Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - AVADEL PHARMACEUTICALS PLC | tv486688_8k.htm |
Exhibit 99.1
Avadel Pharmaceuticals plc
Unaudited Pro Forma Condensed Combined Financial Information
Overview
On February 16, 2018, Avadel Pharmaceuticals plc (the “Company”), together with its subsidiaries Avadel Pharmaceuticals (USA), Inc., Avadel Pediatrics, Inc., FSC Therapeutics LLC (“FSC Therapeutics”), and Avadel US Holdings, Inc. (“Holdings”), as the “Sellers,” completed the previously announced disposition of four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™, together with certain associated business assets (the “Pediatrics Business”) – to Cerecor, Inc. (“Cerecor”), pursuant to the terms of an asset purchase agreement between the Sellers and the Buyer dated as of February 12, 2018 (the “Purchase Agreement”). Certain additional details of the Purchase Agreement and the transactions contemplated thereby (collectively, the “Transaction”) were set forth in a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on February 12, 2018.
Pro forma Financial Information
Set forth below are the following:
| · | Unaudited pro forma condensed combined balance sheet of the Company as of September 30, 2017 (and notes thereto). | |
| · | Unaudited pro forma condensed combined balance sheet of the Company as of December 31, 2016 (and notes thereto). | |
| · | Unaudited pro forma condensed combined statement of income (loss) of the Company for the nine months ended September 30, 2017 (and notes thereto). | |
| · | Unaudited pro forma condensed combined statement of income (loss) of the Company for the twelve months ended December 31, 2016 (and notes thereto). |
Basis of Presentation
The unaudited pro
forma condensed combined financial statements reflect adjustments to the Company’s historical financial results as
reported under the U.S. Generally Accepted Accounting Principles ("GAAP") in connection with the Transaction. The
unaudited pro forma condensed combined balance sheet as of December 31, 2016 and the unaudited pro forma condensed combined
statement of income (loss) for the twelve months then ended give effect to the sale of the Pediatrics Business as if the
Transaction occurred on February 5, 2016 (the date the Pediatrics Business was acquired). The unaudited pro forma condensed
combined balance sheet as of September 30, 2017 and the unaudited pro forma condensed combined statement of income (loss) for
the nine months then ended give effect to the sale of the Pediatrics Business as if the Transaction occurred on January 1,
2017.
The unaudited pro forma condensed combined financial statements included below are being provided for information purposes only and are not necessarily indicative of the results of operations or financial position that would have resulted if the Transaction had actually occurred on the date indicated and are not intended to project the Company’s results of operations or financial position for any future period. The pro forma adjustments are based on available information and assumptions that the Company believes are attributable to the sale of the Pediatrics Business, are factually supportable, and with respect to the statement of income (loss), have continuing impact on the consolidated results.
The unaudited pro forma condensed combined financial statements and the accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.
Avadel Pharmaceuticals plc
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2017 | ||||||||||||
| (in thousands) | As Reported | (1) Adjustments | Pro Forma | |||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 37,449 | $ | - | $ | 37,449 | ||||||
| Marketable securities | 78,161 | - | 78,161 | |||||||||
| Accounts receivable | 24,080 | - | 24,080 | |||||||||
| Other current assets | 9,243 | 445 | 8,798 | |||||||||
| Total current assets | 148,933 | 445 | 148,488 | |||||||||
| Goodwill | 18,491 | - | 18,491 | |||||||||
| Intangible assets, net | 94,256 | 18,495 | 75,761 | |||||||||
| Other long-term assets | 15,747 | 190 | 15,557 | |||||||||
| Total assets | $ | 277,427 | $ | 19,130 | $ | 258,297 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Current portion of long-term related party payable | $ | 30,986 | $ | 1,902 | $ | 29,084 | ||||||
| Accounts payable and accrued expenses | 56,561 | - | 56,561 | |||||||||
| Other current liabilities | 9,761 | - | 9,761 | |||||||||
| Total current liabilities | 97,308 | 1,902 | 95,406 | |||||||||
| Long-term related party payable, less current portion | 76,131 | 20,793 | 55,338 | |||||||||
| Other long-term liabilities | 7,525 | - | 7,525 | |||||||||
| Total liabilities | 180,964 | 22,695 | 158,269 | |||||||||
| Total shareholders' equity | 96,463 | (3,565 | ) | 100,028 | ||||||||
| Total liabilities and shareholders' equity | $ | 277,427 | $ | 19,130 | $ | 258,297 | ||||||
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
| (1) | The divestiture adjustments include the reversal of certain assets and liabilities related to the disposition of four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™. No adjustments have been made to give effect to the Deerfield and Armistice Guarantees and the impact of Avadel’s retained obligation related to a certain supply contract. |
Avadel Pharmaceuticals plc
Unaudited Pro Forma Condensed Combined Balance Sheet
| As of December 31, 2016 | ||||||||||||
| (in thousands) | As Reported | (1) Adjustments | Pro Forma | |||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 39,215 | $ | - | $ | 39,215 | ||||||
| Marketable securities | 114,980 | - | 114,980 | |||||||||
| Accounts receivable | 17,839 | - | 17,839 | |||||||||
| Other current assets | 9,152 | 1,623 | 7,529 | |||||||||
| Total current assets | 181,186 | 1,623 | 179,563 | |||||||||
| Goodwill | 18,491 | - | 18,491 | |||||||||
| Intangible assets, net | 22,837 | 19,577 | 3,260 | |||||||||
| Other long-term assets | 22,968 | 230 | 22,738 | |||||||||
| Total assets | $ | 245,482 | $ | 21,430 | $ | 224,052 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Current portion of long-term related party payable | $ | 34,177 | $ | 1,233 | $ | 32,944 | ||||||
| Accounts payable and accrued expenses | 24,327 | - | 24,327 | |||||||||
| Other current liabilities | 3,917 | - | 3,917 | |||||||||
| Total current liabilities | 62,421 | 1,233 | 61,188 | |||||||||
| Long-term related party payable, less current portion | 135,170 | 21,057 | 114,113 | |||||||||
| Other long-term liabilities | 5,822 | - | 5,822 | |||||||||
| Total liabilities | 203,413 | 22,290 | 181,123 | |||||||||
| Total shareholders' equity | 42,069 | (860 | ) | 42,929 | ||||||||
| Total liabilities and shareholders' equity | $ | 245,482 | $ | 21,430 | $ | 224,052 | ||||||
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
| (1) | The divestiture adjustments include the reversal of certain assets and liabilities related to the disposition of four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™. No adjustments have been made to give effect to the Deerfield and Armistice Guarantees and the impact of Avadel’s retained obligation related to a certain supply contract. |
Avadel Pharmaceuticals plc
Unaudited Pro Forma Condensed Combined Statement of Income (Loss)
Nine months ended September 30, 2017 | ||||||||||||
| (in thousands) | As Reported | (1) Adjustments | Pro Forma | |||||||||
| Total revenue | $ | 138,493 | $ | 5,341 | $ | 133,152 | ||||||
| Operating expenses: | ||||||||||||
| Cost of products and services sold | 12,253 | 2,194 | 10,059 | |||||||||
| Research and development expenses | 22,093 | 20 | 22,073 | |||||||||
| Selling, general and administrative expenses | 35,804 | 9,300 | 26,504 | |||||||||
| Changes in fair value of related party contingent consideration | (30,107 | ) | 1,336 | (31,443 | ) | |||||||
| Other costs | 4,865 | 1,080 | 3,785 | |||||||||
| Total operating expenses | 44,908 | 13,930 | 30,978 | |||||||||
| Operating income (loss) | 93,585 | (8,589 | ) | 102,174 | ||||||||
| Other nonoperating income (expense) | 4,761 | (766 | ) | 5,527 | ||||||||
| Income (loss) before income taxes | 98,346 | (9,355 | ) | 107,701 | ||||||||
| Income tax provision (benefit) | 21,830 | (2,806 | ) | 24,636 | ||||||||
| Net income (loss) | $ | 76,516 | $ | (6,549 | ) | $ | 83,065 | |||||
| Net income per share - basic | $ | 1.87 | $ | 2.03 | ||||||||
| Net income per share - diluted | 1.81 | 1.97 | ||||||||||
| Weighted average number of shares outstanding - basic | 40,839 | 40,839 | ||||||||||
| Weighted average number of shares outstanding - diluted | 42,194 | 42,194 | ||||||||||
Notes to Unaudited Pro Forma Condensed Combined Statement of Income (Loss)
| (1) | The divestiture adjustments include the reversal of certain results of operations related to the disposition of four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™. No adjustments have been made to give effect to the Deerfield and Armistice Guarantees and the impact of Avadel’s retained obligation related to a certain supply contract. |
Avadel Pharmaceuticals
plc
Unaudited Pro Forma Condensed Combined Statement of Income (Loss)
| Twelve months ended December 31, 2016 | ||||||||||||
| (in thousands) | As Reported | (1)(2) Adjustments | Pro Forma | |||||||||
| Total revenue | $ | 150,246 | $ | 5,985 | $ | 144,261 | ||||||
| - | ||||||||||||
| Operating expenses: | ||||||||||||
| Cost of products and services sold | 13,248 | 2,929 | 10,319 | |||||||||
| Research and development expenses | 34,611 | 22 | 34,589 | |||||||||
| Selling, general and administrative expenses | 44,179 | 9,710 | 34,469 | |||||||||
| Changes in fair value of related party contingent consideration | 49,285 | 1,076 | 48,209 | |||||||||
| Other costs | 13,888 | 1,324 | 12,564 | |||||||||
| Total operating expenses | 155,211 | 15,061 | 140,150 | |||||||||
| Operating income (loss) | (4,965 | ) | (9,076 | ) | 4,111 | |||||||
| Other nonoperating expenses | (4,753 | ) | (1,099 | ) | (3,654 | ) | ||||||
| Income (loss) before income taxes | (9,718 | ) | (10,175 | ) | 457 | |||||||
| Income tax provision (benefit) | 31,558 | (3,184 | ) | 34,742 | ||||||||
| Net loss | $ | (41,276 | ) | $ | (6,991 | ) | $ | (34,285 | ) | |||
| Net loss per share - basic | $ | (1.00 | ) | $ | (0.83 | ) | ||||||
| Net loss per share - diluted | (1.00 | ) | (0.83 | ) | ||||||||
| Weighted average number of shares outstanding - basic | 41,248 | 41,248 | ||||||||||
| Weighted average number of shares outstanding - diluted | 41,248 | 41,248 | ||||||||||
Notes to Unaudited Pro Forma Condensed Combined Statement of Income (Loss)
| (1) | The divestiture adjustments include the reversal of certain results of operations related to the disposition of four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™. No adjustments have been made to give effect to the Deerfield and Armistice Guarantees and the impact of Avadel’s retained obligation related to a certain supply contract. |
| (2) | The Adjustments column includes results of the Pediatric Business from February 5, 2016 (date of acquisition) through December 31, 2016. |