Market Overview

Avadel Pharmaceuticals Reports Second Quarter 2017 Results

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Total Revenues Increased 19% on a Year-Over-Year Basis to $46.3 Million

Strong Year-to-Date Operating Cash Flow of $33.5 Million

DUBLIN, Ireland, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Avadel Pharmaceuticals plc (NASDAQ:AVDL) today announced its financial results for the second quarter of 2017.

Highlights Include:

  • Total revenues for the second quarter 2017 were $46.3 million, compared to $38.9 million in the second quarter 2016.

  • GAAP net income for the second quarter of 2017 was $28.9 million, or $0.68 per diluted share, compared to GAAP net loss of $20.0 million, or $0.48 per diluted share, in the second quarter of 2016.

  • Adjusted net income for the second quarter of 2017 was $8.2 million, or $0.19 per diluted share, compared to an adjusted net loss of $1.0 million, or $0.02 per diluted share, in the second quarter of 2016.(1)

  • Cash and marketable securities at June 30, 2017 were $173.8 million, up from $154.2 million at December 31, 2016. 

  • Cash used for share repurchases totaled $13.1 million for the six months ended June 30, 2017.

Mike Anderson, Avadel's Chief Executive Officer, said, "We continued to generate strong revenues of $46.3 million during the second quarter, led by our hospital products, and again exceeded street expectations on both the top and bottom lines. Overall, we had a solid financial performance for the second quarter and reiterate our expectations of being both cash flow positive and profitable in 2017. During the quarter we also continued to make progress in a number of areas, most importantly, the continued initiation of clinical sites and enrollment of patients in our REST-ON Phase III trial of FT218, Micropump® sodium oxybate."

Second Quarter 2017 Results

Revenues during the second quarter of 2017 were $46.3 million, compared to $38.9 million during the same period last year. The increase in revenues was due to Akovaz®, which was not yet in the market during the second quarter of 2016. This increase was partially offset by a decline in Bloxiverz® revenues, primarily as a result of additional competition to neostigmine in the form of an alternative molecule, sugammadex, and the approval of a third generic neostigmine product. On a GAAP basis, net income was $28.9 million during the second quarter of 2017, or $0.68 per diluted share, compared to a net loss of $20.0 million, or $0.48 per diluted share, for the same period last year.   This increase in net income on a year-over-year basis was attributed to $13.2 million of gains related to changes in the fair value of related party contingent consideration for the second of quarter 2017, compared to $23.9 million of expense in the same period last year. Changes in the fair value of related party contingent consideration are non-cash items, and do not reflect the cash amount paid to related parties. Cash payments can be found in the Consolidated Statement of Cash Flows. Also, included in GAAP net income in the second quarter of 2017 are $1.1 million in restructuring costs related to the reduction of the Company's workforce in France, which consist of employee severance, benefits and other costs.

Research and Development expenses totaled $6.8 million for the second quarter of 2017, compared to $7.6 million for the same period last year. The decrease on a year-over-year basis is primarily attributed to lower incurred contract research organization (CRO) expenses as a result of aligning spend with the progress of the REST-ON clinical trial. The Company expects R&D expenses to increase significantly for the balance of 2017 as recruitment and enrollment at the existing and additional clinical sites in the United States increase. 

Selling, General and Administrative expenses were $12.4 million in the second quarter of 2017, compared to $11.3 million in the same period last year.   This increase was largely due to higher costs associated with certain business development activities, audit fees and pre-launch market research studies for FT218.

Adjusted net income for the second quarter of 2017 was $8.2 million, or $0.19 per diluted share, compared to an adjusted net loss of $1.0 million, or $0.02 per diluted share, in the same period last year.(1)  The increase in adjusted net income is largely attributable to an increase in revenues from Akovaz® and a lower adjusted effective tax rate of 43% compared to 111% in the prior year period. Please see the Supplemental Information section within this document for a reconciliation of adjusted net income and adjusted diluted EPS to the respective GAAP amounts.

2017 Guidance

As a result of continued pricing pressure in the ephedrine market and increased competition in the neostigmine market, the Company is revising its revenue guidance to between $165 and $175 million, compared to previous guidance of between $170 and $185 million.  As a result of lower than expected spending during the first two quarters of 2017, R&D is now expected to be in the range of $30 to $40 million compared to previous guidance of $40 to $50 million. Diluted adjusted EPS is unchanged from previous guidance of $0.30 to $0.45.

Conference Call

A conference call to discuss these results has been scheduled for Tuesday, August 8, 2017 at 10:00 a.m. EDT. A question and answer period will follow management's prepared remarks. To access the conference call, investors are invited to dial (844) 388-0559 (U.S. and Canada) or (216) 562-0393 (International). The conference ID number is 56707554. A live audio webcast and accompanying slides can be accessed by visiting the "News & Events" page of the Company's Investors website at www.avadel.com. A replay of the webcast will be archived on Avadel's website for 90 days following the event.

About REST-ON Phase III Clinical Trial

REST-ON is a double-blind, randomized, placebo controlled study of 264 patients to assess the efficacy and safety of a once nightly formulation of sodium oxybate for extended-release oral suspension for the treatment of excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy. For more information, please visit www.rethinknarcolepsy.com.

About Avadel Pharmaceuticals plc:

Avadel Pharmaceuticals plc (NASDAQ:AVDL) is a specialty pharmaceutical company that seeks to develop differentiated pharmaceutical products that are safe, effective and easy to take through formulation development, by utilizing its proprietary drug delivery technology and in-licensing / acquiring new products; ultimately, helping patients adhere to their prescribed medical treatment and see better results. Avadel currently markets products in the hospital and primary care spaces. The Company is headquartered in Dublin, Ireland with operations in St. Louis, Missouri, United States and Lyon, France. For more information, please visit www.avadel.com.

Safe Harbor: This release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements herein that are not clearly historical in nature are forward-looking, and the words "anticipate, "assume," "believe," "expect," "estimate," "plan," "will," "may," and the negative of these and similar expressions generally identify forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond Avadel's control and could cause actual results to differ materially from the results contemplated in such forward-looking statements. These risks, uncertainties and contingencies include the risks relating to: our dependence on a small number of products and customers for the majority of our revenues; the possibility that our Bloxiverz®,Vazculep® and Akovaz® products, which are not patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge for those products; the possibility that we could fail to successfully complete the research and development for pipeline products we are evaluating for potential application to the FDA pursuant to our "unapproved-to-approved" strategy, or that competitors could complete the development of such product and apply for FDA approval of such product before us; our dependence on the performance of third parties in partnerships or strategic alliances for the commercialization of some of our products; the possibility that our products may not reach the commercial market or gain market acceptance; our need to invest substantial sums in research and development in order to remain competitive; our dependence on certain single providers for development of several of our drug delivery platforms and products; our dependence on a limited number of suppliers to manufacture our products and to deliver certain raw materials used in our products; the possibility that our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do; the challenges in protecting the intellectual property underlying our drug delivery platforms and other products; our dependence on key personnel to execute our business plan; the amount of additional costs we will incur to comply with U.S. securities laws as a result of our ceasing to qualify as a foreign private issuer; and the other risks, uncertainties and contingencies described in the Company's filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2016, all of which filings are also available on the Company's website. Avadel undertakes no obligation to update its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Disclosures and Adjustments

Avadel discloses certain non-GAAP financial measures, including adjusted net income and loss and adjusted net income and loss per diluted share, as management believes that a comparison of its current and historical results would be difficult if the disclosures were limited to financial measures prepared only in accordance with generally accepted accounting principles (GAAP) in the U.S.  In addition to reporting its financial results in accordance with GAAP, Avadel reports certain non-GAAP results that exclude, if any, fair value remeasurements of its contingent consideration, impairment of intangible assets, amortization of intangible assets, restructuring costs, foreign exchange gains and losses on assets and liabilities denominated in foreign currencies, but includes the operating cash flows plus any unpaid accrued amounts associated with the  contingent consideration, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance.  The Company's management uses these non-GAAP measures internally for forecasting, budgeting and measuring its operating performance.  Investors and other readers should review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. The table provided within the following "Supplemental Information" section reconciles GAAP net income and loss and diluted earnings or loss per share to the corresponding adjusted amounts.

______________________________

(1) Non-GAAP financial measure: Descriptions of Avadel's non-GAAP financial measures are included under the caption Non-GAAP Disclosures and Adjustments included within this press release and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the Supplemental Information section herein.


         
AVADEL PHARMACEUTICALS PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
         
    Three Months Ended June 30,   Six Months Ended June 30,
    2017   2016   2017   2016
                 
Revenues:                
Product sales and services   $ 47,105     $ 38,165     $ 98,862     $ 73,518  
License and research revenue   (794 )   693     (44 )   1,556  
Total   46,311     38,858     98,818     75,074  
Operating expenses:                
Cost of products and services sold   4,561     3,907     8,463     7,813  
Research and development expenses   6,792     7,604     13,998     12,992  
Selling, general and administrative expenses   12,429     11,290     24,241     20,751  
Intangible asset amortization   564     3,702     1,128     7,216  
Changes in fair value of related party contingent consideration   (13,230 )   23,898     (20,201 )   32,141  
Restructuring costs   1,069         3,722      
Total operating expenses   12,185     50,401     31,351     80,913  
Operating income (loss)   34,126     (11,543 )   67,467     (5,839 )
Investment income, net   527     390     1,579     590  
Interest expense, net   (263 )   (263 )   (526 )   (438 )
Other income (expense) - changes in fair value of related party payable   1,670     (2,773 )   2,220     (4,307 )
Foreign exchange gain (loss)   237     1,680     6     (1,261 )
Income (loss) before income taxes   36,297     (12,509 )   70,746     (11,255 )
Income tax provision   7,370     7,449     15,909     14,761  
Net income (loss)   $ 28,927     $ (19,958 )   $ 54,837     $ (26,016 )
                 
Net income (loss) per share - basic   $ 0.70     $ (0.48 )   $ 1.33     $ (0.63 )
Net income (loss) per share - diluted   0.68     (0.48 )   1.29     (0.63 )
                 
Weighted average number of shares outstanding - basic   41,091     41,241     41,233     41,241  
Weighted average number of shares outstanding - diluted   42,487     41,241     42,625     41,241  
                         


 
AVADEL PHARMACEUTICALS PLC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
    June 30, 2017   December 31, 2016
         
ASSETS        
Current assets:        
Cash and cash equivalents   $ 43,507     $ 39,215  
Marketable securities   130,290     114,980  
Accounts receivable   19,285     17,839  
Inventories   5,747     3,258  
Prepaid expenses and other current assets   5,522     5,894  
Total current assets   204,351     181,186  
Property and equipment, net   3,328     3,320  
Goodwill   18,491     18,491  
Intangible assets, net   21,709     22,837  
Research and development tax credit receivable   3,039     1,775  
Income tax deferred charge       10,342  
Other   8,242     7,531  
Total assets   $ 259,160     $ 245,482  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:        
Current portion of long-term debt   $ 291     $ 268  
Current portion of long-term related party payable   40,615     34,177  
Accounts payable   12,321     7,105  
Deferred revenue   2,455     2,223  
Accrued expenses   30,339     17,222  
Income taxes   1,455     1,200  
  Other   1,233     226  
Total current liabilities   88,709     62,421  
Long-term debt, less current portion   594     547  
Long-term related party payable, less current portion   86,844     135,170  
Other   6,285     5,275  
Total liabilities   182,432     203,413  
         
Shareholders' equity:        
Preferred shares, $0.01 nominal value; 50,000 shares authorized; none issued or outstanding at June 30, 2017 and December 31, 2016, respectively        
Ordinary shares, nominal value of $0.01; 500,000 shares authorized; 41,435 and 41,371 issued and outstanding at June 30, 2017 and December 31, 2016, respectively   414     414  
Treasury shares, at cost, 1,351 and 0 shares held at June 30, 2017 and December 31, 2016, respectively   (14,338 )    
Additional paid-in capital   389,451     385,020  
Accumulated deficit   (276,119 )   (319,800 )
Accumulated other comprehensive loss   (22,680 )   (23,565 )
Total shareholders' equity   76,728     42,069  
Total liabilities and shareholders' equity   $ 259,160     $ 245,482  
 


     
AVADEL PHARMACEUTICALS PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
     
    Six Months Ended June 30,
    2017   2016
         
Cash flows from operating activities:        
Net income (loss)   54,837     (26,016 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization   1,611     7,681  
Loss on disposal of property and equipment       110  
Loss (gain) on sale of marketable securities   (81 )   455  
Foreign exchange loss   1,304     1,261  
Grants recognized in research and development expenses       (70 )
Remeasurement of related party acquisition-related contingent consideration   (20,201 )   32,141  
Remeasurement of related party financing-related contingent consideration   (2,220 )   4,307  
Change in deferred tax and income tax deferred charge   322     (5,028 )
Stock-based compensation expense   4,055     4,913  
Increase (decrease) in cash from:        
Accounts receivable   (1,446 )   (1,689 )
Inventories   (2,489 )   2,345  
Prepaid expenses and other current assets   (264 )   546  
Research and development tax credit receivable   (1,175 )   (1,630 )
Accounts payable & other current liabilities   4,931     (348 )
Deferred revenue   232     (1,461 )
Accrued expenses   12,747     777  
Accrued income taxes   255     6,285  
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value   (16,515 )   (7,769 )
Royalty payments for related party payable in excess of original fair value   (2,287 )   (1,159 )
Other long-term assets and liabilities   (80 )   270  
Net cash provided by operating activities   33,536     15,921  
         
Cash flows from investing activities:        
Purchases of property and equipment   (321 )   (760 )
Acquisitions of businesses       161  
Proceeds from sales of marketable securities   51,820     26,013  
Purchases of marketable securities   (67,743 )   (75,528 )
Net cash used in investing activities   (16,244 )   (50,114 )
         
Cash flows from financing activities:        
Earn-out payments for related party contingent consideration   (665 )   (6,572 )
Royalty payments for related party payable       (816 )
Reimbursement of loans   12      
Cash proceeds from issuance of ordinary shares and warrants   376      
Share repurchases   (13,081 )    
Net cash used in financing activities   (13,358 )   (7,388 )
         
Effect of foreign currency exchange rate changes on cash and cash equivalents   358     416  
         
Net increase (decrease) in cash and cash equivalents   4,292     (41,165 )
Cash and cash equivalents at January 1,   39,215     65,064  
Cash and cash equivalents at June 30,   $ 43,507     $ 23,899  
 


         
AVADEL PHARMACEUTICALS PLC
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per share data)
         
    Three Months Ended June 30,   Six Months Ended June 30,
Revenues by Product:   2017   2016   2017   2016
                 
Bloxiverz   $ 13,719     $ 25,620     $ 27,621     $ 50,367  
Vazculep   10,154     10,421     20,334     19,827  
Akovaz   20,912         46,549      
Other   2,320     2,124     4,358     3,324  
Total product sales and services   47,105     38,165     98,862     73,518  
License and research revenue   (794 )   693     (44 )   1,556  
Total revenues   $ 46,311     $ 38,858     $ 98,818     $ 75,074  
 


 
        GAAP to Non-GAAP adjustments for the three-months ended June 30, 2017        
        Exclude   Include        
    GAAP   Intangible
asset
amortization
  Foreign
exchange
(gain)/loss
  Restructuring
impacts
  License
revenue
adj.
  Contingent
related party
payable fair
value
adjustment
  Contingent
related party
payable
paid/accrued
  Total
adjustments
  Adjusted
GAAP
                                     
Revenues:                                    
Product sales and services   $ 47,105     $     $     $     $     $     $     $     $ 47,105  
License and research revenue   (794 )               1,100             1,100     306  
Total   46,311                 1,100             1,100     47,411  
Operating expenses:                                    
Cost of products and services sold   4,561                                 4,561  
Research and development   6,792                                 6,792  
Selling, general and administrative   12,429                                 12,429  
Intangible asset amortization   564     (564 )                       (564 )    
Changes in fair value of related party contingent consideration   (13,230 )                   13,230     8,516     21,746     8,516  
Restructuring costs   1,069             (1,069 )               (1,069 )    
Total   12,185     (564 )       (1,069 )       13,230     8,516     20,113     32,298  
Operating income (loss)   34,126     564         1,069     1,100     (13,230 )   (8,516 )   (19,013 )   15,113  
Investment and other income   527                                 527  
Interest expense   (263 )                               (263 )
Other expense - changes in fair value of related party payable   1,670                     (1,670 )   (1,166 )   (2,836 )   (1,166 )
Foreign exchange gain   237         (237 )                   (237 )    
Income (loss) before income taxes   36,297     564     (237 )   1,069     1,100     (14,900 )   (9,682 )   (22,086 )   14,211  
Income tax provision (benefit)   7,370     201                 (909 )   (616 )   (1,324 )   6,046  
Net income (loss)   $ 28,927     $ 363     $ (237 )   $ 1,069     $ 1,100     $ (13,991 )   $ (9,066 )   $ (20,762 )   $ 8,165  
                                     
Net income (loss) per share - diluted(1)   0.68     $ 0.01     $ (0.01 )   $ 0.03     $ 0.03     $ (0.33 )   $ (0.21 )   $ (0.49 )   $ 0.19  
Weighted average number of shares outstanding - diluted   42,487     42,487     42,487     42,487     42,487     42,487     42,487     42,487     42,487  
                                                       

(1)  Net income (loss) per share - diluted is calculated by dividing Net income (loss) by the Weighted average number of shares outstanding - diluted. Note, when recalculated using this method, the balances in the Total adjustment and Adjusted GAAP columns may not cross-foot as a result of rounding to full precision.

 
        GAAP to Non-GAAP adjustments for the three-months ended June 30, 2016        
        Exclude   Include        
    GAAP   Intangible
asset
amortization
  Foreign
exchange
(gain)/loss
  Purchase
accounting
adjustments
- FSC
  Contingent
related party
payable fair
value
adjustment
  Contingent
related party
payable
paid/accrued
  Total
adjustments
  Adjusted
GAAP
                                 
Revenues:                                
Product sales and services   $ 38,165     $     $     $     $     $     $     $ 38,165  
License and research revenue   693                             693  
Total   38,858                             38,858  
Operating expenses:                                
Cost of products and services sold   3,907             (762 )           (762 )   3,145  
Research and development   7,604                             7,604  
Selling, general and administrative   11,290                             11,290  
Intangible asset amortization   3,702     (3,702 )                   (3,702 )    
Changes in fair value of related party contingent consideration   23,898                 (23,898 )   6,992     (16,906 )   6,992  
Total   50,401     (3,702 )       (762 )   (23,898 )   6,992     (21,370 )   29,031  
Operating income (loss)   (11,543 )   3,702         762     23,898     (6,992 )   21,370     9,827  
Investment and other income   390                             390  
Interest expense   (263 )                           (263 )
Other expense - changes in fair value of related party payable   (2,773 )               2,773     (941 )   1,832     (941 )
Foreign exchange gain   1,680         (1,680 )               (1,680 )    
Income (loss) before income taxes   (12,509 )   3,702     (1,680 )   762     26,671     (7,933 )   21,522     9,013  
Income tax provision (benefit)   7,449     1,329         274     1,413     (461 )   2,555     10,004  
Net income (loss)   $ (19,958 )   $ 2,373     $ (1,680 )   $ 488     $ 25,258     $ (7,472 )   $ 18,967     $ (991 )
                                 
Net income (loss) per share - diluted(1)   (0.48 )   $ 0.06     $ (0.04 )   $ 0.01     $ 0.61     $ (0.18 )   $ 0.46     $ (0.02 )
Weighted average number of shares outstanding - diluted   41,241     41,241     41,241     41,241     41,241     41,241     41,241     41,241  
                                                 

(1)  Net income (loss) per share - diluted is calculated by dividing Net income (loss) by the Weighted average number of shares outstanding - diluted. Note, when recalculated using this method, the balances in the Total adjustment and Adjusted GAAP columns may not cross-foot as a result of rounding to full precision.

 
        GAAP to Non-GAAP adjustments for the six-months ended June 30, 2017        
        Exclude   Include        
    GAAP   Intangible
asset
amortization
  Foreign
exchange
(gain)/loss
  Restructuring
impacts
  Purchase
accounting
adjustments
- FSC
  License
revenue
adj.
  Contingent
related party
payable fair
value
adjustment
  Contingent
related party
payable
paid/accrued
  Total
adjustments
  Adjusted
GAAP
                                         
Revenues:                                        
Product sales and services   $ 98,862     $     $     $     $     $     $     $     $     $ 98,862  
License and research revenue   (44 )                   1,100             1,100     1,056  
Total   98,818                     1,100             1,100     99,918  
Operating expenses:                                        
Cost of products and services sold   8,463                 (46 )               (46 )   8,417  
Research and development   13,998                                     13,998  
Selling, general and administrative   24,241                                     24,241  
Intangible asset amortization   1,128     (1,128 )                           (1,128 )    
Changes in fair value of related party contingent consideration   (20,201 )                       20,201     18,132     38,333     18,132  
Restructuring charges   3,722             (3,722 )                   (3,722 )    
Total   31,351     (1,128 )       (3,722 )   (46 )       20,201     18,132     33,437     64,788  
Operating income (loss)   67,467     1,128         3,722     46     1,100     (20,201 )   (18,132 )   (32,337 )   35,130  
Investment and other income   1,579                                     1,579  
Interest expense   (526 )                                   (526 )
Other expense - changes in fair value of related party payable   2,220                         (2,220 )   (2,465 )   (4,685 )   (2,465 )
Foreign exchange gain   6         (6 )                       (6 )    
Income (loss) before income taxes   70,746     1,128     (6 )   3,722     46     1,100     (22,421 )   (20,597 )   (37,028 )   33,718  
Income tax provision (benefit)   15,909     402             17         (1,269 )   (1,307 )   (2,157 )   13,752  
Net income (loss)   $ 54,837     $ 726     $ (6 )   $ 3,722     $ 29     $ 1,100     $ (21,152 )   $ (19,290 )   $ (34,871 )   $ 19,966  
                                         
Net income (loss) per share - diluted(1)   1.29     $ 0.02     $     $ 0.09     $     $ 0.03     $ (0.50 )   $ (0.45 )   $ (0.82 )   $ 0.47  
Weighted average number of shares outstanding - diluted   42,625     42,625     42,625     42,625     42,625     42,625     42,625     42,625     42,625     42,625  
                                                             

(1)  Net income (loss) per share - diluted is calculated by dividing Net income (loss) by the Weighted average number of shares outstanding - diluted. Note, when recalculated using this method, the balances in the Total adjustment and Adjusted GAAP columns may not cross-foot as a result of rounding to full precision.

 
        GAAP to Non-GAAP adjustments for the six-months ended June 30, 2016        
        Exclude   Include        
    GAAP   Intangible
asset
amortization
  Foreign
exchange
(gain)/loss
  Purchase
accounting
adjustments
- FSC
  Contingent
related party
payable fair
value
adjustment
  Contingent
related party
payable
paid/accrued
  Total
adjustments
  Adjusted
GAAP
                                 
Revenues:                                
Product sales and services   $ 73,518     $     $     $     $     $     $     $ 73,518  
License and research revenue   1,556                             1,556  
Total   75,074                             75,074  
Operating expenses:                                
Cost of products and services sold   7,813             (1,525 )           (1,525 )   6,288  
Research and development   12,992                             12,992  
Selling, general and administrative   20,751                             20,751  
Intangible asset amortization   7,216     (7,216 )                   (7,216 )    
Changes in fair value of related party contingent consideration   32,141                 (32,141 )   13,437     (18,704 )   13,437  
Total   80,913     (7,216 )       (1,525 )   (32,141 )   13,437     (27,445 )   53,468  
Operating income (loss)   (5,839 )   7,216         1,525     32,141     (13,437 )   27,445     21,606  
Investment and other income   590                             590  
Interest expense   (438 )                           (438 )
Other expense - changes in fair value of related party payable   (4,307 )               4,307     (1,833 )   2,474     (1,833 )
Foreign exchange gain   (1,261 )       1,261                 1,261      
Income (loss) before income taxes   (11,255 )   7,216     1,261     1,525     36,448     (15,270 )   31,180     19,925  
Income tax provision (benefit)   14,761     2,591         548     1,964     (782 )   4,321     19,082  
Net income (loss)   $ (26,016 )   $ 4,625     $ 1,261     $ 977     $ 34,484     $ (14,488 )   $ 26,859     $ 843  
                                 
Net income (loss) per share - diluted(1)   (0.63 )   $ 0.11     $ 0.03     $ 0.02     $ 0.84     $ (0.35 )   $ 0.65     $ 0.02  
Weighted average number of shares outstanding - diluted   41,241     41,241     41,241     41,241     41,241     41,241     41,241     41,241  
                                                 

(1)  Net income (loss) per share - diluted is calculated by dividing Net income (loss) by the Weighted average number of shares outstanding - diluted. Note, when recalculated using this method, the balances in the Total adjustment and Adjusted GAAP columns may not cross-foot as a result of rounding to full precision. 

Contacts: 

Michael F. Kanan
Chief Financial Officer
Phone: (636) 449-1844
Email: mkanan@avadel.com

Lauren Stival
Sr. Director, Investor Relations & Corporate Communications
Phone: (636) 449-5866
Email: lstival@avadel.com

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