Osmotica Pharmaceuticals plc Reports Third Quarter 2019 Results
Third quarter 2019 total revenue of
Submitted NDA for RVL-1201 (oxymetazoline hydrochloride ophthalmic solution, 0.1%) for acquired blepharoptosis, or droopy eyelid, to
“We are pleased with the progress we made on many fronts during the third quarter, beginning with the submission of our new drug application (NDA) for RVL-1201 (RVL) in September. We are currently engaged in productive follow-up discussions with the
“We are also in communication with the
Third Quarter 2019 Financial Highlights
- Total revenues were
$65.5 million , compared to$66.3 million in the third quarter of 2018; - Net loss was
$112.7 million , reflecting an impairment charge of$128.1 million , compared to net loss of$3.6 million in the third quarter of 2018; - Adjusted EBITDA1 was
$22.9 million , compared to Adjusted EBITDA of$25.8 million in the third quarter of 2018; and - Cash and cash equivalents were
$98.0 million and debt (net of deferred financing costs) was$268.1 million as ofSeptember 30, 2019 .
1Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is more fully described and reconciled from net loss determined under U.S. generally accepted accounting principles (“GAAP”) in “Presentation of Non-GAAP Measures” and the attached table “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations.”
Third Quarter 2019 Financial Results
Total revenues decreased by
Net product sales decreased by
Selling, general and administrative expenses increased
Research and development expenses decreased by
The Company incurred an impairment of intangible assets charge of
Net loss for the third quarter of 2019 was
Adjusted EBITDA for the third quarter of 2019 was
For a reconciliation of Adjusted EBITDA to net loss (income), the most comparable GAAP financial measure, please see the “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations” table at the end of this press release.
Liquidity
As of
Presentation of Non-GAAP Measures
In addition to the results provided in accordance with GAAP throughout this press release, the Company has presented Adjusted EBITDA, which is a non-GAAP measurement. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for (i) non-operating income or expense, and (ii) the impact of certain non-cash, nonrecurring or other items that are included in net loss and EBITDA that we do not consider indicative of our ongoing operating performance. In particular, Adjusted EBITDA excludes the following from EBITDA: impairment of intangible assets, management fees, IPO expenses, severance expenses, foreign currency translation, legal settlements and share-based compensation expense. We use Adjusted EBITDA for business planning purposes, in assessing our performance and determining the compensation of substantially all of our employees, including our executive officers, and in measuring our performance relative to that of our competitors. We also believe that Adjusted EBITDA provides investors with useful information to understand our operating results and analyze financial and business trends on a period-to-period basis. Adjusted EBITDA has important limitations as an analytical tool, however, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA is not intended to replace, and should not be considered superior to, the presentation of our financial results in accordance with GAAP. Our definition of Adjusted EBITDA may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. Adjusted EBITDA is reconciled from the net loss as determined under GAAP in the attached table “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations.”
Forward Looking Statements
This press release includes statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” The Company’s actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms “believes,” “expects,” “may,” “will,” “should,” “seeks,” “projects,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, financial guidance, growth plan, strategies, trends and other events, particularly relating to sales of current products and the development, approval and introduction of new products,
Conference Call
As previously announced, Osmotica management will host its third quarter 2019 conference call as follows:
Date | Friday, November 15, 2019 |
Time | 8:30 a.m. EST |
Toll free (U.S.) | (866) 672-5029 |
International | (409) 217-8312 |
Webcast (live and replay) | www.osmotica.com, under the “Investor & News” section |
Conference call ID | 8189498 |
The webcast will be archived for 30 days at the aforementioned URL.
About
Osmotica has a late‑stage development pipeline highlighted by two NDA candidates that recently completed Phase III clinical trials: arbaclofen ER for spasticity in multiple sclerosis patients and RVL‑1201 for the treatment of acquired blepharoptosis, or droopy eyelid.
Osmotica has operations in
Investor and Media Relations for
In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com
-Financial tables follow-
Osmotica Pharmaceuticals plc | |||||||||||||||||
GAAP to Non-GAAP Reconciliations | |||||||||||||||||
Adjusted EBITDA (Unaudited) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Net loss | $ | (112,704 | ) | $ | (3,606 | ) | $ | (244,260 | ) | $ | (2,675 | ) | |||||
Interest expense and amortization of debt discount | 4,504 | 5,311 | 13,555 | 15,396 | |||||||||||||
Income tax benefit | (14,623 | ) | (3,872 | ) | (26,824 | ) | (2,898 | ) | |||||||||
Depreciation and amortization expense | 14,614 | 20,457 | 50,605 | 61,323 | |||||||||||||
EBITDA | (108,209 | ) | 18,290 | (206,924 | ) | 71,146 | |||||||||||
Impairment of intangibles | 128,113 | 6,173 | 253,879 | 6,173 | |||||||||||||
Management fees | - | 250 | (43 | ) | 770 | ||||||||||||
IPO expenses | - | 1,038 | - | 1,982 | |||||||||||||
Consulting Fees | - | ||||||||||||||||
Severance expenses | 1,275 | - | 1,638 | 484 | |||||||||||||
FX translation | 363 | - | 575 | - | |||||||||||||
Legal settlements | - | - | 1,002 | 333 | |||||||||||||
Share compensation expense | 1,335 | - | 3,831 | - | |||||||||||||
Adjusted EBITDA | $ | 22,877 | $ | 25,751 | $ | 53,958 | $ | 80,888 | |||||||||
Osmotica Pharmaceuticals plc | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
September 30, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 98,014 | $ | 70,834 | ||||
Trade accounts receivable, net | 33,862 | 56,424 | ||||||
Inventories, net | 27,240 | 24,383 | ||||||
Prepaid expenses and other current assets | 8,186 | 20,723 | ||||||
Total current assets | 167,302 | 172,364 | ||||||
Property, plant and equipment, net | 30,325 | 31,263 | ||||||
Operating lease assets | 5,558 | - | ||||||
Intangibles, net | 189,324 | 490,390 | ||||||
Goodwill | 100,855 | 100,855 | ||||||
Deferred taxes | 198 | - | ||||||
Other non-current assets | 611 | 752 | ||||||
Total assets | $ | 494,173 | $ | 795,624 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 9,905 | $ | 24,870 | ||||
Accrued liabilities | 66,076 | 87,238 | ||||||
Current portion of long-term debt, net of deferred financing costs | 398 | 1,774 | ||||||
Current portion of lease liability | 2,082 | - | ||||||
Current portion of obligation under finance leases | 130 | 119 | ||||||
Total current liabilities | 78,591 | 114,001 | ||||||
Long-term debt, net of non-current deferred financing costs | 267,661 | 266,803 | ||||||
Long-term portion of obligation under finance leases | 68 | 138 | ||||||
Long-term portion of lease liability | 3,677 | - | ||||||
Income taxes payable-long term portion | 2,479 | 2,541 | ||||||
Deferred taxes | - | 28,294 | ||||||
Total liabilities | 352,476 | 411,777 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity | ||||||||
Ordinary shares | 522 | 525 | ||||||
Additional paid in capital | 489,784 | 487,288 | ||||||
Accumulated deficit | (346,380 | ) | (102,120 | ) | ||||
Accumulated other comprehensive loss | (2,229 | ) | (1,846 | ) | ||||
Total shareholders' equity | 141,697 | 383,847 | ||||||
Total liabilities and shareholders' equity | $ | 494,173 | $ | 795,624 | ||||
Osmotica Pharmaceuticals plc | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net product sales | $ | 64,041 | $ | 65,444 | $ | 176,657 | $ | 196,264 | ||||||||
Royalty revenue | 1,325 | 903 | 2,826 | 1,656 | ||||||||||||
Licensing and contract revenue | 95 | (2 | ) | 637 | 85 | |||||||||||
Total revenues | 65,461 | 66,345 | 180,120 | 198,005 | ||||||||||||
Cost of goods sold (inclusive of amortization of intangibles) | 27,312 | 33,356 | 89,160 | 102,495 | ||||||||||||
Gross profit | 38,149 | 32,989 | 90,960 | 95,510 | ||||||||||||
Selling, general and administrative expenses | 24,751 | 17,452 | 71,919 | 51,290 | ||||||||||||
Research and development expenses | 8,285 | 11,965 | 23,410 | 29,105 | ||||||||||||
Impairment of intangibles | 128,113 | 6,173 | 253,879 | 6,173 | ||||||||||||
Total operating expenses | 161,149 | 35,590 | 349,208 | 86,568 | ||||||||||||
Operating income (loss) | (123,000 | ) | (2,601 | ) | (258,248 | ) | 8,942 | |||||||||
Interest expense and amortization of debt discount | 4,504 | 5,311 | 13,555 | 15,396 | ||||||||||||
Other non-operating gain | (177 | ) | (434 | ) | (719 | ) | (881 | ) | ||||||||
Total other non-operating expense | 4,327 | 4,877 | 12,836 | 14,515 | ||||||||||||
Loss before income taxes | (127,327 | ) | (7,478 | ) | (271,084 | ) | (5,573 | ) | ||||||||
Income tax benefit | 14,623 | 3,872 | 26,824 | 2,898 | ||||||||||||
Net loss | $ | (112,704 | ) | $ | (3,606 | ) | $ | (244,260 | ) | $ | (2,675 | ) | ||||
Other comprehensive loss, net | ||||||||||||||||
Change in foreign currency translation | ||||||||||||||||
adjustments | (383 | ) | (148 | ) | (383 | ) | (1,239 | ) | ||||||||
Comprehensive loss | $ | (113,087 | ) | $ | (3,754 | ) | $ | (244,643 | ) | $ | (3,914 | ) | ||||
Loss per share attributable to shareholders | ||||||||||||||||
Basic and Diluted | $ | (2.15 | ) | $ | (0.08 | ) | $ | (4.65 | ) | $ | (0.06 | ) | ||||
Weighted average shares basic and diluted | ||||||||||||||||
Basic and Diluted | 52,477 | 42,862 | 52,505 | 42,862 |
Osmotica Pharmaceuticals plc | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
(in thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (244,260 | ) | $ | (2,675 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 50,605 | 61,323 | ||||||
Share compensation | 3,831 | - | ||||||
Loss on sale of fixed and leased assets | 75 | 13 | ||||||
Impairment of intangibles | 253,879 | 6,173 | ||||||
Deferred income tax benefit | (28,493 | ) | (7,508 | ) | ||||
Bad debt provision | (160 | ) | (1,293 | ) | ||||
Amortization of deferred financing and loan origination fees | 1,000 | 1,261 | ||||||
Change in operating assets and liabilities: | ||||||||
Trade accounts receivable, net | 22,722 | (33,821 | ) | |||||
Inventories, net | (2,857 | ) | (8,647 | ) | ||||
Prepaid expenses and other current assets | 12,536 | 811 | ||||||
Trade accounts payable | (14,964 | ) | (9,063 | ) | ||||
Accrued and other current liabilities | (21,022 | ) | 600 | |||||
Net cash provided by operating activities | 32,892 | 7,174 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from sale of fixed and leased assets | 12 | 10 | ||||||
Payments on disposal of leased assets | (34 | ) | - | |||||
Purchase of property, plant and equipment | (3,042 | ) | (2,998 | ) | ||||
Net cash used in investing activities | (3,064 | ) | (2,988 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Payments to affiliates | - | (2 | ) | |||||
Repurchases of ordinary shares | (1,338 | ) | - | |||||
Payments on finance lease obligations | (97 | ) | (82 | ) | ||||
Proceeds from insurance financing loan | 1,314 | 975 | ||||||
Repayment of insurance financing loan | (2,691 | ) | (484 | ) | ||||
Repayment of debt | - | (6,140 | ) | |||||
Net cash used in financing activities | (2,812 | ) | (5,733 | ) | ||||
Net change in cash and cash equivalents | 27,016 | (1,547 | ) | |||||
Effect on cash of changes in exchange rate | 164 | (993 | ) | |||||
Cash and cash equivalents, beginning of period | 70,834 | 34,743 | ||||||
Cash and cash equivalents, end of period | $ | 98,014 | $ | 32,203 | ||||
Source: Osmotica Holdings US LLC