Novelion Therapeutics Reports Preliminary Fourth Quarter & Full Year 2016 Financial Results
Company Reiterates FY 2017 Total Net Product Sales Expected to be Between
Global Expansion Plans for Metreleptin Opportunity Underway
"The transformative steps we took in 2016 to realign costs and refocus and intensify our commercial efforts have set us on a strong growth trajectory," said
2016 Unaudited Financial Results Highlights & Business Update
- MYALEPT® (metreleptin): On a GAAP basis, Novelion reported net product sales of MYALEPT of
$5.0 millionin the fourth quarter and full year of 2016. Pro forma net product sales of MYALEPT were $15.2 millionin the fourth quarter and $51.6 millionfor the full year of 2016; $11.2 million, or 74 percent, of such sales in the fourth quarter of 2016 were from prescriptions written in the U.Sand $42.4 million, or 82 percent of such sales for the full year of 2016 were from prescriptions written in the U.S.As of December 31, 2016, there were approximately 125 active commercial patients on MYALEPT therapy globally, approximately 98 of whom are U.S.patients. Active patient numbers used in this press release are based upon internal estimates and criteria.
- JUXTAPID® (lomitapide): On a GAAP basis, Novelion reported net product sales of JUXTAPID of
$8.6 millionin the fourth quarter and full year of 2016. Pro forma net product sales of JUXTAPID were $22.4 millionin the fourth quarter of 2016 and $101.6 millionfor the full year of 2016; $16.9 million, or 75 percent, of such sales in the fourth quarter of 2016 were from prescriptions written in the U.Sand $79.6 million, or 78 percent of such sales for the full year of 2016 were from prescriptions written in the U.S.As of December 31, 2016, there were approximately 340 active commercial patients on JUXTAPID therapy globally, approximately 232 of whom are U.S.patients.
- On a GAAP basis, Novelion reported total net product sales of
$13.6 millionin the fourth quarter and for the full year of 2016. Full-year pro forma total net product sales were $153.2 million.
- Novelion ended 2016 with approximately
$109 millionin unrestricted cash.
March 7, 2017, Novelion announced that the U.S.Patent Trial and Appeal Board ("PTAB") issued a written decision in an Inter Partes Review proceeding affirming the patentability of all claims on U.S. 7,932,268 and U.S. 8,618,135 lomitapide dosage regimen patents.
December 2016, Novelion's subsidiary submitted a marketing authorization application ("MAA") to the European Medicines Agency("EMA") seeking approval for metreleptin as replacement therapy to treat complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy ("GL") and in a subset of patients with partial lipodystrophy ("PL"). In January 2017, Novelion announced that the EMA accepted the MAA for review. The Company, through its subsidiary, will seek to market metreleptin in the EU under the tradename MYALEPTA®. If approved, metreleptin would be the first medication available in the EU to treat GL and PL. We anticipate a potential decision by the first quarter of 2018.
December 2016, Novelion's subsidiary launched JUXTAPID in Japan. Japanrepresents a unique market opportunity for JUXTAPID, with an identified population of more than 160 patients with homozygous familial hypercholesterolemia (HoFH) and favorable pricing and reimbursement. Novelion anticipates annual peak sales of approximately $30 millionin Japan.
- Also in
December 2016, Novelion's subsidiary entered into a licensing agreement with Amryt Pharma ("Amryt") for the exclusive rights to LOJUXTA® (lomitapide) hard capsules in the European Economic Area, Switzerland, Turkey, and certain Middle Eastern and North African countries, including Israel. Amryt will pay Novelion sales-related payments and royalties on product sales in the licensed territories, and will also be responsible for ongoing regulatory and post-marketing obligations and commitments in support of the brand.
- Novelion intends to file its Annual Report on Form 10-K for 2016 no later than
March 30, 2017. As noted in the NT10K filed by Novelion on March 13, 2017, additional time is required in order for Novelion to complete the valuation, purchase price allocation, and audit of the acquisition of Aegerion Pharmaceuticalsthat closed on November 29, 2016.
subsidiary is planning to submit a supplemental biologics licensing application for MYALEPT to treat a subset of PL patients in the
U.S.in the first half of 2017.
- Novelion has undertaken an evaluation process to prioritize and pursue potential life cycle management and research and development opportunities for metreleptin and zuretinol. The Company plans to provide a full update on these plans mid-year.
2017 Financial Guidance
The Company reiterated the following net product sales financial guidance for full year 2017:
- Total net products sales of between
$155 millionand $165 million;
- MYALEPT net product sales of between
$75 millionand $80 million; and
- JUXTAPID net product sales of between
$80 millionand $85 million.
The Company intends to provide full year 2017 operating expense guidance mid-year, upon conclusion of its ongoing R&D program evaluation.
Unaudited Fourth Quarter and Year End 2016 Financial Results
GAAP total net product sales for the fourth quarter of 2016 were
Pro forma total net product sales for the fourth quarter of 2016, adjusted to include total net product sales of MYALEPT and JUXTAPID from
GAAP total operating expenses for the fourth quarter
of 2016 were
During the fourth quarter of 2016, SG&A expenses on a pro forma basis were
GAAP net loss from continuing operations in the fourth
quarter of 2016 was
Net loss from continuing operations on a pro forma basis in the fourth quarter of 2016 was
GAAP total net product sales for the year ended
For the year ended
GAAP total operating expenses for the year ended
For the year ended
GAAP net loss from continuing operations in the year ended
Pro forma net loss from continuing operations in the year ended
Conference Call Details
Novelion will hold a conference call to discuss its financial results, business highlights and outlook today,
To listen to the conference call, dial (866) 516-3002; international callers dial (760) 298-5082. In addition, the presentation will be webcast live, and may be accessed for up to 90 days following the call, by visiting the "Investors" section of Novelion's website, www.novelion.com. An accompanying slide presentation also can be accessed via the "Investors" section of the website.
The non-GAAP results in this press release, including, without limitation, non-GAAP net product sales, non-GAAP operating expenses, non-GAAP R&D expenses and non-GAAP SG&A expenses and non-GAAP net loss, are provided as a complement to results provided in accordance with GAAP because management believes, when considered together with the GAAP information, these non-GAAP financial measures help indicate underlying trends in the Company's business, are important in comparing current results with prior period results and provide additional information regarding the Company's financial performance. In particular, management believes that the pro-forma financial information facilitates the evaluation of the impact of Novelion's acquisition of Aegerion on the business and performance of the Company. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, and to manage the Company's business and evaluate its performance. The non-GAAP financial measures have no standardized meaning under GAAP and therefore may not be comparable to similar measures presented by other companies. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, the financial measures prepared and presented in accordance with GAAP and should be reviewed in conjunction with the relevant GAAP financial measures. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.
Certain statements in this press release constitute "forward-looking statements" of Novelion within the meaning of applicable laws and regulations and constitute
"forward-looking information" within the meaning of applicable Canadian securities laws, including statements regarding expectations such as net product sales, planned regulatory filings and activities, drug development, marketing authorizations and label expansions, as well as long-term growth prospects. Forward-looking statements are based on estimates and assumptions made by Novelion in light of current conditions and expected future developments, as well as other factors that Novelion believes are appropriate in the circumstances, including but not limited to, our financial position and execution of our business strategy, post-acquisition synergies, resolution of litigation and investigations, receipt of regulatory approvals, and product competition, market acceptance, sales, pricing, reimbursement and side effects. These forward-looking statements are neither promises nor
guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the possibility that the anticipated benefits and synergies from Novelion's acquisition of Aegerion cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Aegerion and Novelion operations will be greater than expected; the risk that market acceptance of JUXTAPID and MYALEPT in the
This press release also contains "forward-looking information" that constitutes "financial outlooks" within the meaning of applicable Canadian securities laws. This information is provided to give investors general guidance on management's current expectations of certain factors affecting our business, including our financial results. Given the uncertainties, assumptions and risk factors associated with this type of information, including those described above, investors are cautioned that the information may not be appropriate for other purposes.
For additional disclosure regarding these and other risks we face, see the disclosure contained in the "Risk Factors" section of Novelion's Current Report on Form 8-K filed on
Investors and others should note that we
communicate with our investors and the public using our company website www.novelion.com, including, but not limited to, company disclosures, investor presentations and FAQs,
MYALEPT® (metreleptin) for injection is a leptin analog indicated as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy. LIMITATIONS OF USE: The safety and effectiveness of MYALEPT for the treatment of complications of partial lipodystrophy or for the treatment of liver disease, including nonalcoholic steatohepatitis (NASH), have not been established.
Anti-metreleptin antibodies with neutralizing activity have been identified in patients treated with MYALEPT. T-cell lymphoma has been reported in patients with acquired generalized lipodystrophy, both treated and not treated with MYALEPT. For more detailed information, please see additional Important Safety Information and the Prescribing Information for MYALEPT.
JUXTAPID® (lomitapide) capsules is a microsomal triglyceride transfer protein inhibitor indicated as an adjunct to a low-fat diet and other lipid-lowering treatments, including low-density lipoprotein (LDL) apheresis where available, to reduce LDL cholesterol, total cholesterol, apolipoprotein B, and non-high-density lipoprotein cholesterol in patients with homozygous familial hypercholesterolemia (HoFH). LIMITATIONS OF USE: The safety and effectiveness of JUXTAPID have not been established in patients with hypercholesterolemia who do not have HoFH, including those with heterozygous familial hypercholesterolemia (HeFH). The effect of JUXTAPID on cardiovascular morbidity and mortality has not been determined.
JUXTAPID can cause elevations in transaminases, as well as increases in hepatic fat, with or without concomitant increases in transaminases. Because of the risk of hepatotoxicity, JUXTAPID is available only through a restricted distribution program called the JUXTAPID REMS PROGRAM. For more detailed information, please see additional Important Safety Information and the Prescribing Information for JUXTAPID.
|Condensed Consolidated Statements of Operations|
|Three Months Ended December 31,||Twelve Months Ended |
|Net product sales||$||13,574||$||-||$||13,574||$||-|
|Cost of product sales||7,690||-||7,690||-|
|Selling, general and administrative||16,370||1,775||29,941||16,222|
|Research and development||6,024||2,036||14,800||9,790|
|Total operating expenses||22,394||3,811||44,741||23,345|
|Loss from operations||(16,510||)||(3,811||)||(38,857||)||(23,345||)|
|Interest income (expense), net||(3,199||)||42||(2,959||)||277|
|Fair value gain (loss) on investment||-||(10,740||)|
|Other income, net||8||94||(201||)||81|
|Loss from continuing operations before provision for income taxes||(19,701||)||(3,675||)||(52,757||)||(22,987||)|
|Provision for income taxes||(419||)||(5||)||(313||)||(22||)|
|Loss from continuing operations||(20,120||)||(3,680||)||(53,070||)||(23,009||)|
|Loss from discontinued operations, net of income taxes||-||-||(2||)||-|
|Basic and diluted net loss per common share:|
|Net loss per common share||$||(1.50||)||$||(0.35||)||$||(4.70||)||$||(2.21||)|
|Weighted-average shares outstanding - basic and diluted||13,423||10,566||11,284||10,434|
|Condensed Consolidated Balance Sheet|
|Cash and cash equivalents||$||108,927||$||141,824|
|Accounts receivable, net of allowance for doubtful accounts||9,339||287|
|Prepaid expenses and other current assets||31,468||625|
|Property and equipment, net||4,158||430|
|Intangible assets and goodwill, net||255,366||-|
|Accounts receivable - non -current, net of allowance for doubtful accounts||-||2,000|
|Accounts payable and accrued liabilities||$||77,592||$||3,483|
|Contingent litigation accrual||40,635||—|
|Uncertain tax position liabilities||—||342|
|Other noncurrent liabilities||917|
|Total stockholders' equity||135,856||141,341|
|Total liabilities and stockholders' equity||$||480,584||$||145,166|
|Reconciliation of GAAP to Non-GAAP Financial Information|
|Three Months Ended December 31,||Twelve Months Ended |
|Net loss reconciliation:|
|GAAP net loss||$||(20,120||)||$||(3,680||)||$||(53,072||)||$||(23,009||)|
|Stock based compensation||500||—||673||2,330|
|Amortization of acquired intangible assets||2,134||—||2,134||—|
|Amortization of debt discount||3,253||—||3,253||—|
|Inventory fair value step-up in cost of product sales||742||—||742||—|
|Aegerion non-GAAP net loss (Notes 1, 2)||(9,778||)||(20,158||)||(90,763||)||(6,681||)|
|Restructuring charge related to acquisition||180||—||180||—|
|Non-GAAP net income/(loss)||$||(23,089||)||$||(23,838||)||$||(136,853||)||$||(27,360||)|
|GAAP net loss per common share - basic and diluted||$||(1.50||)||$||(0.35||)||$||(4.70||)||$||(2.21||)|
|Non-GAAP net income/(loss) per common share - basic||$||(1.72||)||$||(2.26||)||$||(12.13||)||$||(2.62||)|
|GAAP and Non-GAAP weighted-average common shares outstanding — basic||13,423||10,566||11,284||10,434|
|Net product sales reconciliation:|
|GAAP net product sales||$||13,574||$||—||$||13,574||$||—|
|Aegerion net product sales (Note 2)||24,037||49,003||139,671||239,887|
|Non-GAAP net product sales||$||37,611||$||49,003||$||153,245||$||239,887|
|Cost of product sales reconciliation:|
|GAAP cost of product sales||$||7,690||$||—||$||7,690||$||—|
|Amortization of acquired intangible assets||(2,134||)||—||(2,134||)||—|
|Inventory fair value step-up in cost of product sales||(742||)||—||(742||)||—|
|Aegerion non-GAAP cost of product sales (Note 2)||1,360||6,621||33,417||29,740|
|Non-GAAP cost of product sales||$||6,174||$||6,621||$||38,231||$||29,740|
|Selling, general and administrative reconciliation:|
|GAAP selling, general and administrative||$||16,370||$||1,775||$||29,941||$||16,222|
|Stock based compensation||(482||)||—||(586||)||(1,076||)|
|Aegerion non-GAAP SG&A (Note 2)||19,155||49,472||149,954||167,902|
|Restructuring charge related to acquisition||(180||)||—||(180||)||—|
|Non-GAAP selling, general and administrative||$||34,863||$||51,247||$||179,129||$||183,048|
|Research and development reconciliation:|
|GAAP research and development||$||6,024||$||2,036||$||14,800||$||9,790|
|Stock based compensation||(18||)||—||(87||)||(1,254||)|
|Aegerion non-GAAP R&D (Note 2)||8,244||10,442||37,417||40,846|
|Restructuring charge related to acquisition||—||—||—|
|Non-GAAP research and development||$||14,250||$||12,478||$||52,130||$||49,382|
|Note 1 - Excludes stock based compensation, amortization of acquired intangible assets, amortization of debt discount, and inventory fair value step-up|
|Note 2 - Includes net loss/expenses from Aegerion:|
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Amanda Murphy, Director, Investor Relations & Corporate Communications Novelion Therapeutics857-242-5024 email@example.com
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