UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K/A
Amendment No. 1
___________________________
Current Report
Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 2023
___________________________
(Exact name of registrant as specified in its charter)
___________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices, including Zip Code)
(888 ) 969-7879
(Registrant’s Telephone Number, including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Explanatory Note
This Amendment No. 1 on Form 8-K/A is being filed by Travere Therapeutics, Inc. (the “Company”) to amend the Company’s Current Report on Form 8-K filed on September 5, 2023 (the “Original Report”), solely to provide the pro forma financial information required by Item 9.01 of Form 8-K that was not filed with the Original Report.
In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended, the complete text of Item 9.01 of the Original Report, as amended hereby, is set forth below.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The unaudited pro forma consolidated financial information of the Company as of and for the six months ended June 30, 2023 and for each of the years ended December 31, 2022, December 31, 2021 and December 31, 2020, is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 2.1*‡ | ||||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
| * | Certain confidential information contained in this Exhibit, marked in brackets, has been omitted, because it is both not material and of the type of information that the registrant treats as private or confidential. | |||||||
| ‡ | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC. | |||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRAVERE THERAPEUTICS, INC. | ||||||||||||||||||||||||||
| Dated: September 7, 2023 | By: | /s/ Eric Dube | ||||||||||||||||||||||||
| Name: | Eric Dube | |||||||||||||||||||||||||
| Title: | Chief Executive Officer | |||||||||||||||||||||||||
EXHIBIT 99.1
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On August 31, 2023 (the “Closing Date”), Travere Therapeutics, Inc., (“Travere” or the “Company”) completed the sale of substantially all of the assets that are primarily related to the Company’s business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (the “Disposal Transaction”) to Mirum Pharmaceuticals, Inc. (“Mirum”). The transaction was pursuant to the Asset Purchase Agreement (the “Purchase Agreement”) previously announced by the Company in a Current Report on Form 8-K filed on July 17, 2023. Mirum agreed to pay an aggregate purchase price, subject to certain adjustments pursuant to the terms of the Asset Purchase Agreement, of up to $445.0 million in cash, with $210.0 million in cash paid at closing and up to $235.0 million after closing, upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million) (the “Milestone Events”).
The following unaudited pro forma consolidated financial statements were derived from the historical consolidated financial statements of Travere, which were prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The unaudited pro forma consolidated financial statements were prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma consolidated financial statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the transaction occurred on the dates indicated. The unaudited pro forma consolidated financial statements also should not be considered indicative of our future results of operations or financial position. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The unaudited pro forma consolidated financial statements as of and for the six months ended June 30, 2023 have been derived from the historical unaudited consolidated financial statements of Travere, included in Travere’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 filed with the Securities and Exchange Commission (“SEC”) on August 3, 2023. The unaudited pro forma consolidated financial statements for the years ended December 31, 2022, 2021, and 2020 have been derived from the historical audited consolidated financial statements of Travere, included in Travere’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023. The unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with Travere’s historical consolidated financial statements and accompanying notes.
The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2023 and for the years ended December 31, 2022, 2021 and 2020 reflect pro forma results of Travere’s operations as if the Disposal Transaction had occurred on January 1, 2020. The unaudited pro forma consolidated balance sheet as of June 30, 2023 gives effect to the Disposal Transaction as if it had occurred on that date. The adjustments in the “Other Separation Adjustments” column in the unaudited pro forma consolidated statements of operations give effect to the Disposal Transaction as if it occurred as of January 1, 2022.
On July 16, 2023, Travere entered into an agreement to sell substantially all of the assets related to the Disposal Transactions to Mirum. Beginning in the third quarter of 2023, the ASC 205-20 criteria for discontinued operations was met, and the Company will present the Disposal Transaction as a discontinued operation in its future Quarterly Report on Form 10-Q and in its Annual Report on Form 10-K. The Company believes that the adjustments included within the Discontinued Operations column of the unaudited pro forma consolidated financial statements are consistent with the guidance for discontinued operations under GAAP. Travere's current estimates on a discontinued operations basis are subject to change as the Company finalizes discontinued operations accounting to be reported in the Quarterly Report on Form 10-Q for the three and nine months ending September 30, 2023 and the Annual Report on Form 10-K for the year ending December 31, 2023.
Article 11 of Regulation S-X requires that pro forma financial information include the following pro forma adjustments to the historical financial statements of the registrant as follows:
•Transaction Accounting Adjustments:
◦Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction.
•Autonomous Entity Adjustments:
◦Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity.
In addition, Regulation S-X permits registrants to reflect adjustments that depict synergies or dis-synergies of the acquisitions and dispositions for which pro forma effect is being given in the disclosures as management adjustments.
The following unaudited pro forma consolidated statements of operations and unaudited pro forma consolidated balance sheet give rise to the following transactions:
•Discontinued Operations:
◦The historical financial results directly attributable to the transaction in accordance with Financial Accounting Standards Board Accounting Standards Codification 205, “Presentation of Financial Statements” (“ASC 205”).
•Other Separation Adjustments:
◦The receipt of cash consideration for the Disposal Transaction of approximately $210.0 million in cash paid at closing and up to $235.0 million after closing, upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million).
1
◦Contractual arrangements including a transition services agreement (“TSA Agreement” or the “TSA”) for a time period not expected to exceed 12 months.
The unaudited pro forma financial statements do not contain any autonomous entity adjustments or potential synergies or dis-synergies that may occur in connection with the divestiture.
2
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 30, 2023
(in thousands, except par value and share amounts)
| Pro Forma Transaction Accounting Adjustments | |||||||||||||||||||||||||||||||||||
| Historical Travere | Less: Discontinued Operations (a) | Notes | Travere Continuing Operations | Add: Other Separation Adjustments | Notes | Pro Forma Travere Continuing Operations | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 70,874 | $ | — | $ | 70,874 | $ | 206,174 | (b) | $ | 277,048 | ||||||||||||||||||||||||
| Marketable debt securities, at fair value | 420,463 | — | 420,463 | — | 420,463 | ||||||||||||||||||||||||||||||
| Accounts receivable, net | 20,397 | — | 20,397 | — | 20,397 | ||||||||||||||||||||||||||||||
| Inventory, net | 18,765 | (2,552) | 16,213 | — | 16,213 | ||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets | 11,556 | (197) | 11,359 | — | 11,359 | ||||||||||||||||||||||||||||||
| Total current assets | 542,055 | (2,749) | 539,306 | 206,174 | 745,480 | ||||||||||||||||||||||||||||||
| Property and equipment, net | 8,570 | — | 8,570 | — | 8,570 | ||||||||||||||||||||||||||||||
| Operating lease right of use assets | 19,559 | — | 19,559 | — | 19,559 | ||||||||||||||||||||||||||||||
| Intangible assets, net | 154,456 | (42,070) | 112,386 | — | 112,386 | ||||||||||||||||||||||||||||||
| Other assets | 11,789 | (308) | 11,481 | — | 11,481 | ||||||||||||||||||||||||||||||
| Total assets | $ | 736,429 | $ | (45,127) | $ | 691,302 | $ | 206,174 | $ | 897,476 | |||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 19,915 | $ | — | $ | 19,915 | $ | — | $ | 19,915 | |||||||||||||||||||||||||
| Accrued expenses | 88,749 | — | 88,749 | 2,470 | (c) | 91,219 | |||||||||||||||||||||||||||||
| Deferred revenue, current portion | 10,244 | — | 10,244 | — | 10,244 | ||||||||||||||||||||||||||||||
| Business combination-related contingent consideration, current portion | 6,900 | (6,900) | — | — | — | ||||||||||||||||||||||||||||||
| Operating lease liabilities, current portion | 4,663 | — | 4,663 | — | 4,663 | ||||||||||||||||||||||||||||||
| Other current liabilities | 5,240 | — | 5,240 | 1,098 | (d) | 6,338 | |||||||||||||||||||||||||||||
| Total current liabilities | 135,711 | (6,900) | 128,811 | 3,568 | 132,379 | ||||||||||||||||||||||||||||||
| Convertible debt | 376,403 | — | 376,403 | — | 376,403 | ||||||||||||||||||||||||||||||
| Deferred revenue, less current portion | 6,788 | — | 6,788 | — | 6,788 | ||||||||||||||||||||||||||||||
| Business combination-related contingent consideration, less current portion | 67,200 | (67,200) | — | — | — | ||||||||||||||||||||||||||||||
| Operating lease liabilities, less current portion | 25,106 | — | 25,106 | — | 25,106 | ||||||||||||||||||||||||||||||
| Other non-current liabilities | 8,736 | — | 8,736 | — | 8,736 | ||||||||||||||||||||||||||||||
| Total liabilities | 619,944 | (74,100) | 545,844 | 3,568 | 549,412 | ||||||||||||||||||||||||||||||
| Commitments and Contingencies | |||||||||||||||||||||||||||||||||||
| Stockholders' Equity: | |||||||||||||||||||||||||||||||||||
| Preferred stock $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Common stock $0.0001 par value; 200,000,000 shares authorized; 74,971,807 issued and outstanding as of June 30, 2023 | 7 | — | 7 | — | 7 | ||||||||||||||||||||||||||||||
| Additional paid-in capital | 1,306,517 | — | 1,306,517 | — | 1,306,517 | ||||||||||||||||||||||||||||||
| Accumulated deficit | (1,186,184) | 28,973 | (e) | (1,157,211) | 202,606 | (h) | (954,605) | ||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (3,855) | — | (3,855) | — | (3,855) | ||||||||||||||||||||||||||||||
| Total stockholders' equity | 116,485 | 28,973 | 145,458 | 202,606 | 348,064 | ||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 736,429 | $ | (45,127) | $ | 691,302 | $ | 206,174 | $ | 897,476 | |||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
3
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 2023
(in thousands, except share and per share amounts)
| Pro Forma Transaction Accounting Adjustments | |||||||||||||||||||||||||||||||||||
| Historical Travere | Less: Discontinued Operations (a) | Notes | Travere Continuing Operations | Add: Other Separation Adjustments | Notes | Pro Forma Travere Continuing Operations | |||||||||||||||||||||||||||||
| Net product sales | $ | 107,295 | $ | (53,606) | $ | 53,689 | $ | — | $ | 53,689 | |||||||||||||||||||||||||
| License and collaboration revenue | 9,395 | — | 9,395 | — | 9,395 | ||||||||||||||||||||||||||||||
| Total revenue | 116,690 | (53,606) | 63,084 | — | 63,084 | ||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of goods sold | 7,115 | (1,518) | 5,597 | — | 5,597 | ||||||||||||||||||||||||||||||
| Research and development | 129,324 | (4,649) | 124,675 | — | 124,675 | ||||||||||||||||||||||||||||||
| Selling, general and administrative | 146,282 | (12,043) | 134,239 | — | 134,239 | ||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 8,596 | (8,596) | — | — | — | ||||||||||||||||||||||||||||||
| Total operating expenses | 291,317 | (26,806) | 264,511 | — | 264,511 | ||||||||||||||||||||||||||||||
| Operating loss | (174,627) | (26,800) | (201,427) | — | (201,427) | ||||||||||||||||||||||||||||||
| Other income (expenses), net: | |||||||||||||||||||||||||||||||||||
| Interest income | 8,774 | — | 8,774 | — | 8,774 | ||||||||||||||||||||||||||||||
| Interest expense | (5,851) | 159 | (5,692) | — | (5,692) | ||||||||||||||||||||||||||||||
| Other expense, net | (114) | — | (114) | — | (114) | ||||||||||||||||||||||||||||||
| Total other income, net | 2,809 | 159 | 2,968 | — | 2,968 | ||||||||||||||||||||||||||||||
| Loss before income tax provision | (171,818) | (26,641) | (198,459) | — | (198,459) | ||||||||||||||||||||||||||||||
| Income tax provision | (143) | — | (g) | (143) | — | (g) | (143) | ||||||||||||||||||||||||||||
| Net loss from continuing operations | $ | (171,961) | $ | (26,641) | $ | (198,602) | $ | — | $ | (198,602) | |||||||||||||||||||||||||
| Basic and diluted net loss from continuing operations per common share | $ | (2.38) | $ | (2.75) | $ | (2.75) | |||||||||||||||||||||||||||||
| Basic and diluted weighted average common shares outstanding | 72,109,573 | 72,109,573 | 72,109,573 | ||||||||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
4
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2022
(in thousands, except share and per share amounts)
| Pro Forma Transaction Accounting Adjustments | |||||||||||||||||||||||||||||||||||
| Historical Travere | Less: Discontinued Operations (a) | Notes | Travere Continuing Operations | Add: Other Separation Adjustments | Notes | Pro Forma Travere Continuing Operations | |||||||||||||||||||||||||||||
| Net product sales | $ | 200,528 | $ | (102,558) | $ | 97,970 | $ | — | $ | 97,970 | |||||||||||||||||||||||||
| License and collaboration revenue | 11,490 | — | 11,490 | — | 11,490 | ||||||||||||||||||||||||||||||
| Total revenue | 212,018 | (102,558) | 109,460 | — | 109,460 | ||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of goods sold | 7,592 | (3,172) | 4,420 | — | 4,420 | ||||||||||||||||||||||||||||||
| Research and development | 235,780 | (8,364) | 227,416 | — | 227,416 | ||||||||||||||||||||||||||||||
| Selling, general and administrative | 220,206 | (22,559) | 197,647 | — | 197,647 | ||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 15,006 | (15,006) | — | — | — | ||||||||||||||||||||||||||||||
| Total operating expenses | 478,584 | (49,101) | 429,483 | — | 429,483 | ||||||||||||||||||||||||||||||
| Operating loss | (266,566) | (53,457) | (320,023) | — | (320,023) | ||||||||||||||||||||||||||||||
| Other income (expenses), net: | |||||||||||||||||||||||||||||||||||
| Interest income | 6,276 | — | 6,276 | — | 6,276 | ||||||||||||||||||||||||||||||
| Interest expense | (11,275) | 261 | (11,014) | — | (11,014) | ||||||||||||||||||||||||||||||
| Other income, net | 974 | — | 974 | 1,920 | (f) | 2,894 | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | (7,578) | — | (7,578) | — | (7,578) | ||||||||||||||||||||||||||||||
| Total other expense, net | (11,603) | 261 | (11,342) | 1,920 | (9,422) | ||||||||||||||||||||||||||||||
| Loss before income tax provision | (278,169) | (53,196) | (331,365) | 1,920 | (329,445) | ||||||||||||||||||||||||||||||
| Income tax provision | (313) | — | (g) | (313) | — | (g) | (313) | ||||||||||||||||||||||||||||
| Net loss from continuing operations | $ | (278,482) | $ | (53,196) | $ | (331,678) | $ | 1,920 | $ | (329,758) | |||||||||||||||||||||||||
| Basic and diluted net loss from continuing operations per common share | $ | (4.37) | $ | (5.20) | $ | (5.17) | |||||||||||||||||||||||||||||
| Basic and diluted weighted average common shares outstanding | 63,758,515 | 63,758,515 | 63,758,515 | ||||||||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
5
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2021
(in thousands, except share and per share amounts)
| Pro Forma Transaction Accounting Adjustments | |||||||||||||||||||||||||||||||||||
| Historical Travere | Less: Discontinued Operations (a) | Notes | Travere Continuing Operations | Add: Other Separation Adjustments | Notes | Pro Forma Travere Continuing Operations | |||||||||||||||||||||||||||||
| Net product sales | $ | 210,776 | $ | (95,654) | $ | 115,122 | $ | — | $ | 115,122 | |||||||||||||||||||||||||
| License and collaboration revenue | 16,714 | — | 16,714 | — | 16,714 | ||||||||||||||||||||||||||||||
| Total revenue | 227,490 | (95,654) | 131,836 | — | 131,836 | ||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of goods sold | 6,784 | (2,966) | 3,818 | — | 3,818 | ||||||||||||||||||||||||||||||
| Research and development | 210,328 | (9,093) | 201,235 | — | 201,235 | ||||||||||||||||||||||||||||||
| Selling, general and administrative | 149,883 | (22,279) | 127,604 | — | 127,604 | ||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 22,260 | (22,260) | — | — | — | ||||||||||||||||||||||||||||||
| Total operating expenses | 389,255 | (56,598) | 332,657 | — | 332,657 | ||||||||||||||||||||||||||||||
| Operating loss | (161,765) | (39,056) | (200,821) | — | (200,821) | ||||||||||||||||||||||||||||||
| Other income (expenses), net: | |||||||||||||||||||||||||||||||||||
| Interest income | 1,993 | — | 1,993 | — | 1,993 | ||||||||||||||||||||||||||||||
| Interest expense | (20,141) | 459 | (19,682) | — | (19,682) | ||||||||||||||||||||||||||||||
| Other income, net | 231 | — | 231 | — | 231 | ||||||||||||||||||||||||||||||
| Total other expense, net | (17,917) | 459 | (17,458) | — | (17,458) | ||||||||||||||||||||||||||||||
| Loss before income tax provision | (179,682) | (38,597) | (218,279) | — | (218,279) | ||||||||||||||||||||||||||||||
| Income tax provision | (409) | — | (g) | (409) | — | (g) | (409) | ||||||||||||||||||||||||||||
| Net loss from continuing operations | $ | (180,091) | $ | (38,597) | $ | (218,688) | $ | — | $ | (218,688) | |||||||||||||||||||||||||
| Basic and diluted net loss from continuing operations per common share | $ | (3.01) | $ | (3.66) | $ | (3.66) | |||||||||||||||||||||||||||||
| Basic and diluted weighted average common shares outstanding | 59,832,287 | 59,832,287 | 59,832,287 | ||||||||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
6
TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2020
(in thousands, except share and per share amounts)
| Pro Forma Transaction Accounting Adjustments | |||||||||||||||||||||||||||||||||||
| Historical Travere | Less: Discontinued Operations (a) | Notes | Travere Continuing Operations | Add: Other Separation Adjustments | Notes | Pro Forma Travere Continuing Operations | |||||||||||||||||||||||||||||
| Net product sales | $ | 198,321 | $ | (89,438) | $ | 108,883 | $ | — | $ | 108,883 | |||||||||||||||||||||||||
| Total revenue | 198,321 | (89,438) | 108,883 | — | 108,883 | ||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of goods sold | 6,126 | (3,054) | 3,072 | — | 3,072 | ||||||||||||||||||||||||||||||
| Research and development | 131,773 | (7,564) | 124,209 | — | 124,209 | ||||||||||||||||||||||||||||||
| Selling, general and administrative | 135,799 | (22,586) | 113,213 | — | 113,213 | ||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 3,655 | (3,655) | — | — | — | ||||||||||||||||||||||||||||||
| Acquired IPR&D expense | 97,131 | — | 97,131 | — | 97,131 | ||||||||||||||||||||||||||||||
| Total operating expenses | 374,484 | (36,859) | 337,625 | — | 337,625 | ||||||||||||||||||||||||||||||
| Operating loss | (176,163) | (52,579) | (228,742) | — | (228,742) | ||||||||||||||||||||||||||||||
| Other income (expenses), net: | |||||||||||||||||||||||||||||||||||
| Interest income | 5,003 | — | 5,003 | — | 5,003 | ||||||||||||||||||||||||||||||
| Interest expense | (19,050) | 380 | (18,670) | — | (18,670) | ||||||||||||||||||||||||||||||
| Other income, net | 1,420 | — | 1,420 | — | 1,420 | ||||||||||||||||||||||||||||||
| Total other expense, net | (12,627) | 380 | (12,247) | — | (12,247) | ||||||||||||||||||||||||||||||
| Loss before income tax provision | (188,790) | (52,199) | (240,989) | — | (240,989) | ||||||||||||||||||||||||||||||
| Income tax benefit | 19,359 | — | (g) | 19,359 | — | (g) | 19,359 | ||||||||||||||||||||||||||||
| Net loss from continuing operations | $ | (169,431) | $ | (52,199) | $ | (221,630) | $ | — | $ | (221,630) | |||||||||||||||||||||||||
| Basic and diluted net loss from continuing operations per common share | $ | (3.56) | $ | (4.66) | $ | (4.66) | |||||||||||||||||||||||||||||
| Basic and diluted weighted average common shares outstanding | 47,539,631 | 47,539,631 | 47,539,631 | ||||||||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
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TRAVERE THERAPEUTICS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The historical financial information as of and for the six months ended June 30, 2023 has been derived from and should be read in conjunction with the historical unaudited consolidated financial statements of Travere, included in Travere’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 and the assumptions outlined in Note 2 below. The historical financial information for the years ended December 31, 2022, 2021, and 2020 has been derived from and should be read in conjunction with the historical audited consolidated financial statements of Travere, included in Travere’s Annual Report on Form 10-K for the years ended December 31, 2022, 2021, and 2020 and the assumptions outlined in Note 2 below.
NOTE 2. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
The following adjustments have been reflected in the unaudited pro forma consolidated financial statements:
(a) The Discontinued Operations column in the unaudited pro forma consolidated financial statements represents the historical financial results directly attributable to the Disposal Transaction in accordance with Financial Accounting Standards Board Accounting Standards Codification 205, "Presentation of Financial Statements" ("ASC 205").
(b) The unaudited pro forma consolidated balance sheet reflects a net cash adjustment equal to $206.2 million which is comprised of (1) $210.0 million cash proceeds at close and (2) $0.4 million cash proceeds for reimbursement from Mirum of prepaid regulatory and research and development fees, less (3) $4.2 million of investment banker fees owed by the Company upon close. Cash proceeds include up to $445.0 million in cash, with $210.0 million paid at closing and up to $235.0 million after closing, upon the achievement of the Milestone Events. None of the contingent consideration has been recorded in the unaudited pro forma consolidated financial statements. The Company will defer recognition of the contingency under ASC 450-30 Gain Contingencies until the Milestone Events are achieved, when all contingencies are resolved and the gain is realized or realizable.
(c) Total transaction costs, excluding investment banker fees, were estimated to be $3.4 million which is comprised of (1) $0.9 million of costs incurred for the six months ended June 30, 2023 captured in Selling, general, and administrative expenses and (2) $2.5 million of unaccrued costs recorded as an accrual in the unaudited pro forma consolidated balance sheet. These costs consist of accounting, financial, and legal advisory fees. No transaction costs were incurred for the years ended December 31, 2022, 2021, or 2020.
(d) The taxes payable adjustment has been made to the unaudited pro forma consolidated balance sheet for the expected income tax payable due as a result of the gain on disposition. The current tax payable on the gain is reduced by losses incurred in the current year, net operating loss carryforwards, and tax credit carryforwards. The Company's deferred tax asset and liability position has not changed because a valuation allowance fully offsets the deferred tax assets both before and after considering the attributes utilized as a result of the gain on disposition. The estimated tax impact is subject to change and the actual impact could differ from the results reflected herein.
(e) Reflects the estimated gain on disposal of approximately $235.1 million, which is reflected as the difference between the sales price and the historical carrying value of the disposal group as of June 30, 2023. The actual amount will be based on balances as of closing and may differ from the information presented. The gain is calculated based on the following:
Amount (in millions) | ||||||||
| Cash proceeds received from Mirum upon closing (b) | $ | 210.0 | ||||||
Add: Reimbursement of prepaid fees from Mirum (b) | 0.4 | |||||||
Less: Carrying value of net liabilities (a) | 28.9 | |||||||
Less: Investment banker fees owed upon closing (b) | (4.2) | |||||||
| Expected net gain on the Disposal Transaction | $ | 235.1 | ||||||
(f) In connection with the Disposal Transaction, the Company entered into the TSA pursuant to which the Company will provide certain services to Mirum with respect to Mirum’s use and operation of the assets purchased for a transitional period. The pro forma adjustment reflects income that can be reasonably estimated as of the filing date and is in the amount of $1.9 million for the year ended December 31, 2022. TSA services provided by the Company are not anticipated to last beyond 12 months post-close.
(g) No income tax adjustment has been made to the unaudited pro forma consolidated statement of operations based on the Company’s historical losses on which no benefit was recorded.
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(h) The adjustment made to Accumulated deficit in the unaudited pro forma consolidated balance sheet consists of the following adjustments:
Amount (in millions) | ||||||||
| Cash proceeds received from Mirum upon closing (b) | $ | 210.0 | ||||||
Add: Reimbursement of prepaid fees from Mirum (b) | 0.4 | |||||||
Less: Estimated transaction costs to be incurred (c) | (2.5) | |||||||
Less: Investment banker fees owed upon closing (b) | (4.2) | |||||||
Less: Estimated income tax payable (d) | (1.1) | |||||||
| Pro forma adjustment to Accumulated deficit | $ | 202.6 | ||||||
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