On May 9, 2023 Emergent BioSolutions Inc. (NYSE: EBS) reported its financial results for the first quarter ended March 31, 2023 (Press release, Emergent BioSolutions, MAY 9, 2023, View Source [SID1234631240]). Among the highlights, Emergent has received from the U.S. government Notices of Intent to Purchase medical countermeasures to combat smallpox and botulism. Further, the Company expects to reach a deal with its lenders to amend and extend the terms of its debt obligations.

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"Since the beginning of the year, we have taken strategic actions to stabilize and strengthen our core businesses to create sustainable, long-term value for all our stakeholders," said Robert G. Kramer, president and CEO of Emergent BioSolutions. "The impending sale of our travel health business, notices of intent from the U.S. government to procure medical countermeasures, productive conversations with our lenders, and the anticipated launch of over-the-counter Narcan Nasal Spray later this summer all help build momentum for the rest of 2023 and beyond."

FINANCIAL HIGHLIGHTS (1)

Q1 2023 vs. Q1 2022

($ in millions, except per share amounts) Q1 2023 Q1 2022 % Change
Total Revenues $165.1 $307.5 (46)%
Net Loss $(183.0) $(3.7) *
Net Loss per Diluted Share $(3.65) $(0.07) *
Adjusted Net Income (Loss) (2) $(158.8) $9.1 *
Adjusted Net Income (Loss) (2) per Diluted Share $(3.17) $0.18 *
Adjusted EBITDA (2) $(100.8) $36.0 *
Gross Margin % 2% 48% NM
Adjusted Gross Margin % (2) 4% 48% NM
* % change is greater than +/- 100%
NM – Not Meaningful
SELECT Q1 2023 AND OTHER RECENT BUSINESS UPDATES

Received from the U.S. government Notices of Intent to Procure ACAM2000, (Smallpox (Vaccinia) Vaccine, Live), VIGIV [Vaccinia Immune Globulin Intravenous (Human)], and BAT [Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G) – (Equine)], medical countermeasures that help address the threat of smallpox and botulism, for inclusion in the Strategic National Stockpile
Announced U.S. Food and Drug Administration ("FDA") approval of NARCAN (naloxone HCl) Nasal Spray 4 mg as an over-the-counter ("OTC") emergency treatment for known or suspected opioid overdose
Announced an agreement to sell the travel health business to Bavarian Nordic for up to $380 million, including $270 million upfront
Q1 2023 FINANCIAL PERFORMANCE (1)

Revenues

Beginning in 2023, the Company is revising the categories used in discussing product/service level revenues. The new categories are:

Anthrax MCM — comprises potential contributions from AV7909, BioThrax, Anthrasil and raxibacumab
NARCAN — comprises contributions from NARCAN Nasal Spray
Smallpox MCM — comprises potential contributions from ACAM2000, VIGIV and Tembexa
Other Products — includes potential contributions from BAT, RSDL, Trobigard, Vaxchora and Vivotif
CDMO — comprises service and lease revenues from the contract development and manufacturing business
($ in millions) Q1 2023 Q1 2022 % Change
Product sales, net (3):
Anthrax MCM
$21.9 $109.4 (80)%
NARCAN
$100.4 $93.1 8%
Smallpox MCM
$7.2 $23.3 (69)%
Other Products
$13.9 $11.3 23%
Total product sales, net $143.4 $237.1 (40)%
Contract development and manufacturing ("CDMO"):
Services
$13.4 $51.8 (74)%
Leases
$1.8 $9.0 (80)%
Total CDMO $15.2 $60.8 (75)%
Contracts and grants $6.5 $9.6 (32)%
Total revenues $165.1 $307.5 (46)%
Product Sales, net

Anthrax MCM

For Q1 2023, revenues from Anthrax MCM decreased $87.5 million as compared with Q1 2022. The decrease was primarily due to timing of sales related to AV7909 (Anthrax Vaccine Adsorbed, Adjuvanted) and BioThrax (Anthrax Vaccine Adsorbed) during Q1 2022, partially offset by an increase in Anthrasil [Anthrax Immune Globulin Intravenous (human)] sales.

NARCAN

For Q1 2023, revenues from NARCAN increased $7.3 million as compared with Q1 2022. The increase was primarily driven by an increase in branded NARCAN sales as well as an increase in Canadian public sales, partially offset by a reduction in commercial retail sales in the U.S.

Smallpox MCM

For Q1 2023, revenues from Smallpox MCM decreased $16.1 million as compared with Q1 2022. The decrease was primarily due to the timing of ACAM2000 international sales during Q1 2022.

Other Products

For Q1 2023, revenues from other product sales increased $2.6 million as compared with Q1 2022. The increase was primarily due to higher Vivotif (Typhoid Vaccine Live Oral Ty21a) and Vaxchora (Cholera Vaccine, Live, Oral) product sales, partially offset by decreases in RSDL (Reactive Skin Decontamination Lotion Kit) and BAT product sales.

CDMO

CDMO Services

For Q1 2023, revenues from contract development and manufacturing services decreased $38.4 million as compared with Q1 2022. The decrease was primarily due to $19.2 million less of revenue related to reduced production activities at the Company’s Bayview facility as a result of a halt in manufacturing under the Janssen contract in 2022. Additionally, the decrease also reflects reduced production at the Company’s Camden facility. The decreases were slightly offset by an increase in production at the Company’s Canton facility.

CDMO Leases

For Q1 2023, revenues from contract development and manufacturing leases decreased $7.2 million as compared with Q1 2022. The decrease was primarily due to a reduction of lease revenues related to the Janssen contract termination.

Contracts and Grants

For Q1 2023, revenues from contracts and grants decreased $3.1 million as compared with Q1 2022. The decrease was primarily due to the conclusion of COVID-19 related studies in Q4 2022.

Operating Expenses

($ in millions) Q1 2023 Q1 2022 % Change
Cost of product sales $102.9 $80.3 28%
Cost of CDMO $52.2 $75.6 (31)%
Research and development ("R&D") $40.6 $46.4 (13)%
Selling, general and administrative $100.5 $84.8 19%
Amortization of intangible assets $17.0 $14.0 21%
Total operating expenses $313.2 $301.1 4%
Cost of Product Sales

For Q1 2023, cost of product sales increased $22.6 million as compared with Q1 2022. The increase was primarily due to lower overhead absorption coupled with higher allocations of product COGS at the Bayview facility, partially offset by lower period costs at our Bern facility and lower NARCAN royalty fees.

Cost of CDMO

For Q1 2023, cost of CDMO decreased $23.4 million as compared with Q1 2022. The decrease was primarily due to reduced production activities across the CDMO network of manufacturing sites in Q1 2023 compared to Q1 2022 resulting in decreased raw materials consumption, partially offset by increased costs at our Camden facility for additional investments in quality enhancement and improvement initiatives and increased costs associated with production activities at the Company’s Canton Facility.

Research and Development (2)

For Q1 2023, R&D expenses decreased $5.8 million as compared with Q1 2022. The decrease was primarily due to a reduction in R&D spend related to the next phase of the development program for the chikungunya vaccine candidate CHIKV VLP; this development program will be included in the sale of the Travel Health business to Bavarian Nordic, first announced in February 2023. Net of contracts and grants revenue, which consists primarily of reimbursements against development investments, adjusted research and development expenses were $34.1 million for Q1 2023.

Selling, General and Administrative

For Q1 2023, selling, general and administrative expenses increased $15.7 million as compared with Q1 2022. The increase was primarily due to higher professional services fees and severance costs related to our 2023 Restructuring Plan discussed further below.

Restructuring Expense

During Q1 2023, the Company incurred restructuring expense in connection with an organizational restructuring plan (the "2023 Plan") announced on January 9, 2023. The Company incurred approximately $9.7 million in charges in connection with the 2023 Plan during Q1 2023. These charges consist primarily of charges related to employee transition, severance payments and employee benefits. All activities related to the 2023 Plan were substantially completed during the first quarter of 2023.

Capital Expenditures

($ in millions) Q1 2023 Q1 2022 % Change
Capital expenditures $15.1 $32.2 (53)%
Capital expenditures as a % of total revenues 9% 10% (100) bps
For Q1 2023, gross capital expenditures decreased largely due to lower product development activities, including our chikungunya facility redesign project.

Segment Information

The Company manages the business with a focus on two reportable segments. Our Products segment, which includes the Anthrax MCM products, NARCAN products, Smallpox MCM products and Other products, and our Services segment consisting of our CDMO services. The Company evaluates the performance of these reportable segments based on revenue and Adjusted Gross Margin, which is a non-GAAP financial measure. Segment revenue includes external customer sales, but does not include inter-segment services. The Company does not allocate contracts and grants, R&D, SG&A, amortization of intangible assets, interest and other income (expense) or taxes to its evaluation of the performance of these segments.

($ in millions)

Products Services
Three Months Ended March 31, Three Months Ended March 31,
2023 2022 % Change 2023 2022 % Change
Revenues $143.4 $237.1 (40)% $15.2 $60.8 (75)%

Cost of sales $102.9 $80.3 28% $52.2 $75.6 (31)%
Less: Changes in fair value of contingent consideration $1.5 $0.5 * $— $— NM
Less: Restructuring costs $2.0 $— NM $— $— NM
Adjusted cost of sales ** $99.4 $79.8 25% $52.2 $75.6 (31)%

Gross margin *** $40.5 $156.8 (74)% $(37.0) $(14.8) *
Gross margin % *** 28% 66% NM
(243)% (24)% NM

Adjusted gross margin **** $44.0 $157.3 (72)% $(37.0) $(14.8) *
Adjusted gross margin % **** 31% 66% NM (243)% (24)% NM
* % change is greater than +/- 100%
** Adjusted cost of sales, which is a non-GAAP financial measure, is calculated as cost of sales less restructuring costs, and other special items and non-cash items related to changes in fair value of contingent consideration. See "Reconciliation of Non-GAAP Measures" for the reconciliation of this non-GAAP measure to the most closely related GAAP financial measure.
*** Gross margin is calculated as revenues less cost of sales. Gross margin % is calculated as gross margin divided by revenues.
**** Adjusted gross margin, which is a non-GAAP financial measure, is calculated as revenues less Adjusted cost of sales. Adjusted gross margin %, which is a non-GAAP financial measure, is calculated as Adjusted gross margin divided by revenues. See "Reconciliation of Non-GAAP Measures" for the reconciliation of this non-GAAP measure to the most closely related GAAP financial measure.
NM – Not Meaningful
For Q1 2023, Product gross margin and Product adjusted gross margin decreased $116.3 million and $113.3 million, respectively, as compared with Q1 2022. The decrease in Product gross margin and Product adjusted gross margin was primarily due to decreased sales volumes and increases in costs related to lower overhead absorption combined with a less favorable sales mix weighted more heavily towards lower margin products.

For Q1 2023, Services gross margin and Services adjusted gross margin decreased $22.2 million and $22.2 million, respectively, as compared with Q1 2022. The decreases are primarily due to reduced production activities across our CDMO network including the halt in manufacturing under the Janssen contract and the decrease in margins at the Company’s Camden facility due to additional investments in quality enhancement and improvement initiatives.

2023 FINANCIAL FORECAST

The Company provides the following updated financial forecast for the full year 2023 and Q2 2023, in both instances reflecting management’s expectations based on the most current information available, and taking into account the actual performance in Q1 2023.

Full Year 2023

METRIC ($ in millions) Updated Range (as of 05/09/23) Action Previous Range (as of 02/27/23)
Total Revenues $1,100 – $1,200 UNCHANGED $1,100 – $1,200
Net Loss $(185) – $(135) REVISED $(180) – $(130)
Adjusted Net Loss (2) $(85) – $(35) REVISED $(80) – $(30)
Adjusted EBITDA (2) $100 – $150 REVISED $75 – $125
Adjusted Gross Margin % (2) 39% – 42% REVISED 41% – 44%

Product/Service Level Revenue
Anthrax MCM
$260 – $280 UNCHANGED $260 – $280
NARCAN
$360 – $380 REVISED $290 – $310
Smallpox MCM
$235 – $255 UNCHANGED $235 – $255
Other Products
$120 – $140 REVISED $165 – $185
CDMO
$90 – $110 REVISED $115 – $135
The 2023 financial forecast reflects the following key considerations.

OVERALL — Reflects the impact of the previously announced sale of the Travel Health business to Bavarian Nordic, which is anticipated to close in the second quarter.
Total Revenues — Unchanged, reflecting the neutral impact of the overall updates across all sources of revenues.
Anthrax MCM — Unchanged, reflecting assumptions that have remained constant regarding procurement and delivery of the Company’s related products to the U.S. and allied governments.
NARCAN — Revised, primarily reflecting robust demand from the U.S. PIP (public interest) channel and Canadian market.
Smallpox MCM — Unchanged, reflecting assumptions that have remained constant regarding procurement and delivery of the Company’s related products to the U.S. and allied governments.
Other Products — Revised, reflecting the removal of the Travel Health products, Vaxchora and Vivotif, following the anticipated completion of the divestiture of this business.
CDMO — Revised, reflecting the impact of recent changes to customer requirements for COVID-related products coupled with continued remediation costs and investments to improve quality and compliance across the Company’s manufacturing network.
Adjusted Net Loss — Revised, reflecting the impact of higher NARCAN sales and the Travel Health business divestiture, offset by lower CDMO revenues and an increase in the tax valuation allowance.
Adjusted EBITDA — Revised, reflecting the impact of higher NARCAN sales and the Travel Health business divestiture, offset by lower CDMO revenues.
Adjusted Gross Margin — Revised, reflecting the impact of overall revenue mix.
Q2 2023

METRIC ($ in millions) Initial Range (as of 05/09/23)
Total Revenues $210 – $230
FOOTNOTES

(1) All financial information incorporated within this release is unaudited.
(2) See "Reconciliation of Non-GAAP Measures" and the reconciliation tables for the definitions and reconciliations of these non-GAAP financial measures to the most closely related GAAP financial measures.
(3) Product sales, net are reported net of variable consideration including returns, rebates, wholesaler fees and prompt pay discounts in accordance with U.S. generally accepted accounting principles.

CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST INFORMATION

Company management will host a conference call at 5:00 pm eastern time today, May 9, 2023, to discuss these financial results. The conference call and presentation supplement can be accessed from the Company’s website or through the following:

By phone
Advance registration is required. Visit https://register.vevent.com/register/BIc8d797bf092b4802982a749c6726584d to register and receive an email with the dial-in number, passcode and registrant ID.

By webcast
Visit View Source

A replay of the call can be accessed from the Emergent website.

On May 9, 2023 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three months ended March 31, 2023 (Press release, Eagle Pharmaceuticals, MAY 9, 2023, View Source [SID1234631239]).

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Business and Recent Highlights:

· Net product sales of PEMFEXY totaled $22.9 million in the first quarter 2023. Based on internal data and customer feedback, the Company estimates that as of the second quarter to date, its U.S. share of commercial (non-340B) pemetrexed usage has grown to 15% up from 6% exiting the fourth quarter of 2022.

1 Adjusted non-GAAP net income, adjusted non-GAAP earnings per share, adjusted non-GAAP EBITDA, adjusted non-GAAP R&D expense and adjusted non-GAAP SG&A expense are non-GAAP financial measures. For descriptions and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures, please see below and the tables at the end of this press release.

2 Based on IQVIA SMART-US weekly volume data and internal data.

3 View Source

4 View Source

5 IQVIA SMART-US weekly volume data for the first quarter of 2023 and 2022 historic IQVIA data.

· Centers for Medicare & Medicaid Services ("CMS") established a unique, product-specific billing code for Byfavo (remimazolam for injection)6, a short-acting sedative for procedures lasting 30 minutes or less. This new Healthcare Common Procedure Coding System (HCPCS) Level II code ("J-code") is J2249 "Injection, remimazolam, 1 mg." The J-code will be effective on July 1, 2023.

· Reached a settlement agreement with Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively, "Dr. Reddy’s"). Eagle had asserted its Orange Book-listed patents against Dr. Reddy’s related to its new drug application referencing BENDEKA. Under the settlement agreement, Dr. Reddy’s has the right to market its product beginning November 17, 2027, or earlier based on certain circumstances. The settlement with Dr. Reddy’s follows Eagle’s previously announced settlements with Hospira, Inc. ("Hospira") and Accord Healthcare, Inc. ("Accord") related to their new drug applications referencing BENDEKA.

o With the Dr. Reddy’s settlement, all the existing challenges, except for one, which is for a proposed powder, not liquid, formulation have been settled. The Company expects bendamustine to be a significant contributor for several more years.

· Reaffirms full-year Company guidance.

· The Company is also currently working with lenders to secure financing to support a potential accretive acquisition.

Financial Highlights

First Quarter 2023

· Total revenue for Q1 2023 was $66.3 million, compared to $115.9 million in Q1 2022.
· Q1 2023 net income was $5.8 million, or $0.44 per basic and diluted share, compared to net income of $44.1 million, or $3.47 per basic and $3.41 per diluted share, in Q1 2022.
· Q1 2023 adjusted non-GAAP net income was $16.5 million, or $1.27 per basic and $1.26 per diluted share, compared to adjusted non-GAAP net income of $52.2 million, or $4.10 per basic and $4.04 per diluted share, in Q1 2022.
· Cash and cash equivalents were $21.9 million, net accounts receivable was $115.0 million, and total debt was $77.5 million, as of March 31, 2023.

"Following on from our outstanding performance in 2022, we believe Eagle remains well positioned for another strong year, and therefore we are reiterating our 2023 guidance. Our products continue to track well, and we are on pace to surpass our 2022 net product sales for the full year 2023 for PEMFEXY, which continues to gain share in commercial (non-340B) pemetrexed usage in the U.S.," stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

"To be clear, the investments we are making for the future account for much of the expected difference of our earnings in 2023 versus 2022. We are investing to support our products and advance our pipeline, notably CAL02, which bridges much of the year-over-year gap. We believe the expansion of our commercial team will enable us to capture synergies with an acquisition target and are currently working with lenders to secure financing to support a potentially accretive transaction," concluded Tarriff.

View Source

First Quarter 2023 Financial Results

Total revenue for the three months ended March 31, 2023 was $66.3 million, as compared to $115.9 million for the three months ended March 31, 2022.

Q1 2023 RYANODEX net product sales were $8.8 million, compared to $6.6 million in the first quarter of 2022.

Q1 2023 BELRAPZO net product sales were $6.4 million, compared to $5.9 million in the first quarter of 2022.

Q1 2023 PEMFEXY net product sales were $22.9 million, compared to $37.2 million in the first quarter of 2022.

Q1 2023 vasopressin net product sales were $3.5 million, compared to $34.3 million in the first quarter of 2022. During the first quarter of 2023, the Company gave notice to customers and the FDA that it was withdrawing from the vasopressin market. Inventory on hand is expected to be depleted by the end of the second quarter of 2023.

Q1 2023 royalty revenue was $20.1 million, compared to $25.8 million in the prior year quarter.

A summary of total revenue is outlined below:

Three Months Ended March 31,
2023 2022
(unaudited) (unaudited)
Revenue (in thousands):
Product sales, net $ 46,221 $ 90,088
Royalty revenue 20,084 25,786
Total revenue $ 66,305 $ 115,874

Gross margin was 74% during the first quarter of 2023, compared to 76% in the first quarter of 2022. The decrease in gross margin was primarily the result of the inclusion of amortization of intangible assets related to the newly acquired products, which we expect to continue going forward.

R&D expense was $9.3 million for the first quarter of 2023, compared to $6.1 million for the first quarter of 2022. The increase was primarily due to higher spend of $2.0 million on CAL02 and $1.0 million on Byfavo and Barhemsys pediatric studies.

SG&A expenses in the first quarter of 2023 were $28.0 million compared to $22.2 million in the first quarter of 2022. This increase was driven by $3.3 million in salary and other personnel-related costs, $2.0 million in external sales and marketing spend, partially offset by $2.0 million in lower legal-related costs.

Net income for the first quarter of 2023 was $5.8 million, or $0.44 per basic and diluted share, compared to net income of $44.1 million, or $3.47 per basic and $3.41 per diluted share, in the first quarter of 2022, primarily as a result of the factors discussed above.

Adjusted non-GAAP net income for the first quarter of 2023 was $16.5 million, or $1.27 per basic and $1.26 per diluted share, compared to adjusted non-GAAP net income of $52.2 million, or $4.10 per basic and $4.04 per diluted share, in the first quarter of 2022.

Adjusted non-GAAP EBITDA for the first quarter of 2023 was $22.3 million, compared to adjusted non-GAAP EBITDA of $66.9 million in the first quarter of 2022.

2023 Full-Year Guidance

The Company continues to expect:

· Adjusted EBITDA of $74.0-$80.0 million
· Adjusted non-GAAP earnings per share of $4.20-$4.53
· Adjusted non-GAAP R&D expense of $41.0-$45.0 million
· Adjusted non-GAAP SG&A expense of $86.0-$90.0 million

Liquidity

As of March 31, 2023, Eagle had $21.9 million in cash and cash equivalents, $115.0 million in accounts receivable, net, and $77.5 million in outstanding debt on the Company’s $150 million credit facility with JPMorgan. As of March 31, 2023, Eagle had a working capital surplus of $94.7 million.

Conference Call

As previously announced, Eagle management will host its first quarter 2023 conference call as follows:

Date May 9, 2023
Time 8:30 A.M. ET
Toll free (U.S.) 800-274-8461
International 203-518-9814
Webcast (live and replay) www.eagleus.com, under the "Investor + News" section

A replay of the conference call will be available for two weeks after the call’s completion by dialing 888-566-0151 (U.S.) or 402-220-9181 (International) and entering conference call ID EGRXQ123. The webcast will be archived for 30 days at the aforementioned URL.

On May 9, 2023 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three months ended March 31, 2023 (Press release, Eagle Pharmaceuticals, MAY 9, 2023, View Source [SID1234631239]).

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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!

Business and Recent Highlights:

· Net product sales of PEMFEXY totaled $22.9 million in the first quarter 2023. Based on internal data and customer feedback, the Company estimates that as of the second quarter to date, its U.S. share of commercial (non-340B) pemetrexed usage has grown to 15% up from 6% exiting the fourth quarter of 2022.

1 Adjusted non-GAAP net income, adjusted non-GAAP earnings per share, adjusted non-GAAP EBITDA, adjusted non-GAAP R&D expense and adjusted non-GAAP SG&A expense are non-GAAP financial measures. For descriptions and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures, please see below and the tables at the end of this press release.

2 Based on IQVIA SMART-US weekly volume data and internal data.

3 View Source

4 View Source

5 IQVIA SMART-US weekly volume data for the first quarter of 2023 and 2022 historic IQVIA data.

· Centers for Medicare & Medicaid Services ("CMS") established a unique, product-specific billing code for Byfavo (remimazolam for injection)6, a short-acting sedative for procedures lasting 30 minutes or less. This new Healthcare Common Procedure Coding System (HCPCS) Level II code ("J-code") is J2249 "Injection, remimazolam, 1 mg." The J-code will be effective on July 1, 2023.

· Reached a settlement agreement with Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively, "Dr. Reddy’s"). Eagle had asserted its Orange Book-listed patents against Dr. Reddy’s related to its new drug application referencing BENDEKA. Under the settlement agreement, Dr. Reddy’s has the right to market its product beginning November 17, 2027, or earlier based on certain circumstances. The settlement with Dr. Reddy’s follows Eagle’s previously announced settlements with Hospira, Inc. ("Hospira") and Accord Healthcare, Inc. ("Accord") related to their new drug applications referencing BENDEKA.

o With the Dr. Reddy’s settlement, all the existing challenges, except for one, which is for a proposed powder, not liquid, formulation have been settled. The Company expects bendamustine to be a significant contributor for several more years.

· Reaffirms full-year Company guidance.

· The Company is also currently working with lenders to secure financing to support a potential accretive acquisition.

Financial Highlights

First Quarter 2023

· Total revenue for Q1 2023 was $66.3 million, compared to $115.9 million in Q1 2022.
· Q1 2023 net income was $5.8 million, or $0.44 per basic and diluted share, compared to net income of $44.1 million, or $3.47 per basic and $3.41 per diluted share, in Q1 2022.
· Q1 2023 adjusted non-GAAP net income was $16.5 million, or $1.27 per basic and $1.26 per diluted share, compared to adjusted non-GAAP net income of $52.2 million, or $4.10 per basic and $4.04 per diluted share, in Q1 2022.
· Cash and cash equivalents were $21.9 million, net accounts receivable was $115.0 million, and total debt was $77.5 million, as of March 31, 2023.

"Following on from our outstanding performance in 2022, we believe Eagle remains well positioned for another strong year, and therefore we are reiterating our 2023 guidance. Our products continue to track well, and we are on pace to surpass our 2022 net product sales for the full year 2023 for PEMFEXY, which continues to gain share in commercial (non-340B) pemetrexed usage in the U.S.," stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

"To be clear, the investments we are making for the future account for much of the expected difference of our earnings in 2023 versus 2022. We are investing to support our products and advance our pipeline, notably CAL02, which bridges much of the year-over-year gap. We believe the expansion of our commercial team will enable us to capture synergies with an acquisition target and are currently working with lenders to secure financing to support a potentially accretive transaction," concluded Tarriff.

View Source

First Quarter 2023 Financial Results

Total revenue for the three months ended March 31, 2023 was $66.3 million, as compared to $115.9 million for the three months ended March 31, 2022.

Q1 2023 RYANODEX net product sales were $8.8 million, compared to $6.6 million in the first quarter of 2022.

Q1 2023 BELRAPZO net product sales were $6.4 million, compared to $5.9 million in the first quarter of 2022.

Q1 2023 PEMFEXY net product sales were $22.9 million, compared to $37.2 million in the first quarter of 2022.

Q1 2023 vasopressin net product sales were $3.5 million, compared to $34.3 million in the first quarter of 2022. During the first quarter of 2023, the Company gave notice to customers and the FDA that it was withdrawing from the vasopressin market. Inventory on hand is expected to be depleted by the end of the second quarter of 2023.

Q1 2023 royalty revenue was $20.1 million, compared to $25.8 million in the prior year quarter.

A summary of total revenue is outlined below:

Three Months Ended March 31,
2023 2022
(unaudited) (unaudited)
Revenue (in thousands):
Product sales, net $ 46,221 $ 90,088
Royalty revenue 20,084 25,786
Total revenue $ 66,305 $ 115,874

Gross margin was 74% during the first quarter of 2023, compared to 76% in the first quarter of 2022. The decrease in gross margin was primarily the result of the inclusion of amortization of intangible assets related to the newly acquired products, which we expect to continue going forward.

R&D expense was $9.3 million for the first quarter of 2023, compared to $6.1 million for the first quarter of 2022. The increase was primarily due to higher spend of $2.0 million on CAL02 and $1.0 million on Byfavo and Barhemsys pediatric studies.

SG&A expenses in the first quarter of 2023 were $28.0 million compared to $22.2 million in the first quarter of 2022. This increase was driven by $3.3 million in salary and other personnel-related costs, $2.0 million in external sales and marketing spend, partially offset by $2.0 million in lower legal-related costs.

Net income for the first quarter of 2023 was $5.8 million, or $0.44 per basic and diluted share, compared to net income of $44.1 million, or $3.47 per basic and $3.41 per diluted share, in the first quarter of 2022, primarily as a result of the factors discussed above.

Adjusted non-GAAP net income for the first quarter of 2023 was $16.5 million, or $1.27 per basic and $1.26 per diluted share, compared to adjusted non-GAAP net income of $52.2 million, or $4.10 per basic and $4.04 per diluted share, in the first quarter of 2022.

Adjusted non-GAAP EBITDA for the first quarter of 2023 was $22.3 million, compared to adjusted non-GAAP EBITDA of $66.9 million in the first quarter of 2022.

2023 Full-Year Guidance

The Company continues to expect:

· Adjusted EBITDA of $74.0-$80.0 million
· Adjusted non-GAAP earnings per share of $4.20-$4.53
· Adjusted non-GAAP R&D expense of $41.0-$45.0 million
· Adjusted non-GAAP SG&A expense of $86.0-$90.0 million

Liquidity

As of March 31, 2023, Eagle had $21.9 million in cash and cash equivalents, $115.0 million in accounts receivable, net, and $77.5 million in outstanding debt on the Company’s $150 million credit facility with JPMorgan. As of March 31, 2023, Eagle had a working capital surplus of $94.7 million.

Conference Call

As previously announced, Eagle management will host its first quarter 2023 conference call as follows:

Date May 9, 2023
Time 8:30 A.M. ET
Toll free (U.S.) 800-274-8461
International 203-518-9814
Webcast (live and replay) www.eagleus.com, under the "Investor + News" section

A replay of the conference call will be available for two weeks after the call’s completion by dialing 888-566-0151 (U.S.) or 402-220-9181 (International) and entering conference call ID EGRXQ123. The webcast will be archived for 30 days at the aforementioned URL.

On May 9, 2023 Delcath Systems, Inc. (Nasdaq: DCTH), an interventional oncology company focused on the treatment of primary and metastatic cancers of the liver, reported that it will be participating in the Lytham Partners Spring 2023 Investor Conference taking place virtually on Thursday, May 18, 2023 (Press release, Delcath Systems, MAY 9, 2023, View Source [SID1234631238]).

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!

Industry Panel
Delcath CEO Gerard Michel will be participating on a panel titled Advancements in the Fight Against Cancer. The panel will be webcasted on Thursday, May 18, 2023, at 11AM ET on the Company’s website at View Source or View Source The webcast will also be archived and available for replay.

1×1 Meetings
Management will be participating in virtual one-on-one meetings throughout the event. To arrange a meeting with management, please contact Lytham Partners at 1×[email protected] or register at View Source

On May 9, 2023 CytomX Therapeutics, Inc. (Nasdaq: CTMX), a leader in the field of conditionally activated, localized biologics, reported first quarter 2023 financial results and provided a business update (Press release, CytomX Therapeutics, MAY 9, 2023, View Source [SID1234631237]).

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!

"As we entered 2023, CytomX continued the advancement of our diversified portfolio of innovative Probody therapeutic candidates for the treatment of cancer while ensuring disciplined resource allocation," said Sean McCarthy, D.Phil., chief executive officer and chairman of CytomX Therapeutics. "We remain intensely focused on execution towards key inflection points in our therapeutic pipeline including continued progress with CX-904 in Phase 1 and advancing our next-generation candidates, CX-2051 and CX-801, towards IND filings. Our scientific depth in conditional activation and biologics localization positions the company at the forefront of potential breakthroughs with potent biologic modalities such as ADCs, T-Cell engagers and cytokines. Additionally, our scientific leadership has attracted valued new relationships with Regeneron and Moderna, allowing us to maintain balance sheet strength. Moreover, with more than fifteen internal and partnered therapeutic programs, we are well positioned to deliver meaningful treatments to patients over time."

Dr. McCarthy continued, "I’m also thrilled to announce the promotion of Dr. Marcia Belvin to the position of chief scientific officer. Marcia’s skill and experience has played a central role in the translation of key learnings from our first wave of clinical programs into the next generation Probody therapeutic candidates that comprise our current pipeline. My colleagues and I look forward to Marcia’s continued success as we pursue our shared vision of building a long-term company that brings new and differentiated treatments to people with cancer."

First Quarter Business Highlights and Recent Developments

•
Continued progress in Phase 1 dose escalation for CX-904, T-cell-engaging bispecific (TCB) targeted to EGFRxCD3 – CX-904 is a conditionally activated TCB designed to target the epidermal growth factor receptor (EGFR) on cancer cells and the CD3 receptor on T cells within the tumor microenvironment. CX-904 is partnered with Amgen and is being evaluated by CytomX in an ongoing Phase 1 study in patients with advanced solid tumors. The first patient was dosed in May 2022 and the dose escalation portion of the study continues to advance. The primary goal of dose escalation is to assess safety and reach dose levels and exposures by the end of 2023 at which enrollment into backfill cohorts in certain EGFR positive tumors can begin. In 2024, a key milestone will be the selection of the recommended Phase 2 dose and decision to potentially initiate expansion cohorts. This program is partnered with Amgen in a global co-development alliance.

•
IND enabling activities on track for filings for CX-2051 (EpCAM-directed ADC) and CX-801 (Interferon alpha-2b) in the second half of 2023 – CytomX has selected previously validated anti-cancer targets, EpCAM and IFNa2b, respectively, that have been limited in their potential due to systemic toxicities, for its next generation molecules. The molecular design of CX-2051 and CX-801 has incorporated CytomX’s platform expertise and clinical learnings to optimize predicted therapeutic index in order to potentially broaden the clinical utility of these promising targets through tumor localized conditional activation.

•
BMS advancement of BMS-986288 to Phase 2 – In February 2023, BMS published pipeline updates that included moving the Anti-CTLA-4 non-fucosylated Probody, BMS-986288, from Phase 1 to Phase 2. BMS prioritized the BMS-986288 Probody program over the other two molecules in its CTLA-4 pipeline – the Probody, BMS-986249, and the antibody, BMS-986218. Clinical evaluation of BMS-986288 is ongoing.

•
CD71-Targeting strategies under evaluation – In March 2023, AbbVie notified CytomX that it would not advance the CD71-targeting, conditionally activated ADC, CX-2029, into additional clinical studies and provided notice of termination of the 2016 CD71 License and Collaboration Agreement. CytomX is assessing acquisition of full rights to CX-2029 whilst also evaluating potential next generation CD71 targeting strategies.

•
Clinical candidate milestone achievement in Astellas TCB collaboration – In January 2023, Astellas nominated a collaboration clinical candidate, the first Probody TCB molecule to progress in the alliance, triggering a $5 million dollar milestone payment to CytomX. CytomX and Astellas are collaborating on additional conditionally activated TCB programs, and CytomX is eligible to receive future preclinical, clinical, and commercial milestones. CytomX retains a cost share and co-commercialization option on a select number of targets.

•
Marcia Belvin, Ph.D. promoted to Chief Scientific Officer – In March 2023, Marcia Belvin, Ph.D. was promoted to the position of chief scientific officer. Dr Belvin has served as the company’s senior vice president, head of research since April 2020 and joined the company as head of oncology research in 2018. Prior to joining CytomX, Dr. Belvin held roles of increasing responsibility at Genentech, where for over 13 years, she led multiple preclinical pipeline teams and oversaw programs in cancer signaling, cancer metabolism, and cancer immunology. Dr. Belvin began her career at Exelixis, where she managed teams responsible for preclinical pipeline discovery within the oncology and inflammation portfolios.

Priorities for 2023

•
CX-904 (EGFRxCD3): Continue patient enrollment and dose escalation in ongoing Phase 1 study and initiate backfill cohorts by the end of 2023
•
File 2 New INDs (wholly-owned): CX-801 (IFNa2b) and CX-2051 (EpCAM) projected in the second half of 2023
•
Next-Generation CTLA-4 Program: Continued clinical progress for BMS-986288
•
CX-2029 (CD71): Determine next steps for CD71 program, including CX-2029
•
Collaborations: Continuation of drug discovery activities within R&D alliances including those with our newest collaborators, Regeneron and Moderna

First Quarter 2023 Financial Results

Cash, cash equivalents and investments totaled $204.5 million as of March 31, 2023, compared to $193.7 million as of December 31, 2022. Operating cash received in the first quarter included a $35.0 million upfront payment received as a result of the execution of the Moderna collaboration agreement in the fourth quarter of 2022 and a $5.0 million milestone earned under the Astellas collaboration.

Total revenue was $23.5 million for the three months ended March 31, 2023, compared to $9.0 million for the corresponding period in 2022. The increase in revenue was driven primarily by a higher percentage of completion versus the corresponding period in 2022 for projects under the company’s projects with Bristol Myers Squibb, the milestone earned under the agreement with Astellas, and revenue recognition of the remaining deferred revenue upon termination of the AbbVie CD71 Agreement.

Research and development expenses decreased by $9.4 million during the three months ended March 31, 2023 to $21.2 million, compared to $30.6 million for the corresponding period in 2022. The decrease in research and development expenses for the three months ended March 31, 2023 compared to the corresponding period of 2022 was primarily due to a decrease in personnel related expenses, as well as winding down of laboratory contract services and clinical study activities related to the CX-2009 and CX-2029 programs, partially offset by an increase in laboratory contract services related to IND enabling activities.

General and administrative expenses decreased by $2.6 million during the three months ending March 31, 2023 to $8.0 million, compared to $10.5 million for the corresponding period in 2022. General and administrative expenses decreased primarily due to a decrease in personnel related expenses due to the workforce reduction in 2022 and patent related legal expenses.