On May 10, 2021 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three months ended March 31, 2021 (Press release, Eagle Pharmaceuticals, MAY 10, 2021, View Source [SID1234579553]).
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Business and Recent Highlights:
Completed the last study required by FDA for the Company’s vasopressin product and expect to have the results shortly. Eagle plans to respond to the CRL issued for its first-to-file Abbreviated New Drug Applicable ("ANDA") for vasopressin in full by mid-year. The Company’s patent trial against Endo Par Innovation Company, LLC was postponed and is now scheduled to begin on July 7, 2021. The Company believes it will have first-to-file 180 day exclusivity for vasopressin;
Approval of TREAKISYM (bendamustine) RTD formulation, in combination with rituximab for treatment of relapsed or refractory diffuse large B-cell lymphoma ("r/r DLBCL") received from the Pharmaceuticals and Medical Devices Agency ("PMDA") in Japan. This represents a meaningful extension of Eagle’s bendamustine franchise and is expected to significantly increase the market opportunity;
Filing of TREAKISYM RI (50ml) liquid formulation with the PMDA in Japan. Eagle expects approximately $20-$25 million from combined royalty and milestone revenue in 2022 for TREAKISYM (bendamustine) RTD and RI formulations;
Appointed former FDA Official and Public Health Expert Dr. Luciana Borio to its Board of Directors; and
In active discussions for several promising in-licensing and acquisition candidates that the Company believes will strengthen its portfolio and pipeline going forward.
Financial Highlights
First Quarter 2021
Total revenue for Q1 2021 was $41.2 million, compared to $46.0 million in Q1 2020, primarily reflecting decreased product sales of RYANODEX and royalty revenue of BENDEKA.
Q1 2021 net loss was $0.4 million, or $0.03 per basic and diluted share, compared to net loss of $2.9 million, or $0.21 per basic and diluted share in Q1 2020.
Q1 2021 adjusted non-GAAP net income was $3.2 million, or $0.24 per basic and diluted share, compared to adjusted non-GAAP net income of $11.7 million, or $0.86 per basic and $0.84 per diluted share, in Q1 2020.
Cash and cash equivalents were $105.2 million, net accounts receivable was $44.9 million, and debt was $32.0 million as of March 31, 2021.
"Vasopressin is tracking as expected. The trial is now less than two months away and we have now completed the last study required to submit our response to the CRL to the FDA. Our expectation remains that we will receive final approval in time to bring the product to market this year. We believe we also have an outstanding and large opportunity with TREAKISYM in Japan representing another extension of our bendamustine franchise. Equally important and exciting is the PEMFEXY launch early next year, which gives us four months of initial exclusivity," stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.
"We are now in late-stage diligence for several in-licensing opportunities that would leverage our capabilities, meet our criteria and broaden our portfolio and pipeline. We will aim to finalize a few such transactions that have the potential to bolster our earnings both in the short and longer term," concluded Tarriff.
First Quarter 2021 Financial Results
Total revenue for the three months ended March 31, 2021 was $41.2 million, as compared to $46.0 million for the three months ended March 31, 2020.
Q1 2021 BELRAPZO product sales were $5.7 million, compared to $4.6 million in Q1 2020.
Q1 2021 RYANODEX product sales were $6.8 million, compared to $11.4 million in Q1 2020.
Royalty revenue was $24.1 million in the first quarter of 2021, compared to $28.3 million in the first quarter of 2020. BENDEKA royalties were $23.8 million in the first quarter of 2021, compared to $28.0 million in the first quarter of 2020. A summary of total revenue is outlined below:
Three Months Ended March 31,
2021
2020
(unaudited)
(unaudited)
Revenue (in thousands):
Product sales, net
$17,120
$17,694
Royalty revenue
24,129
28,326
Total revenue
$41,249
$46,020
Gross Margin was 74% during the first quarter of 2021, as compared to 83% in the first quarter of 2020. The compression in gross margin for the first quarter of 2021 was driven by revenue mix including the launch of TREAKISYM product sales to our partner in the first quarter of 2021, on which we earn no profit.
R&D expense was $14.3 million for the first quarter of 2021, compared to $9.4 million in the first quarter of 2020. The increase is largely attributable to $2.6 million in development costs for vasopressin, a $0.9 million increase in the cost for fulvestrant, and a $0.9 million increase in development costs for RYANODEX related projects. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the first quarter of 2021 was $13.1 million.
SG&A expenses in the first quarter of 2021 totaled $19.9 million compared to $24.8 million in the first quarter of 2020. The decrease is primarily related to the non-recurrence of a $2.5 million charge for the Tyme transaction, and lower marketing, travel, entertainment, and trade show expenses as a result of reduced travel due to the COVID-19 pandemic. Excluding stock-based compensation and other non-cash and non-recurring items, first quarter 2021 SG&A expense was $13.4 million.
Net loss for the first quarter of 2021 was $0.4 million, or $0.03 per basic and diluted share, compared to net loss of $2.9 million, or $0.21 per basic and diluted share, in the first quarter of 2020, due to the factors discussed above.
Adjusted non-GAAP net income for the first quarter of 2021 was $3.2 million, or $0.24 per basic and diluted share, compared to adjusted non-GAAP net income of $11.7 million or $0.86 per basic and $0.84 per diluted share in the first quarter of 2020. For a full reconciliation of adjusted non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of this press release.
2021 Expense Guidance
R&D spend in 2021, on a non-GAAP basis, is expected to be $26-$30 million, as compared to $27.8 million in 2020.
SG&A spend in 2021, on a non-GAAP basis, is expected to be $52-$56 million, as compared to $50.9 million in 2020. This represents a reduction from earlier guidance for 2021 SG&A spend of $56-60 million.
The guidance provided in this section represents forward-looking information, and actual results may vary. Please see the risks and assumptions referred to in the Forward-Looking Statements section of this press release.
Liquidity
As of March 31, 2021, the Company had $105.2 million in cash and cash equivalents plus $44.9 million in net accounts receivable. The Company had $32.0 million in outstanding debt. Therefore, as of March 31, 2021, the Company had net cash plus receivables of $118.1 million.
In the first quarter of 2021, the Company purchased $1.4 million of its common stock as part of its $160.0 million Share Repurchase Program. From August 2016 through March 31, 2021, the Company has repurchased $208.3 million of its common stock.
www.eagleus.com, under the "Investor + News" section
A replay of the conference call will be available for one week after the call’s completion by dialing 800-839-6980 (US) or 402-220-6062 (International) and entering conference call ID EGRXQ121. The webcast will be archived for 30 days at the aforementioned URL.