On May 10, 2018 Eagle Pharmaceuticals, Inc. ("Eagle" or "the Company") (Nasdaq: EGRX) reported its financial results for the three months ended March 31, 2018 (Press release, Eagle Pharmaceuticals, MAY 10, 2018, View Source [SID1234526420]). Highlights of and subsequent to the first quarter of 2018 include:

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Business and Recent Highlights:

Eagle requested final U.S. Food and Drug Administration (FDA) approval for its tentatively approved ready-to-dilute bendamustine hydrochloride 500ml solution; launch to be scheduled upon approval;
RYANODEX for EHS clinical trial planned for August 17 – 23, 2018 during the Hajj pilgrimage;
Eagle’s vasopressin injection 1ml abbreviated new drug application (ANDA) accepted for filing by the FDA in April 2018; Eagle believes it is first-to-file;
Eagle continued to advance RYANODEX in the treatment of nerve agent exposure; Eagle expects to meet again shortly with officials from the U.S. Military to formalize the clinical and regulatory plans;
Oral arguments in the litigation to resolve Eagle’s orphan drug exclusivity for BENDEKA were held in Washington D.C. on May 4, 2018;
United States Patent and Trademark Office issued a third patent (9,925,263) in the Eagle Biologics family of patents in March 2018; and
Eagle completed enrollment in the fulvestrant clinical study in February 2018 with study results anticipated in the fall of 2018.
Financial Highlights:

First Quarter 2018

Total revenue for the first quarter of 2018 was $46.6 million, compared to $76.8 million in the first quarter of 2017 (which included $25.0 million in license and other income);
Q1 2018 income before income tax provision was $1.7 million compared to $32.7 million in Q1 2017;
Q1 2018 net income was $2.6 million, or $0.18 per basic and $0.17 per diluted share, compared to net income of $22.9 million, or $1.50 per basic and $1.42 per diluted share in Q1 2017;
Q1 2018 Adjusted Non-GAAP net income was $8.2 million, or $0.55 per basic and $0.53 per diluted share, compared to Adjusted Non-GAAP net income of $26.5 million, or $1.74 per basic and $1.64 per diluted share in Q1 2017;
During Q1 2018, Eagle purchased an additional $7 million of Eagle common stock as part of its share buyback program; since August 2016, Eagle has repurchased $88 million of Eagle common stock;
Settled $48 million in potential Arsia milestone obligations in exchange for $15 million in cash; and
Cash and cash equivalents were $95.7 million, accounts receivable was $53.4 million, and debt was $48.8 million as of March 31, 2018.
Reiterating 2018 Expense Guidance:
R&D expense is expected to be in the range of $46 – $50 million ($40 – $44 million on a non-GAAP basis)
SG&A expense is expected to be in the range of $61 – $64 million ($44 – $47 million on a non-GAAP basis)
"We expect multiple catalysts to drive growth and build long-term value at Eagle. This includes expanding our existing bendamustine and RYANODEX portfolios by taking advantage of product and label expansion opportunities, as well as protecting the franchises with our robust patent estate and exclusivity. We believe that advancing several of our late-stage opportunities targeting attractive new markets will open additional paths for growth and profitability for years to come," stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.

"We have decided to launch our tentatively approved bendamustine hydrochloride 500ml solution, subject to receipt of final approval from the FDA, which we have recently requested. We believe that we are uniquely positioned to fill a need with the segment of the population that requires an alternative to TREANDA, but at a lower price point to BENDEKA. Over time, this would provide us with more control over our revenue growth and allow us to better manage our business. We continue to believe BENDEKA is a tremendous product with many patient and caregiver benefits. Teva is doing a very good job for us and we are pleased with their accomplishments. We view the launch of a "big bag" formulation as complementary, enabling us to provide additional value to a cost-conscious segment of the market, while at the same time allowing Eagle to increase profitability," added Tarriff.

"We also look forward to advancing RYANODEX for EHS with another clinical study at the Hajj in August of this year, adding to the positive data we have already collected. Our fulvestrant study is now fully underway with results anticipated later this year. In addition, with what we believe is a first-to-file ANDA submission for vasopressin accepted for filing, as well as our progress on a second ANDA product, we are excited about these added opportunities to create value for patients and shareholders," concluded Tarriff.

First Quarter 2018 Financial Results

Total revenue for the three months ended March 31, 2018 was $46.6 million, as compared to $76.8 million for the three months ended March 31, 2017 (which included a $25 million milestone payment from Teva).

Research and development expenses increased to $17.3 million for the first quarter of 2018, compared to $7.5 million in the first quarter of 2017, largely due to external clinical costs associated with the fulvestrant clinical study, which completed randomization of 600 subjects during the first quarter of 2018. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the first quarter of 2018 was $15.0 million.

SG&A expenses decreased to $15.2 million in the first quarter of 2018 compared to $18.6 million in the first quarter of 2017. The decrease was due to the expiration of the Spectrum co-promotion agreement at the end of June 2017, as well as a reduction in marketing expenses. These reductions were partially offset by the increase in personnel-related expenses associated with the expansion of our sales force during the second quarter of 2017. Excluding stock-based compensation and other non-cash and non-recurring items, first quarter 2018 SG&A expense was $10.5 million.

Net income for the first quarter of 2018 was $2.6 million, or $0.18 per basic and $0.17 per diluted share, compared to net income of $22.9 million, or $1.50 per basic and $1.42 per diluted share in the three months ended March 31, 2017, due to the factors discussed above.

Adjusted Non-GAAP net income for the first quarter of 2018 was $8.2 million, or $0.55 per basic and $0.53 per diluted share, compared to Adjusted Non-GAAP net income of $26.5 million or $1.74 per basic and $1.64 per diluted share in the first quarter of 2017. 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.

Liquidity

As of March 31, 2018, the Company had $95.7 million in cash and cash equivalents and $53.4 million in net accounts receivable, $42 million of which was due from Teva. The Company had $48.8 million in outstanding debt.

We purchased $7 million of Eagle common stock as part of our expanded $100 million share buyback program. Since August 2016, we have repurchased $88 million of our common stock. During the first quarter of 2018, we paid $15 million in cash to settle the Arsia milestones.

2018 Expense Guidance

2018 R&D expense is expected to be in the range of $46 – $50 million. This reflects ongoing expenses for (i) the enrollment of fulvestrant and RYANODEX for EHS clinical trials; (ii) API outlays for the fulvestrant and vasopressin programs; and (iii) additional preclinical assays for the RYANODEX nerve agent program. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense is expected to be in the range of $40 – $44 million.

2018 SG&A expense is expected to be in the range of $61 – $64 million. Excluding stock-based compensation and other non-cash and non-recurring items, SG&A expense is expected to be in the range of $44 – $47 million.