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La Jolla Pharmaceutical Company Announces Financial Results for the Three and Six Months Ended June 30, 2020 and Highlights Recent Corporate Progress

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SAN DIEGO, California, Aug. 06, 2020 (GLOBE NEWSWIRE) -- La Jolla Pharmaceutical Company (NASDAQ:LJPC), which is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases, today announced financial results for the three and six months ended June 30, 2020 and highlighted recent corporate progress.

Recent Corporate Progress

  • Acquisition of Tetraphase Pharmaceuticals, Inc.: On July 28, 2020, La Jolla completed its acquisition of Tetraphase Pharmaceuticals, Inc., a biopharmaceutical company focused on commercializing its novel tetracycline, XERAVA™ (eravacycline), to treat serious and life-threatening infections, for $43 million in upfront cash plus potential future cash payments of up to $16 million. For the three and six months ended June 30, 2020, U.S. net sales of XERAVA, which was launched in October 2018, were $1.5 million and $3.2 million, up 88% and 191%, respectively, from the same periods in 2019. Complete financial results of Tetraphase for the six months ended June 30, 2020 will be included in an amended Form 8-K to be filed by La Jolla on or before October 13, 2020. Financial results for periods ending September 30, 2020 and beyond will include Tetraphase's financial results subsequent to the acquisition closing date of July 28, 2020.
     
  • Appointment of Larry Edwards as President and Chief Executive Officer: Effective July 28, 2020, La Jolla's Board of Directors appointed Larry Edwards as President and Chief Executive Officer of La Jolla.

"With two, FDA-approved, innovative therapies for life-threatening diseases, La Jolla is well-positioned to help patients in need," said Larry Edwards, President and Chief Executive Officer of La Jolla. "By leveraging the stronger platform that the combined company will provide, we look forward to increasing patient access to these important medicines."

Financial Results

For the three and six months ended June 30, 2020, U.S. net sales of GIAPREZA were $5.8 million and $13.4 million, up 2% and 33%, respectively, from the same periods in 2019.

La Jolla's net loss for the three and six months ended June 30, 2020 was $15.6 million and $24.2 million, or $0.57 and $0.89 per share, respectively, compared to $30.4 million and $62.1 million, or $1.12 per share and $2.29 per share, respectively, for the same periods in 2019.

As of June 30, 2020, La Jolla had $71.4 million of cash and short-term investments, compared to $87.8 million as of December 31, 2019. Net cash used in operating activities for the three and six months ended June 30, 2020 was $8.4 million and $20.6 million, respectively, down 49% and 58%, respectively, from the same periods in 2019.

About GIAPREZA

GIAPREZA™ (angiotensin II) for injection is approved by the U.S. Food and Drug Administration (FDA) as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA is approved by the European Commission (EC) for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. GIAPREZA mimics the body's endogenous angiotensin II peptide, which is central to the renin-angiotensin-aldosterone system, which in turn regulates blood pressure. Prescribing information for GIAPREZA is available at http://www.giapreza.com. The European Summary of Product Characteristics is available on the EMA website: www.ema.europa.eu/en/medicines/human/EPAR/giapreza. GIAPREZA is marketed in the U.S. by La Jolla Pharmaceutical Company on behalf of La Jolla Pharma, LLC, its wholly owned subsidiary.

GIAPREZA Important Safety Information

Contraindications

None.

Warnings and Precautions

There is a potential for venous and arterial thrombotic and thromboembolic events in patients who receive GIAPREZA. Use concurrent venous thromboembolism (VTE) prophylaxis.

Adverse Reactions

The most common adverse reactions that were reported in greater than 10% of GIAPREZA-treated patients were thromboembolic events.

Drug Interactions

Angiotensin converting enzyme (ACE) inhibitors may increase response to GIAPREZA. Angiotensin II receptor blockers (ARBs) may reduce response to GIAPREZA.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

For additional information, please see Full Prescribing Information for the United States and the Summary of Product Characteristics for the European Union.

About XERAVA

XERAVA™ (eravacycline) for injection is a novel fluorocycline of the tetracycline class of antibacterials that is approved by the U.S. Food and Drug Administration (FDA) for the treatment of complicated intra‑abdominal infections (cIAI) in patients 18 years of age and older. XERAVA is approved by the European Commission (EC) for the treatment of cIAI in adults. Prescribing information for XERAVA is available at www.xerava.com. XERAVA is marketed in the U.S. by Tetraphase Pharmaceuticals, Inc., a wholly owned subsidiary of La Jolla.

XERAVA Important Safety Information

XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections in patients 18 years of age and older.

XERAVA is not indicated for the treatment of complicated urinary tract infections.

To reduce the development of drug-resistant bacteria and maintain the effectiveness of XERAVA and other antibacterial drugs, XERAVA should be used only to treat or prevent infections that are proven or strongly suspected to be caused by susceptible bacteria.

XERAVA is contraindicated for use in patients with known hypersensitivity to eravacycline, tetracycline-class antibacterial drugs or to any of the excipients. Life-threatening hypersensitivity (anaphylactic) reactions have been reported with XERAVA.

The use of XERAVA during tooth development (last half of pregnancy, infancy and childhood to the age of eight years) may cause permanent discoloration of the teeth (yellow-gray-brown) and enamel hypoplasia.

The use of XERAVA during the second and third trimester of pregnancy, infancy and childhood up to the age of eight years may cause reversible inhibition of bone growth.

Clostridium difficile associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents and may range in severity from mild diarrhea to fatal colitis.

The most common adverse reactions observed in clinical trials (incidence ≥ 3%) were infusion site reactions, nausea and vomiting.

XERAVA is structurally similar to tetracycline-class antibacterial drugs and may have similar adverse reactions. Adverse reactions including photosensitivity, pseudotumor cerebri and anti-anabolic action, which has led to increased blood urea nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis and abnormal liver function tests, have been reported for other tetracycline-class antibacterial drugs, and may occur with XERAVA. Discontinue XERAVA if any of these adverse reactions are suspected.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

For additional information, please see Full Prescribing Information for the United States.

About La Jolla Pharmaceutical Company

La Jolla Pharmaceutical Company is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. GIAPREZA™ (angiotensin II) is approved by the U.S. FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. XERAVA™ (eravacycline) is approved by the U.S. FDA for the treatment of complicated intra-abdominal infections. For more information, please visit www.ljpc.com.

Forward-looking Statements

This press release contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management's expectations and assumptions as of the date of this press release and involve substantial risks and uncertainties that could cause the actual outcomes to differ materially from what we currently expect. These risks and uncertainties include, but are not limited to, those associated with: GIAPREZA™ (angiotensin II) and XERAVA™ (eravacycline) sales; whether La Jolla will realize the benefits from the acquisition of Tetraphase Pharmaceuticals, Inc.; regulatory actions relating to La Jolla's products by the U.S. FDA, European Commission and/or other regulatory authorities; cash used in operating activities and our capital requirements; and other risks and uncertainties identified in our filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release apply only as of the date made, and we undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.


LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)

  June 30,
2020
  December 31,
2019
  (Unaudited)    
ASSETS      
Current assets:      
Cash $ 68,353     $ 87,820  
Short-term investments 3,062      
Accounts receivable, net 1,843     2,960  
Inventory, net 3,120     2,211  
Prepaid expenses and other current assets 2,792     4,467  
Total current assets 79,170     97,458  
Property and equipment, net 12,827     18,389  
Right-of-use lease asset 14,792     15,491  
Restricted cash 606     909  
Total assets $ 107,395     $ 132,247  
       
LIABILITIES AND SHAREHOLDERS' DEFICIT      
Current liabilities:      
Accounts payable $ 2,481     $ 4,177  
Accrued expenses 6,772     9,312  
Accrued payroll and related expenses 5,741     8,332  
Lease liability, current portion 2,890     2,766  
Total current liabilities 17,884     24,587  
Lease liability, less current portion 25,000     26,481  
Deferred royalty obligation, net 124,406     124,379  
Other noncurrent liabilities 15,317     12,790  
Total liabilities 182,607     188,237  
Commitments and contingencies (Note 6)      
Shareholders' deficit:      
Common Stock, $0.0001 par value; 100,000,000 shares authorized,
27,358,611 and 27,195,469 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
3     3  
Series C-12 Convertible Preferred Stock, $0.0001 par value; 11,000 shares authorized, 3,906 shares issued and outstanding at June 30, 2020 and December 31, 2019; and liquidation preference of $3,906 at June 30, 2020 and December 31, 2019 3,906     3,906  
Additional paid-in capital 982,393     977,432  
Accumulated deficit (1,061,514 )   (1,037,331 )
Total shareholders' deficit (75,212 )   (55,990 )
Total liabilities and shareholders' deficit $ 107,395     $ 132,247  
               


LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)

  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   2020   2019
Revenue              
Net product sales $ 5,805     $ 5,703     $ 13,396     $ 10,098  
Total revenue 5,805     5,703     13,396     10,098  
Operating expenses              
Cost of product sales 808     551     1,524     1,051  
Research and development 8,781     22,043     17,964     43,287  
Selling, general and administrative 8,677     11,323     16,829     23,643  
Total operating expenses 18,266     33,917     36,317     67,981  
Loss from operations (12,461 )   (28,214 )   (22,921 )   (57,883 )
Other income (expense)              
Interest expense (2,470 )   (2,806 )   (4,876 )   (5,535 )
Interest income 32     604     222     1,317  
Other income—related party         4,085      
Other expense (693 )       (693 )    
Total other income (expense), net (3,131 )   (2,202 )   (1,262 )   (4,218 )
Net loss $ (15,592 )   $ (30,416 )   $ (24,183 )   $ (62,101 )
Net loss per share, basic and diluted $ (0.57 )   $ (1.12 )   $ (0.89 )   $ (2.29 )
Weighted-average common shares outstanding, basic and diluted 27,326     27,108     27,282     27,071  
                       


LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Cash Flows
(Unaudited)

  Six Months Ended June 30,
  2020   2019
Operating activities      
Net loss $ (24,183 )   $ (62,101 )
Adjustments to reconcile net loss to net cash used for operating activities:      
Share-based compensation expense 3,997     13,103  
Depreciation and amortization expense 1,798     2,263  
Loss on disposal of equipment 904     15  
Unrealized gains on short-term investments (63 )    
Non-cash interest expense 3,392     4,678  
Non-cash rent expense 699     639  
Changes in operating assets and liabilities:      
Accounts receivable, net 1,117     (512 )
Inventory, net (909 )   52  
Prepaid expenses and other current assets 1,675     22  
Accounts payable (1,696 )   (3,664 )
Accrued expenses (3,378 )   974  
Accrued payroll and related expenses (2,591 )   (3,429 )
Lease liability (1,357 )   (1,241 )
Net cash used for operating activities (20,595 )   (49,201 )
Investing activities      
Proceeds from the sale of property and equipment 2,860      
Purchase of property and equipment     (441 )
Purchase of short-term investments (2,999 )    
Net cash used for investing activities (139 )   (441 )
Financing activities      
Net proceeds from issuance of common stock under 2013 Equity Plan 605      
Net proceeds from issuance of common stock under ESPP 359     484  
Net cash provided by financing activities 964     484  
Net decrease in cash and restricted cash (19,770 )   (49,158 )
Cash and restricted cash at beginning of period 88,729     173,513  
Cash and restricted cash at end of period $ 68,959     $ 124,355  
Supplemental disclosure of non-cash investing and financing activities:      
Conversion of Series F Convertible Preferred Stock into common stock $     $ 2,737  
Cumulative-effect adjustment from adoption of ASU 2018-07 $     $ (160 )
Initial recognition of right-of-use lease asset $     $ 16,798  
Reconciliation of cash and restricted cash to the condensed consolidated balance sheets
Cash $ 68,353     $ 123,446  
Restricted cash 606     909  
Total cash and restricted cash $ 68,959     $ 124,355  
               

La Jolla Pharmaceutical Company Contact
Michael Hearne
Chief Financial Officer
La Jolla Pharmaceutical Company
(858) 333-5769
mhearne@ljpc.com 

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