On November 14, 2019 KemPharm, Inc. (Nasdaq: KMPH), a specialty pharmaceutical company engaged in the discovery and development of proprietary prodrugs, reported its corporate and financial results for the quarter ended September 30, 2019 (Press release, KemPharm, NOV 14, 2019, View Source [SID1234551392]).
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 third quarter of 2019 was highlighted by our entry into a licensing agreement (the KP415/KP484 Licensing Agreement) with an affiliate of Gurnet Point Capital (GPC) for our ADHD product candidates, KP415 and KP484," said Travis Mickle, Ph.D., President and Chief Executive Officer of KemPharm. "Working with the team that GPC has assembled, our immediate focus remains on finalizing the New Drug Application (NDA) for KP415, with the goal of filing in January 2020, or sooner if possible. However, the decision of when to file belongs to GPC."
Dr. Mickle continued, "Since our last announcement, KVK-Tech, Inc. (KVK-Tech) has informed us that APADAZ (benzhydrocodone and acetaminophen, or APAP, tablets) and its authorized generic, APADAZ-AG, are now available for wholesalers to place initial stocking orders. We look forward to further updates from our partner, KVK-Tech, as they begin their awareness efforts."
Q3 2019 Financial Results:
"Since the beginning of 2019, we have undertaken measures to reduce our operating spend, including a 33% workforce reduction, other general and administrative cost reductions, and the conclusion of the clinical phase for KP415. The KP415/KP484 License Agreement provides several milestone payments, including the $10M upfront payment we have already received, another milestone payable at acceptance of the KP415 NDA, potential regulatory milestones at approval and sales milestones post-approval. In addition, development cost reimbursements and consultation fee revenue for our support of all KP415 remaining development and commercial manufacturing provides the potential for us to cover a substantial portion of our operating expenses," said LaDuane Clifton, KemPharm’s Chief Financial Officer.
For Q3 2019, KemPharm reported revenue of $11.5 million, which included the $10 million upfront payment, development cost reimbursements and consultation fee revenue generated under the KP415/KP484 License Agreement. Net income for Q3 2019 was $3.1 million, or $0.09 per basic share and $0.06 per diluted share, compared to a net loss of $15.1 million, or $0.94 per basic and diluted share for Q3 2018. Net income for Q3 2019 was driven primarily by income from operations of $3.2 million and non-cash fair value adjustment income of $1.4 million which was offset by net interest expense and other expenses of approximately $1.5 million. Research and development expenses for Q3 2019 were $3.6 million, which was a reduction of 73% compared to $13.3 million in Q3 2018. General and administrative expenses for Q3 2019 were $3.6 million, which was an increase of $0.6 million compared to Q3 2018, primarily driven by an increase in professional fees incurred in connection with the KP415 licensing process and partially offset by a decrease in personnel costs.
As of September 30, 2019, total cash, which is comprised of cash, cash equivalents and restricted cash, was $7.0 million. Based on our current operating forecast, which includes principal and interest payments totaling approximately $9.2 million, which are due in the first half of 2020, currently available resources are sufficient to continue operations into but not through Q2 2020.
"We continue to explore additional options to reduce our near-term cash requirements, including pushing out the timing of upcoming near-term principal and interest payments with the goal of extending our cash runway past the potential approval of the KP415 NDA. In addition, we have initiated a process to explore addressing our debt in its entirety. For that purpose, we have engaged Cowen and Company, LLC, to serve as our financial advisors," Mr. Clifton concluded. While the Company is actively pursuing debt restructuring efforts, it cannot guarantee that those efforts will be successful for either the near- or long-term debt obligations.
The Company also reported that it expects to receive a notification from the Nasdaq Stock Market (Nasdaq) pertaining to its non-compliance with Nasdaq continued listing qualifications. Once received, the Company plans to submit a request to appear before the Nasdaq Hearings Panel and request an extension of the compliance period. Under Nasdaq rules, the Hearings Panel has the authority to extend the compliance period for up to an additional 180 days, subject to their review of the Company’s plan for regaining compliance with the continued listing requirements. During this process, KemPharm’s common stock would remain listed and active on the Nasdaq Global Market. There can be no assurance that the Company will be successful in maintaining the listing of its common stock on the Nasdaq Global Market.
Conference Call Information:
KemPharm will host a conference call and live audio webcast with slide presentation today, Thursday, November 14, 2019, at 5:30 p.m. ET, to discuss its corporate and financial results for the third quarter 2019. Interested participants and investors may access the conference call by dialing either:
(866) 395-2480 (U.S.)
(678) 509-7538 (international)
Conference ID: 8076615
An audio webcast with slide presentation will be accessible via the Investor Relations section of the KemPharm website View Source An archive of the webcast and presentation will remain available for 90 days beginning at approximately 6:30 p.m. ET, on November 14, 2019.