Novelion Therapeutics Reports Third Quarter 2017 Financial Results and Announces Leadership Change
- Company Reiterates FY 2017 Guidance for Total Net Revenues of
- Company Announces Leadership Change and Search for Chief Executive Officer
To lead the company until a permanent CEO is appointed, the Board announced the creation of an interim
Third Quarter 2017 Highlights & Business Update
- JUXTAPID: Novelion reported net revenues of JUXTAPID of
$15.2 millionin the third quarter of 2017, $10.3 million, or 68%, of which were from prescriptions written in the U.S.
- MYALEPT: Novelion reported net revenues of MYALEPT of
$13.5 millionin the third quarter of 2017. $11.3 million, or 84%, of these revenues were from prescriptions written in the U.S.
- Novelion reported total net revenues of
$28.7 millionin the third quarter of 2017.
- The Company is continuing its efforts to stabilize JUXTAPID in the
U.S., and continues to make progress with the launch in Japan.
- Novelion ended the third quarter of 2017 with
$70.5 millionin unrestricted cash, compared with $83.3 millionat the end of the second quarter of 2017.
- Novelion's marketing authorization application for metreleptin was accepted by the
European Medicines Agencyin January of 2017. In October 2017, the company submitted its responses to the Day 120 Questions, and based on current timelines, continues to anticipate EMA approval in the first half of 2018.
- Novelion appointed
Jeffrey Hackmanas Executive Vice President and Chief Operating Officer, effective November 1, 2017. Mr. Hackmanwill lead the company's commercial efforts, business development, manufacturing and supply chain initiatives. Mr. Hackmanwas most recently senior vice president, head of the US Internal Medicine and Oncology franchises for Shire. In this role, Mr. Hackmanwas a member of the US commercial leadership team and was responsible for sales, marketing, business insights and analytics for eight licensed products within Shire's US rare disease portfolio.
- Novelion appointed
Murray Stewart, M.D. as Executive Vice President, Head of R&D, effective November 27, 2017. Dr. Stewartwill lead the company's clinical development activities, provide strategic regulatory guidance for the pipeline and commercial product initiatives, and maintain oversight of global medical affairs, publications and registry activities. Dr. Stewartwill join Novelion from GlaxoSmithKline (GSK) where he is currently chief medical officer with global responsibility for patient well-being across the vaccines, pharmaceutical and consumer business units.
- Novelion appointed
Suzanne Bruhn, Ph.D. to its board of directors, effective October 1, 2017. Dr. Bruhnis president and chief executive officer of Proclara Biosciences, Inc.Prior to joining Proclara, Dr. Bruhnserved as president and chief executive officer of Promedior, Inc.She also served as a member of the board of directors of Raptor Pharmaceuticalsfrom 2011 until it was acquired by Horizon Pharma in 2016. Previously, Dr. Bruhnserved as senior vice president, strategic planning and program management at Shire from 1998 until 2012.
2017 Financial Guidance
The Company reiterated its previously stated net revenues financial guidance for full year 2017 and expects:
- Total net revenues between
$135 millionand $145 million;
- JUXTAPID net revenues between
$70 millionand $75 million; and
- MYALEPT net revenues between
$65 millionand $70 million.
Third Quarter 2017 Financial Results
GAAP total net revenues for the third quarter of 2017 were
GAAP total operating expenses for the third quarter of 2017 were
On a pro forma basis, during the third quarter of 2017, SG&A expenses were
On a pro forma basis, during the third quarter of 2017, R&D expenses were
GAAP net loss in the third quarter of 2017 was
On a pro forma basis, net loss in the third quarter of 2017 was
As part of the Merger between QLT and Aegerion, the Company acquired inventory, a portion of which is classified as non-current based on its forecasted consumption exceeding one year. An excess and obsolescence analysis is run to determine the need to adjust inventory
carrying values. In the third quarter, that analysis led to a write down of inventory of approximately
First Nine Months of 2017 Financial Results
GAAP total net revenues for the first nine months of 2017 were
GAAP total operating expenses for the first nine months of 2017 were
On a pro forma basis, for the first nine months of 2017, SG&A expenses were
GAAP net loss for the first nine months of 2017 was
On a pro forma basis, net loss for the first nine months of 2017 was
The non-GAAP results in this press release, including, without limitation, non-GAAP net revenues, 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
expectations about 2017 revenues, improving growth and shareholder value, stabilizing the Company's base commercial business, adjusting expenses to build long-term value, planned regulatory filings, approvals and activities, maximizing the value of metreleptin and potential additional indications, drug development, marketing authorizations and label expansions, improving product utilization, 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, 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 risk that we may not be able to raise sufficient capital to pursue the development of metreleptin in additional indications; the risk that we may not be able to re-structure the Aegerion outstanding convertible debt on terms that are acceptable to us; 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 an appropriate subject of reliance 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 Annual Report on Form 10-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,
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.
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.
Condensed Consolidated Statements of Operations
|Three Months Ended ||
Nine Months Ended |
|Cost of product sales||29,505||—||60,227||—|
|Selling, general and administrative||21,395||3,162||72,360||13,572|
|Research and development||17,112||2,855||37,236||8,774|
|Total operating expenses||38,563||6,017||112,137||22,346|
|Loss from operations||(39,399||)||(6,017||)||(72,834||)||(22,346||)|
|Interest (expense) income, net||(9,897||)||110||(28,722||)||240|
|Fair value loss on investment||—||—||—||(10,704||)|
|Other income (expense), net||49||(144||)||176||(244||)|
|Loss before provision for income taxes||(49,247||)||(6,051||)||(101,380||)||(33,054||)|
|(Provision for) recovery of income taxes||(497||)||115||(762||)||104|
|Net loss per common share—basic and diluted||$||(2.67||)||$||(0.56||)||$||(5.49||)||$||(3.12||)|
|Weighted-average shares outstanding—basic and diluted||18,648||10,565||18,599||10,565|
Condensed Consolidated Balance Sheets
|Cash and cash equivalents||$||70,501||$||108,927|
|Accounts receivable, net||14,516||9,339|
|Insurance proceeds receivable||22,000||22,000|
|Prepaid expenses and other current assets||7,641||9,762|
|Property and equipment, net||3,450||4,159|
|Intangible assets, net||231,546||250,324|
|Accounts payable and accrued liabilities||$||56,676||$||54,789|
|Provision for legal settlement||63,050||64,010|
|Convertible Notes, net||249,789||225,584|
|Total stockholders' equity||38,267||135,787|
|Total liabilities and stockholders' equity||$||408,321||$||480,782|
Reconciliation of GAAP to Non-GAAP Financial Information
|Three Months Ended ||Nine Months Ended |
|Net loss reconciliation:|
|GAAP net loss||$||(49,744||)||$||(5,936||)||$||(102,142||)||$||(32,950||)|
|Amortization of acquired intangible assets||6,274||—||18,778||—|
|Amortization of debt discount||8,399||—||24,205||—|
|Inventory fair value step-up||17,472||—||26,500||—|
|2016 Aegerion non-GAAP net loss (Note 1)||—||(8,597||)||—||(79,022||)|
|Restructuring charge related to acquisition||56||—||2,541||—|
|Non-GAAP net loss||$||(16,617||)||$||(14,316||)||$||(26,699||)||$||(111,719||)|
|GAAP net loss per common share - basic and diluted||$||(2.67||)||$||(0.56||)||$||(5.49||)||$||(3.12||)|
|Non-GAAP net loss per common share - basic||$||(0.89||)||$||(1.36||)||$||(1.44||)||$||(10.57||)|
|GAAP and Non-GAAP weighted-average common shares outstanding — basic||18,648||10,565||18,599||10,565|
|Net revenues reconciliation:|
|GAAP net revenues||$||28,669||$||—||$||99,530||$||—|
|2016 Aegerion revenues (Note 1)||—||35,387||—||115,633|
|Non-GAAP net revenues||$||28,669||$||35,387||$||99,530||$||115,633|
|Cost of product sales reconciliation:|
|GAAP cost of product sales||$||29,505||$||—||$||60,227||$||—|
|Amortization of acquired intangible assets||(6,274||)||—||(18,778||)||—|
|Inventory fair value step-up||(16,989||)||—||(25,195||)||—|
|Aegerion non-GAAP cost of product sales (Note 1)||—||6,718||—||33,533|
|Non-GAAP cost of product sales||$||6,242||$||6,718||$||16,254||$||33,533|
|Selling, general and administrative reconciliation:|
|GAAP selling, general and administrative||$||21,395||$||3,162||$||72,360||$||13,572|
|Inventory fair value step-up||(483||)||—||(1,305||)||—|
|Aegerion non-GAAP SG&A (Note 1)||—||25,177||—||98,117|
|Non-GAAP selling, general and administrative||$||20,202||$||28,202||$||68,241||$||111,530|
|Research and development reconciliation:|
|GAAP research and development||$||17,112||$||2,855||$||37,236||$||8,774|
|Aegerion non-GAAP R&D (Note 1)||—||9,910||—||29,173|
|Non-GAAP research and development||$||16,896||$||12,685||$||36,631||$||37,853|
|Note 1 - Includes financial information from pre-merger Aegerion for the three and nine months ended |
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