On August 29, 2024 RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, reported its first half 2024 financial results and operational highlights, for the six months ended June 30, 2024 (Press release, RedHill Biopharma, AUG 29, 2024, View Source [SID1234646207]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"The first six months of this year have realized significant accomplishments, laying the groundwork for numerous potential upcoming catalysts. RedHill is now in possession of a promising, advancing and largely financially de-risked development pipeline designed to address substantial and underserved indications in oncology, viral pandemic preparedness, nuclear/radioprotection and diabetes and obesity-related disorders," said Dror Ben-Asher, RedHill’s Chief Executive Officer. "There is no doubt that the last four years have been a challenge, primarily as a result of the pandemic’s negative impact on our commercial launches in the United States in the first half of 2020. However, we have been turning the ship around and I am immensely proud of our team that works tirelessly to create opportunities, deliver on plans and create value in the lab and in the clinic through new studies, generating additional patents and publications, identifying important new indications and forging the right partnerships for our assets, while maintaining a market leadership position with Talicia. We are executing on our plans to ensure a clear value-driven focus, operational efficiency and financial streamlining with a low cost-base, as well as a strengthened cash balance and solid control over all elements of our business."
Financial results for the six months ended June 30, 2024 (Unaudited)2
Net Revenues for the first half of 2024 were $2.6 million, compared to $5.4 million for the first half of 2023. Talicia net revenues were $3.5 million for the six months ended June 30, 2024, compared to $5.1 million for the six months ended June 30, 2023, mainly due to a 26% decrease in gross revenues and a 9% increase in Gross-to-Net deductions, mainly from increased Medicaid rebates. In the first half of 2024, $0.5 million of net revenues came from sales in the UAE. Talicia scripts in the U.S. in the first half of 2024 were down by approximately 12%, compared to the same period in 2023, mainly due to reduced promotion and marketing following employee terminations and other cost-cutting measures in the United States. These measures had a significant positive impact on reducing expenses, as detailed below.
Movantik had negative net revenues of $0.9 million in the first half of 2024, compared to negative net revenues of $0.1 million in the first half of 2023, mainly due to returns related to sales in the second and third quarters of 2020.
Gross Profit for the first half of 2024 was $1.2 million, compared to $3 million for the first half of 2023, in line with the decrease in Net Revenues as explained above and primarily attributable to the reduction in Talicia prescriptions following employee terminations and other cost-cutting measures.
Research and Development Expenses for the first half of 2024 were $0.7 million, as compared to $2.3 million for the first half of 2023. The decrease is mainly attributable to the costs from closing the RHB-204 clinical trial, which were recognized in the first half of 2023, and to ongoing cost-reduction measures.
Selling, Marketing, and General and Administrative Expenses for the first half of 2024 were $9 million, compared to $19 million for the first half of 2023. This decrease was primarily due to downsizing the U.S. workforce following the Movantik divestiture, leading to lower payroll and related expenses, and reduced sales force expenses.
Other Income – There was no other income for the first half of 2024, as compared to $43 million of other income for the first half of 2023. The other income recognized in the first half of 2023 was comprised of (i) $35.5 million from the divestiture of Movantik and (ii) $7.5 million from transitional services fees provided to the buyer of Movantik.
Operating Loss for the first half of 2024 was $8.4 million, compared to operating income of $24.7 million for the first half of 2023. The difference is primarily attributable to the changes resulting from the divestiture of Movantik the previous year, as detailed above. Excluding the other income from the Movantik transaction in 2023, the operating loss decreased by approximately $9.9 million, from an operating loss of $18.3 million for the first half of 2023, reflecting the positive operating impact of the cost-cutting measures.
Financial Income, net for the first half of 2024 was $5.4 million, compared to $26.3 million for the first half of 2023. In the first half of 2024, the income recognized was mainly attributable to warrants’ revaluation, offset by offerings’ expenses. In the first half of 2023, the income recognized was primarily attributable to a $20.6 million gain resulting from the extinguishment of the HCR Collateral Management LLC debt in exchange for the transfer of rights to Movantik.
Net Loss was $3.1 million for the first half of 2024, compared to net income of $51 million for the first half of 2023. This change was primarily attributable to the effects resulting from the sale of Movantik and ongoing cost-reduction measures, as detailed above. Excluding the other income and financial income from the Movantik transaction in 2023, the net loss decreased by approximately $9.5 million, from a net loss of $12.6 million for the first half of 2023, reflecting the positive net impact of the cost-cutting measures.
Total Assets as of June 30, 2024 were $22 million, as compared to $23 million as of December 31, 2023. The decrease was primarily attributable to a reduction in the inventory balance due to sales, as well as a reduction in right-of-use assets, due to termination of car leases in the six months ended June 30, 2024.
Total Liabilities as of June 30, 2024 were $22 million, as compared to $21 million as of December 31, 2023. The increase is mainly due to higher allowance from deductions from revenues and increased warrant-related derivative liabilities, partially offset by lower accounts payable, accrued expenses and lease liabilities (due to the car leases’ termination).
Net Cash Used in Operating Activities for the six months ended June 30, 2024 was $6.2 million, compared to $17.8 million for the same period in 2023. The decrease in cash used was primarily due to settling pre-closing liabilities associated with Movantik and other operational activities in the six months ended June 30, 2023. Furthermore, this reduction is attributable to the cost-cutting measures mentioned above.
Net Cash Provided by Financing Activities for the six months ended June 30, 2024 was $7.9 million, comprised primarily of the net proceeds from securities offerings in the six months ended June 30, 2024. For the six months ended June 30, 2023, Net Cash Provided by Financing Activities was $4.8 million, comprised primarily of the net proceeds from securities offerings in the six months ended June 30, 2023, and the decrease in restricted cash, partially offset by the repayment of payables related to the purchase of intangible assets.
Cash Balance as of June 30, 2024 was $8.2 million1.
R&D and Commercial Highlights:
R&D:
RedHill’s pipeline is centered around opaganib3 & RHB-1074, two promising, potentially broad utility, novel, oral, host-directed small molecule drugs with demonstrated safety and efficacy profiles. Both candidates are advancing in predominantly U.S. government-supported, externally-funded programs, directed at multiple underserved indications with sizeable multi-billion-dollar market opportunities and potentially advantageous pathways to approval.
Between them, they are in development for multiple oncology, viral, inflammatory and diabetes and obesity-related indications, including COVID-19, Ebola, acute respiratory distress syndrome (ARDS) and radio/chemical protection (Acute Radiation Syndrome (ARS) and Sulfur Mustard exposure).
Being (i) easy to administer and distribute and (ii) viral mutation-resistant, they are ideally suited for stockpiling strategies in the event of nuclear/chemical incidents and viral pandemic scenarios.
Opaganib:
·
U.S. Army program for Ebola. Opaganib is believed to be the first host-directed molecule to show activity in vivo in Ebola virus disease, delivering a statistically significant increase in survival and, separately, demonstrating a robust synergistic effect in vitro when combined with remdesivir (Veklury; Gilead Sciences, Inc.), improving viral inhibition while maintaining cell viability
·
Orphan drug designation granted by FDA for neuroblastoma (opaganib has several such designations in multiple indications, with three in oncology)
·
Discussions ongoing for a potential externally-funded, late-stage study in an additional underserved oncology indication
·
Positive in vivo study results support potential of opaganib therapy in diabetes / obesity-related disorders – a market projected to be worth approximately $100 billion within the next decade
·
U.S. government-funded programs ongoing with the NIH / BARDA-funded nuclear and chemical medical countermeasure programs for ARS and Sulfur Mustard exposure
·
Late-stage COVID-19 program continues to address a multi-hundreds of millions of dollars market
·
New opaganib publications:
o
The Sphingolipid-Modulating Drug Opaganib Protects against Radiation-Induced Lung Inflammation and Fibrosis: Potential Uses as a Medical Countermeasure and in Cancer Radiotherapy. Publication showed that opaganib significantly improved long-term survival in an in vivo model of lung damage following exposure to ionizing radiation5
o
Effect of Opaganib on Supplemental Oxygen and Mortality in Patients with Severe SARS-CoV-2 Based Upon FiO2 Requirements. Publication showed that oral opaganib reduced mortality by 62% and delivered improved time to room air, and faster time to hospital discharge in a large group of 251 hospitalized, moderately severe COVID-19 patients requiring a Fraction of inspired Oxygen up to and including 60% (FiO2≤60%). The paper also indicates that due to the lack of treatment effect in patients requiring FiO2>60%, this may represent a threshold level for disease irreversibility (likely due to more severe COVID-19 lung disease) and be an important patient selection clinical biomarker, a key finding for future therapeutic strategies and studies6
·
New Chinese patents granted for opaganib:
o
In combination with immune checkpoint inhibitors (ICIs) as a method of inducing an anti-cancer immune response. Provides protection for opaganib’s potential use in combination with a range of approved and in-development ICIs across a growing range of indications through 2040
o
As a therapy for inhibition of single-stranded RNA virus replication (notably Ebola Disease Virus); valid through 2035
RHB-107 (upamostat):
·
COVID-19: Enrollment ongoing in the U.S Department of Defense-supported 300-patient Phase 2 ACESO PROTECT platform trial for early COVID-19 outpatient treatment. Enrollment is estimated to be completed in the first half of 2025
·
U.S. Army-funded Ebola development program ongoing; RHB-107 also demonstrated a robust synergistic effect in vitro when combined with remdesivir. Management of potential Ebola virus pandemic outbreaks represents a significant opportunity and is a key concern for global health agencies
RHB-1047: Newly published positive Phase 3 data demonstrated 64% increased efficacy with RHB-104 in Crohn’s disease
Commercial:
Talicia: The leading prescribed branded H. pylori therapy in the U.S., maintaining leadership position with a streamlined commercial team:
·
Expected upcoming new H. pylori treatment guidelines may further enhance positioning and use
·
Potential manufacturing developments aiming to open additional new markets underway
·
Now commercially launched in the UAE, triggering RedHill’s eligibility for potential milestone and royalty payments
·
Two new U.S. patent grants covering Talicia as:
o
A method for eradicating H. pylori regardless of BMI, valid until May 2042
o
Use as an all-in-one treatment of H. pylori infection, valid until 2034