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| 8-K - 8-K - Neos Therapeutics, Inc. | a18-8249_18k.htm |
Neos Therapeutics Reports Fourth Quarter and Full-Year 2017 Financial Results
Company to Host Conference Call at 8:30am ET Today
Dallas/Fort Worth, Texas, March 15, 2018 — Neos Therapeutics, Inc. (Nasdaq: NEOS), a pharmaceutical company focused on developing, manufacturing and commercializing innovative extended-release (XR) products using its proprietary modified-release drug delivery technologies, today reported financial results for the fourth quarter and full year ended December 31, 2017 and provided a business update.
“We’ve launched three ADHD products in the last two years and are very pleased with our product portfolio, which we believe reflects both the strength of our unique technology platform as well as our ability to develop, manufacture and commercialize products,” said Vipin K. Garg, Ph.D., President and CEO of Neos Therapeutics. “Our second product, Cotempla XR-ODT™, is new to the market but already seeing strong adoption. We believe this is, in part, the result of our established relationships with nearly 11,000 healthcare professionals, their awareness of our XR-ODT technology and their interest in using our innovative products. With three synergistic Attention Deficit/Hyperactivity Disorder (ADHD) products on the market, we expect to see continued commercial growth and a significant improvement in gross profit.”
Neos’ three commercial products are Adzenys XR-ODT®, Cotempla XR-ODT™ and Adzenys ER™ which launched in May 2016, October 2017 and February 2018, respectively.
Commercial Product Highlights as Reported by IQVIA (formerly called IMS Health)
|
|
|
Cumulative |
|
Cumulative |
|
Year-over- |
|
Cumulative |
|
Patients switching |
|
|
Adzenys XR-ODT® |
|
62,737 |
|
20,330 |
|
208.6 |
% |
260,767 |
|
71 |
% |
|
Cotempla XR-ODT™ |
|
12,073 |
|
N/A |
|
N/A |
|
37,168 |
|
79 |
% |
|
TOTAL |
|
74,810 |
|
20,330 |
|
268.0 |
% |
297,935 |
|
N/A |
|
*EUTRx = Equivalent Unit TRx
Additional Commercial Product Highlights as Reported by IQVIA
· Continued Strong Growth in Adzenys XR-ODT and Cotempla XR-ODT Prescription Trends: The cumulative total number of EUTRx for Adzenys XR-ODT were 62,737 for the three months ended December 31, 2017, an increase of 23.7% over the 50,697 for the three months ended September 30, 2017. For Cotempla XR-ODT, the cumulative total number of EUTRx for the three months ended December 31, 2017 were 12,073, compared to 648 EUTRx for the three months ended September 30, 2017.
· Market Share of Neos’ XR-ODT Products is Increasing: The combined total weekly prescriptions for Adzenys XR-ODT and Cotempla XR-ODT continued to grow and had increased to 9,031 weekly EUTRx for the week ended March 2, 2018. This represents an aggregate market share of 0.54% of the entire ADHD market.
· The Number of Prescribers of Adzenys XR-ODT and Cotempla XR-ODT Continues to Grow: As of December 31, 2017, 10,870 health care providers had written prescriptions for Adzenys XR-ODT since its launch, and 1,949 health care providers had written prescriptions for Cotempla
XR-ODT since its launch. As of the week ended February 16, 2018, those numbers had increased to 11,619 and 3,480, respectively.
· Patient Switching from Another ADHD Medication Continues to be an Important Driver of Product Uptake: Doctors are switching patients over from other ADHD medications to both Adzenys XR-ODT (71% switching) and Cotempla XR-ODT (79% switching).
Recent Announcements
· In January 2018, the Company announced that study findings for two of its ADHD medications, Cotempla XR-ODT and Adzenys ER, were presented in three posters at the 2018 Annual Meeting of the American Professional Society of ADHD and Related Disorders. The results showed efficacy, safety and tolerability of Cotempla XR-ODT in children 6-12 years of age in a laboratory classroom study, and demonstrated bioequivalence of Adzenys ER with Adderall XR.
· On February 26, 2018, the Company announced the U.S. commercial launch of Adzenys ER (amphetamine) Extended-Release Oral Suspension, its third ADHD product. This product received approval from the U.S. Food and Drug Administration (FDA) on September 15, 2017 for the treatment of ADHD in patients six years and older. This extended-release liquid medication does not require refrigeration or reconstitution at the pharmacy level. Adzenys ER oral suspension utilizes the same proprietary modified-release drug delivery technology as Adzenys XR-ODT.
Select Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2017
· Total product revenues were $7.8 million for the three months ended December 31, 2017, compared to $3.5 million for the same period in 2016, and for the fiscal year ended December 31, 2017, total product revenues were $25.0 million, compared with $9.2 million for the same period in 2016. For the three months ended December 31, 2017, total product revenues associated with dispensed patient prescriptions for the Company’s ADHD products were $7.2 million.
|
Net product sales (in $millions) |
| ||||||||||||||||
|
|
|
Q4 2017 |
|
Q4 2016 |
|
Change % |
|
FY 2017 |
|
FY 2016 |
|
Change % |
| ||||
|
Adzenys XR-ODT |
|
$ |
6.3 |
|
$ |
2.2 |
|
186.4 |
% |
$ |
19.0 |
|
$ |
3.0 |
|
533.3 |
% |
|
Cotempla XR-ODT |
|
$ |
0.9 |
|
N/A |
|
N/A |
|
$ |
0.9 |
|
N/A |
|
N/A |
| ||
|
Generic Tussionex |
|
$ |
0.6 |
|
$ |
1.3 |
|
-53.8 |
% |
$ |
5.1 |
|
$ |
6.2 |
|
-17.7 |
% |
|
Total |
|
$ |
7.8 |
|
$ |
3.5 |
|
122.9 |
% |
$ |
25.0 |
|
$ |
9.2 |
|
171.7 |
% |
· The Company reported a gross profit of $5.0 million for the three months ended December 31, 2017, compared to a gross loss of $0.5 million for the same period in 2016, and for the fiscal year ended December 31, 2017, gross profit was $12.6 million as compared to a gross loss of $2.3 million for the same period of 2016.
· Research and development expenses for the three months ended December 31, 2017, were $1.8 million, compared to $3.6 million for the same period in 2016, and for the fiscal year ended December 31, 2017, research and development expenses were $9.0 million compared to $12.2 million for the same period of 2016. The decrease in the fourth quarter was primarily due to a decline in testing, materials and supply expenses due to the approval of the Company’s ADHD product candidates in 2017 coupled with a non-recurring FDA fee associated with the filing of the New Drug Application for Adzenys ER in 2016.
· Selling and marketing expenses were $11.9 million for the three months ended December 31, 2017, compared to $9.7 million for the same period in 2016, and for the fiscal year ended December 31, 2017, selling and marketing expenses were $46.9 million compared to $49.3 million for the same period in 2016. The fourth quarter increase was principally due to higher medical marketing costs as well as increased transaction fees associated with the higher level of prescriptions processed for the Company’s products.
· General and administrative expenses for the three months ended December 31, 2017, were $3.0 million compared to $3.0 million for the same period in 2016, and for the fiscal year ended December 31, 2017, general and administrative expenses were $13.8 million compared to $12.6 million for the same period in 2016.
· The Company reported a net loss of $14.2 million, or $0.49 per share, for the three months ended December 31, 2017, compared to a net loss of $18.4 million, or $1.14 per share, for the same period in 2016. For the fiscal year ended December 31, 2017, the Company reported a net loss of $66.2 million, or $2.68 per share, compared to a net loss of $83.3 million, or $5.19 per share for the fiscal year ended December 31, 2016.
· At December 31, 2017, the Company held $50.4 million in cash and cash equivalents and short-term investments.
Conference Call Details
Neos management will host a conference call and live audio webcast to discuss results and provide a company update at 8:30 a.m. ET today. The live call may be accessed by dialing (877) 388-8985 for domestic calls, or +1 (562) 912-2654 for international callers, and referencing conference ID number 5653457. A live audio webcast for the conference call will be available on the Investor Relations page of the Company’s website at http://investors.neostx.com/.
About Neos Therapeutics
Neos Therapeutics, Inc. (NASDAQ: NEOS) is a pharmaceutical company focused on developing, manufacturing and commercializing products utilizing its proprietary modified-release drug delivery technology platforms. Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), Cotempla XR-ODT™ (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), and Adzenys-ER™ (amphetamine) extended-release oral suspension (see Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD, are the first three approved products using the Company’s extended-release technology platform. In addition, Neos manufactures and markets its generic version of the branded product Tussionex®(1), an extended-release oral suspension of hydrocodone and chlorpheniramine for the relief of cough and upper respiratory symptoms of a cold (see Full Prescribing Information, including Boxed WARNING). Additional information about Neos is available at www.neostx.com.
(1)Tussionex® is a registered trademark of the UCB Group of Companies.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the commercialization of Adzenys XR-ODT, Cotempla XR-ODT™ and Adzenys ER, our marketing plans, and the therapeutic potential of our products. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements reflect our current views about our expectations, strategy, plans, prospects or intentions, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to market and sell our products and other risks set forth under the caption “Risk Factors” in our most recently filed Annual Report on Form 10-K as updated by our subsequently filed other SEC filings, including our Quarterly Report(s) on Form 10-Q. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
Neos Therapeutics, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
|
|
|
December 31, |
| ||||
|
|
|
2017 |
|
2016 |
| ||
|
ASSETS |
|
|
|
|
| ||
|
Current Assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
31,969 |
|
$ |
24,352 |
|
|
Short-term investments |
|
18,448 |
|
15,430 |
| ||
|
Accounts receivable, net of allowances for chargebacks and cash discounts of $1,154 and $950, respectively |
|
13,671 |
|
6,135 |
| ||
|
Inventories |
|
13,459 |
|
5,767 |
| ||
|
Deferred contract sales organization fees |
|
— |
|
720 |
| ||
|
Other current assets |
|
5,093 |
|
2,865 |
| ||
|
Total current assets |
|
82,640 |
|
55,269 |
| ||
|
Property and equipment, net |
|
8,203 |
|
7,076 |
| ||
|
Intangible assets, net |
|
16,348 |
|
17,647 |
| ||
|
Other assets |
|
162 |
|
150 |
| ||
|
Total assets |
|
$ |
107,353 |
|
$ |
80,142 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
| ||
|
Current Liabilities: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
11,460 |
|
$ |
7,798 |
|
|
Accrued expenses |
|
10,570 |
|
5,264 |
| ||
|
Deferred revenue |
|
14,676 |
|
3,662 |
| ||
|
Current portion of long-term debt |
|
896 |
|
4,921 |
| ||
|
Total current liabilities |
|
37,602 |
|
21,645 |
| ||
|
Long-Term Liabilities: |
|
|
|
|
| ||
|
Long-term debt, net of current portion |
|
58,938 |
|
58,599 |
| ||
|
Derivative liability |
|
1,660 |
|
— |
| ||
|
Deferred rent |
|
1,083 |
|
1,174 |
| ||
|
Other long-term liabilities |
|
180 |
|
272 |
| ||
|
Total long-term liabilities |
|
61,861 |
|
60,045 |
| ||
|
Stockholders’ Equity (Deficit): |
|
|
|
|
| ||
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2017 and December 31, 2016 |
|
— |
|
— |
| ||
|
Common stock, $0.001 par value, 100,000,000 authorized at December 31, 2017 and December 31, 2016; 29,030,757 and 28,996,956 issued and outstanding, respectively, at December 31, 2017; 16,079,902 and 16,060,996 issued and outstanding, respectively, at December 31, 2016 |
|
29 |
|
16 |
| ||
|
Treasury stock, at cost, 33,801 shares at December 31, 2017 and 18,906 shares at December 31, 2016 |
|
(352 |
) |
(232 |
) | ||
|
Additional paid-in capital |
|
274,584 |
|
198,787 |
| ||
|
Accumulated deficit |
|
(266,365 |
) |
(200,118 |
) | ||
|
Accumulated other comprehensive loss |
|
(6 |
) |
(1 |
) | ||
|
Total stockholders’ equity (deficit) |
|
7,890 |
|
(1,548 |
) | ||
|
Total liabilities and stockholders’ equity (deficit) |
|
$ |
107,353 |
|
$ |
80,142 |
|
Neos Therapeutics, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Net product sales |
|
$ |
7,787 |
|
$ |
3,503 |
|
$ |
25,018 |
|
$ |
9,154 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of goods sold |
|
2,778 |
|
4,020 |
|
12,391 |
|
11,437 |
| ||||
|
Gross profit (loss) |
|
5,009 |
|
(517 |
) |
12,627 |
|
(2,283 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Research and development expenses |
|
1,784 |
|
3,602 |
|
8,957 |
|
12,207 |
| ||||
|
Selling and marketing expenses |
|
11,851 |
|
9,661 |
|
46,881 |
|
49,291 |
| ||||
|
General and administrative expenses |
|
3,039 |
|
3,025 |
|
13,805 |
|
12,625 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Loss from operations |
|
(11,665 |
) |
(16,805 |
) |
(57,016 |
) |
(76,406 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
(2,836 |
) |
(2,191 |
) |
(10,085 |
) |
(6,937 |
) | ||||
|
Loss on debt extinguishment |
|
— |
|
— |
|
— |
|
(1,187 |
) | ||||
|
Other income, net |
|
276 |
|
622 |
|
854 |
|
1,197 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss |
|
$ |
(14,225 |
) |
$ |
(18,374 |
) |
$ |
(66,247 |
) |
$ |
(83,333 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares outstanding used to compute net loss per share, basic and diluted |
|
28,746,608 |
|
16,062,685 |
|
24,751,091 |
|
16,052,390 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss per share of common stock, basic and diluted |
|
$ |
(0.49 |
) |
$ |
(1.14 |
) |
$ |
(2.68 |
) |
$ |
(5.19 |
) |
Contacts:
Richard Eisenstadt
Chief Financial Officer
Neos Therapeutics
(972) 408-1389
reisenstadt@neostx.com
Sarah McCabe
Stern Investor Relations, Inc.
(212) 362-1200
sarah@sternir.com