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Cerecor Reports Third Quarter 2019 Results

  • Sale of Pediatric Portfolio in a Deal Valued in Excess of $43 Million
  • First Patient Enrolled in Diabetic OH Trial with CERC-301
  • Completed Phase 1 Healthy Volunteer Study with CERC-802
  • CERC-802 IND Accepted by FDA and Received Fast Track Designation

ROCKVILLE, Md., Nov. 14, 2019 (GLOBE NEWSWIRE) -- Cerecor Inc. (NASDAQ:CERC), a biopharmaceutical company focused on becoming a leader in development and commercialization of treatments for orphan diseases  and neurology, announced today its financial results for the third quarter ended September 30, 2019 and provided additional corporate highlights.

"It's been a transformational start to the back-half of the year for Cerecor.  We continue to execute on our plan to increase shareholder value by advancing our clinical pipeline and executing transformative business development deals.  CERC-802 achieved several regulatory milestones and had encouraging results from its Phase I Safety Study in Healthy Volunteers. CERC-301 final results were reported from its neurogenic Orthostatic Hypotension (nOH) trial in patients with Parkinson's disease and is preparing to advance into a proof-of-concept trial investigating its use in Orthostatic Hypotension (OH) associated with Diabetes.  Diabetic OH is a significantly larger patient population (15-fold greater than nOH with ~3 million U.S. patients) ; and there are no approved therapies. Additionally, the sale of the Pediatric Portfolio strengthens our balance sheet by providing non-dilutive capital for R&D helping us to advance CERC-801 towards NDA approval, allowing us to obtain a PRV for potential monetization.,"  said Dr. Simon Pedder, Executive Chairman of the Board.

Corporate Update

  • On October 10, 2019, the Company entered into, and subsequently closed on, an asset purchase agreement with Aytu BioScience, Inc. (Aytu) to sell its Pediatric Portfolio with the overall deal valued in excess of $43 million
    º The Pediatric Portfolio includes the following five product lines: Aciphex® Sprinkle™, Cefaclor for Oral Suspension, Karbinal® ER, Flexichamber™, Poly-Vi-Flor® and
    º  Composite of $17 million in cash and preferred stock ($4.5  in cash & 12.5 million of Aytu stock)
    º  Assumption of Cerecor's outstanding payment obligations payable to Deerfield CSF, LLC ("Deerfield Note") and other liabilities in excess of $15 million
    º  Elimination of existing royalty obligations & various commercial accruals of $11 million
    º  Estimated annual expense reduction of $7 to $9 million associated with Commercial Sales organization transfer to Aytu
    º  The Company retained all rights to Millipred®, which is the Company's most profitable product.  Millipred® profits will assist the Company in funding its pipeline assets and may provide future optionality towards monetization and further pipeline funding
  • James Harrell, EVP of Marketing and Investor Relations, was promoted to Chief Commercial Officer
  • Private Placement of ~$3.7 million from Armistice Capital in September 2019

Research and Development Update

Orphan Pipeline

  • The CDG FIRST trial enrolled its first patient in July 2019.  The purpose of the trial is to investigate the natural course of disease and current treatment approaches for Congenital Disorders of Glycosylation (CDGs). The data acquired through the CDG FIRST study is expected to be used to support regulatory filings for the CERC-800s series (CERC-801, CERC-802 and CERC-803), and may help to expedite the first approved treatment(s) for CDGs
  • The U.S. Food and Drug Administration ("FDA") communicated that the Company may proceed under   the IND for CERC-802 in MPI-CDG (Mannose-Phosphate Isomerase)
  • CERC-802 obtained fast-track designation (FTD) from the FDA.  Both CERC-801 and CERC-802 now have fast-track designation from the FDA   
  • CERC-802 completed its Phase I Safety Study in healthy volunteers.  The single-center, US-based safety, tolerability and pharmacokinetic study was an open-label, randomized, single-dose, 4-way crossover study in 16 healthy adult volunteers. Pharmacokinetic (PK) data is expected in early 2020

Neurological Pipeline

  • CERC-301 completed and reported its final results from its Phase I trial in nOH
    º  The 20mg dose group (the highest dose tested) demonstrated rapid, robust and sustained increases in blood pressure over baseline and placebo with a maximum improvement of 29.1 mmHg throughout the study 
    º  Additionally, there was strong dose-related consistency of plasma concentrations across all doses studied.  We believe this data may support a single daily dose and has the potential to be used in a broader Orthostatic Hypotension patient population
  • Initiated a Phase I Proof-of-Concept trial in diabetic orthostatic hypotension (DOH)
    º  The purpose of this study is to assess the single dose effects of CERC-301 in patients with symptomatic DOH
    º  This study is a randomized, double-blind, placebo-controlled, two-way cross-over trial over two 24-hour in-clinic visits. At each visit, subjects will receive a single 20 mg dose of CERC-301 or placebo then undergo a series of orthostatic challenge tests over the 24 hour in-clinic period
    º  Patients will also complete an OH symptomatic assessment following each orthostatic challenge. Safety, tolerability, PK data will also be collected. As part of the routine laboratory tests, particular interest will be paid to the patient's plasma glucose levels  over the course of the study

Third Quarter 2019 Financial Results

Net product revenue increased  $1.4 million to $5.5 million for the three months ended September 30, 2019 as compared to the same period in 2018. The increase was due to improved product mix and higher sales volume during the current period.

Total operating expenses were $9.3 million for the three months ended September 30, 2019, compared to operating expenses of $28.4 million for the three months ended September 30, 2018.  The significant decrease was due to $18.7 million of in-process research and development costs as a result of the Ichorion acquisition in 2018. 

Net loss for the three months ended September 30, 2019 was $4.0 million compared to net loss of $24.6 million for the three months ended September 30, 2018.  The significant decrease was largely a result of the 2018 in-process research and development costs highlighted above.

The cash balance was $5.3 million for the quarter ended September 30, 2019.  The company received $4.5 million in cash from Aytu from the sale of the pediatric portfolio in the fourth quarter of 2019.

Unaudited Condensed Consolidated Statements of Operations

    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
    2019 (a), (b)   2018 (a)   2019 (a), (b)   2018 (a)  
    (in thousands, except per share data)   (in thousands, except per share data)  
Product revenue, net   $ 5,513     $ 4,075     $ 15,374     $ 13,046    
License and other revenue     100             100          
Sales force revenue                       297    
Total revenues, net     5,613       4,075       15,474       13,343    
Operating expenses:                          
Cost of product sales     1,435       3,111       3,241       5,398    
Research and development     1,743       1,048       8,857       3,780    
Acquired in-process research and development           18,724             18,724    
General and administrative     2,679       1,884       7,779       7,834    
Sales and marketing     2,631       2,311       8,676       5,889    
Amortization expense     1,037       1,065       3,195       3,316    
Impairment of intangible assets           160       1,449       1,861    
Change in fair value of contingent consideration     (197 )     85       (1,009 )     361    
Total operating expenses     9,328       28,388       32,188       47,163    
Loss from operations     (3,715 )     (24,313 )     (16,714 )     (33,820 )  
Other (expense) income:                          
Change in fair value of warrant liability and unit purchase option liability    
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