Total revenues of $24.5 million for the year
Significant improvement in EBITDA for the year
Earnings per share of $0.05 for 2016
Strengthened balance sheet vs. 2015
Positive cash inflow from operating activities in Q4
Global expansion of the Natesto® franchise successfully initiated
Acerus Pharmaceuticals Corporation (TSX:ASP) today reported its
financial results for the three and twelve-month period ended December
31, 2016. Unless otherwise noted, all amounts are in U.S. dollars.
”Despite the introduction of an Estrace® generic, Acerus
managed to deliver strong financial results for the year and
significantly strengthened its balance sheet," said Tom Rossi, President
and Chief Executive Officer. "We are very excited about the new Natesto®
partners we have brought on board in both the US and South Korea and
look forward to expanding our presence in other countries in the near
future. With the addition of Gynoflor™, we have also bolstered our
product portfolio in Women’s Health and actively continue to pursue high
quality opportunities that will help build our Canadian business.”
Financial Results for the Three and Twelve Months
Ended December 31, 2016
Revenue for the fourth quarter 2016 totalled $1.8 million versus $8.1
million for fourth quarter in 2015. Revenues for the year ended December
31, 2016 and 2015 were $24.5 million and $16.9 million respectively, up
45%. The increase in 2016 revenue is mainly driven by the accelerated
recognition of the upfront fees received under the previous Natesto®
licensing agreement from the fourth quarter 2015 to the end of the
second quarter 2016. On a Canadian dollar basis, product sales of Estrace®
in the fourth quarter 2016 increased by 11 percent over the third
quarter 2016 but decreased by 27 percent over fourth quarter 2015 due to
a third party generic obtaining public reimbursement across major
provinces in July 2016. On a year over year basis, Estrace®
product sales declined by 10 percent.
Research and development ("R&D") expenses for the three and twelve
months ended December 31, 2016 were $0.4 million and $1.6 million,
respectively, compared to R&D expenses for the three and twelve months
ended December 31, 2015 of $0.7 million and $2.9 million, respectively.
The lower expenses in the fourth quarter and fiscal 2016 reflect a
decrease in product development, professional fees and clinical trial
spending. Selling, general and administrative expenses (“SG&A”) were
$1.6 million and $5.5 million for the three and twelve months ended
December 31, 2016. This compares to $1.3 million and $5.8 million for
the three and twelve month periods in 2015 respectively. These results
demonstrate continued tight control on expenses to help fund incremental
commercial spending related to the Canadian launch of Natesto®.
Earnings before interest, tax, depreciation and amortization (“EBITDA”)
(see “Non-IFRS Financial Measures” below) for the three and twelve
months ended December 31, 2016 was an income of $0.2 million and a loss
of $2.6 million respectively, compared to a loss of $13.7 million and a
loss of $12.3 million for the same prior year periods. Adjusted EBITDA
(see “Non-IFRS Financial Measures” below) for the three and twelve
months ended December 31, 2016 was a loss of $0.5 million and a loss of
$0.6 million compared to a loss of less than $0.1 million and a loss of
$0.9 million in the same prior year periods.
On December 31, 2016, the Company had current assets of $14.4 million
and current liabilities of $8.5 million. The Company had a cash balance
of $5.2 million at December 31, 2016, which was a $0.1 million increase
from third quarter 2016.
The remaining $4.0 million of the Aytu upfront payment was received in
January 2017. The Company used these funds to extinguish its outstanding
long-term debt with an affiliate of MidCap Financial LLC.
Basic and diluted earnings per share for the three and twelve months
ended December 31, 2016 were $0.00 and $0.05.
In January 2016, Natesto® was approved by Health Canada for
commercial sale in Canada with a convenient twice-daily starting dose
and it became commercially available in Canada in September 2016. Acerus
markets Natesto® through a dedicated sales force to a select
group of physicians in the major Canadian provinces. Early prescription
results are very encouraging and feedback from healthcare professionals
has been overwhelmingly positive.
On June 30, 2016, Acerus transitioned the U.S. commercialization rights
for NATESTO® to Aytu BioScience. Field promotional activities
began in July 2016 and prescription trends in the U.S. remain positive
with strong month over month growth.
In September 2016, the Corporation initiated an open-label study in 100
hypogonadal males in 10 Canadian centers. The study will assess a
modified titration methodology, which is simplified and more in line
with Canadian Men’s Health Foundation Multidisciplinary Guidelines as
endorsed by both the Canadian Urological Association and the Canadian
Society of Endocrinology and Metabolism. The study will also capture
information on the change in symptoms from baseline and patient
preference, for patients having prior experience on testosterone
replacement therapy medication. The study is currently expected to
report out results in the third quarter of 2017.
On December 15, 2016, we granted exclusives rights to market Natesto®
in South Korea to Hyundai Pharm Co., LTD. (“Hyundai”), a South Korean
pharmaceutical company. Under the terms of the license, development and
supply agreement, Acerus received a non-refundable upfront fee in
January 2017. Additionally, the Company is eligible to receive another
milestone payment upon regulatory approval of the product in South
Korea, as well as a transfer price for supplying the product.
Additionally, the Corporation is pursuing commercial partnerships for
Natesto® globally in other jurisdictions.
On November 16, 2015, Health Canada granted a Notice of Compliance (NOC)
for a third party generic version of Estrace®, which obtained
public reimbursement across major provinces as of July 2016 and is
commercially available in Canada. Estrace® has been available
on the Canadian market for approximately 40 years and generated net
sales of CDN$9.0 million in 2016, representing a 10% decline from 2015
despite the entrance of a generic competitor. The Company is closely
monitoring the situation and is implementing initiatives which can
potentially minimize further erosion of sales going forward.
On February 28, 2017, the Corporation submitted a New Drug Submission
(“NDS”) to Health Canada to obtain marketing approval for Gynoflor™ in
Canada. Currently, there are no estriol + lactobacilli products approved
on the Canadian market.
Gynoflor™ is an ultra-low dose estrogen (estriol) and probiotic
(Lactobacillus acidophilus) combination vaginal tablet used for the
treatment of symptoms of vaginal atrophy, for the restoration of vaginal
flora following the use of anti-infectives and for the treatment of
certain vaginal infections.
Gynoflor™ is approved in 41 countries across Europe, Asia-Pacific, the
Middle East, Africa and South America, and it is estimated that up to
32.7 million women worldwide have been treated with the product to date.
Update on Litigation Initiated by Mr. Eugene Melnyk
In April 2016, we were served with a statement of claim filed in the
Ontario Superior Court of Justice by Mr. Eugene Melnyk against the
Company, as well as its Chairman and President & Chief Executive
Officer. On December 21, 2016, the Honourable Mr.
Justice Wilton-Siegel of the Ontario Superior Court of Justice heard a
motion brought by Mr. Eugene Melnyk for leave to commence a derivative
action in the name of the Company against certain of the Company’s
directors and officers. The motion was dismissed by Mr. Justice
Wilton-Siegel with written reasons to follow. On February 22, 2017,
Justice Wilton-Siegel issued his written reasons dismissing Mr. Melnyk's
claim with costs.
The above information is in summary form and readers are encouraged to
consult the documents noted below for further details at the links
indicated or on SEDAR at www.sedar.com.
Management Discussion & Analysis (MD&A)
Shareholders are reminded of the conference call to discuss the
company’s fourth quarter and year end 2016 results to be held on
Wednesday, March 8, 2017 at 8:30 a.m. Eastern Time. To access the call
live, please dial 416-340-2216 or 1-866-225-2055. Listeners are
encouraged to dial in 10 minutes before the call begins to avoid delays.
A replay of the conference call will be available until 11:59 p.m.
Eastern Time on Thursday, March 16, 2017 by dialing 905-694-9451 or
1-800-408-3053, using access code: 1212516#.
Acerus Pharmaceuticals Corporation is a fully-integrated, Canadian
specialty pharmaceutical company engaged in the development,
manufacture, marketing and distribution of innovative, branded products
in Men’s and Women’s Health. Acerus’ shares trade on TSX under the
symbol ASP. For more information, visit www.aceruspharma.com
and follow us on Twitter
Non-IFRS Financial Measures
The non-IFRS measures included in this press release are not recognized
measures under IFRS and do not have a standardized meaning prescribed by
IFRS and may not be comparable to similar measures presented by other
issuers. When used, these measures are defined in such terms as to allow
the reconciliation to the closest IFRS measure. These measures are
provided as additional information to complement those IFRS measures by
providing further understanding of our results of operations from our
perspective. Accordingly, they should not be considered in isolation nor
as a substitute for analysis of our financial information reported under
IFRS. Despite the importance of these measures to management in goal
setting and performance measurement, we stress that these are non-IFRS
measures that may have limits in their usefulness to investors.
We use non-IFRS measures, such as EBITDA and Adjusted EBITDA to provide
investors with a supplemental measure of our operating performance and
thus highlight trends in our core business that may not otherwise be
apparent when relying solely on IFRS financial measures. We also believe
that securities analysts, investors and other interested parties
frequently use non-IFRS measures in the valuation of issuers. We also
use non-IFRS measures in order to facilitate operating performance
comparisons from period to period, prepare annual operating budgets, and
to assess our ability to meet our future debt service, capital
expenditure and working capital requirements.
The definition and reconciliation of EBITDA and Adjusted EBITDA used and
presented by the Company to the most directly comparable IFRS measures
refer to the section “Non-IFRS Financial Measures” in our 2016 Annual
MD&A available on SEDAR at www.sedar.com.
Notice Regarding Forward-Looking Statements
Information in this press release that is not current or historical
factual information may constitute forward looking information within
the meaning of securities laws. Implicit in this information are
assumptions regarding our future operational results. These assumptions,
although considered reasonable by the company at the time of
preparation, may prove to be incorrect. Readers are cautioned that
actual performance of the company is subject to a number of risks and
uncertainties, including with respect to the ability of Acerus to obtain
regulatory approval for GYNOFLOR™, and could differ materially from what
is currently expected as set out above. For more exhaustive information
on these risks and uncertainties you should refer to our annual
information form dated March 7, 2017 which is available at www.sedar.com.
Forward-looking information contained in this press release is based on
our current estimates, expectations and projections, which we believe
are reasonable as of the current date. You should not place undue
importance on forward-looking information and should not rely upon this
information as of any other date. While we may elect to, we are under no
obligation and do not undertake to update this information at any
particular time, whether as a result of new information, future events
or otherwise, except as required by applicable securities law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170308005402/en/
Source: Acerus Pharmaceuticals Corporation