Acerus Pharmaceuticals Corporation (“Acerus” or the “Company”)
(TSX: ASP; OTCQB: ASPCF) today reported its financial results for
the three and twelve-month period ended December 31, 2021. Unless
otherwise noted, all amounts are in US dollars and are prepared in
accordance with International Financial Reporting Standards
(“IFRS”).
Recent Highlights
- Total Natesto®
prescriptions in the US rose 20% year-over-year in the fourth
quarter of 2021 and, for the full year, were up approximately 28%
over fiscal 2020
- The rollout and
acceptance of Natesto® continues to grow in the US, now benefitting
from nearly complete in-person sales interaction as the pandemic
subsides
- After the
quarter, the Company announced it had increased its secured loan
facility (the “Loan Facility”) from US$25 million to US$30.845
million, made possible by an advance under a secured grid
promissory note with First Generation Capital Inc. (“First
Generation”). The proceeds paid all remaining obligations under the
former senior loan facility with SWK Funding LLC (“SWK”)
- Most recently,
Acerus completed the acquisition of Serenity Pharmaceuticals LLC
(“Serenity”) on March 7, 2022, including the global rights to its
Noctiva™ brand
“I’m pleased to announce a very successful start
to 2022 that heralds a new phase of growth for Acerus,” said Edward
Gudaitis, President and Chief Executive Officer of Acerus
Pharmaceuticals. “With the pandemic largely under control, we ended
the year with significant momentum behind Natesto® in the US, where
we saw total prescriptions rise 28% over the prior-year period.
Such growth was driven primarily by success in the Urology segment,
where prescriptions rose 30% in the fourth quarter and were up over
40% for the full year. This trend has continued into 2022, as we’re
benefitting from a return to in-person meetings with healthcare
practitioners, strong economic trends, and overall increasing
demand.
“At the same time, we recently announced two
significant events that bolster the outlook for Acerus this year
and beyond. We first increased our First Generation facility and
paid off our existing SWK obligations, providing greater financial
flexibility as well as reduced cash interest expense going forward.
We then announced the transformational acquisition of Serenity –
which we believe puts us on track for faster top line growth and
improved long-term financial performance. The team and I look
forward to the coming quarters and the re-launch of
Noctiva™ in the US. Given our success with Natesto® and our
expanded product portfolio, we anticipate that 2022 is on track to
be our best year ever.”
Summary of Results for the Three Months
Ended December 31, 2021 compared to the Three Months Ended December
31, 2020, unless otherwise noted
Revenue was $0.7 million in 2021 compared to
$0.3 million in the prior-year period. The improvement was
primarily due to continued growth in product sales and the
assumption of full Natesto® revenue recognition as a result of
re-purchasing the rights from Aytu Biopharma on April 1, 2021, as
previously reported. Revenue recognition in 2020, under IFRS15,
reflected the value of shipments to Aytu Biopharma plus an estimate
of the associated co-promotion revenue under the former licensing
agreement.
The Company posted a gross profit of $0.3
million in the fourth quarter of 2021 compared to a gross loss of
$0.6 million in the prior-year period. The 2020 fourth quarter
reflects a $0.5 million charge for spoilage of slow-moving raw
materials.
Fourth quarter research and development
(“R&D”) expenses were $3.3 million compared to $0.7 million in
2020. The 2021 results include a $1.7 million non-cash impairment
charge to reduce the carrying value of the company’s TriVair
intangible asset after the Company received notice in December 2021
that its TriVair patent application to extend patent protection
from 2024 to 2037 for the US market was rejected. The remaining
increase in R&D is attributable to an increase in clinical
trial activities for Natesto® in the US related to an ambulatory
blood pressure study that commenced in 2021 and is expected to be
completed in 2022.
Selling, general and administrative expenses
(“SG&A”) declined by $0.4 million to $5.2 million in the fourth
quarter of 2021 versus $5.6 million in the comparable period last
year. The 2020 fourth quarter included a $1.6 million non-cash
charge on the sale of the Estrace® business. Excluding this,
SG&A increased by $1.2 million year-over-year, of which $0.8
million reflects investment in the Company’s US sales operations
and related staffing to support the Natesto® growth strategy.
Earnings before interest, tax, depreciation and
amortization (“EBITDA”)1 was a loss of $8.1 million compared to an
EBITDA loss of $6.5 million in 2020. Adjusted EBITDA1 was a loss of
$6.2 million for the current quarter compared to a loss of $4.8
million in the prior-year period.
The Company posted a net loss of $9.0 million,
or $(0.01) per share, for the quarter compared to a loss of $7.1
million, or $(0.01) per share, in the fourth quarter of 2020.
Cash as of December 31, 2021 was $2.2 million
compared with $9.2 million as of December 31, 2020, reflecting
proceeds of $20 million drawn on the First Generation subordinated
loan facility and the $2.3 million Recipharm settlement received in
the third quarter of 2021, offset by cash used in operations as
well as principal and interest repayments totaling $3.2 million on
the senior debt with SWK.
COMPANY UPDATE AND OUTLOOK
Natesto®
The Company continues to execute its commercial
strategy focused on expanding in the US market. Total Natesto®
prescriptions rose 20% compared to the fourth quarter of 2020.
Commercial preparations also continue regarding
the reintroduction of Natesto® into the Canadian market. The timing
of the Company’s return to Canada is still delayed due to
manufacturing and supply chain disruptions, although the rollout is
expected to commence in the second half of 2022.
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 had to withdraw the avanafil dossier from the
review process.
Acerus has been working with Petros
Pharmaceuticals, the licensor of avanafil to Acerus, and Sanofi to
update the regulatory dossier for resubmission. Such resubmission
is expected to be made to Health Canada in the near future, with
the anticipated introduction of avanafil to the Canadian market
occurring in 2023.
Recent Transaction / Capital
Requirements
As announced on February 28, 2022, Acerus
entered into a definitive agreement to acquire Serenity and the
global rights to Noctiva™. This transaction closed on March 7,
2022. In order to fund the up-front fee, required sales force
expansion, marketing investment (including direct to consumer),
growth of the existing Natesto® business, and resumption of
Noctiva™ production, Acerus expects to raise an estimated US$60
million in additional capital over the next two years. As of March
15, 2022, the Company has fully drawn on the existing First
Generation facility and will need to raise the first tranche of the
$60 million in capital within the second quarter of 2022 to execute
on the aforementioned strategy.
Conference Call Shareholders
are reminded that the conference call to discuss the Company’s
results for the fourth quarter and year ended December 31, 2021
will be held on March 15, 2022 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 1133647#.
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, March 22, 2022
by dialing 905-694-9451 or 1-800-408-3053, using access code:
6591972#.
About Acerus Acerus
Pharmaceuticals Corporation is a 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 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, charges related to
product recall and gain on extinguishment of payables. 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 (in USD’000s).
|
|
|
|
|
|
|
|
|
|
|
For the three months endedDecember 31, |
|
|
For the year endedDecember 31, |
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net loss |
|
$ |
(9,023 |
) |
|
$ |
(7,103 |
) |
|
$ |
(33,817 |
) |
|
$ |
(24,424 |
) |
Adjustments: |
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
38 |
|
|
|
180 |
|
|
|
150 |
|
|
|
717 |
|
|
Depreciation of property and equipment |
|
34 |
|
|
|
60 |
|
|
|
513 |
|
|
|
245 |
|
|
Depreciation of right of use asset |
|
|
8 |
|
|
|
13 |
|
|
|
18 |
|
|
|
48 |
|
|
Interest expense and other financing costs* |
|
863 |
|
|
|
362 |
|
|
|
2,570 |
|
|
|
1,975 |
|
|
Interest income |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
|
|
(67 |
) |
|
Change in fair value of derivative |
|
(43 |
) |
|
|
(22 |
) |
|
|
(84 |
) |
|
|
(182 |
) |
|
Loss on modification of debt |
|
|
- |
|
|
|
- |
|
|
|
64 |
|
|
|
- |
|
EBITDA |
|
$ |
(8,126 |
) |
|
$ |
(6,512 |
) |
|
$ |
(30,594 |
) |
|
$ |
(21,688 |
) |
|
|
|
|
|
|
|
|
Termination Fees |
|
|
- |
|
|
|
- |
|
|
|
6,254 |
|
|
|
- |
|
Litigation settlement proceeds |
|
|
- |
|
|
|
- |
|
|
|
(2,328 |
) |
|
|
- |
|
Share based compensation |
|
|
295 |
|
|
|
230 |
|
|
|
1,095 |
|
|
|
654 |
|
Foreign exchange (gain) loss |
|
|
8 |
|
|
|
(96 |
) |
|
|
(63 |
) |
|
|
(112 |
) |
Gain on remeasurement of lease liability |
|
- |
|
|
|
(75 |
) |
|
|
- |
|
|
|
(75 |
) |
Charges related to product recall |
|
|
- |
|
|
|
71 |
|
|
|
- |
|
|
|
- |
|
Impairment loss on intangible asset |
|
|
1,656 |
|
|
|
- |
|
|
|
1,656 |
|
|
|
- |
|
Gain from sale of property and equipment |
|
- |
|
|
|
- |
|
|
|
56 |
|
|
|
- |
|
Loss on sale of intangible asset |
|
|
- |
|
|
|
1,629 |
|
|
|
- |
|
|
|
1,629 |
|
Adjusted EBITDA |
|
$ |
(6,167 |
) |
|
$ |
(4,753 |
) |
|
$ |
(23,924 |
) |
|
$ |
(19,592 |
) |
* This figure includes interest expense,
amortization of deferred financing costs and accretion expense
related to our outstanding debts. |
|
|
|
Notice Regarding Forward-Looking
StatementsInformation 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.
Company Contactir@aceruspharma.com
Investor Relations Contact
Chris WittyAcerus Investor Relations (646)
438-9385cwitty@darrowir.com
|
|
|
|
|
|
Acerus Pharmaceuticals Corporation |
Consolidated Statements of Financial Position |
As at December 31, 2021 and December 31, 2020 |
(expressed in thousands of U.S. dollars) |
|
|
|
|
|
|
December 31, 2021 |
|
|
December 31, 2020 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
Cash |
$ |
2,159 |
|
|
$ |
9,153 |
|
|
Trade and other receivables |
|
422 |
|
|
|
528 |
|
|
Contract asset |
|
- |
|
|
|
936 |
|
|
Inventory |
|
4,605 |
|
|
|
2,313 |
|
|
Prepaid and other assets |
|
1,463 |
|
|
|
1,104 |
|
Total current assets |
|
8,649 |
|
|
|
14,034 |
|
|
|
|
|
Property and equipment, net |
|
365 |
|
|
|
806 |
|
Right of use asset |
|
302 |
|
|
|
- |
|
Intangible assets, net |
|
336 |
|
|
|
2,142 |
|
Total assets |
$ |
9,652 |
|
|
$ |
16,982 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT) |
|
|
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
$ |
7,448 |
|
|
$ |
5,435 |
|
|
Termination fee payable |
|
2,456 |
|
|
|
- |
|
|
Current portion of long-term debt |
|
2,153 |
|
|
|
1,439 |
|
|
Current portion of lease liability |
|
16 |
|
|
|
229 |
|
Total current liabilities |
|
12,073 |
|
|
|
7,103 |
|
|
|
|
|
Termination fee payable |
|
2,101 |
|
|
|
- |
|
Lease liability |
|
300 |
|
|
|
- |
|
Long-term debt |
|
21,137 |
|
|
|
6,580 |
|
Derivative financial instruments |
|
55 |
|
|
|
139 |
|
Total liabilities |
|
35,666 |
|
|
|
13,822 |
|
|
|
|
|
Shareholders' equity (deficit) |
|
|
|
Share capital |
$ |
198,163 |
|
|
$ |
198,163 |
|
|
Contributed surplus |
|
18,078 |
|
|
|
13,435 |
|
|
Accumulated other comprehensive loss |
|
(13,949 |
) |
|
|
(13,949 |
) |
|
Deficit |
|
(228,306 |
) |
|
|
(194,489 |
) |
Total shareholders' equity (deficit) |
|
(26,014 |
) |
|
|
3,160 |
|
Total liabilities & shareholders' equity
(deficit) |
$ |
9,652 |
|
|
$ |
16,982 |
|
|
|
|
|
Acerus Pharmaceuticals Corporation |
Consolidated Statements of Loss and Comprehensive Loss |
For the years ended December 31, 2021 and 2020 |
(expressed in thousands of U.S. dollars, except per share and share
data) |
|
|
|
|
For the three months endedDecember 31, |
|
|
For the year endedDecember 31, |
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Product revenue |
|
$ |
738 |
|
|
$ |
271 |
|
|
$ |
2,121 |
|
|
$ |
1,085 |
|
Termination Fees |
|
|
- |
|
|
|
- |
|
|
|
(6,254 |
) |
|
|
- |
|
|
|
|
|
738 |
|
|
|
271 |
|
|
|
(4,133 |
) |
|
|
1,085 |
|
Cost of goods sold |
|
393 |
|
|
|
846 |
|
|
|
1,118 |
|
|
|
2,014 |
|
Gross profit/(loss) |
|
|
345 |
|
|
|
(575 |
) |
|
|
(5,251 |
) |
|
|
(929 |
) |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,309 |
|
|
|
744 |
|
|
|
6,563 |
|
|
|
2,526 |
|
|
Selling, general and administrative |
|
|
5,234 |
|
|
|
5,617 |
|
|
|
21,852 |
|
|
|
19,430 |
|
Total operating expenses |
|
|
8,543 |
|
|
|
6,361 |
|
|
|
28,415 |
|
|
|
21,956 |
|
Operating loss |
|
|
(8,198 |
) |
|
|
(6,936 |
) |
|
|
(33,666 |
) |
|
|
(22,885 |
) |
|
|
|
|
|
|
|
|
|
|
Other expenses (income) |
|
|
|
|
|
|
|
|
|
Interest on long-term debt and other financing costs |
|
863 |
|
|
|
362 |
|
|
|
2,570 |
|
|
|
1,975 |
|
|
Litigation settlement proceeds |
|
|
0 |
|
|
|
- |
|
|
|
(2,328 |
) |
|
|
- |
|
|
Interest income |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
|
|
(67 |
) |
|
Foreign exchange (gain) loss |
|
|
8 |
|
|
|
(96 |
) |
|
|
(63 |
) |
|
|
(112 |
) |
|
Change in fair value of derivative financial instruments |
|
(43 |
) |
|
|
(22 |
) |
|
|
(84 |
) |
|
|
(182 |
) |
|
Gain on remeasurement of lease liability |
|
|
- |
|
|
|
(75 |
) |
|
|
- |
|
|
|
(75 |
) |
|
Loss on modification of debt |
|
|
- |
|
|
|
- |
|
|
|
64 |
|
|
|
- |
|
Total other expenses (income) |
|
|
825 |
|
|
|
167 |
|
|
|
151 |
|
|
|
1,539 |
|
Loss for the year before income taxes |
|
|
(9,023 |
) |
|
|
(7,103 |
) |
|
|
(33,817 |
) |
|
|
(24,424 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net loss and comprehensive loss for the year |
|
|
(9,023 |
) |
|
|
(7,103 |
) |
|
$ |
(33,817 |
) |
|
$ |
(24,424 |
) |
|
|
|
|
|
|
|
|
|
|
Loss per common share |
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share |
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
1,537,588,081 |
|
|
|
1,010,646,898 |
|
|
|
1,537,588,081 |
|
|
|
975,848,903 |
|
|
|
|
|
|
|
|
|
|
|
Acerus Pharmaceuticals (TSX:ASP)
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