Acerus Pharmaceuticals Corporation (“Acerus” or the “Company”)
(TSX:ASP; OTCQB:ASPCF) today reported its financial results for the
three and nine-month period ended September 30, 2021. Unless
otherwise noted, all amounts are in US dollars and are prepared in
accordance with International Financial Reporting Standards
(“IFRS”).
Third Quarter Highlights
- 31%
year-over-year quarterly growth of NATESTO® total prescriptions
(“TRx”) in the U.S. market
- Settlement of
litigation against Recipharm Limited, the Company’s former contract
manufacturer for ESTRACE®, reflected as $2.3 million in other
income as well as $0.4 million of reimbursed litigation
expenses
- New Orange Book
listed patent for NATESTO® extends intellectual property protection
in the United States to 2034
“The third quarter was one of continued
execution in the U.S. market, even in the face of some ongoing
pandemic and industry-related challenges,” said Ed Gudaitis,
President and Chief Executive Officer of Acerus. “We were pleased
with the year-over-year growth in total NATESTO® prescriptions,
particularly in the urology sales channel. We also successfully
settled our litigation against Recipharm and were able to book $2.3
million in other income, ending a minor distraction for the Company
while strengthening the balance sheet in tandem. Consistent with
industry trends, Acerus did experience increased COVID-19
pandemic-related access restrictions – tied to the Delta variant –
in the third quarter, which dampened the rapid growth path begun
earlier this year. Reflecting current macro-economic conditions, we
also were negatively impacted by some sales force vacancies, which
affected overall prescription volume growth. Neither of these
issues, though, is expected to greatly impact our results in the
fourth quarter, and so we are optimistic about the business heading
into 2022. Given the improved outlook and generally positive
prescription trends, we believe Acerus can accelerate top line
growth and attract further investment to reach its potential.”
Summary of Results for the Three Months
Ended September 30, 2021 compared to the Three Months Ended
September 30, 2020, unless otherwise noted
Product revenue was $0.6 million compared to
$0.5 million in the prior year period, an increase of 19%. The
improvement was primarily due to the assumption of full NATESTO®
product sales and revenue recognition as a result of re-purchasing
the rights from Aytu Biopharma on April 1, 2021, as previously
reported. Revenue recognition in the prior year period
under IFRS15 reflected the value of shipment to Aytu Biopharma plus
an estimate of the associated co-promotion revenue under the former
licensing agreement. The Company faced some headwinds in the fiscal
2021 third quarter that impacted total prescription volume and
subsequent revenue growth, including a temporary increase in
COVID-19 restrictions and, to a lesser extent, constraints in
hiring qualified staff; both issues are not anticipated to
materially impact fourth quarter results.
The Company posted a gross margin of $0.1
million in the third quarter of 2021 compared to a negative gross
margin of $0.3 million in the prior-year period. The negative gross
margin in the prior period reflects a charge of $0.3 million for
obsolete raw materials combined with non-cash costs of $0.2 million
related to the amortization of intangible assets and depreciation
of property and equipment.
Third quarter research and development
(“R&D”) expenses were $1.4 million compared to $0.8 million in
2020. This increase was principally due to increased clinical
trials related to an ambulatory blood pressure study that commenced
in 2021 and is expected to be completed in mid-2022.
Selling, general and administrative expenses
(“SG&A”) declined by $0.6 million to $5.0 million in the third
quarter of 2021, versus $5.6 million in the comparable period last
year. The decrease relates to a decline of $1.0 million in expenses
related to the Company’s US NATESTO® sales and distribution
organization, as the prior year period reflected start-up costs.
This decline was partially offset by an increase in legal fees
principally related to the filing and listing of a new patent for
NATESTO® in the United States.
Other income includes a credit of $2.3 million
related to the settlement of the Recipharm litigation announced on
August 12, 2021. and represents the value of forgone ESTRACE® sales
that the Company could have recognized had there been sufficient
inventory to supply the Canadian market.
Earnings before interest, tax, depreciation and
amortization (“EBITDA”)1 was a loss of $3.9 million compared to an
EBITDA loss of $6.5 million in 2020. Adjusted EBITDA1 was a loss of
$5.9 million for the current quarter compared to a loss of $6.2
million in the prior-year period.
The Company posted a net loss of $4.9 million,
or $(0.00) per share, for the quarter compared to a loss of $7.0
million, or $(0.01) per share, in the third quarter of 2020.
Cash as of September 30, 2021 was $2.3 million
compared with $9.1 million as of December 31, 2020, reflecting the
recent $2.3 million settlement payment as well as proceeds of $12.0
million drawn on the $15.0 million subordinated demand loan
facility with First Generation Capital, offset by cash used in
operations as well as principal and interest repayments totaling
$2.5 million on the senior debt with SWK Funding LLC and a lease
termination payment of $0.2 million related to the Company’s former
Canadian headquarters.
COMPANY UPDATE AND OUTLOOK
NATESTO®
With the full buy back of NATESTO® rights for
the US market completed April 1, 2021, the Company continues to
execute on its commercial strategy focusing on the US market. Total
NATESTO® prescriptions continued to grow, with a 31% increase
compared to the third quarter of 2020.
Our U.S. NATESTO® business was bolstered by an
additional patent granted and listing in the Orange Book during the
third quarter, extending intellectual property protection on
NATESTO® in the U.S. to 2034.
Commercial preparations continue regarding the
reintroduction of NATESTO® into the Canadian market. Unfortunately,
the timing of the Company’s return to Canada has now been delayed
due to manufacturing and supply chain disruptions and delays.
Canadian stock of NATESTO® is not expected to be ready until the
second quarter of 2022.
Recipharm Litigation
On June 18, 2020, Acerus announced it had
commenced litigation against Recipharm Limited (“Recipharm”), a
wholly-owned subsidiary of Recipharm AB, in the Commercial Court of
London. Acerus previously alleged that the suspension of
Recipharm’s manufacturing license in August 2018 was a violation of
its contractual obligations and led to a shortage of ESTRACE® in
Canada. On June 15, 2021, the Company won at a preliminary issue
trial in which Recipharm alleged that Acerus’ claim for damages was
barred by the terms of the companies’ manufacturing contract. In
agreeing with Acerus that its claim for damages was not barred, the
Commercial Court of London directed the matter to proceed to a full
trial. Recipharm was granted permission to appeal the court’s
decision on August 3, 2021 with the main proceedings being stayed
pending appeal.
On August 12, 2021, the Company announced that
it had accepted an offer to settle pursuant to Part 36 of the
English Civil Procedure Rules, and a payment of GBP 1.7 million
($2.3 million) was received in the quarter. In addition, the
Company received $0.4 million in October, 2021 to offset the
majority of its costs of the litigation.
avanafil
In October, 2021, the Company received a Notice
of Deficiency from Health Canada related to its avanafil New Drug
Submission (“NDS”). Health Canada had previously requested the
provision of additional pre-clinical and toxicology data related to
the avanafil active pharmaceutical ingredient (API) from the API
manufacturer, Sanofi. Sanofi did not provide the available data in
a format requested by Health Canada as per the timeline prescribed.
As a result, Acerus has had to withdraw the avanafil dossier from
the review process. Acerus is working with Petros Pharmaceuticals,
the licensor of avanafil to Acerus, and Sanofi to ensure that the
information will be provided in a timely manner and to discuss how
to apportion the additional regulatory costs incurred as a result
of the failure of Sanofi to supply the information to Health
Canada. A resubmission is expected to be made to Health Canada
during the first quarter of 2022, with the expected introduction of
avanafil to the Canadian market occurring in 2023.
Access to Capital
Absent further equity or debt investment, the
Company is expected to fully utilize the $15 million subordinated
demand loan facility with First Generation Capital later in
November 2021. The Company will need further equity or debt
investment to meet its cash loan covenants by the end of November.
The Company has engaged HC Wainwright, a New York based investment
bank, to assist it in identifying additional investment
opportunities. The Company will provide an update on its progress
when available.
Conference Call Shareholders
are reminded that the conference call to discuss the Company’s
results for the three- and nine-month period ending September 30,
2021 will be held on Tuesday, November 9, 2021 at 10:00 a.m.
Eastern Time.
To access the call live, please dial
416-406-0743 or 1-800-952-5114 and use access code 5090811#.
Listeners are encouraged to dial in 10 minutes before the call
begins to avoid delays. A replay of the conference call will be
available until 11:59 p.m. Eastern Time on Tuesday, November 16,
2021 by dialing 905-694-9451 or 1-800-408-3053, using access code:
8120716#.
An updated version of the Company’s Corporate
Deck will be made available on the Company’s website after the
shareholders conference call.
About Acerus Acerus
Pharmaceuticals Corporation is a Canadian-based specialty
pharmaceutical company focused on the commercialization and
development of innovative prescription products that improve
patient experience, with a primary focus in the field of men’s
health. The Company commercializes its products via its own
salesforce in the United States and Canada, and through a global
network of licensed distributors in other territories.
Acerus’ shares trade on TSX under the symbol ASP
and on the OTCQB under the symbol ASPCF. For more information,
visit www.aceruspharma.com and follow us on Twitter and
LinkedIn.
1 Non-IFRS Financial
Measures - EBITDA and Adjusted EBITDAThe
non-IFRS measures included in this press release are not recognized
measures under IFRS and do not have a standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other issuers. When used, these measures are defined
in such terms as to allow the reconciliation to the closest IFRS
measure. These measures are provided as additional information to
complement those IFRS measures by providing further understanding
of our results of operations from our perspective. Accordingly,
they should not be considered in isolation nor as a substitute for
analysis of our financial information reported under IFRS. Despite
the importance of these measures to management in goal setting and
performance measurement, we stress that these are non-IFRS measures
that may have limits in their usefulness to investors.
We use non-IFRS measures, such as EBITDA and
Adjusted EBITDA to provide investors with a supplemental measure of
our operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS financial measures. We also believe that securities analysts,
investors and other interested parties frequently use non-IFRS
measures in the valuation of issuers. We also use non-IFRS measures
in order to facilitate operating performance comparisons from
period to period, prepare annual operating budgets, and to assess
our ability to meet our future debt service, capital expenditure
and working capital requirements.
The definition and reconciliation of EBITDA and
Adjusted EBITDA used and presented by the Company to the most
directly comparable IFRS measures follows below:
EBITDA is defined as net (loss)/income adjusted
for income tax, depreciation of property and equipment,
amortization of intangible assets, interest on long-term debt and
other financing costs, interest income, licensing revenue and
changes in fair values of derivative financial instruments.
Management uses EBITDA to assess the Company’s operating
performance.
Adjusted EBITDA is defined as EBITDA adjusted
for, as applicable, royalty expenses associated with triggering
events, milestones, share based compensation, impairment of
intangible asset, foreign exchange (gain)/loss and the impact of
charges related to a product recall. We use Adjusted EBITDA as a
key metric in assessing our business performance when we compare
results to budgets, forecasts and prior years. Management believes
Adjusted EBITDA is an alternative measure of cash flow generation
than, for example, cash flow from operations, particularly because
it removes cash flow fluctuations caused by extraordinary changes
in working capital. A reconciliation of net (loss)/income to EBITDA
(and Adjusted EBITDA) is set out below.
|
|
|
|
|
|
|
|
|
|
For the three months
endedSeptember 30, |
|
For the nine months
endedSeptember 30, |
|
|
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
Net loss |
|
$ |
(4,898 |
) |
$ |
(7,048 |
) |
|
$ |
(24,794 |
) |
$ |
(17,321 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization
of intangible assets |
|
|
37 |
|
|
179 |
|
|
|
112 |
|
|
537 |
|
|
|
Depreciation of property and equipment |
|
36 |
|
|
57 |
|
|
|
479 |
|
|
185 |
|
|
|
Depreciation
of right of use asset |
|
|
7 |
|
|
11 |
|
|
|
10 |
|
|
35 |
|
|
|
Interest expense and other financing costs* |
|
1,007 |
|
|
385 |
|
|
|
1,707 |
|
|
1,613 |
|
|
|
Interest
income |
|
|
2 |
|
|
(2 |
) |
|
|
(5 |
) |
|
(65 |
) |
|
|
Change in fair value of derivative |
|
(53 |
) |
|
(56 |
) |
|
|
(41 |
) |
|
(160 |
) |
|
|
Loss on
modification of debt |
|
|
- |
|
|
|
|
64 |
|
|
- |
|
|
EBITDA |
|
$ |
(3,862 |
) |
$ |
(6,474 |
) |
|
$ |
(22,468 |
) |
$ |
(15,176 |
) |
|
|
|
|
|
|
|
|
|
|
Termination Fees |
|
|
- |
|
|
- |
|
|
|
6,254 |
|
|
- |
|
|
Litigation settlement proceeds |
|
|
(2,328 |
) |
|
- |
|
|
|
(2,328 |
) |
|
- |
|
|
Share based compensation |
|
|
333 |
|
|
176 |
|
|
|
800 |
|
|
424 |
|
|
Foreign exchange (gain) loss |
|
|
(31 |
) |
|
77 |
|
|
|
(71 |
) |
|
(16 |
) |
|
Charges related to product recall |
|
|
- |
|
|
- |
|
|
|
- |
|
|
(71 |
) |
|
Gain on sale of property and equipment |
|
0 |
|
|
- |
|
|
|
56 |
|
|
- |
|
|
Adjusted EBITDA |
|
$ |
(5,888 |
) |
$ |
(6,221 |
) |
|
$ |
(17,757 |
) |
$ |
(14,839 |
) |
|
|
|
|
|
|
|
|
|
|
Notice Regarding Forward-Looking
Statements Information in this press release that is not
current or historical factual information may constitute forward
looking information within the meaning of securities laws. Implicit
in this information are assumptions regarding our future
operational results. These assumptions, although considered
reasonable by the company at the time of preparation, may prove to
be incorrect. Readers are cautioned that actual performance of the
company is subject to a number of risks and uncertainties,
including with respect to the commercial performance of NATESTO®
globally and in the U.S., and could differ materially from what is
currently expected as set out above. For more exhaustive
information on these risks and uncertainties you should refer to
our annual information form dated March 10, 2021 which is available
at www.sedar.com. Forward-looking information contained in this
press release is based on our current estimates, expectations and
projections, which we believe are reasonable as of the current
date. You should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. While we may elect to, we are under no obligation and
do not undertake to update this information at any particular time,
whether as a result of new information, future events or otherwise,
except as required by applicable securities law.
ContactCompany
Contactir@aceruspharma.com
Chris WittyAcerus Investor Relations (646)
438-9385cwitty@darrowir.com
Acerus Pharmaceuticals Corporation |
|
|
|
|
Condensed Interim Consolidated Statements of Financial
Position |
|
|
|
|
As at September 30, 2021 and December 31, 2020 |
|
|
|
|
Unaudited |
|
|
|
|
|
|
(expressed in thousands of U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,2021 |
December 31,2020 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash |
|
|
|
$ |
2,273 |
|
$ |
9,153 |
|
|
|
Trade and
other receivables |
|
|
|
|
2,199 |
|
|
528 |
|
|
|
Contract
asset |
|
|
|
|
- |
|
|
936 |
|
|
|
Inventory |
|
|
|
|
2,316 |
|
|
2,313 |
|
|
|
Prepaid and other assets |
|
|
|
|
1,881 |
|
|
1,104 |
|
|
Total current assets |
|
|
|
|
8,669 |
|
|
14,034 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
|
340 |
|
|
806 |
|
|
Right of use asset |
|
|
|
|
310 |
|
|
- |
|
|
Intangible assets, net |
|
|
|
|
2,030 |
|
|
2,142 |
|
|
Total assets |
|
|
|
$ |
11,349 |
|
$ |
16,982 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT) |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
$ |
7,696 |
|
$ |
5,435 |
|
|
|
Termination
fee payable |
|
|
|
|
2,378 |
|
|
- |
|
|
|
Current portion of long-term debt |
|
|
|
2,136 |
|
|
1,439 |
|
|
|
Current portion of lease liability |
|
|
|
10 |
|
|
229 |
|
|
Total current liabilities |
|
|
|
|
12,220 |
|
|
7,103 |
|
|
|
|
|
|
|
|
|
|
Termination fee payable |
|
|
|
|
2,769 |
|
|
- |
|
|
Lease liability |
|
|
|
|
299 |
|
|
- |
|
|
Long-term debt |
|
|
|
|
14,569 |
|
|
6,580 |
|
|
Derivative financial instruments |
|
|
|
|
98 |
|
|
139 |
|
|
Total liabilities |
|
|
|
|
29,955 |
|
|
13,822 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity (deficit) |
|
|
|
|
|
|
|
Share
capital |
|
|
|
$ |
198,163 |
|
$ |
198,163 |
|
|
|
Contributed
surplus |
|
|
|
|
16,463 |
|
|
13,435 |
|
|
|
Accumulated other comprehensive loss |
|
|
|
(13,949 |
) |
|
(13,949 |
) |
|
|
Deficit |
|
|
|
|
(219,283 |
) |
|
(194,489 |
) |
|
Total shareholders' equity (deficit) |
|
|
|
(18,606 |
) |
|
3,160 |
|
|
Total liabilities & shareholders' equity
(deficit) |
|
$ |
11,349 |
|
$ |
16,982 |
|
|
|
|
|
|
|
|
|
|
Acerus Pharmaceuticals Corporation |
|
|
|
|
|
|
|
|
Condensed Interim Consolidated Statements of Loss and Comprehensive
Loss |
|
|
|
|
|
|
|
For the three and nine months ended September 30, 2021 and
2020 |
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
(expressed in thousands of U.S. dollars, except per share and share
data) |
|
|
|
|
|
|
|
|
|
|
|
For the
three months endedSeptember 30, |
|
For the nine
months endedSeptember 30, |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
Product revenue |
|
|
$ |
587 |
|
|
$ |
493 |
|
|
$ |
1,383 |
|
|
$ |
814 |
|
|
Termination Fees |
|
|
|
- |
|
|
|
- |
|
|
|
(6,254 |
) |
|
|
- |
|
|
|
|
|
|
|
587 |
|
|
|
493 |
|
|
|
(4,871 |
) |
|
|
814 |
|
|
Cost of goods sold |
|
489 |
|
|
|
743 |
|
|
|
725 |
|
|
|
1,168 |
|
|
Gross margin (loss) |
|
|
|
98 |
|
|
|
(250 |
) |
|
|
(5,596 |
) |
|
|
(354 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
|
|
|
1,353 |
|
|
|
760 |
|
|
|
3,254 |
|
|
|
1,782 |
|
|
|
Selling, general and administrative |
|
|
5,046 |
|
|
|
5,634 |
|
|
|
16,618 |
|
|
|
13,813 |
|
|
Total operating expenses |
|
|
|
6,399 |
|
|
|
6,394 |
|
|
|
19,872 |
|
|
|
15,595 |
|
|
Operating loss |
|
|
|
(6,301 |
) |
|
|
(6,644 |
) |
|
|
(25,468 |
) |
|
|
(15,949 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
Interest on long-term debt and other financing costs |
|
1,007 |
|
|
|
385 |
|
|
|
1,707 |
|
|
|
1,613 |
|
|
|
Litigation settlement proceeds |
|
|
(2,328 |
) |
|
|
- |
|
|
|
(2,328 |
) |
|
|
- |
|
|
|
Interest
income |
|
|
|
2 |
|
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(65 |
) |
|
|
Foreign
exchange (gain) loss |
|
|
|
(31 |
) |
|
|
77 |
|
|
|
(71 |
) |
|
|
(16 |
) |
|
|
Change in fair value of derivative financial instruments |
|
(53 |
) |
|
|
(56 |
) |
|
|
(41 |
) |
|
|
(160 |
) |
|
|
Loss on
modification of debt |
|
|
|
- |
|
|
|
- |
|
|
|
64 |
|
|
|
- |
|
|
Total other expenses (income) |
|
|
|
(1,403 |
) |
|
|
404 |
|
|
|
(674 |
) |
|
|
1,372 |
|
|
Loss for the period before income taxes |
|
|
(4,898 |
) |
|
|
(7,048 |
) |
|
|
(24,794 |
) |
|
|
(17,321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net loss and comprehensive loss for the
period |
|
(4,898 |
) |
|
|
(7,048 |
) |
|
$ |
(24,794 |
) |
|
$ |
(17,321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share |
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
|
1,537,588,081 |
|
|
|
1,010,646,898 |
|
|
|
1,537,588,081 |
|
|
|
892,940,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acerus Pharmaceuticals (TSX:ASP)
Gráfico Histórico do Ativo
De Dez 2024 até Jan 2025
Acerus Pharmaceuticals (TSX:ASP)
Gráfico Histórico do Ativo
De Jan 2024 até Jan 2025