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Egalet Reports Second Quarter 2018 Financial Results

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Egalet Reports Second Quarter 2018 Financial Results

--Improvements in formulary status for key products--

--Company to host conference call today at 8:30 AM EDT--

PR Newswire

WAYNE, Pa., Aug. 8, 2018 /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 second quarter ended June 30, 2018 and provided updates on its commercial products: SPRIX® (ketorolac tromethamine) Nasal Spray, OXAYDO® (oxycodone HCI, USP) tablets for oral use only –CII and ARYMO® ER (morphine sulfate) extended-release tablets for oral use —CII.    

Egalet Logo. (PRNewsFoto/Egalet Corporation) (PRNewsfoto/Egalet Corporation)

"In the second quarter, we continued to grow our commercial products and improve our payer coverage," said Bob Radie, president and chief executive officer of Egalet. "Since the beginning of the year, we have had five commercial market access wins which we believe should improve patient access to both SPRIX Nasal Spray and ARYMO ER."

Second Quarter 2018 Highlights

2018 Second Quarter Financial Results

  • Cash Position: As of June 30, 2018, Egalet had cash, marketable securities and restricted cash totaling $70.4 million.
  • Net Product Sales: There were net product sales of $7.4 million for the three months ended June 30, 2018 compared to $6.3 million for the same period in 2017. Net product sales for the three months ended June 30, 2018 consisted of $5.4 million for SPRIX Nasal Spray, $1.7 million for OXAYDO and $351,000 for ARYMO ER. Net product sales for the three months ended June 30, 2017 consisted of $4.9 million for SPRIX Nasal Spray, $1.3 million for OXAYDO and $31,000 for ARYMO ER. Net product sales in the three months ended June 30, 2017 reflected prescriptions dispensed to patients. Due to the adoption of the ASC 606 on January 1, 2018, net product sales in the three months ended June 30, 2018 reflected shipments to customers.
  • Cost of Sales (excluding product rights amortization): Cost of sales was $1.6 million for the three months ended June 30, 2018 and $1.1 million for the same period in 2017. Cost of sales for SPRIX Nasal Spray, OXAYDO and ARYMO ER for the three months ended June 30, 2018 reflects the average cost of inventory shipped to wholesalers and specialty pharmaceutical companies during the period. Cost of sales for SPRIX Nasal Spray and OXAYDO for the three months ended June 30, 2017 reflects the average cost of inventory produced and dispensed to patients in the period. Cost of sales for ARYMO ER for the three months ended June 30, 2017 includes the portion of inventory produced after the FDA approval of ARYMO ER in January 2017. The portion of inventory produced before the FDA approval of ARYMO ER was recorded in research and development expense in prior periods.
  • G&A Expenses: General and administrative expenses were $6.7 million for the three months ended June 30, 2018 compared to $12.5 million for the same period in 2017. The decrease in the period is due to $4.5 million related to ARYMO ER post-marketing study fees incurred in the three months ended June 30, 2017 and a decrease in salary and stock-based compensation expense of $1.1 million for the three months ended June 30, 2018 due to reduced headcount.
  • S&M Expenses: Sales and marketing expenses were $9.0 million for the three months ended June 30, 2018 compared to $9.3 million for the same period in 2017.
  • R&D Expenses: Research and development expenses were $1.0 million for the three months ended June 30, 2018 compared to $4.6 million for the same period in 2017. The decrease in the period was driven primarily by a decrease in compensation-related expenses of $1.1 million and a decrease in development costs for Egalet-002 of $3.1 million in the three months ended June 30, 2018.
  • Change in Fair Value of Warrant Liability and Derivative Liability: During the three months ended June 30, 2018, Egalet recognized a change in the fair value of its derivative liabilities of $3.2 million. The change in fair value of the derivative liability is due primarily to the changes in the value of Egalet's common stock during the three months ended June 30, 2018.
  • Interest Expense: Interest expense for the three months ended June 30, 2018 was $3.8 million compared to interest expense of $4.7 million for the same period in 2017. The decrease was driven primarily by the decrease in interest expense of $1.2 million related to the extinguishment of $36.4 million of the 5.50% Notes in December 2017, offset by an increase of $451,000 related to the issuance of $23.9 million of 6.50% Notes. The interest expense of $3.8 million for the three months ended June 30, 2018 includes non-cash interest and amortization of debt discount totaling $697,000. The interest expense of $4.7 million for the three months ended June 30, 2017 includes non-cash interest and amortization of debt discount totaling $1.6 million.
  • Net Loss: Net loss for the three months ended June 30, 2018 was ($12.0 million), or ($0.22) per share, compared to a net loss of ($26.5 million), or ($1.04) per share for the same period in 2017.

Earnings Conference Call Information
Egalet's management will host a conference call to discuss the second quarter 2018 financial results today:

Date:

Wednesday, August 8, 2018

Time:

8:30 a.m. EDT

Webcast (live and archive):

egalet.com  (Events & Webcasts, Investor page)

Dial-in numbers:

1-888-346-2615 (domestic)


1-412-902-4253 (international)

Replay numbers:

1-877-344-7529 (domestic)


1-412-317-0088 (international)

Conference number:

10122708

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 three approved products: ARYMO® ER (morphine sulfate) extended-release tablets for oral use —CII, developed using Egalet's proprietary Guardian™ Technology, OXAYDO® (oxycodone HCI, USP) tablets for oral use only —CII and SPRIX® (ketorolac tromethamine) Nasal Spray. Using Guardian Technology, Egalet developed a pipeline of clinical-stage, product candidates for which we are seeking partners including Egalet-002, an abuse-deterrent, extended-release, oral oxycodone formulation for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. 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.

For full prescribing information on ARYMO ER, including the boxed warning and medication guide, please visit arymoer.com. For full prescribing information on SPRIX, including the boxed warning and medication guide, please visit sprix.com. For full prescribing information on OXAYDO, including the boxed warning and medication guide, 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 and contain the words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "suggest," "target," "potential," "will," "would," "could," "should," "continue," "look forward to" and other similar expressions 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: Egalet's ability to continue as a going concern; Egalet's stock price and ability to remain listed on the Nasdaq, including Egalet's ability to meet the conditions and milestones established by the Nasdaq Hearings Panel and the potential need to redeem portions of its remaining outstanding indebtedness in the event of such a delisting; the amount and potential impact of any redemption of Egalet's 5.50% Convertible Senior Notes due 2020; the potential need to seek bankruptcy protection, whether in connection with the potential obligation to redeem portions of our outstanding indebtedness, our failure to so redeem or in connection with any defaults under our outstanding indebtedness or otherwise; the reception by healthcare professionals of any new formulation of SPRIX and the timing of availability of any new SPRIX formulation; the potential impact of strengthening the ARYMO ER label or the labels of any of Egalet's other products; the success of Egalet's clinical trials, including the timely recruitment of trial subjects and meeting the timelines therefor; Egalet's ability to obtain and maintain regulatory approval of Egalet's products and product candidates and the labeling claims that Egalet believes are necessary or desirable for successful commercialization of its products and 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 commercialize its products, and to do so successfully; the costs of commercialization activities, including marketing, sales and distribution; the size and growth potential of the markets for Egalet's products and product candidates, and Egalet's ability to service those markets; Egalet's ability to obtain reimbursement and third-party payor contracts for its products; the impact of commercial access wins on patient access to SPRIX Nasal Spray and ARYMO ER; Egalet's ability to service its debt obligations; Egalet's ability to raise additional funds to execute its business plan and growth strategy on terms acceptable to Egalet, if at all; the entry of any generic products for SPRIX or any delay in or inability to reformulate SPRIX; Egalet's ability to find and hire qualified sales professionals; the rate and degree of receptivity in the marketplace and among physicians to Egalet's products; the success of products that compete with Egalet's that are or become available; the regulatory environment and social concerns about limiting the use of opioids; Egalet's ability to integrate and grow any businesses or products that it may acquire; general market conditions; and other risk factors set forth in Egalet's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the United States Securities and Exchange Commission (SEC) and in other filings Egalet makes with the SEC from time to time. While Egalet may elect to update these forward-looking statements at some point in the future, it specifically disclaims any 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.

Media and Investor Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: ir@egalet.com
Tel: 484-259-7370  

 

Egalet Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share data)




December 31, 2017


June 30, 2018






(unaudited)

Assets






Current assets:







Cash and cash equivalents


$

31,090


$

37,829

Marketable securities, available for sale



59,953



32,178

Accounts receivable



4,120



9,083

Inventory



3,225



3,183

Prepaid expenses and other current assets



2,672



1,539

Other receivables



893



889

Total current assets



101,953



84,701

Intangible assets, net



6,583



5,466

Restricted cash



400



400

Property and equipment, net



9,911



8,565

Deposits and other assets



1,011



848

Total assets


$

119,858


$

99,980

Liabilities and stockholders' deficit







Current liabilities:







Accounts payable


$

10,160


$

8,758

Accrued expenses



16,104



27,949

Deferred revenue



7,456



Debt - current, net



1,081



22,386

Warrant liability



8,166



2,833

Total current liabilities



42,967



61,926

Debt - non-current portion, net



98,890



78,620

Deferred income tax liability



26



1,005

Derivative liability



16,623



1,153

Other liabilities



727



634

Total liabilities



159,233



143,338








Stockholders' deficit







Common stock--$0.001 par value; 75,000,000 and 275,000,000 shares authorized at December 31, 2017 and June 30, 2018, respectively; 45,939,663 and 56,298,373 shares issued and outstanding at December 31, 2017 and June 30, 2018, respectively



46



52

Additional paid-in capital



254,871



273,379

Accumulated other comprehensive income



1,008



926

Accumulated deficit



(295,300)



(317,715)

Total stockholders' deficit



(39,375)



(43,358)

Total liabilities and stockholders' deficit


$

119,858


$

99,980

 

 

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)




Three Months Ended


Six Months Ended



June 30, 


June 30, 



2017


2018


2017


2018

Revenue












Net product sales


$

6,255


$

7,443


$

11,682


$

13,704

Total revenue



6,255



7,443



11,682



13,704














Costs and Expenses













Cost of sales (excluding amortization of product rights)



1,072



1,565



2,397



3,780

Amortization of product rights



522



531



1,025



1,068

General and administrative



12,471



6,695



20,962



13,767

Sales and marketing



9,340



9,019



18,598



18,074

Research and development



4,594



999



11,114



2,302

Total costs and expenses



27,999



18,809



54,096



38,991

Loss from operations



(21,744)



(11,365)



(42,414)



(25,287)

Other (income) expense:













Change in fair value of warrant and derivative liability





(3,181)



(12)



(8,306)

Interest expense, net



4,749



3,804



9,283



7,360

Other (gain) loss



(14)



(25)



167



(25)




4,735



598



9,438



(971)

Loss before provision (benefit) for income taxes



(26,479)



(11,963)



(51,852)



(24,316)

Provision (benefit) for income taxes









Net loss


$

(26,479)


$

(11,963)


$

(51,852)


$

(24,316)

Per share information:













Net loss per share of common stock, basic and diluted


$

(1.04)


$

(0.22)


$

(2.06)


$

(0.48)

Weighted-average shares outstanding, basic and diluted



25,542,733



53,302,399



25,145,440



50,302,419

 

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SOURCE Egalet Corporation

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