), a once-daily oral therapy for the treatment of moderate to severe acne vulgaris, to Almirall, LLC (Almirall). Paratek retains the development and commercialization rights for sarecycline in the rest of the world.
In 2019, Paratek was awarded a contract from BARDA to support the development of NUZYRA for the treatment of pulmonary anthrax.
For more information, visit www.ParatekPharma.com or follow @ParatekPharma on Twitter.
Forward Looking Statements
This press release contains forward-looking statements including statements related to our overall strategy, products, prospects, potential and expected results, including statements about the impact of the COVID-19 pandemic on our revenue projections, supply chain and clinical trials, projected awareness, payor coverage, net product revenues, total revenues including assumptions related to our financial guidance, the financial impact of our BARDA contract including the status of the FDA review of the pre-EUA application, the status of our supplemental mouse pharmacokinetic data to support the human dose recommendation, the timing and exercise of BARDA's procurement of NUZYRA for the SNS, BARDA exercising full contract line items, including for U.S. onshoring and PMR reimbursement, our anticipated cash runway, our operating expenses, our SEYSARA royalties and SEYSARA -backed loan funded on May 1, 2019, the strategy, execution and progression of our commercial launch of NUZYRA, our ability to shape the future treatment paradigm for community-acquired pneumonia and serious skin infections, our plans to evaluate additional indications for NUZYRA, including NTM, and to work toward an oral-only indication in CABP, future governmental stockpiling opportunities, and our potential to further drive long-term value for all of our shareholders. All statements, other than statements of historical facts, included in this press release are forward-looking statements, and are identified by words such as "advancing," "expect," "look forward," "anticipate," "continue," and other words and terms of similar meaning. These forward-looking statements are based upon our current expectations and involve substantial risks and uncertainties. We may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in our forward-looking statements and you should not place undue reliance on these forward-looking statements. Our actual results and the timing of events could differ materially from those included in such forward-looking statements as a result of these risks and uncertainties. These and other risk factors are discussed under "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019 and our other filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein.
PARATEK PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
| June 30, 2020 | December 31, 2019 | |||||||
| Cash, cash equivalents and marketable securities | $ | 186,818 | $ | 215,379 | ||||
| Total assets | 227,126 | 251,079 | ||||||
| Working capital | 188,278 | 219,154 | ||||||
| Total current liabilities | 33,925 | 24,200 | ||||||
| Long-term debt, less current portion | 251,586 | 260,728 | ||||||
| Common stock and additional paid-in capital | 698,222 | 671,537 | ||||||
| Accumulated deficit | (761,934 | ) | (711,258 | ) | ||||
| Total stockholders' deficit | (63,458 | ) | (39,647 | ) | ||||
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except loss per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Product revenue, net | $ | 8,133 | $ | 1,702 | $ | 15,436 | $ | 3,049 | ||||||||
| Government contract service revenue | 439 | — | 775 | — | ||||||||||||
| Government contract grant revenue | 437 | — | 437 | — | ||||||||||||
| Collaboration and royalty revenue | 317 | 343 | 597 | 594 | ||||||||||||
| Net revenue | $ | 9,326 | $ | 2,045 | $ | 17,245 | $ | 3,643 | ||||||||
| Expenses: | ||||||||||||||||
| Cost of product revenue | 2,236 | 567 | 3,707 | 773 | ||||||||||||
| Research and development | 4,561 | 10,679 | 10,949 | 22,071 | ||||||||||||
| Selling, general and administrative | 20,975 | 20,920 | 44,613 | 44,238 | ||||||||||||
| Total operating expenses | 27,772 | 32,166 | 59,269 | 67,082 | ||||||||||||
| Loss from operations | (18,446 | ) | (30,121 | ) | (42,024 | ) | (63,439 | ) | ||||||||
| Other income and expenses: | ||||||||||||||||
| Interest income | 363 | 935 | 1,067 | 1,881 | ||||||||||||
| Interest expense | (4,971 | ) | (3,991 | ) | (9,797 | ) | (7,217 | ) | ||||||||
| Other gains (losses), net | (5 | ) | (24 | ) | 78 | (36 | ) | |||||||||
| Net loss | $ | (23,059 | ) | $ | (33,201 | ) | $ | (50,676 | ) | $ | (68,811 | ) | ||||
| Other comprehensive loss | ||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | (217 | ) | 144 | 180 | 344 | |||||||||||
| Comprehensive loss | $ | (23,276 | ) | $ | (33,057 | ) | $ | (50,496 | ) | $ | (68,467 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.53 | ) | $ | (1.02 | ) | $ | (1.19 | ) | $ | (2.12 | ) | ||||
| Weighted average common stock outstanding | ||||||||||||||||
| Basic and diluted | 43,629,836 | 32,446,202 | 42,635,520 | 32,390,691 | ||||||||||||
Investor and Media Relations:
Ben Strain
617-807-6688
ir@ParatekPharma.com
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