Net Product Sales of
Management to Host Conference Call and Webcast Today at
"The successful re-launch of Thiola and accelerated uptake to end the third quarter was an important milestone for
Third Quarter 2014 Financial Results
Net Product Sales
Net sales for the third quarter of 2014 were
Cost of Goods Sold
Cost of product sales for the third quarter of 2014 was
Operating Expenses
Non-GAAP operating expenses were
Selling, General and Administrative ("SG&A") Expenses
Non-GAAP SG&A expenses totaled
Research and Development ("R&D") Expenses
Non-GAAP R&D expenses totaled
Other Income
Other income totaled
At
Net Loss
Non-GAAP net loss for the third quarter of 2014 was
GAAP net loss for the third quarter of 2014 was
Financial Guidance
Based on the slower than expected progress while initially bringing patients back on Thiola after the supply outage,
Update to Credit Loan Agreement
The Company has renegotiated with its primary credit lender to be in compliance with certain terms and covenants and to also provide greater flexibility as the Company executes the new operating plan. Details of the amended terms can be found in Retrophin's form 10-Q filed with the
Commercial Products Highlights
Thiola® (tiopronin)
- As of
November 7, 2014 , patients on therapy has surpassed the IMS estimates of ~450 patients on therapy prior to the supply disruption. - With the restoration of supply, a 10-member salesforce is actively marketing to prescribers and uncovering new growth opportunities.
Chenodal® (chenodeoxycholic acid)
Retrophin plans to seek U.S. regulatory approval for the addition of a cerebrotendinous xanthomatosis (CTX) indication to the Chenodal label. On addition of CTX to the Chenodal label, it is expected that orphan drug designation would grant seven years of market exclusivity as per the Orphan Drug Act.
Pipeline Updates
Sparsentan
- The DUET study, a Phase II clinical trial of sparsentan in patients with Focal Segmental Glomerulosclerosis (FSGS), continues to enroll toward the target of 100 total subjects. The trial is expected to be fully enrolled by year-end 2015.
Retrophin continues to work with patient advocacy groups and academic investigators to increase awareness of the DUET trial and accelerate enrollment.
RE-024
Retrophin intends to file a U.S. IND for RE-024 in the first half of 2015.- PKAN patients currently receiving RE-024 in physician-initiated studies outside the U.S. will continue to receive treatment.
RE-034
Retrophin continues to develop RE-034 to enable multiple strategic options, including a potential U.S. IND submission in 2015.
Non-core assets
- As reported on
October 14, 2014 ,Retrophin entered into an agreement to divest toTuring Pharmaceuticals , non-core assets ketamine, Syntocinon Nasal Spray® (oxytocin), and Vecamyl® (mecamylamine HCI tablets). Under the terms of the agreement,Turing Pharmaceuticals will payRetrophin a$3 million upfront payment and assume certain liabilities and future milestone payments related to these products. The divestment is expected to close by the end of the first quarter of 2015 and is subject to specified conditions to closing.
Conference Call Information
Use of Non-GAAP Financial Measures
To supplement Retrophin's financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP adjusted financial measures in this press release and the accompanying tables. The Company believes that these non-GAAP financial measures are helpful in understanding its past financial performance and potential future results. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP. Retrophin's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. In addition,
Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future the Company may exclude other items, or cease to exclude items that it has historically excluded, for purposes of its non-GAAP financial measures; Because of the non-standardized definitions, the non-GAAP financial measures as used by the Company in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the Company's competitors and other companies.
As used in this press release, (i) the historical non-GAAP net income (loss) measures exclude from GAAP net income (loss), as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, change in fair value of derivative liabilities, depreciation expense, non-cash interest and finance expenses; adjust the income tax provision to the estimated amount of taxes that are payable in cash; (ii) the historical non-GAAP SG&A expense measures exclude from GAAP SG&A expenses, as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, legal settlements and depreciation expense; (iii) the historical non-GAAP R&D expense measures exclude from GAAP R&D expenses, as applicable, intangible asset amortization, stock-based compensation expense, transaction and license fees and depreciation expense; (iv) the non-GAAP net income (loss) (and the related per share) guidance measures exclude from estimated GAAP net income intangible asset amortization and depreciation expense, stock-based compensation expense, transaction and license fees, non-cash interest and finance expenses; and adjust the income tax provision to the estimated amount of taxes that are payable in cash.
About
Forward-Looking Statements
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding the research, development and commercialization of pharmaceutical products. Without limiting the foregoing, these statements are often identified by the words "may", "might", "believes", "thinks", "anticipates", "plans", "expects", "intends" or similar expressions. In addition, expressions of our strategies, intentions or plans are also forward-looking statements. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the Company's business and finances in general, as well as risks and uncertainties associated with the Company's pre-clinical and clinical stage pipeline as well as its sales and marketing strategies. Specifically, the risks and uncertainties the Company faces with respect to its pre-clinical and clinical stage pipeline include risk that the Company's research programs will not identify pre-clinical candidates for further development and risk that the Company's clinical candidates will not be found to be safe or effective. Specifically, the Company faces risk that the Sparsentan Phase II clinical trials will fail to demonstrate that Sparsentan is safe or effective; risk that the Sparsentan Phase II program will be delayed for regulatory or other reasons; risk that the Company will be unable to file an IND for RE-024 or RE-034 or initiate Phase I clinical trials for regulatory or other reasons. The Company faces risk that it will be unable to raise additional funding required to complete development of any or all of its product candidates; risk relating to the Company's dependence on contractors for clinical drug supply and commercial manufacturing; uncertainties relating to patent protection and intellectual property rights of third parties; risks and uncertainties relating to competitive products and technological changes that may limit demand for the Company's products. You are cautioned not to place undue reliance on these forward-looking statements as there are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. The Company undertakes no obligation to publicly update forward-looking statement, whether as a result of new information, future events, or otherwise. Investors are referred to the full discussion of risks and uncertainties as included in the Company's filings with the
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 25,861,729 | $ | 5,997,307 | |||||||
| Marketable securities | 11,930,492 | 132,994 | |||||||||
| Accounts receivable | 4,676,688 | - | |||||||||
| Inventory, net | 683,565 | - | |||||||||
| Prepaid expenses and other current assets | 2,292,085 | 1,370,943 | |||||||||
| Total current assets | 45,444,559 | 7,501,244 | |||||||||
| Property and equipment, net | 633,167 | 127,427 | |||||||||
| Security deposits | 337,014 | 244,058 | |||||||||
| Restricted cash | 40,000 | 40,000 | |||||||||
| Other asset | 1,921,265 | - | |||||||||
| Investment | 400,000 | - | |||||||||
| Intangible assets, net | 96,219,940 | 12,586,150 | |||||||||
| Goodwill | 935,935 | - | |||||||||
| Total assets | $ | 145,931,880 | $ | 20,498,879 | |||||||
| Liabilities and Stockholders' Deficit | |||||||||||
| Current liabilities: | |||||||||||
| Deferred technology purchase liability, current portion | $ | 1,500,000 | $ | 1,634,630 | |||||||
| Accounts payable | 11,285,010 | 3,553,567 | |||||||||
| Accrued expenses | 11,692,302 | 3,526,434 | |||||||||
| Securities sold, not yet purchased | 3,150,413 | 1,457,901 | |||||||||
| Other liability | 774,067 | - | |||||||||
| Acquisition-related contingent consideration, less current portion | 2,253,075 | - | |||||||||
| Derivative financial instruments, warrants | 18,480,000 | 25,037,346 | |||||||||
| Total current liabilities | 49,134,867 | 35,209,878 | |||||||||
| Note payable | 40,160,206 | - | |||||||||
| Convertible debt | 43,132,928 | - | |||||||||
| Other liability | 12,565,722 | - | |||||||||
| Acquisition-related contingent consideration, less current portion | 9,984,855 | - | |||||||||
| Deferred technology purchase liability, less current portion | 1,000,000 | 1,000,000 | |||||||||
| Deferred income tax liability, net | 141,151 | 2,600,899 | |||||||||
| Total liabilities | 156,119,729 | 38,810,777 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' Deficit: | |||||||||||
| Preferred stock Series A |
- | - | |||||||||
| Common stock |
2,670 | 1,855 | |||||||||
| Additional paid-in capital | 138,414,487 | 50,189,127 | |||||||||
| Treasury stock, at cost, 379,591 and 130,790, respectively | (3,214,608 | ) | (957,272 | ) | |||||||
| Accumulated deficit | (149,134,700 | ) | (67,435,621 | ) | |||||||
| Accumulated other comprehensive income (loss) | 3,744,302 | (109,987 | ) | ||||||||
| Total stockholders' deficit | (10,187,849 | ) | (18,311,898 | ) | |||||||
| Total liabilities and stockholders' deficit | $ | 145,931,880 | $ | 20,498,879 | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended |
Nine Months Ended |
||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Net product sales | $ | 8,348,583 | $ | - | $ | 14,118,217 | $ | - | |||||||||
| Operating expenses: | |||||||||||||||||
| Cost of goods sold | 197,411 | - | 233,271 | - | |||||||||||||
| Research and development | 13,018,729 | 1,399,875 | 33,603,446 | 2,113,813 | |||||||||||||
| Selling, general and administrative | 18,575,982 | 3,754,611 | 41,180,510 | 10,391,061 | |||||||||||||
| Total operating expenses | 31,792,122 | 5,154,486 | 75,017,227 | 12,504,874 | |||||||||||||
| Operating loss | (23,443,539 | ) | (5,154,486 | ) | (60,899,010 | ) | (12,504,874 | ) | |||||||||
| Other income (expenses): | |||||||||||||||||
| Interest income (expense), net | (2,629,101 | ) | 4 | (4,807,502 | ) | (41,554 | ) | ||||||||||
| Finance expense | (12,500 | ) | - | (4,720,780 | ) | - | |||||||||||
| Realized gain on sale of marketable securities, net | 168,943 | 59,737 | 543,784 | 59,737 | |||||||||||||
| Change in fair value of derivative instruments - gain (loss) | 6,359,144 | (5,803,054 | ) | (14,276,072 | ) | (8,198,672 | ) | ||||||||||
| Gain (loss) on transactions denominated in foreign currencies | 753 | - | 753 | (3,873 | ) | ||||||||||||
| Total other income (expense), net | 3,887,239 | (5,743,313 | ) | (23,259,817 | ) | (8,184,362 | ) | ||||||||||
| Loss before provision for income taxes | (19,556,300 | ) | (10,897,799 | ) | (84,158,827 | ) | (20,689,236 | ) | |||||||||
| Income tax benefit | - | - | 2,459,748 | - | |||||||||||||
| Net loss | $ | (19,556,300 | ) | $ | (10,897,799 | ) | $ | (81,699,079 | ) | $ | (20,689,236 | ) | |||||
| Net loss per common share, basic | $ | (0.73 | ) | $ | (0.71 | ) | $ | (3.24 | ) | $ | (1.62 | ) | |||||
| Net loss per common share, diluted | $ | (0.89 | ) | $ | (0.71 | ) | $ | (3.24 | ) | $ | (1.62 | ) | |||||
| Weighted average common shares outstanding, basic | 26,682,510 | 15,365,631 | 25,229,847 | 12,797,714 | |||||||||||||
| Weighted average common shares outstanding, diluted | 28,210,225 | 15,365,631 | 25,229,847 | 12,797,714 | |||||||||||||
| Comprehensive Loss: | |||||||||||||||||
| Net loss | $ | (19,556,300 | ) | $ | (10,897,799 | ) | $ | (81,699,079 | ) | $ | (20,689,236 | ) | |||||
| Unrealized gain (loss) on sale of marketable securities | 3,232,213 | (154,834 | ) | 3,854,289 | (154,834 | ) | |||||||||||
| Comprehensive loss | $ | (16,324,087 | ) | $ | (11,052,633 | ) | $ | (77,844,790 | ) | $ | (20,844,070 | ) | |||||
| RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| GAAP reported net loss | $ | (19,556,300 | ) | $ | (10,897,799 | ) | $ | (81,699,079 | ) | $ | (20,689,236 | ) | ||||||||
| Share-based compensation | 4,694,468 | 1,705,225 | 14,709,095 | 1,992,818 | ||||||||||||||||
| Intangible asset amortization and depreciation | 750,820 | 53,821 | 1,698,026 | 159,128 | ||||||||||||||||
| Change in fair value of derivative liabilities | (6,359,144 | ) | 5,803,054 | 14,276,072 | 8,198,672 | |||||||||||||||
| Transaction and license fees | 756,164 | 250,000 | 2,734,160 | 475,000 | ||||||||||||||||
| Legal settlements | - | - | 327,208 | 2,234,424 | ||||||||||||||||
| Executive severance | 4,639,055 | - | 4,639,055 | - | ||||||||||||||||
| Net interest expense and finance fees | 854,655 | - | 7,446,652 | 13,291 | ||||||||||||||||
| Income tax adjustments | - | - | (2,459,748 | ) | - | |||||||||||||||
| Non-GAAP adjusted net loss | $ | (14,220,282 | ) | $ | (3,085,699 | ) | $ | (38,328,559 | ) | $ | (7,615,903 | ) | ||||||||
| GAAP reported net loss per common share, basic | $ | (0.73 | ) | $ | (0.71 | ) | $ | (3.24 | ) | $ | (1.62 | ) | ||||||||
| GAAP reported net loss per common share, diluted | $ | (0.89 | ) | $ | (0.71 | ) | $ | (3.24 | ) | $ | (1.62 | ) | ||||||||
| Non-GAAP adjusted net loss per common share, basic and diluted | $ | (0.53 | ) | $ | (0.20 | ) | $ | (1.52 | ) | $ | (0.60 | ) | ||||||||
| GAAP Weighted average common shares outstanding, basic | 26,682,510 | 15,365,631 | 25,229,847 | 12,797,714 | ||||||||||||||||
| GAAP Weighted average common shares outstanding, diluted | 28,210,225 | 15,365,631 | 25,229,847 | 12,797,714 | ||||||||||||||||
| Non-GAAP Weighted average common shares outstanding, basic and diluted | 26,682,510 | 15,365,631 | 25,229,847 | 12,797,714 | ||||||||||||||||
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | ||||||||||||||||||||||||||||
| CERTAIN LINE ITEMS AND OTHER INFORMATION | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| Three Months | ||||||||||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||||||||
| Reported | Adjustments | Adjusted* | Reported | Adjustments | Adjusted* | |||||||||||||||||||||||
| Net product sales | $ | 8,348,583 | $ | - | $ | 8,348,583 | $ | - | $ | - | $ | - | ||||||||||||||||
| Cost of goods sold | 197,411 | - | 197,411 | - | - | - | ||||||||||||||||||||||
| Research and development | 13,018,729 | (2,732,839 | ) | (a) | 10,285,890 | 1,399,875 | (36,205 | ) | (a) | 1,363,670 | ||||||||||||||||||
| Selling, general and administrative | 18,575,982 | (8,107,668 | ) | (b) | 10,468,314 | 3,754,611 | (1,972,841 | ) | (b) | 1,781,770 | ||||||||||||||||||
| Operating loss | (23,443,539 | ) | 10,840,507 | (12,603,032 | ) | (5,154,486 | ) | 2,009,046 | (3,145,440 | ) | ||||||||||||||||||
| Interest income (expense), net | (2,629,101 | ) | 842,155 | (c) | (1,786,946 | ) | 4 | - | 4 | |||||||||||||||||||
| Finance expense | (12,500 | ) | 12,500 | - | - | - | - | |||||||||||||||||||||
| Realized gain on sale of marketable securities, net | 168,943 | - | 168,943 | 59,737 | - | 59,737 | ||||||||||||||||||||||
| Change in fair value of derivative instruments | 6,359,144 | (6,359,144 | ) | - | (5,803,054 | ) | 5,803,054 | - | ||||||||||||||||||||
| Gain (loss) on transaction denominated in foreign currencies | 753 | - | 753 | - | - | - | ||||||||||||||||||||||
| Income (loss) before provision for income taxes | (19,556,300 | ) | 5,336,018 | (14,220,282 | ) | (10,897,799 | ) | 7,812,100 | (3,085,699 | ) | ||||||||||||||||||
| Income tax benefit | $ | - | - | - | $ | - | - | - | ||||||||||||||||||||
| Net income (loss) | $ | (19,556,300 | ) | $ | 5,336,018 | $ | (14,220,282 | ) | $ | (10,897,799 | ) | $ | 7,812,100 | $ | (3,085,699 | ) | ||||||||||||
| Net loss per common share, basic | $ | (0.73 | ) | $ | (0.53 | ) | $ | (0.71 | ) | $ | (0.20 | ) | ||||||||||||||||
| Net loss per common share, diluted | $ | (0.89 | ) | $ | (0.53 | ) | $ | (0.71 | ) | $ | (0.20 | ) | ||||||||||||||||
| Weighted average common shares outstanding, basic | 26,682,510 | 26,682,510 | 15,365,631 | 15,365,631 | ||||||||||||||||||||||||
| Weighted average common shares outstanding, diluted | 28,210,225 | 26,682,510 | 15,365,631 | 15,365,631 | ||||||||||||||||||||||||
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | ||||||||||||||||||||||||||
| CERTAIN LINE ITEMS AND OTHER INFORMATION | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Nine Months | ||||||||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||||||
| Reported | Adjustments | Adjusted* | Reported | Adjustments | Adjusted* | |||||||||||||||||||||
| Net product sales | $ | 14,118,217 | $ | - | $ | 14,118,217 | $ | - | $ | - | $ | - | ||||||||||||||
| Cost of goods sold | 233,271 | - | 233,271 | - | - | - | ||||||||||||||||||||
| Research and development | 33,603,446 | (6,094,038 | ) | (d) | 27,509,408 | 2,113,813 | (72,888 | ) | (d) | 2,040,925 | ||||||||||||||||
| Selling, general and administrative | 41,180,510 | (18,013,506 | ) | (e) | 23,167,004 | 10,391,061 | (4,788,482 | ) | (e) | 5,602,579 | ||||||||||||||||
| Operating loss | (60,899,010 | ) | 24,107,544 | (36,791,466 | ) | (12,504,874 | ) | 4,861,370 | (7,643,504 | ) | ||||||||||||||||
| Interest income (expense), net | (4,807,502 | ) | 2,725,872 | (c) | (2,081,630 | ) | (41,554 | ) | 13,291 | (c) | (28,263 | ) | ||||||||||||||
| Finance expense | (4,720,780 | ) | 4,720,780 | - | - | - | - | |||||||||||||||||||
| Realized gain on sale of marketable securities, net | 543,784 | - | 543,784 | 59,737 | - | 59,737 | ||||||||||||||||||||
| Change in fair value of derivative instruments | (14,276,072 | ) | 14,276,072 | - | (8,198,672 | ) | 8,198,672 | - | ||||||||||||||||||
| Gain (loss) on transaction denominated in foreign currencies | 753 | - | 753 | (3,873 | ) | - | (3,873 | ) | ||||||||||||||||||
| Net loss before provision for income taxes | (84,158,827 | ) | 45,830,268 | (38,328,559 | ) | (20,689,236 | ) | 13,073,333 | (7,615,903 | ) | ||||||||||||||||
| Income tax benefit | $ | 2,459,748 | (2,459,748 | ) | - | $ | - | - | - | |||||||||||||||||
| Net loss | $ | (81,699,079 | ) | $ | 43,370,520 | $ | (38,328,559 | ) | $ | (20,689,236 | ) | $ | 13,073,333 | $ | (7,615,903 | ) | ||||||||||
| Net loss per common share, basic | $ | (3.24 | ) | $ | (1.52 | ) | $ | (1.62 | ) | $ | (0.60 | ) | ||||||||||||||
| Net loss per common share, diluted | $ | (3.24 | ) | $ | (1.52 | ) | $ | (1.62 | ) | $ | (0.60 | ) | ||||||||||||||
| Weighted average common shares outstanding, basic | 25,229,847 | 25,229,847 | 12,797,714 | 12,797,714 | ||||||||||||||||||||||
| Weighted average common shares outstanding, diluted | 25,224,847 | 25,224,847 | 12,797,714 | 12,797,714 | ||||||||||||||||||||||
| * Explanation of Adjustments and Certain Line Items: | ||||||||||||||||||||||||||
| (a) Share-based compensation expense of |
| (b) Share-based compensation expense of |
| (c) Non-cash interest expense associated with debt discount and debt issuance costs for the respective three and nine month periods. |
| (d) Share-based compensation expense of |
| (e) Share-based compensation expense of |
646-564-3671
marc@retrophin.com
or
646-564-3680
IR@retrophin.com
Source:
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