On February 25, 2020 Paratek Pharmaceuticals, Inc. (Nasdaq: PRTK), a commercial-stage biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases or other public health threats for civilian, government and military use, reported financial results and provided an update on corporate activities for the fourth quarter and year-ended December 31, 2019 (Press release, Paratek Pharmaceuticals, FEB 25, 2020, View Source [SID1234554734]).
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!
"2019 was a transformative year for Paratek. Demand for NUZYRA continued to increase in the fourth quarter with net sales growing a robust 74% versus the prior quarter." said Evan Loh, M.D., Chief Executive Officer. "With particular strength seen with the oral formulation, NUZYRA is on track to have one of the most successful antibiotics launches in the last decade."
Dr. Loh continued, "In December, we announced that we entered into a 5-year contract valued up to $285 million with Biomedical Advanced Research and Development Authority, or BARDA, to support the development of NUZYRA for the treatment of pulmonary anthrax. We believe that this long-term Project BioShield agreement with BARDA, along with the approved indications for NUZYRA in CABP and ABSSSI, solidify Paratek’s position as a leader in the anti-infective space. The magnitude of the projected funding through this BARDA agreement and the expected continued strong launch trajectory of NUZYRA will significantly strengthen Paratek’s balance sheet."
"The recent news with coronavirus only further highlights the urgent need for innovative therapeutics to fight this devastating disease," said Randy Brenner, Chief Development & Regulatory Officer. "As with influenza, many of the coronavirus fatalities are unfortunately associated with secondary bacterial pneumonia infections, further highlighting the importance of a novel once daily well-tolerated oral and IV antibiotic in the treatment paradigm for pandemic preparedness. With a broad-based public-private partnership established by our recently announced BARDA contract, anchored by a therapy that is approved for pneumonia, we are aggressively pursuing other opportunities within the government to support national pandemic preparedness."
NUZYRA Commercial Highlights
NUZYRA generated $11.5 million in net sales in the 11 months since its February 2019 launch.
NUZYRA generated $5.4 million in net sales in the fourth quarter of 2019, an increase of 74% versus prior quarter, driven by increases in demand.
Over 80% of commercial lives and greater than 50% of Medicaid lives in the U.S. now have access to NUZYRA.
Recent Highlights
BARDA awarded Paratek a 5-year contract valued at up to $285 million, with an option to extend to 10-years, to support: 1) the development of NUZYRA for the treatment of pulmonary anthrax; 2) all of the U.S. Food and Drug Administration post-marketing requirements associated with the initial NUZYRA approval; and 3) the procurement of up to 10,000 treatment courses of NUZYRA for the treatment of anthrax to be secured in the Strategic National Stockpile.
The pre-Emergency Use Authorization (EUA) for NUZYRA is targeted for submission to the FDA in the first quarter of 2020. The purchase of the first 2,500 treatment courses will be initiated once FDA agrees the application is sufficient which is expected in the second quarter of 2020.
Zai Lab Limited announced its New Drug Application for omadacycline for the treatment of CABP and ABSSSI infections has been accepted in China.
Paratek earned $3.0 million upon this regulatory submission in the fourth quarter of 2019.
Paratek is eligible to receive $6.0 million upon regulatory approval and royalties on net sales.
Paratek entered into a license grant with Almirall (ALM) for SEYSARA (sarecycline) for the greater China region, which includes the Peoples Republic of China, Hong Kong, and Macau. Almirall plans to develop sarecycline for acne in China, with a submission to the China National Medical Products Administration expected in 2023. Under the terms of the agreement, Paratek will earn high single-digit royalties on net sales.
Fourth Quarter and Full Year 2019 Financial Results
Paratek reported a net loss of $27.4 million, or ($0.81) per share, for the fourth quarter of 2019, compared to a net loss of $22.8 million, or ($0.71) per share, for the same period in 2018.
For the year ended December 31, 2019, Paratek reported a net loss of $128.8 million, or ($3.93) per share, compared to a net loss of $112.4 million, or ($3.57) per share, for the same period in 2018.
Revenue earned during the fourth quarter of 2019 of $9.0 million was attributable to U.S. NUZYRA net sales of $5.4 million and collaboration and royalty revenue of $3.6 million, which included a $3.0 million milestone earned from Zai Lab and royalties earned from SEYSARA sales in the U.S. Revenue earned during the fourth quarter of 2018 was primarily attributable to a $12.0 million milestone earned from Almirall, LLC upon FDA approval of SEYSARA and a $5.0 million milestone earned from Zai Lab upon FDA approval of NUZYRA.
Revenue earned during the year ended December 31, 2019 of $16.5 million was attributable to U.S. NUZYRA net sales of $11.5 million and royalty and collaboration revenues of $5.0 million, consisting primarily of a $3.0 million milestone payment earned in December 2019 upon submission of the first regulatory approval application for a licensed product in the People’s Republic of China and royalties earned from SEYSARA sales in the United States. Revenue earned during the year ended December 31, 2018 of $17.0 million was primarily attributable to a $12.0 million milestone earned from Almirall, LLC upon FDA approval of SEYSARA and a $5.0 million milestone earned from Zai Lab upon FDA approval of NUZYRA.
Research and development expenses were $9.1 million in the fourth quarter of 2019 compared to $11.8 million for the same period in 2018.
Research and development expenses were $39.6 million for the year ended December 31, 2019, compared to $57.5 million for the year ended December 31, 2018. The $17.9 million decrease is primarily the result of the capitalization of NUZYRA commercial supply costs, which were classified as research and development expense until FDA approval of NUZYRA on October 2, 2018, partially offset by higher clinical study costs associated with our Phase 2 UTI program.
Selling, general and administrative expenses were $21.3 million in fourth quarter of 2019, compared to $25.3 million for the same period in 2018.
Selling, general and administrative expenses were $89.1 million for the year ended December 31, 2019, compared to $63.7 million for the year ended December 31, 2018. The $25.4 million increase is primarily the result of the cost of our contract sales force, higher marketing, trade and distribution fees, and increased salaries, benefits and other personnel-related costs in support of the commercialization of NUZYRA.
As of December 31, 2019, Paratek had $215.4 million in cash, cash equivalents and marketable securities.
Financial Guidance
Paratek also announced its full year 2020 financial guidance. This financial guidance consists of the following components:
Paratek estimates 2020 total revenues to be between $75 and $80 million. This revenue consists of the following elements:
2020 NUZYRA U.S. net product sales is expected to be approximately $66 million with approximately $38 million of these sales coming from the initial BARDA procurement of 2,500 anthrax treatment courses.
The initial NUZYRA BARDA procurement is anticipated to be secured in the first half of 2020.
Royalty and collaboration revenue and BARDA grant revenue are expected to be approximately $9 to $14 million.
Of note, BARDA grant revenue consists of reimbursement associated with the post-marketing requirement clinical development activities, the anthrax development program and the onshoring of U.S. NUZYRA manufacturing.
2020 R&D and SG&A expense is expected to be approximately $140 million.
R&D expense includes approximately $5 million earmarked for start-up activities in preparation for a potential NTM registrational study.
Excluding the BARDA R&D and onshoring cost reimbursement, R&D and SG&A expense is expected to remain relatively flat when compared to 2019.
Based upon our current operating plan which includes estimated NUZYRA product sales, and the BARDA expense reimbursement of activities related to the Project BioShield contract, we anticipate that our existing cash, cash equivalents and marketable securities of $215.4 million as of December 31, 2019, extend our cash runway through the end of 2023 with a pathway to cash flow break even.
This anticipated pathway assumes the Company will be able to fund all company operating expenses, anticipated capital expenditures, and debt service, including repayment in full of the Hercules Loan and Security Agreement under its existing terms.
Company performance and unanticipated events could cause actual results to vary from this forward-looking guidance.
Call and Webcast
Paratek’s earnings conference call for the quarter ended December 31, 2019 will be broadcast today at 4:30 p.m. EDT on February 25, 2019. The live webcast can be accessed under "Events and Presentations" in the Investor Relations section of Paratek’s website at www.ParatekPharma.com.
Domestic investors wishing to participate in the call should dial: 877-407-0792 and international investors should dial: 201-689-8263. The conference ID is 13699046. Investors can also access the call at View Source
Website Information
Paratek routinely posts important information for investors on the Investor Relations section of its website at www.ParatekPharma.com. Paratek intends to use this website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of Paratek’s website, in addition to following its press releases, U.S. Securities and Exchange Commission (SEC) filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, Paratek’s website is not incorporated by reference into, and is not a part of, this document.