On November 15, 2016 Juniper Pharmaceuticals, Inc. (Nasdaq: JNP) ("Juniper" or the "Company"), a women’s health therapeutics company, reported financial results for the three- and nine- month periods ended September 30, 2016 (Press release, Juniper Pharmaceuticals, NOV 15, 2016, View Source;p=RssLanding&cat=news&id=2222420 [SID1234516627]). Recent highlights include:
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OneCrinone 90 mg (progesterone) launched in Japan by Merck KGaA, Darmstadt, Germany ("Merck KGaA");
Completed pilot study for JNP-0101 intravaginal ring ("IVR") demonstrating delivery of oxybutynin in an animal model;
Discontinued development of COL-1077 lidocaine vaginal gel following Phase 2b results;
Revenue increased to $11.6 million for the third quarter of 2016 and $33.6 million for the first nine months of 2016, up 5% and 13%, respectively, versus the prior year periods;
Service revenues increased for the seventh consecutive quarter on a local currency basis;
Cash and equivalents of $15.0 million at September 30, 2016; and,
Monetized U.S. Crinone (progesterone gel) royalty stream with Allergan, Inc., providing $11 million of non-dilutive cash to Juniper in November 2016.
Juniper Pharmaceuticals, Inc.
"Ongoing strong quarterly revenue growth provides continued cash flow which, coupled with the $11 million from Allergan, enables targeted investments in product development while also supporting our solid cash position," said Alicia Secor, Juniper’s President and CEO.
"We continue to advance our IVR pipeline, targeting unmet and underserved needs in women’s health including overactive bladder, HRT and preterm birth," Ms. Secor continued. "We are selectively evaluating acquisition and in-licensing opportunities with the goal of bringing in one or more women’s health therapeutics to enhance our product portfolio and establish a new trajectory to support our mission of building a leading women’s health company."
Juniper’s current 505(b)(2) product candidates are: JNP-0101, an oxybutynin IVR for the treatment of overactive bladder in women; JNP-0201, a combination estrogen + progesterone IVR for menopausal symptoms; and, JNP-0301, a progesterone IVR for the prevention of preterm birth in women with a short cervical length at mid-pregnancy.
Third Quarter Financial Results
Third quarter total revenues increased 5% to $11.6 million, compared with $11.0 million for the quarter ended September 30, 2015.
Product revenues were $7.1 million, an increase of $0.3 million, or 5%, versus the third quarter of last year, driven by continued in-market growth and new market sales of Crinone by Merck KGaA.
Service revenues were $3.3 million, a $0.1 million, or 4%, increase versus the third quarter of last year. While we experienced continued strong revenue growth in the local UK currency, the weak pound versus the U.S. dollar continues to dampen translated revenue. On a local currency basis, third quarter service revenues increased 22% year-over-year.
Royalty revenues, based on Allergan’s sales of Crinone in the U.S., increased by $0.1 million to $1.2 million.
Gross profit increased to $5.9 million as compared with $4.4 million in the prior year quarter.
Total operating expenses were $5.7 million in the third quarter of 2016. The $1.5 million increase as compared to the prior year quarter was driven by a $0.7 million increase in R&D spending and a $0.9 million increase in general and administrative costs.
Third quarter R&D expense was driven by costs associated with the now-concluded Phase 2 clinical trial of COL-1077. The increase in general and administrative costs was primarily driven by costs associated with organizational growth.
Juniper recorded net income of $0.2 million, or $0.02 per diluted share, in the third quarter of 2016, compared to net income of $0.4 million, or $0.03 per diluted share, in the same period of 2015.
Nine Months Financial Results
For the nine months ended September 30, 2016, total revenues increased 13% to $33.6 million, compared with $29.7 million for the nine months ended September 30, 2015.
Product revenues were $20.7 million, an increase of $2.3 million, or 13%, versus the same period last year. Service revenues were $10.0 million, up $1.6 million, or 19%, versus the same period last year. On a local currency basis, service revenues in the first nine months of 2016 increased 31% year-over-year. Royalty revenues increased by $0.1 million to $3.0 million.
Gross profit increased to $15.1 million as compared with $12.7 million in the same period last year.
Total operating expenses were $19.0 million in the nine months ended September 30, 2016. The $5.5 million increase as compared to the prior year period was driven by a $3.1 million increase in R&D spending and a $2.5 million increase in general and administrative costs.
Juniper recorded a net loss of $3.7 million, or ($0.34) per diluted share, in the nine months ended September 30, 2016, compared to a net loss of $0.5 million, or ($0.05) per diluted share, in the same period of 2015.
Liquidity
Cash and cash equivalents increased to $15.0 million as of September 30, 2016, versus $13.0 million at June 30, 2016 and $13.9 million at December 31, 2015.
On November 15, 2016, the Company announced the monetization of U.S. Crinone royalty stream with Allergan, Inc. Juniper will record the $11 million payment and royalties for the month of October as royalty income in the fourth quarter of 2016.
Restatement
Financial results for prior periods discussed above are based on the Company’s restated financial results as filed on Forms 10-K/A and 10-Q/A filed on November 14, 2016 with the SEC.
Under the revised methodology, product revenue is recognized upon shipment to Merck KGaA at the minimum price (our direct manufacturing cost plus 20%). Amounts invoiced above the minimum price for countries where we are entitled to a percentage of Merck KGaA’s net revenue are recorded as deferred revenue. Upon receiving sell-through information from Merck KGaA, revenue is recorded to reflect the percentage of Merck KGaA’s net selling price for specific countries.