On March 18, 2021 RedHill Biopharma reported Fourth Quarter and Full Year 2020 Financial Results and Operational Highlights (Press release, RedHill Biopharma, MAR 18, 2021, View Source [SID1234576852])
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Financials:
Full year 2020 net revenues of approximately $64 million, with gross profit of approximately $27.5 million
Solid cash balance of approximately $100 million as of March 4, 2021
Planned commercial operational breakeven by the end of 2021
Commercial Highlights:
Talicia: Consistent month-over-month prescription growth despite pandemic conditions, with 52% new prescription growth in Q4/2020 compared to Q3/2020
Movantik: Market leadership position holding strong and well-positioned for further growth in 2021
R&D Highlights:
Two advanced programs at the forefront of global COVID-19 novel therapeutics development:
Opaganib: Ongoing global Phase 2/3 study in hospitalized patients approximately two thirds enrolled, data expected Q2/2021; Positive U.S. Phase 2 data reported
RHB-107: Ongoing U.S. Phase 2/3 study in symptomatic non-hospitalized patients
RHB-204: Ongoing Phase 3 study for pulmonary NTM disease as oral first-line treatment
Management to host webcast today, at 8:30 a.m. EDT
RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, today reported its financial results and operational highlights for the year ended December 31, 2020.
Dror Ben-Asher, RedHill’s Chief Executive Officer, said: "2020 was a year that our team looks back on with a sense of immense achievement. While navigating the challenging conditions caused by the pandemic, we have delivered broad commercial growth culminating in a very strong end to 2020 for both Movantik and Talicia". Mr. Ben-Asher continued: "At the same time, we have rapidly progressed two novel oral COVID-19 therapies to Phase 3 stage development, covering both hospitalized and non-hospitalized patients and have reported positive clinical and preclinical data, positioning RedHill at the forefront of novel COVID-19 therapeutics development worldwide. With strong momentum across both commercial and R&D operations, we expect 2021 to be a breakout year."
Micha Ben Chorin, Chief Financial Officer at RedHill, added: "RedHill is delivering on a clear strategy designed to enable us to achieve fast growth and increased profit margin. We have been diligent in maintaining a solid balance sheet and we expect to achieve commercial operational breakeven by the end of this year."
Financial highlights for the year ended December 31, 2020
Net Revenues were approximately $64 million for the year ended December 31, 2020, an increase of $58 million compared to the year ended December 31, 2019, attributed to revenues generated from the commercialization of Movantik and Talicia initiated in 2020. Net revenues for the fourth quarter of 2020 were approximately $21.5 million, an increase of $0.5 million compared to the third quarter of 2020, with a 12% increase in product delivery.
Gross Profit was approximately $27.5 million for the year ended December 31, 2020, an increase of $23.5 million compared to the year ended December 31, 2019, primarily due to the increase in net revenues.
Research and Development Expenses were approximately $16.5 million for the year ended December 31, 2020, mainly attributable to the development of our COVID-19 therapeutics and the Phase 3 study of RHB-204 for pulmonary NTM disease, and were, in total, lower than the research and development expenses for the year ended December 31, 2019.
Selling, Marketing and Business Development Expenses were approximately $49 million for the year ended December 31, 2020, compared to approximately $18 million for the year ended December 31, 2019. The increase was attributable to the expansion of our U.S. sales force and marketing activities, in support of the launch of Talicia and post-acquisition commercialization of Movantik.
General and Administrative Expenses were approximately $25 million for the year ended December 31, 2020, compared to approximately $11 million for the year ended December 31, 2019. The increase was mainly attributable to the expansion of commercialization activities related to the Talicia launch and the Movantik acquisition from AstraZeneca.
Operating Loss was approximately $64 million for the year ended December 31, 2020, compared to approximately $43 million for the year ended December 31, 2019. The increase was attributable to the expansion of our commercial operations.
Net Loss was approximately $76 million for the year ended December 31, 2020, compared to approximately $42 million for the year ended December 31, 2019. The increase was attributable to factors mentioned above, as well as interest expenses mainly related to the royalty and debt financing in the first quarter of 2020.
Net Cash Used in Operating Activities was approximately $49 million for the year ended December 31, 2020, compared to approximately $41 million for the year ended December 31, 2019. The increase was attributable to the increase in operating loss, as described above.
Net Cash Used in Investing Activities was approximately $36 million for the year ended December 31, 2020, primarily related to the $52.5 million upfront payment to AstraZeneca for the acquisition of Movantik, partially offset by inflow from current bank deposits and financial assets at fair value through profit or loss.
Net Cash Provided by Financing Activities was approximately $84 million for the year ended December 31, 2020, comprised primarily from financing inflow of approximately $102 million, mainly in debt and equity, partially offset by $16 million classified as restricted cash.
Liquidity and Capital Resources
Cash Balance[1] as of December 31, 2020, was approximately $46 million. Cash balance as of March 4, 2021 was approximately $100 million.
Commercial Highlights
Movantik (naloxegol)[2]
The Company has completed three full quarters of Movantik promotion following its acquisition from AstraZeneca, achieving: A reversal of the trend of declining new prescriptions prior to the acquisition, maintaining Movantik’s position as a segment-leading brand and ending 2020 strongly recording the second highest monthly new prescription volume of 2020 in December.
RedHill acquired the global rights to Movantik from AstraZeneca, excluding Europe and Canada, subsequently adding Israel rights, and replaced a co-commercialization agreement with Daiichi Sankyo (assigned under the agreement with AstraZeneca), with a new royalty-bearing agreement that resulted in RedHill assuming full control over brand strategy and commercialization activities for Movantik in the U.S. and increasing gross margin.
Talicia (omeprazole magnesium, amoxicillin and rifabutin)[3]
Despite the challenging pandemic environment, the Company has persisted in its efforts to support the launch and rapid growth of Talicia, in particular in expanding the prescriber base. This has resulted in the strong accumulation of new Talicia prescribers in the second half of 2020 and consistent month-over-month prescription growth despite pandemic conditions. Talicia ended 2020 strongly, with 52% new prescription growth in the fourth quarter of 2020, as compared to the previous quarter, and achieving its highest weekly new prescription volume in December.
This growth is supported by the addition of Talicia as a preferred brand on leading national formularies, approaching 70% U.S. commercial coverage in the fourth quarter, with further formulary additions expected to add to the previously announced listings of Talicia on the national formularies of Prime Therapeutics, EnvisionRx, and Express Scripts.
Aemcolo (rifamycin)[4]
The Company has implemented plans to support, and build on, the initial momentum that Aemcolo was generating pre-COVID-19 travel restrictions. The Company expects that these plans will drive a resurgence of interest in Aemcolo once travel restrictions are lifted and international travel from the U.S. returns to significant levels.
R&D Highlights
COVID-19 Program: Opaganib (ABC294640, Yeliva)[5]
The late-stage development program for novel, orally-administered, opaganib in patients with severe COVID-19 pneumonia is progressing rapidly. Opaganib has demonstrated dual anti-inflammatory and antiviral activity, targeting a human cell component involved in viral replication and therefore expected to be effective against emerging viral strains with mutations in the spike protein.
The global Phase 2/3 randomized, double-blind, parallel-arm, placebo-controlled study of opaganib in patients with severe COVID-19 pneumonia requiring hospitalization and treatment with supplemental oxygen (NCT04467840), is rapidly advancing in a total of 8 countries and approximately 40 recruiting sites, with additional expansion ongoing. The study has passed three Data Safety Monitoring Board reviews, including a futility review, which is suggestive that the study is progressing as expected. The 464-patient study has already enrolled approximately two thirds of the patients and is expected to deliver top-line data in the second quarter of 2021.
In December 2020, the Company reported positive top-line safety and efficacy data from the U.S. Phase 2 study with opaganib in patients with COVID-19 pneumonia, in which opaganib demonstrated greater improvement in reducing oxygen requirement by end of treatment on Day 14, on top of standard-of-care. The Phase 2 data also showed no material safety differences between the opaganib and placebo treatment arms – further adding to the growing opaganib safety database.
In September 2020, RedHill announced that opaganib demonstrated potent inhibition of SARS-CoV-2, achieving complete blockage of viral replication, as measured after three days incubation, in an in vitro model of human bronchial tissue, comparing favorably with remdesivir, the positive control in the study. Furthermore, treatment of cells infected with SARS-CoV-2 with opaganib did not compromise cell membrane integrity, a measure of cell viability and drug safety, further demonstrating opaganib’s promising potential for treating patients with COVID-19. On top of its anti-inflammatory mechanism, opaganib is also one of very few orally available broad-spectrum antivirals in advanced clinical evaluation for treating COVID-19.
The Company also signed collaborations with several U.S., European and Canadian suppliers, including with Cosmo Pharmaceuticals NV (SIX: COPN) for large-scale ramp-up of opaganib manufacturing, further strengthening manufacturing capabilities and capacity for opaganib.
The Company continues its discussions with U.S. and other government agencies and non-governmental organizations around potential funding to support the rapid advancement of opaganib toward potential emergency use applications and manufacturing scale-up.
COVID-19 Program: RHB-107 (upamostat)[6]
In February 2021, RedHill announced dosing of the first patient in the U.S. Phase 2/3 COVID-19 outpatient study with novel, orally-administered, RHB-107 (upamostat). The study with once-daily RHB-107 is evaluating treatment of patients with symptomatic COVID-19 who do not require hospitalization – the vast majority of COVID-19 patients. The study allows patients to remain in the comfort of their home yet be monitored at a level previously possible only in a hospital setting, enabling increased compliance and retention rates.
RHB-107 is a novel, orally-administered, serine protease inhibitor targeting human cell factors involved in viral entry and is therefore expected to be effective against emerging viral variants with mutations in the spike protein. In previously announced in vitro results, RHB-107 strongly inhibited SARS-CoV-2 viral replication.
RHB-204[7] – Pulmonary Nontuberculous Mycobacteria (NTM) Disease
In November 2020, RedHill commenced its U.S. Phase 3 study to evaluate the efficacy and safety of RHB-204 in adults with pulmonary NTM disease caused by Mycobacterium avium Complex (MAC) infection.
The FDA also granted Fast Track designation for RHB-204 in January 2021, providing early and frequent communications and a rolling review of any New Drug Application (NDA). Having already been granted Qualified Infectious Disease Product (QIDP) designation, RHB-204 is also eligible for NDA Priority Review and Accelerated Approval.
In October 2020, the Company announced that RHB-204 had been granted FDA Orphan Drug Designation. This, along with the previously granted QIDP designation, extends U.S. market exclusivity for RHB-204 to a potential total of 12 years upon FDA approval.
Opaganib – Cholangiocarcinoma and Prostate Cancer
The Phase 2a study evaluating the activity of opaganib in advanced cholangiocarcinoma (bile duct cancer) is ongoing. Enrollment has been completed for the first cohort of 39 patients, evaluating the activity of orally-administered opaganib as a stand-alone treatment. Preliminary data from this cohort indicated a signal of activity in a number of subjects with advanced cholangiocarcinoma. Enrollment is ongoing for a second cohort, evaluating opaganib in combination with hydroxychloroquine, an anti-autophagy agent.
In light of preclinical findings demonstrating tumor regression following combination treatment with opaganib and RHB-107 (upamostat), RedHill plans to add an additional cohort to the ongoing Phase 2a study, evaluating opaganib in combination with RHB-107, subject to discussions with the FDA. Opaganib has been granted FDA Orphan Drug Designation for the treatment of cholangiocarcinoma.
An additional Phase 2 study with opaganib in prostate cancer is ongoing at the Medical University of South Carolina (MUSC). The study is supported by a National Cancer Institute grant awarded to MUSC with additional support from RedHill.
COVID-19 Impact Update
RedHill’s primary concern during the COVID-19 pandemic continues to be the safety and health of its employees, patients, colleagues, and the communities to which we belong.
Operationally, the actions the Company took to mitigate the impact of the COVID-19 pandemic continue to serve us well, with minimal effect on our ongoing operational and supply chain activities. Promotional activity has now been largely re-instated, where safe to do so, and in adherence to social distancing and other public health guidelines. RedHill will continue to assess the potential impact of COVID-19 on its business and operations.
Conference Call and Webcast Information:
The Company will host a conference call and live webcast today, Thursday, March 18, 2021, at 8:30 a.m. EDT to present the fourth quarter and full year 2020 financial results and operational highlights.
The webcast and slides will be broadcast live on the Company’s website, View Source, and will be available for replay for 30 days.