On August 12, 2021 KemPharm, Inc. (NASDAQ: KMPH), a specialty pharmaceutical company focused on the discovery and development of proprietary prodrugs, reported its financial results for the second quarter ended June 30, 2021 (Press release, KemPharm, AUG 12, 2021, View Source [SID1234586560]).
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"The second quarter of 2021 and recent weeks continued what has been a period of unprecedented growth and opportunity for KemPharm, highlighted by the U.S. commercial launch of AZSTARYS," said Travis C. Mickle, Ph.D., President and Chief Executive Officer of KemPharm. "AZSTARYS, previously KP415, was conceived based on the vision that our LAT technology was well-suited to developing a prodrug of d-methylphenidate (d-MPH) that could address key patient and prescriber demands that were underserved by ADHD products on the market at the time. Today that vision is a reality, and as the commercial rollout of AZSTARYS by Corium continues, ADHD patients and their caregivers will have the opportunity to benefit from the unique attributes inherent only to AZSTARYS. It is a truly exciting time for KemPharm and, we believe, for the millions of patients seeking a better treatment option for their ADHD symptoms."
Dr. Mickle continued, "In addition to the commercial launch of AZSTARYS, the second quarter was highlighted by the classification of serdexmethylphenidate (SDX) as a Schedule IV controlled substance by the Drug Enforcement Administration (DEA). SDX comprises 70% of the active pharmaceutical ingredient (API) in AZSTARYS, which is classified as a Schedule II controlled substance. Importantly, the classification of SDX as a Schedule IV controlled substance and the unique properties of SDX, we believe, provide us the opportunity to develop an SDX-based product candidate or candidates that could potentially address disease indications for which no therapy currently exists. We have recently initiated a clinical trial with SDX, and in the coming months we expect to report clinical data together with an SDX development plan. Based on the results of the clinical trial, this plan may involve one or more potential product candidates that have the potential to generate substantial near-term and longer-range value for the Company."
Q2 2021 Financial Results:
For Q2 2021, KemPharm reported revenue of $12.0 million, which was comprised of a $10.0 million milestone payment earned upon the DEA scheduling of SDX, and service fee revenue of $2.0 million, as compared to Q2 2020 revenue of $6.9 million, which was derived primarily from a $5.0 million milestone payment earned upon U.S. Food and Drug Administration (FDA) acceptance of the AZSTARYS New Drug Application (NDA) and service fee revenue. The service fee revenue is being earned under consulting arrangements which contractually continue through March 2022.
KemPharm’s net income for Q2 2021 was $6.2 million, or $0.18 per basic share. Recognition of a non-cash deemed dividend of $16.9 million related to the warrant exercise inducement transaction in June 2021 led to a ($10.7) million net loss attributable to common stockholders and diluted shares, or ($0.40) per basic share attributable to common stockholders and diluted share for Q2 2021, compared to net income of $0.9 million, or $0.21 per basic and diluted share for the same period in 2020. Net income for Q2 2021 was driven primarily by operating income of $5.8 million and a non-cash gain on extinguishment of debt of $0.8 million related to the forgiveness of the PPP loan, partially offset by non-cash fair value adjustment loss of $0.4 million related to derivative and warrant liability. The net operating income of $5.8 million for Q2 2021 was a change of $3.2 million compared to net operating income of $2.6 million in the same period in 2020, which was primarily due to an increase in revenue of $5.1 million and a net increase in operating expenses of $1.8 million period over period. The net increase in operating expenses was primarily due to increases in research and development expense of $0.9 million, general and administrative expenses of $0.6 million and royalty and direct contract acquisition costs of $0.4 million.
As of June 30, 2021, total cash and cash equivalents was $132.3 million, which was an increase of $56.4 million compared to March 31, 2021.
As of June 30, 2021, total shares of common stock outstanding was 34,977,923 shares, and fully diluted common shares outstanding was 46,546,998 shares, which included 4,584,889 shares issuable upon exercise of warrants. In addition, no preferred stock is outstanding as of June 30, 2021.
Conference Call Information:
KemPharm will host a conference call and live audio webcast on Thursday, August 12, 2021, at 4:30 p.m. ET, to discuss its corporate and financial results for Q2 2021.
Telephone Access: To access the conference call telephonically, interested participants and investors are required to register via the following online form: View Source
Once registered, all individuals will be provided with participant dial-in numbers, a passcode and a registrant ID, which can then be used to access the conference call.
Participants may register at any time. It is recommended that the registration process be completed at least 15 minutes prior to the start of the call.
Webcast Access: The live audio webcast with slide presentation will be accessible via the Investor Relations section of KemPharm’s website, View Source An archive of the webcast and presentation will be available for 90 days beginning at approximately 5:30 p.m. ET, on August 12, 2021.
About AZSTARYS:
AZSTARYS is an FDA-approved, once-daily product for the treatment of attention deficit hyperactivity disorder (ADHD) in patients age six years or older. AZSTARYS consists of SDX, KemPharm’s prodrug of d-methylphenidate (d-MPH), co-formulated with immediate release d-MPH.
The complete approved prescribing information for AZSTARYS may be downloaded in PDF format here:
View Source