On February 26, 2019 RedHill Biopharma Ltd. (Nasdaq: RDHL) (Tel-Aviv Stock Exchange: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company primarily focused on gastrointestinal (GI) diseases, reported its full-year 2018 financial results and operational highlights (Press release, RedHill Biopharma, FEB 26, 2019, View Source [SID1234533728]).
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Key Highlights:
Positive top-line results from the confirmatory Phase 3 study with TALICIA for eradication of H. pylori infection; NDA filing expected in H1/19 with potential U.S. commercial launch in Q4/19
Positive top-line results from a first Phase 3 study with RHB-104 for Crohn’s disease; FDA meeting planned mid-2019
Initiation of pivotal Phase 3 study with RHB-204 for first-line treatment of pulmonary nontuberculous mycobacteria (NTM) infections expected in H2/19
Strengthening of commercial management team with appointment of Rick D. Scruggs, former executive VP at Salix Pharmaceuticals, as RedHill’s chief operating officer, U.S. operations
Debt-free balance sheet with approximately $53 million in cash as of December 31, 2018
Net revenues of $8.4 million and gross margin of 66% in 2018, compared to net revenues of $4.0 million and gross margin of 47% in 20171
Micha Ben Chorin, RedHill’s chief financial officer, said: "We had a successful 2018 with positive data reported from our two key Phase 3 studies: the confirmatory Phase 3 study with TALICIA for eradication of H. pylori infection and the first Phase 3 study with RHB-104 for Crohn’s disease."
Mr. Ben Chorin added: "We enter 2019 with a solid cash position of $53.2 million and a debt-free balance sheet. One of our potential key upcoming milestones this year is the planned filing of a U.S. NDA for TALICIA in the first half of 2019, which is expected to support a potential commercial launch in the fourth quarter of 2019, subject to FDA approval. Additionally, we expect to meet with the FDA to discuss the development path to potential approval of RHB-104 for Crohn’s disease following the positive Phase 3 study results. We also plan to initiate a pivotal Phase 3 study with RHB-204 for potential first-line treatment of pulmonary nontuberculous mycobacteria (NTM) infections, an orphan disease with a strong unmet medical need, in the second half of 2019."
"We continue to strengthen our commercial management team with senior industry executives and are pleased to have Rick D. Scruggs, a former senior executive at Salix Pharmaceuticals, expand his role as chief operating officer, U.S. operations to lead our growing U.S. commercial operations. For 2019, our established sales team is positioned to drive revenue growth with a lineup of four commercial products. In an effort to drive additional revenue growth and further leverage our existing U.S. commercial operations, we continue to evaluate opportunities to in-license and acquire additional U.S commercial products," concluded Mr. Ben Chorin.
Select 2018 operational highlights:
TALICIA (RHB-105)2 – Eradication of H. pylori Infection
Following the positive results from the confirmatory Phase 3 study with TALICIA for eradication of H. pylori infection (ERADICATE Hp2 study), RedHill plans to submit a New Drug Application (NDA) to the Food and Drug Administration (FDA) in the first half of 2019, with eligibility for six-month priority review and potential U.S. commercial launch in the fourth quarter of 2019, subject to FDA approval.
RHB-104 – Crohn’s Disease
The first Phase 3 study with orally-administered RHB-104 for the treatment of Crohn’s disease (MAP US study) successfully met both its primary endpoint and key secondary endpoints and confirmed the broad benefit of RHB-104 as an add-on therapy to standard-of-care treatments for Crohn’s disease. RedHill continues to assess additional data from the positive study as it becomes available and plans to meet with the FDA mid-2019 to discuss the development path towards potential approval.
RHB-204 – Pulmonary Nontuberculous Mycobacteria (NTM) Infections
A pivotal Phase 3 study with RHB-204 for the treatment of pulmonary nontuberculous mycobacteria infections is expected to be initiated in the second half of 2019, subject to completion of the ongoing supportive non-clinical program and additional input from the FDA. The study is intended to assess the efficacy and safety of RHB-204 and potentially support its approval as a first-line treatment for pulmonary NTM infections caused by Mycobacterium avium complex (MAC).
BEKINDA (RHB-102) – Gastroenteritis and Gastritis and Diarrhea-Predominant Irritable Bowel Syndrome (IBS-D)
Following the successful completion of a first Phase 3 study with BEKINDA for gastroenteritis and gastritis and guidance provided by the FDA, RedHill is currently working to design a confirmatory Phase 3 study to support a potential NDA for BEKINDA for acute gastroenteritis and gastritis.
RedHill held a positive end-of-Phase 2/pre-Phase 3 (Type B) meeting with the FDA discussing the clinical and regulatory pathway towards potential U.S. approval of BEKINDA for the treatment of IBS-D. RedHill is currently finalizing the design of two pivotal Phase 3 studies with BEKINDA for IBS-D.
YELIVA (opaganib, ABC294640) – Cholangiocarcinoma
The ongoing Phase 2a study evaluating the activity of orally-administered YELIVA in advanced cholangiocarcinoma (bile duct cancer) achieved its pre-specified efficacy goal for the first stage of the two-stage study design and advanced to its second stage. Enrollment of the full cohort of 39 evaluable patients is expected to be completed in the second half of 2019.
U.S. Commercial Highlights:
RedHill currently commercializes and promotes four GI-specialty products in select U.S. territories, Donnatal (Phenobarbital, Hyoscyamine Sulfate, Atropine Sulfate, Scopolamine Hydrobromide)3, EnteraGam (serum-derived bovine immunoglobulin/protein isolate SBI)4, Mytesi (crofelemer 125 mg delayed-release tablets)5 and Esomeprazole Strontium DR Capsules 49.3 mg6.
RedHill expanded its leadership team with the appointment of Rick D. Scruggs as chief operating officer, U.S. operations. With more than 25 years of experience in the pharmaceutical industry, Rick has extensive experience in commercial operations and business development, having served as executive vice president of business development at Salix Pharmaceuticals, Inc., up to its acquisition by Valeant Pharmaceuticals International, Inc. (now Bausch Health Companies Inc.).
Full-Year 2018 Results7
Net Revenues of $8.4 million for 2018, compared to $4.0 million for 2017 8.
Cost of Revenues of $2.8 million for 2018, compared to $2.1 million for 2017.
Gross Profit of $5.5 million for 2018, compared to $1.9 million for 2017; with gross margin increased from 47% to 66%.
Research and Development Expenses of $24.9 million for 2018, compared to $33.0 million for 2017. The decrease was mainly due to the finalization of the Phase 3 study with RHB-104 and completion of the clinical studies with BEKINDA.
Selling, Marketing and Business Development Expenses were $12.5 million for 2018, compared to $12.0 million for 2017.
General and Administrative Expenses were approximately $7.5 million for 2018, compared to $8.0 million for 2017.
Operating Loss of $39.3 million for 2018, compared to $52.0 million for 2017.
Net Cash Used in Operating Activities was $34.5 million for 2018, compared to $44.8 million for 2017.
Net Cash Provided by Financing Activities was $41.8 million for 2018, compared to $25.7 million for 2017. The increase was mainly due to higher gross proceeds raised in underwritten public offerings.
Cash Balance9 as of December 31, 2018, was $53.2 million, compared to $46.2 million as of December 31, 2017.
Conference Call and Webcast Information:
The Company will host a conference call today, February 26, 2019, at 8:30 a.m. EST to review the financial results and operational highlights.
To participate in the conference call, please dial one of the following numbers 15 minutes prior to the start of the call: United States: +1-866-966-1396; International: +1-631-510-7495; and Israel: +972-3-721-7998. The access code for the call is: 3459887.
The conference call will be broadcast live and will be available for replay for 30 days on the Company’s website, View Source Please access the Company’s website at least 15 minutes ahead of the conference call to register.
Availability of RedHill’s Annual Report on Form 20-F Through its Website
RedHill’s Annual Report on Form 20-F, containing audited financial statements for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on February 26, 2019, is available on its website (View Source). Shareholders may receive a hard copy of the annual report free of charge upon request.