TIDMAMYT
RNS Number : 2065R
Amryt Pharma PLC
04 March 2021
Amryt Announces Record FY 2020 Results
18.5% YoY revenue growth to $182.6M (1)
25% YoY revenue growth in metreleptin and 10% YoY revenue growth
in lomitapide (1)
4(th) consecutive quarter of positive cash flow generation
Cash of $118.8M at December 31, 2020
Positive results reported from EASE pivotal Phase 3 study in
Epidermolysis Bullosa
Regulatory submissions for Oleogel-S10 (2) (Filsuvez(R)) on
track for Q1 2021
Issuing FY 2021 Revenue Guidance of $200M to $205M
Conference call and webcast today at 0830 EST / 1330 GMT
DUBLIN, Ireland, and Boston MA, March 4, 2021, Amryt (Nasdaq:
AMYT, AIM: AMYT), a global, commercial-stage biopharmaceutical
company dedicated to acquiring, developing and commercializing
novel treatments for rare diseases , today provides a business
update and announces unaudited financial results for Q4 2020 and
the full year ended December 31, 2020.
Joe Wiley, CEO of Amryt Pharma, commented: "I am very pleased
with today's strong results for 2020 which demonstrate the very
positive performance and growth that our commercial products are
delivering, coupled with the significant progress we are achieving
in our exciting development pipeline of new therapeutic drug
candidates. Our business continues to perform and grow strongly. In
particular, our revenue growth exceeded expectations and the fact
that we turned EBITDA profitable has translated into a significant
increase in our cash balances. Given the strong performance of our
business in 2020, we are now issuing revenue guidance for FY 2021
of $200-$205 million which demonstrates our confidence in Amryt's
prospects.
Our EASE study investigating Oleogel-S10 in EB was the first
ever Phase 3 study to demonstrate positive results in this
devastating disease and we are currently progressing regulatory
submissions with the relevant authorities in both the US and
Europe.
Our two commercial products, metreleptin and lomitapide continue
to deliver growth across a host of metrics including revenue and
EBITDA growth, cash generation and market expansion. We have the
management team, systems and infrastructure in place to continue to
grow our existing commercial products and we will be able to
leverage these capabilities to launch Oleogel-S10, if approved.
2020 was a challenging year for us all as a result of the global
pandemic but our business model proved resilient and capable of
overcoming the challenges the pandemic presented. On a personal
note, I would like to thank all of our team, patients, clinical
partners and shareholders for their support as we navigated through
the past year and completed our merger integration ahead of
schedule. I have been truly humbled by the team spirit demonstrated
by my Amryt colleagues throughout the period and we and our
business have emerged stronger from the experience."
FY 2020 & Recent Commercial Highlights:
-- 18.5% growth in FY 2020 revenues to $182.6M (2019: $154.1M (1) )
-- Operating loss before finance expense for the FY 2020 of
$46.5M (2019: $50.5M). Excluding non-cash items and share based
compensation expenses, this resulted in EBITDA (3) of $30.4M
-- Strong cash generation during 2020 with $26.9M of cash
generated from operating activities, of which $5.8M was generated
in Q4 2020. Excluding the legacy Aegerion fines inherited by Amryt,
total cash generated from operating activities in 2020 was
$42.6M.
-- Cash of $118.8M at December 31, 2020 (2019: $67.2M)
-- Amryt listed on the Nasdaq Global Select Market ("Nasdaq") in July 2020
-- $40M raised through private placement with leading biotech investors in December 2020
-- In October, Amryt signed a distribution agreement for
Lojuxta(R) (lomitapide) with Swixx BioPharma AG across 17
jurisdictions in CEE. This follows on from Amryt's appointment in
June 2020 of Swixx as exclusive distributor of Myalepta(R)
(metreleptin) across the CEE territories.
-- In December, Amryt received Ministry of Health reimbursement
approval for Lojuxta(R) in Saudi Arabia
Pipeline and Regulatory:
-- Announced positive results from EASE pivotal Phase 3 trial in
epidermolysis bullosa ("EB") . The primary endpoint of the trial
was achieved and demonstrated a statistically significant
acceleration of target wound healing by day 45 in patients treated
with Oleogel-S10 vs control gel (p-value = 0.013) representing a
44% increase in target wound closure with Oleogel-S10 vs the
control gel .
-- The Recessive Dystrophic EB ("RDEB") sub-group experienced a
greater benefit when treated with Oleogel-S10 than the overall
population (nominal p-value =0.008) representing a 72% increase in
target wound closure with Oleogel-S10 vs the control gel.
Favourable trends were evident among secondary endpoints including
change in procedural pain, total body wound burden based on EBDASI
score and affected body surface area percentage . Oleogel-S10 had
an acceptable safety profile and was well tolerated when compared
with control gel.
-- EASE trial data were presented as a late-breaking abstract at
the 29(th) EADV (European Association of Dermatology and
Venereology) Virtual Congress 2020
-- In September, the EMA Committee for Orphan Medicinal Products
("COMP") adopted a positive opinion for orphan designation for the
use of AP103 in EB. In December, the FDA also granted Orphan Drug
Designation for AP103.
-- In December, Amryt received Marketing Authorisation Approval for Lojuxta(R) in Brazil
Q4 & FY 2020 Financial Performance:
-- 18.5% YoY growth in FY 2020 revenues to $182.6M (2019: $154.1M (1) )
-- 5.5% revenue growth in Q4 2020 to $42.5M (Q4 2019: $40.3M)
-- 25% increase in metreleptin revenues to $106.9M in FY 2020 (2019: $85.4M (1) )
-- US accounted for 57% of global metreleptin revenues and EMEA accounted for 30% in FY 2020
-- Metreleptin revenues in Q4 were $22.2M (Q3 2020: $29.9M). Q3
2020 included a $6.9M LATAM order. As previously disclosed,
ordering patterns in LATAM can be sporadic in nature.
-- 10% increase in Juxtapid(R)/Lojuxta(R) (lomitapide) revenues
to $74.8M in FY 2020 (2019: $68.0M (1) ).
-- US accounted for 50% of global lomitapide revenues and EMEA
accounted for 35% in FY 2020 with EMEA delivering 38% growth
YoY
-- Lomitapide revenues in Q4 were $20.2M (Q3 2020: $19.1M)
(1) Unaudited combined revenues for 2019 represent the combined
unaudited revenues of the Company assuming the acquisition by Amryt
of Aegerion happened on 1 January 2019. It also (i) excludes
revenues from sales to end-users in Japan following the
out-licencing of Juxtapid to Recordati in February 2019, (ii)
excludes up-front payments from Recordati in 2019, and (iii)
includes a 22.5% royalty on Japanese sales of Juxtapid from 1
January 2019 as if the Recordati agreement was in place from that
date.
(2) For the purposes of this announcement, we use the name
Oleogel-S10. Filsuvez (R) which has been selected as the brand name
for the product but please note, Amryt does not, as yet, have
regulatory approval for Filsuvez (R) to treat EB.
IFRS and non-GAAP adjusted Q4 2020 results:
US$M Q4 2019 Q4 2020 Q4 2020 Q4 2020 Non-GAAP Adjusted FY 2020 (unaudited) FY 2020 FY 2020 Non-GAAP Adjusted
(unaudited) (unaudited) Non-cash adjustments(4) Non-cash adjustments(5)
as restated(6)
Revenue 40.3 42.5 - 42.5 182.6 - 182.6
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
Gross profit 8.4 12.6 17.3 29.9 63.6 70.6 134.2
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
R&D (8.2) (5.1) - (5.1) (27.6) - (27.6)
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
SG&A (24.2) (19.8) 0.4 (19.4) (76.7) 1.5 (75.2)
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
Acquisition &
severance
related
costs (1.7) - - - (1.0) - (1.0)
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
Share based
compensation
expenses (0.5) (1.6) 1.6 - (4.7) 4.7 -
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
Operating
(loss) /
profit
before
finance
expense (26.2) (13.9) 19.3 5.4(3) (46.4) 76.8 30.4(3)
---------------- ------------- ------------------------- -------------------------- -------------------- ------------------------- --------------------------
The Q4 2020 operating loss of $13.9M includes the impact of
non-cash items including amortisation, depreciation and the impact
of share-based compensation expenses. Adjusting for these non-cash
items, the Company delivered $5.4M of EBITDA(3) for Q4 2020 and
$30.4M in FY 2020.
(3) EBITDA is earnings before interest, tax, depreciation,
amortisation and share based compensation expenses. To supplement
Amryt's financial results presented in accordance with IFRS
generally accepted accounting principles, the Company uses EBITDA
as a key measure of company performance as the Company believes
that this measure is most reflective of the operational
profitability or loss of the Company and provides management and
investors with useful supplementary information which can enhance
their ability to evaluate the operating performance of the
business. EBITDA, as measured by the Company, is not meant to be
considered in isolation or as a substitute to operating profit /
loss attributable to Amryt and should be read in conjunction with
the Company's condensed consolidated financial statements prepared
in accordance with IFRS.
(4) Non-cash items include amortisation of the acquired
metreleptin and lomitapide intangible assets ($10.7M), amortisation
of the inventory fair value step-up that was acquired at the
acquisition date ($6.6M), depreciation and amortisation ($0.4M) and
share based compensation expenses ($1.6M).
(5) Non-cash items include amortisation of the acquired
metreleptin and lomitapide intangible assets ($43.0M), amortisation
of the inventory fair value step-up that was acquired at the
acquisition date ($27.6M), depreciation and amortisation ($1.5M)
and share based compensation expenses ($4.7M).
(6) See Note 15 in financial statements below.
Financial Position:
Cash generated from operating activities in 2020 was $26.9M, of
which $5.8M was generated in Q4 2020 (Q3 2020: $11.4M). During the
quarter, the Company paid $4.6M in net finance payments, $3.9M in
residual payments related to legacy fines levied on Aegerion and
$2.1M in capital expenditure. The legacy fines were fully
discharged in Q1 2021. At December 31, 2020, the Company had cash
of $118.8M (unaudited) as compared to $67.2M at December 31,
2019.
Post-Year End Events:
-- Issuing full year 2021 revenue guidance of $200M - $205M,
representing a 9-12% increase on 2020
-- In January 2021, Amryt received reimbursement approval from
NICE for Myalepta(R)(metreleptin) in England and Wales
-- In February 2021, Amryt and Medison Pharma signed
multi-regional distribution agreements in Israel and Canada
Conference Call & Webcast:
Amryt will host a call and webcast for analysts and investors on
March 4 at 0830 EST/1330 GMT.
Webcast Player URL: https://edge.media-server.com/mmc/p/ntt3nmv3
Telephone Dial in details :
United States +1 646 787 1226
+44 (0) 203 009
United Kingdom 5709
------------------
Ireland +353 (1) 506 0626
------------------
Confirmation Code 7749400
------------------
A playback facility will be available from March 4, 2021 at 1830
GMT - March 11, 2021 at 1830 GMT . Access details for the playback
facility are as follows: Confirmation Code: 7749400 | US: + 1 917
677 7532 | UK: +44 (0) 3333 00 9785 | Ireland : +353 (1) 553
8777.
About Amryt
Amryt is a global commercial-stage biopharmaceutical company
focused on acquiring, developing and commercializing innovative
treatments to help improve the lives of patients with rare and
orphan diseases. Amryt comprises a strong and growing portfolio of
commercial and development assets.
Amryt's commercial business comprises two orphan disease
products - metreleptin (Myalept(R)/ Myalepta(R)) and lomitapide (
Juxtapid(R)/ Lojuxta(R)).
Myalept(R) / Myalepta(R) (metreleptin) is approved in the US
(under the trade name Myalept(R)) as an adjunct to diet as
replacement therapy to treat the complications of leptin deficiency
in patients with congenital or acquired generalized lipodystrophy
(GL) and in the EU (under the trade name Myalepta(R)) as an adjunct
to diet for the treatment of leptin deficiency in patients with
congenital or acquired GL in adults and children two years of age
and above and familial or acquired partial lipodystrophy (PL) in
adults and children 12 years of age and above for whom standard
treatments have failed to achieve adequate metabolic control. For
additional information, please follow this link .
Juxtapid(R)/ Lojuxta(R) (lomitapide) is approved as an adjunct
to a low-fat diet and other lipid-lowering medicinal products for
adults with the rare cholesterol disorder, Homozygous Familial
Hypercholesterolaemia ("HoFH") in the US, Canada, Columbia,
Argentina and Japan (under the trade name Juxtapid(R)) and in the
EU, Israel and Brazil (under the trade name Lojuxta(R)). For
additional information, please follow this link .
Amryt's lead development candidate, Filsuvez (R) (Oleogel-S10)
is a potential treatment for the cutaneous manifestations of
Junctional and Dystrophic Epidermolysis Bullosa ("EB"), a rare and
distressing genetic skin disorder affecting young children and
adults for which there is currently no approved treatment.
Filsuvez(R) has been selected as the brand name for Oleogel-S10.
The product does not currently have regulatory approval to treat
EB.
Amryt's pre-clinical gene therapy platform, AP103, offers a
potential treatment for patients with Dystrophic EB, and is also
potentially relevant to other genetic disorders.
For more information on Amryt, including products, please visit
www.amrytpharma.com .
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014. The
person making this notification on behalf of Amryt is Rory Nealon,
CFO/COO and Company Secretary.
Financial Advisors
Shore Capital ( Edward Mansfield, Daniel Bush, John More) are
NOMAD and Joint Broker to Amryt in the UK. Stifel (Ben Maddison)
are Joint Broker to the company in the UK. Davy (John Frain, Daragh
O'Reilly) act as Joint Broker to the company.
Forward-Looking Statements
This press release may contain forward-looking statements
containing the words "expect", "anticipate", "intends", "plan",
"estimate", "aim", "forecast", "project" and similar expressions
(or their negative) identify certain of these forward-looking
statements. The forward-looking statements in this announcement are
based on numerous assumptions and Amryt's present and future
business strategies and the environment in which Amryt expects to
operate in the future. Forward-looking statements involve inherent
known and unknown risks, uncertainties and contingencies because
they relate to events and depend on circumstances that may or may
not occur in the future and may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. These
statements are not guarantees of future performance or the ability
to identify and consummate investments. Many of these risks and
uncertainties relate to factors that are beyond each of Amryt's
ability to control or estimate precisely, such as future market
conditions, the course of the COVID-19 pandemic, currency
fluctuations, the behaviour of other market participants, the
outcome of clinical trials, the actions of regulators and other
factors such as Amryt's ability to obtain financing, changes in the
political, social and regulatory framework in which Amryt operates
or in economic, technological or consumer trends or conditions.
Past performance should not be taken as an indication or guarantee
of future results, and no representation or warranty, express or
implied, is made regarding future performance. No person is under
any obligation to update or keep current the information contained
in this announcement or to provide the recipient of it with access
to any additional relevant information that may arise in connection
with it. Such forward-looking statements reflect the Company's
current beliefs and assumptions and are based on information
currently available to management.
Contacts
Joe Wiley, CEO / Rory Nealon, CFO/COO, +353 (1) 518 0200,
ir@amrytpharma.com
Edward Mansfield, Shore Capital, NOMAD, +44 (0) 207 468 7906,
edward.mansfield@shorecap.co.uk
Tim McCarthy, LifeSci Advisors, LLC, +1 (212) 915 2564,
tim@lifesciadvisors.com
Amber Fennell, Consilium Strategic Communications, +44 (0) 203
709 5700, fennell@consilium-comms.com
Amryt Pharma plc
Condensed Consolidated Statement of Comprehensive Loss
Three Months Ended Year Ended
December 31, December 31,
---------------------------- ----------------------------
Note 2020 2019 2020 2019
(unaudited) (unaudited) (unaudited) (unaudited)
restated*
------------- ------------- ------------- -------------
US$'000 US$'000 US$'000 US$'000
Revenue 3 42,522 40,296 182,607 58,124
Cost of sales (29,881) (31,902) (119,029) (38,733)
------------- ------------- ------------- -------------
Gross profit 12,641 8,394 63,578 19,391
Research and development expenses (5,137) (8,195) (27,618) (15,827)
Selling, general and administrative
expenses (19,790) (19,552) (76,673) (35,498)
Restructuring and acquisition costs 5 (12) (1,676) (1,017) (13,038)
Share based payment expenses 4 (1,593) (522) (4,729) (841)
Impairment charge - (4,670) - (4,670)
------------- ------------- ------------- -------------
Operating loss before finance expense (13,891) (26,221) (46,459) (50,483)
============= ============= ============= =============
Non-cash change in fair value of
contingent consideration 5 (19,677) (1,441) (27,827) (6,740)
Non-cash contingent value rights
finance expense 5 (7,506) (1,511) (12,004) (1,511)
Net finance expense - other (4,077) (1,136) (19,569) (4,759)
------------- ------------- ------------- -------------
Loss on ordinary activities before
taxation (45,151) (30,309) (105,859) (63,493)
------------- ------------- ------------- -------------
Tax (credit)/charge on loss on ordinary
activities (1,839) 588 1,332 495
------------- ------------- ------------- -------------
Loss for the year attributable to
the equity holders of the Company (46,990) (29,721) (104,527) (62,998)
============= ============= ============= =============
Exchange translation differences
which may be reclassified through
profit or loss 686 69 6 (2,164) 755
------------- ------------- ------------- -------------
Total other comprehensive (loss)/income 686 696 (2,164) 755
------------- ------------- ------------- -------------
Total comprehensive loss for the
year attributable to the equity
holders of the Company (46,304) (29,025) (106,691) (62,243)
============= ============= ============= =============
Loss per share
Loss per share - basic and diluted,
attributable to ordinary equity
holders of the parent (US$) 6 (0.28) (0.19) (0.66) (0.83)
============= ============= ============= =============
* see Note 15
Amryt Pharma plc
Condensed Consolidated Statement of Financial Position
As at December 31,
---------------------------------
Note 2020 2019
(unaudited) (unaudited)
restated*
----- -------------
US$'000 US$'000
Assets
Non-current assets
Goodwill 7 19,131 19,131
Intangible assets 7 305,369 342,327
Property, plant and equipment 7,574 3,036
Other non-current assets 1,542 1,873
------------- -------------
Total non-current assets 333,616 366,367
------------- -------------
Current assets
Trade and other receivables 8 43,185 35,500
Inventories 40,992 58,000
Cash and cash equivalents, including restricted
cash 9 118,798 67,229
------------- -------------
Total current assets 202,975 160,729
------------- -------------
Total assets 536,591 527,096
============= =============
Equity and liabilities
Equity attributable to owners of the parent
Share capital 10 13,851 11,918
Share premium 10 51,408 2,422
Other reserves 10 236,488 248,630
Accumulated deficit (235,605) (131,137)
------------- -------------
Total equity 66,142 131,833
------------- -------------
Non-current liabilities
Contingent consideration and contingent value
rights 5 148,323 102,461
Deferred tax liability 6,612 7,147
Long term loan 11 87,302 81,610
Convertible notes 12 101,086 96,856
Provisions and other liabilities 13 25,951 4,963
------------- -------------
Total non-current liabilities 369,274 293,037
------------- -------------
Current liabilities
Trade and other payables 90,236 78,351
Provisions and other liabilities 13 10,939 23,875
------------- -------------
Total current liabilities 101,175 102,226
------------- -------------
Total liabilities 470,449 395,263
------------- -------------
Total equity and liabilities 536,591 527,096
============= =============
* see Note 15
Amryt Pharma plc
Condensed Consolidated Statement of Cash Flows
Year ended December
31,
---------------------------------
Note 2020 2019
(unaudited) (unaudited)
restated*
----- ------------- -------------
US$'000 US$'000
Cash flows from operating activities
Loss on ordinary activities after taxation (104,527) (62,998)
Net finance expense - other 19,569 4,759
Depreciation and amortization 44,465 12,281
Amortization of inventory fair value step-up 27,617 7,473
Loss on disposal of fixed assets 133 43
Share based payment expenses 4 4,729 841
Non-cash change in fair value of contingent
consideration 5 27,827 6,740
Non-cash contingent value rights finance expense 5 12,004 1,511
Impairment of intangible asset - 4,670
Deferred taxation credit (535) (934)
Movements in working capital and other adjustments:
Change in trade and other receivables 8 (7,685) (4,732)
Change in trade and other payables 8,909 (6,337)
Change in provision and other liabilities 13 4,663 4,928
Change in inventories (10,609) (5,894)
Change in non-current assets 331 177
------------- -------------
Net cash flow from (used in) operating activities 26,891 (37,472)
------------- -------------
Cash flow from investing activities
Net cash received on acquisition of subsidiary - 24,985
Payments for property, plant and equipment (1,503) (578)
Payments for intangible assets (963) (74)
Deposit interest received 87 92
------------- -------------
Net cash flow (used in) from investing activities (2,379) 24,425
Cash flow from financing activities
Proceeds from issue of equity instruments,
net of expenses 10 37,927 63,009
Proceeds from long term debt borrowings, net
of debt issue costs - 31,176
Repayment of long term debt - (21,990)
Interest paid (10,780) (6,253)
Payment of leases (1,119) -
Net cash flow from financing activities 26,028 65,942
------------- -------------
Exchange and other movements 1,029 3,108
------------- -------------
Net change in cash and cash equivalents 51,569 56,003
Cash and cash equivalents at beginning of the
year 67,229 11,226
------------- -------------
Restricted cash at end of the year 9 223 2,032
============= =============
Cash at bank available on demand at end of
the year 9 118,575 65,197
============= =============
Total cash and cash equivalents at end of the
year 9 118,798 67,229
============= =============
* see Note 15
Amryt Pharma plc
Condensed Consolidated Statement of Changes in Equity
For the year ended December 31, 2020
(unaudited)
Equity
Share component
based Reverse of Other Currency
Share Share Warrant Treasury payment Merger acquisition convertible distributable translation Accumulated
Note capital premium reserve shares reserve reserve reserve notes reserves reserve deficit Total
US$ US$ US$ US$ US$ US$ US$ US$ ' 000 US$ ' US$ US$ ' US$
' 000 ' 000 ' 000 ' 000 ' 000 ' 000 ' 000 000 ' 000 000 ' 000
Balance at
January 1,
2019 25,198 68,233 - - 6,473 42,627 (73,914) - - (51) (72,263) (3,697)
Loss for the
year, as
restated* - - - - - - - - - - (62,998) (62,998)
Foreign
exchange
translation
reserve, as
restated* - - - - - - - - - 755 - 755
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Total
comprehensive
loss,
as restated* - - - - - - - - - 755 (62,998) (62,243)
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Transactions
with owners
Share
consolidation 10 (21,262) 21,262 - - - - - - - - - -
Issue of
shares in
equity
fund raise 10 533 7,467 - - - - - - - - - 8,000
Issue costs
associated
with equity
fund raise 10 - (1,886) - - - - - - - - - (1,886)
Acquisition of
subsidiary
without a
change of
control 10 (495) (3,726) - - - - - - (2,969) 7,190 - -
Issue of
shares and
warrants
in
consideration
of Aegerion
Acquisition 10 5,759 132,392 14,464 - - - - - - - - 152,615
Issue of
shares and
warrants
in equity
fund raise 10 2,059 47,338 10,603 - - - - - - - - 60,000
Issue costs
associated
with equity
fund raise 10 - (2,575) (530) - - - - - - - - (3,105)
Issue of
convertible
notes 12 - - - - - - - 29,210 - - - 29,210
Issue of
contingent
value
rights 5 - - - - - - - - (47,902) - - (47,902)
Transfer to
distributable
reserves 10 - (268,505) - - - - - - 268,505 - - -
Treasury
shares
acquired
in
consideration
for
additional
warrants 10 - - 7,534 (7,534) - - - - - - - -
Issue of
shares in
exchange
for warrants 10 126 2,422 (2,548) - - - - - - - - -
Share based
payment
expense 4 - - - - 841 - - - - - - 841
Share based
payment
expense
- Lapsed - - - - (4,124) - - - - - 4,124 -
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Total
transactions
with
owners (13,280) (65,811) 29,523 (7,534) (3,283) - - 29,210 217,634 7,190 4,124 197,773
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Balance at
December 31,
2019 as
restated* 11,918 2,422 29,523 (7,534) 3,190 42,627 (73,914) 29,210 217,634 7,894 (131,137) 131,833
========= ========== ========= ========= ======== ======== ============ ============ ============== ============ ============ ==========
Balance at
January 1,
2020 11,918 2,422 29,523 (7,534) 3,190 42,627 (73,914) 29,210 217,634 7,894 (131,137) 131,833
Loss for the
year - - - - - - - - - - (104,527) (104,527)
Foreign
exchange
translation
reserve - - - - - - - - - (2,164) - (2,164)
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Total
comprehensive
loss - - - - - - - - - (2,164) (104,527) (106,691)
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Transactions
with owners
Issue of
shares in
exchange
for warrants 10 630 14,131 (14,761) - - - - - - - - -
Issue of
shares in
equity
fund raise 10 1,303 38,697 - - - - - - - - - 40,000
Issue costs
associated
with equity
fund raise 10 - (3,848) - - - - - - - - - (3,848)
Issue of
treasury
shares
for share
options
exercised 10 - 6 - 113 - - - - - - - 119
Share based
payment
expense 4 - - - - 4,729 - - - - - - 4,729
Share based
payment
expense
- Lapsed - - - - (59) - - - - - 59 -
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Total
transactions
with
owners 1,933 48,986 (14,761) 113 4,670 - - - - - 59 41,000
--------- ---------- --------- --------- -------- -------- ------------ ------------ -------------- ------------ ------------ ----------
Balance at
December 31,
2020 13,851 51,408 14,762 (7,421) 7,860 42,627 (73,914) 29,210 217,634 5,730 (235,605) 66,142
========= ========== ========= ========= ======== ======== ============ ============ ============== ============ ============ ==========
* see Note 15
1. General information
Amryt is a global commercial-stage biopharmaceutical company
focused on acquiring, developing and commercializing innovative
treatments to help improve the lives of patients with rare and
orphan diseases. Amryt comprises a strong and growing portfolio of
commercial and development assets.
As used herein, references to "we," "us," "Amryt" or the "Group"
in these condensed consolidated interim financial statements shall
mean Amryt Pharma plc and its global subsidiaries, collectively.
References to the "Company" in these condensed consolidated interim
financial statements shall mean Amryt Pharma plc.
Amryt Pharma plc is a company incorporated in England and Wales.
The Company is listed on Nasdaq (ticker: AMYT) and the AIM market
of the London Stock Exchange (ticker: AMYT).
Aegerion Pharmaceuticals, Inc. ("Aegerion"), a former subsidiary
of Novelion Therapeutics Inc., is a rare and orphan disease company
with a diversified offering of multiple commercial and development
stage assets. The acquisition of Aegerion by Amryt in September
2019 has given Amryt an expanded commercial footprint to market two
U.S. and EU approved products, lomitapide (Juxtapid (U.S.) /
Lojuxta (EU)) and metreleptin (Myalept (U.S.) / Myalepta (EU)).
Amryt's lead development asset, Filsuvez(R)/Oleogel-S10, is a
potential treatment for Epidermolysis Bullosa ("EB"), a rare and
distressing genetic skin disorder for which there is currently no
treatment. Oleogel-S10 is currently an investigational product and
has not received regulatory approval by the FDA or EMA. Filsuvez(R)
has been selected as the brand name for the product. On September
20, 2019, Amryt registered Filsuvez (R) as the trademark name for
Oleogel-S10 in the European Union. On February 18, 2020, Amryt also
registered this trademark name in the United States and is in the
process of registering the Oleogel-S10 trademark in other key
jurisdictions.
On July 8, 2020, Amryt listed on the NASDAQ Global Select Market
under the symbol AMYT. The Company has not issued any new
securities in connection with this filing. The Ordinary Shares will
continue to trade on the AIM market of the London Stock
Exchange.
On August 11, 2020 Amryt announced that the Company gave
Euronext Dublin ("Euronext") notice of its intention to cancel the
admission of the Company's Ordinary Shares ('Ordinary Shares") to
trading on the Euronext Growth Market ("Cancellation"). The last
day of trading in Ordinary Shares on the Euronext Growth Market was
September 8, 2020. The Cancellation applies only to the Euronext
Growth Market and will have no effect on the Company's American
Depositary Shares ("ADSs") which trade on the NASDAQ Global Select
Market under the symbol AMYT or on Amryt's Ordinary Shares trading
on the AIM market of the London Stock Exchange.
2. Accounting policies
Basis of preparation
The condensed consolidated interim financial statements of the
Group have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all of the information
required in annual financial statements in accordance with
International Financial Reporting Standards ("IFRS") and should be
read in conjunction with the annual consolidated financial
statements for the year ended December 31, 2019. Selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the Group's financial
position and performance since the last annual financial
statements. The accounting policies used in the preparation of the
interim financial information are the same as those used in the
Group's audited financial statements for the year ended December
31, 2019 and those which are expected to be used in the financial
statements for the year ended December 31, 2020.
Basis of going concern
Having considered the Group's current financial position and
cash flow projections, the Board of Directors believes that the
Group will be able to continue in operational existence for at
least the next 12 months from the date of approval of these
condensed consolidated interim financial statements and that it is
appropriate to continue to prepare the condensed consolidated
interim financial statements on a going concern basis.
As part of their inquiries, the Board of Directors reviewed
budgets, projected cash flows, and other relevant information for a
period not less than 12 months from the date of approval of the
condensed consolidated interim financial statements for the year
ended December 31, 2020.
A key consideration for the Directors in assessing the going
concern assumption is the continuing impact of the acquisition of
Aegerion, which was completed in September 2019. This acquisition
represents a significant step forward for Amryt and has created
value for Amryt with immediate effect post-deal close through
enhanced scale of the combined Group. The integration of Aegerion
into the Amryt Group has been successful as demonstrated by growth
in revenues and cost reductions. This success demonstrates the
potential to continue to drive revenues and deliver operational
synergies through a combination of medical, commercial, clinical,
development and regulatory infrastructure. Additionally, Amryt
completed a private placement of 3,200,000 American Depositary
Shares ("ADSs") yielding gross proceeds of US$40,000,000. In the
prior year Amryt also completed a US$60,000,000 fundraising as part
of the acquisition of Aegerion.
Basis of consolidation
The condensed consolidated interim financial statements comprise
the financial statements of the Group for the year ended December
31, 2020. Subsidiaries are entities controlled by the Company.
Where the Company has control over an investee, it is classified as
a subsidiary. The Company controls an investee if all three of the
following elements are present: power over an investee, exposure or
rights to variable returns from its involvement with the investee
and the ability to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate
that there may be a change in any of these elements of control.
Subsidiaries are fully consolidated from the date that control
commences until the date that control ceases. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Intergroup
balances and any unrealized gains or losses, income or expenses
arising from intergroup transactions are eliminated in preparing
the condensed consolidated interim financial statements.
Presentation of balances
The condensed consolidated interim financial statements are
presented in U.S. dollars ("US$"), rounded to the nearest thousand,
which is the functional currency of the Company and presentation
currency of the Group.
The following table discloses the major exchange rates of those
currencies other than the functional currency of US$ that are
utilized by the Group:
Foreign currency units EUR GBP CHF SEK NOK DKK
to 1 US$
----------------------------------- ------ ------ ------ ------ ------ ------
Average three-month period
to December 31, 2020 (unaudited) 0.8391 0.7578 0.9043 8.6208 9.0381 6.2461
Average 12-month period
to December 31, 2020 (unaudited) 0.8777 0.7799 0.9391 9.2135 9.4206 6.5432
At December 31, 2020 0.8141 0.7365 0.8829 8.1885 8.5671 6.0570
Foreign currency units EUR GBP CHF SEK NOK DKK
to 1 US$
----------------------------------- ------ ------ ------ ------ ------ ------
Average three-month period
to December 31, 2019 (unaudited) 0.9034 0.7773 0.9903 9.6157 9.1073 6.7494
Average 12-month period
to December 31, 2019 (audited) 0.8932 0.7836 0.9938 9.4533 8.7976 6.6690
At December 31, 2019 (audited) 0.8929 0.7624 0.971 9.3282 8.8046 6.6698
(EUR = Euro; GBP = Pounds Sterling, CHF = Swiss Franc, SEK =
Swedish Kroner, NOK = Norwegian Kroner, DKK = Danish Kroner)
Changes in accounting policies and disclosures
In the current year, the Group has applied the amendments to
IFRS related to IFRS 3 and the definition of a business. These
amendments and interpretations do not have significant impact on
the disclosures or the amounts reported in these condensed
consolidated interim financial statements.
Critical accounting judgements and key sources of estimation
uncertainty
In preparing these condensed consolidated interim financial
statements in conformity with IFRS management is required to make
judgements, estimates and assumptions that affect the application
of policies and amounts reported in the condensed consolidated
interim financial statements and accompanying notes. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The significant estimates, assumptions or judgements, applied in
the condensed consolidated interim financial statements were the
same as those applied in the Group's audited financial statements
for the year ended December 31, 2019 other than for those applied
in finalizing the acquisition accounting for the Aegerion
acquisition (see Note 5, Business combinations and asset
acquisitions).
Principal accounting policies
The condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in
the Group's audited financial statements for the year ended
December 31, 2019.
3. Segment information
The Group is a global, commercial-stage biopharmaceutical
company dedicated to commercializing and developing novel
therapeutics to treat patients suffering from serious and
life-threatening rare diseases.
The Group currently operates as one business segment,
pharmaceuticals, and is focused on the development and
commercialization of two commercial products and two development
products. The Group derives its revenues primarily from one source,
being the pharmaceutical sector with high unmet medical need.
The Group's Chief Executive Officer, Joseph Wiley, is currently
the Company's chief operating decision maker ("CODM"). The Group
does not operate any separate lines of business or separate
business entities with respect to its products. Accordingly, the
Group does not accumulate discrete financial information with
respect to separate service lines and does not have separate
reportable segments.
The following table summarizes total revenues from external
customers by product and by geographic region, based on the
location of the customer. Revenues represent the revenue from the
Group for the full year (the prior year revenues include revenue
from Aegerion, with acquired products and additional regions, from
September 24, 2019 onward).
Three months ended December 31, 2020 (unaudited)
-------------------------------------------------------
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 15,111 6,261 796 22,168
Lomitapide 9,270 7,461 3,433 20,164
Other - 190 - 190
------------- ------------ ------------ ------------
Total revenue 24,381 13,912 4,229 42,522
============= ============ ============ ============
Three months ended December 31, 2019 (unaudited)
-------------------------------------------------------
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 13,908 7,354 2,061 23,323
Lomitapide 9,297 4,949 2,416 16,662
Other - 206 105 311
------------- ------------ ------------ ------------
Total revenue 23,205 12,509 4,582 40,296
============= ============ ============ ============
Year ended December 31, 2020 (unaudited)
-------------------------------------------------------
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 60,568 32,494 13,810 106,872
Lomitapide 37,317 26,144 11,289 74,750
Other - 763 222 985
------------------------- -------- -------- --------
Total revenue 97,885 59,401 25,321 182,607
========================= ======== ======== ========
Year ended December 31, 2019 (audited)
---------------------------------------------
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 14,944 8,048 2,096 25,088
Lomitapide 10,616 18,985 2,659 32,260
Other - 671 105 776
---------- ---------- ---------- ---------
Total revenue 25,560 27,704 4,860 58,124
========== ========== ========== =========
Major Customers
For the three months and year ended December 31, 2020, one
customer accounted for 57% and 54%, respectively, of the Group's
net revenues (2019: 58% and 44%, respectively) and accounted for
42% of the Group's December 31, 2020 accounts receivable balance
(2019: 44%).
4. Share based payments
On July 10, 2019, the shareholders of the Company approved a
resolution to give authority to the Company to undertake a
consolidation of the existing ordinary shares in the capital of the
Company under which every six existing ordinary shares were
consolidated into one ordinary share.
Under the terms of the Company's Employee Share Option Plan,
options to purchase 18,753,648 shares were outstanding at December
31, 2020. Under the terms of this plan, options are granted to
officers, consultants and employees of the Group at the discretion
of the Remuneration Committee. A total of 4,432,000 share options
were granted to non-executive directors and employees in the year
ended December 31, 2020. For the year ended December 31, 2019, a
total of 11,330,641 share options were granted to directors and
employees.
The terms and conditions of the grants are as follows, whereby
all options are settled by physical delivery of shares:
Vesting conditions
The employee share options vest following a period of service by
the officer or employee. The required period of service is
determined by the Remuneration Committee at the date of grant of
the options (usually the date of approval by the Remuneration
Committee) and it is generally over a three-year period. There are
no market conditions associated with the share option vesting
periods.
Contractual life
The term of an option is determined by the Remuneration
Committee provided that the term may not exceed a period of seven
to ten years from the date of grant. All options will terminate 90
days after termination of the option holder's employment, service
or consultancy with the Group except where a longer period is
approved by the Board of Directors. Under certain circumstances
involving a change in control of the Group, each option will
automatically accelerate and become exercisable in full as of a
date specified by the Board of Directors.
Outstanding warrants at December 31, 2020 consisted of 8,966,520
zero cost warrants (December 31, 2019: 17,196,273) with no
expiration date that were issued to Aegerion creditors in
connection with the acquisition of Aegerion. The remaining warrants
consisting of 345,542 warrants (December 31, 2019: 345,542) were
issued in connection with the admission to the AIM in 2016.
The number and weighted average exercise price (in Sterling
pence) of share options and warrants per ordinary share is as
follows:
Share Options Warrants
Weighted Weighted
average exercise average exercise
price (Sterling price (Sterling
Units pence) Units pence)
----------- ------------------ ------------ ------------------
Balance at 1 January 2019 (pre
share consolidation) 19,505,131 19.20p 22,909,951 24.00p
Balance at 1 January 2019 (restated
for 6:1 share
consolidation) 3,250,855 115.20p 3,818,325 144.00p
Granted 11,330,641 117.01p 18,841,378 -
Lapsed (99,776) 197.66p (3,472,783) 144.00p
Exercised - - (1,645,105) -
----------- ------------------ ------------ ------------------
Outstanding at 31 December 2019
(audited) 14,481,720 116.00p 17,541,815 0.03p
=========== ================== ============ ==================
Exercisable at 31 December 2019
(audited) 2,468,310 109.08p 17,541,815 0.03p
=========== ================== ============ ==================
Balance at 1 January 2020 14,481,720 116.00p 17,541,815 0.03p
Granted 4,432,000 144.76p - -
Lapsed (87,119) 113.42p - -
Exercised (72,953) 120.72p (8,229,753) -
----------- ------------------ ------------ ------------------
Outstanding at 31 December 2020
(unaudited) 18,753,648 122.79p 9,312,062 0.05p
=========== ================== ============ ==================
Exercisable at 31 December 2020
(unaudited) 5,866,152 114.24p 9,312,062 0.05p
=========== ================== ============ ==================
Fair value is estimated at the date of grant using the
Black-Scholes pricing model, taking into account the terms and
conditions attached to the grant. The following are the inputs to
the model for the equity instruments granted during the year:
December December
December 31, 2020 December 31, 2019
31, 2020 Warrant 31, 2019 Warrant
Options Inputs Inputs Options Inputs Inputs
---------------- ---------- ---------------- ----------
Days to Expiration 2,555 - 2,555 -
Volatility 33% - 37% - 27% - 48% -
Risk free interest rate 0.39% - 0.46% - 0.38% - 0.83% -
123.5p - 75.84p -
Share price at grant 178.9p - 121.5p -
In the year ended December 31, 2020, a total of 4,432,000 share
options exercisable at a weighted average price of GBP1.4476 were
granted. The fair value of share options granted in the year ended
December 31, 2020 was GBP6,416,000/US$8,230,000. In 2019, a total
of 11,330,641 share options exercisable at a weighted average price
of GBP1.17 were granted. The fair value of share options granted in
2019 were GBP13,258,000/US$16,919,000.
The share options outstanding as at December, 2020 have a
weighted remaining contractual life of 5.45 years with exercise
prices ranging from GBP0.76 to GBP1.79. The share options
outstanding as at December 31, 2019 had a weighted remaining
contractual life of 6.19 years with exercise prices ranging from
GBP0.76 to GBP1.50.
The 2016 warrants outstanding as at December 31, 2020 have a
weighted remaining contractual life of 0.3 years with an exercise
price of GBP1.44. The warrants outstanding as at December 31, 2019
had a weighted remaining contractual life of 1.3 years with an
exercise price of GBP1.44.
Restricted Share Units
Under the terms of the Company's Employee Share Option Plan,
restricted share units ("RSUs") to purchase 1,556,960 shares were
outstanding at December 31, 2020. Under the terms of this plan,
RSUs are granted to officers, consultants and employees of the
Group at the discretion of the Remuneration Committee. For the year
ended December 31, 2020, a total of 1,556,960 RSUs were granted to
employees of the company. For the year ended December 31, 2019, no
RSUs were granted to employees. The fair value of the RSUs is based
on the share price at the date of grant, with the expense spread
over the vesting period. The fair value of RSUs granted in the year
ended December 31, 2020 was US$2,609,000 and have a weighted
remaining contractual life of 2.59 years. The following table
summarises the RSU activity for the year:
RSUs
-----------------------------
Weighted average
fair value
Unit (US$)
---------- -----------------
Balance at January 1, 2020 - -
Granted 1,556,960 $11.68
Lapsed (7,050) $11.61
Exercised - -
---------- -----------------
Outstanding at December 31, 2020 1,549,910 $11.68
========== =================
The value of share options and RSU's charged to the Condensed
Consolidated Statement of Comprehensive Loss during the quarter and
the year is as follows:
Three months ended Year ended
December 31, December 31,
--------------------------------- -------------------------------
2020 2019 2020 2019
(unaudited) (unaudited) (unaudited) (audited)
------------- ------------- ------------- -----------
US$'000 US$'000 US$'000 US$'000
Share option expense 1,224 522 4,134 841
RSU expense 369 - 595 -
------------- ------------- -----------
Total s hare option expense 1,593 522 4,729 841
============= ============= ============= ===========
5. Business combinations and asset acquisitions
Acquisition of Aegerion Pharmaceuticals
On May 20, 2019, Amryt entered into a Restructuring Support
Agreement (as subsequently amended on June 12, 2019) and Plan
Funding Agreement pursuant to which, among other matters, Amryt
agreed to the acquisition of Aegerion Pharmaceuticals, Inc.
("Aegerion"), a former wholly-owned subsidiary of Novelion
Therapeutics Inc. ("Novelion"). On May 20, 2019, Aegerion and its
U.S. subsidiary, Aegerion Pharmaceuticals Holdings, Inc., filed
voluntary petitions under Chapter 11 of Title 11 of the U.S. Code
in the Bankruptcy Court. On September 24, 2019, Amryt completed the
acquisition of Aegerion. Amryt acquired Aegerion upon its emergence
from bankruptcy in an exchange for ordinary shares and zero cost
warrants in Amryt. Amryt issued 85,092,423 effective shares at
US$1.793 per share, which is made up of 77,027,423 ordinary shares
and 8,065,000 zero cost warrants, to acquire Aegerion for a value
of US$152,615,000.
The Company believes that the acquisition of Aegerion will
enable the Group to advance the Group's ambition to create a global
leader in rare and orphan diseases with a diversified offering of
multiple development-stage and commercial assets and provides it
with scale to support further growth.
As part of the acquisition of Aegerion, it was agreed, for
certain Aegerion creditors who wished to restrict their percentage
share interest in Amryt's issued share capital, to issue to the
relevant Aegerion creditor, as an alternative to Amryt's ordinary
shares, an equivalent number of new zero cost warrants to subscribe
for Amryt's ordinary shares to be constituted on the terms of the
zero cost warrant.
Relevant Aegerion creditors are entitled at any time to exercise
the zero cost warrants, at which point in time, the Company would
issue to that Aegerion creditor the relevant number of fully paid
ordinary shares in return for the exercise of the zero cost
warrants. Each zero cost warrant entitles the holder thereof to
subscribe for one ordinary share. The zero cost warrants constitute
the Company's direct and unsecured obligations and rank pari passu
and without any preference among themselves (save for any
obligations to be preferred by law) at least equally with the
Company's other present and future unsecured and unsubordinated
obligations. The zero cost warrants are not transferable except
with the Company's prior written consent.
On November 14, 2019, the Company repurchased a combined
4,864,656 ordinary shares from Highbridge Tactical Master Fund
L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77
Global Multi Strategy Alpha Master Limited. In exchange for the
ordinary shares, these institutions were issued an equivalent
number of zero cost warrants.
During the three months and year ended December 31, 2020, the
Group incurred acquisition and restructuring related costs of
US$12,000 and US$1,017,000, respectively (2019: US$1,676,000 and
US$13,038,000, respectively) relating to external legal fees,
advisory fees, due diligence costs and severance costs. These costs
have been included in operating costs in the Condensed Consolidated
Statement of Comprehensive loss.
IFRS 3 Business combinations requires the assignment of fair
values to identifiable assets and liabilities acquired to be
completed within 12 months of the acquisition date. The initial
assignment of fair values was performed on a provisional basis and
included in the consolidated financial statement for the year ended
December 31, 2019 and subsequent consolidated interim financial
statements due to the relative size of the acquisition and the
timing of the transaction. The Group finalized the fair values of
the assets and liabilities of Aegerion in 2020. The adjustments
made in finalizing fair values primarily relate to the measurement
of intangible assets separately from goodwill, valuation of
inventory and associated deferred tax liabilities. The acquired
goodwill is attributable principally to the profit generating
potential of the businesses, the assembled workforce and benefits
arising from embedded infrastructure that are expected to be
achieved from integrating the acquired businesses into the Group's
existing business. No amount of goodwill is expected to be
deductible for tax purposes.
As at September 24, 2019
(unaudited)
----------------------------------------------
As previously
reported in
December 31,
2019 financial Fair value,
statements Adjustments* as restated
------------- -------------
US$'000 US$'000 US$'000
Assets
Non-current assets
Property, plant and equipment 276 - 276
Right of use assets 924 - 924
Intangible Assets 308,374 (9,000) 299,374
Other assets 2,334 (433) 1,901
---------------- ------------- -------------
Total non-current assets 311,908 (9,433) 302,475
---------------- ------------- -------------
Current assets
Cash and cash equivalents 24,985 - 24,985
Trade and other receivables 23,259 - 23,259
Inventory 45,959 11,482 57,441
Prepaid expenses and other assets 2,469 (881) 1,588
---------------- ------------- -------------
Total current assets 96,672 10,601 107,273
---------------- ------------- -------------
Total assets 408,580 1,168 409,748
================ ============= =============
Current liabilities
Accounts payable 5,137 (1,186) 3,951
Accrued liabilities 64,088 2,922 67,010
Lease liabilities - current 384 - 384
Provision for legal settlements -
current 14,916 257 15,173
---------------- ------------- -------------
Total current liabilities 84,525 1,993 86,518
---------------- ------------- -------------
Non-current liabilities
Lease liabilities - long term 538 - 538
Long term debt 54,469 - 54,469
Convertible notes debt and equity
components - long term 125,000 - 125,000
Provision for legal settlements -
long term 7,821 - 7,821
Deferred tax liability 14,425 (12,507) 1,918
---------------- ------------- -------------
Total non-current liabilities 202,253 (12,507) 189,746
---------------- ------------- -------------
Total liabilities 286,778 (10,514) 276,264
================ ============= =============
Total identifiable net assets at
fair value 121,802 11,682 133,484
---------------- ------------- -------------
Goodwill arising on acquisition 30,813 (11,682) 19,131
---------------- ------------- -------------
Consideration 152,615 - 152,615
---------------- ------------- -------------
Consideration
Issue of fully paid up ordinary shares
and zero cost warrants 152,615 - 152,615
Total consideration 152,615 - 152,615
================ ============= =============
*Adjustments relate to finalization of fair values following
completion of the fair value assignment to identifiable assets and
liabilities acquired. See Note 15, Restatement of prior year
comparatives, for more details on the adjustments.
Contingent Value Rights
Related to the transaction, Amryt issued Contingent Value Rights
("CVRs") pursuant to which up to US$85,000,000 may become payable
to Amryt's shareholders and optionholders, who were on the register
prior to the completion of the acquisition on September 20, 2019,
if certain approval and revenue milestones are met in relation
Oleogel-S10, Amryt's lead product candidate. If any such milestone
is achieved, Amryt may elect to pay the holders of CVRs by the
issue of Amryt shares or loan notes. If Amryt elects to issue Loan
Notes to holders of CVRs, it will settle such loan notes in cash
120 days after their issue. If none of the milestones are achieved,
scheme shareholders and optionholders will not receive any
additional consideration under the terms of the CVRs. In these
circumstances, the value of each CVR would be zero.
The terms of the CVRs are as follows:
-- The total CVR payable is up to US$85,000,000
-- This is divided into three milestones which are related to
the success of Oleogel-S10 (the Group's lead development asset)
-- FDA approval
o US$35,000,000 upon FDA approval
o 100% of the amount due if approval is obtained before December
31, 2021, with a sliding scale on a linear basis to zero if before
July 1, 2022
-- EMA approval
o US$15,000,000 upon EMA approval
o 100% of the amount due if approval is obtained before December
31, 2021, with a sliding scale on a linear basis to zero if before
July 1, 2022
-- Revenue targets
o US$35,000,000 upon Oleogel-S10 revenues exceeding
US$75,000,000 in any 12-month period prior to June 30, 2024
-- Payment can at the Board's discretion be in the form of either:
o 120-day loan notes (effectively cash), or
o Shares valued using the 30 day / 45-day VWAP.
The CVRs were contingent on the successful completion of the
acquisition and, accordingly, have been based on fair value as at
September 24, 2019. The CVRs have been classified as a financial
liability in the Condensed Consolidated Statement of Financial
Position. Given that CVRs were issued to legacy Amryt shareholders
in their capacity as owners of the identified acquirer as opposed
to the seller in the transaction, management concluded that the
most appropriate classification would be to recognize the CVR as a
distribution on consolidation instead of goodwill.
Measurement of CVRs
As at December 31, 2020, the carrying value of the CVRs was
US$61,417,000 (2019: US$49,413,000). The value of the potential
payout was calculated using the probability-weighted expected
returns method. Using this method, the potential payment amounts
were multiplied by the probability of achievement and discounted to
present value. The probability adjusted present values took into
account published orphan drug research data and statistics which
were adjusted by management to reflect the specific circumstances
applicable to the type of product acquired in the Amryt GmbH
transaction. The market-based probability chance of success is
based on market benchmarks for orphan drugs, was increased to 89%
in 2020 (2019: 72%) following the positive results from our phase 3
EASE trial of Oleogel-S10 earlier in the year. Discount rates of
10% and 16.5%, as applicable, were used in the calculation of the
present value of the estimated contractual cash flows for the year
ended December 31, 2020 (2019: 10% and 16.5%). Management was
required to make certain estimates and assumptions in relation to
revenue forecasts, timing of revenues and probability of
achievement of commercialization of Oleogel-S10. However,
management notes that, due to issues outside their control (i.e.
regulatory requirements and the commercial success of the product),
the timing of when such revenue targets may occur may change. Such
changes may have a material impact on the assessment of the
expected cash flows of the CVRs.
Amryt reviews the expected cash flows on a regular basis as the
discount on initial recognition is being unwound as financing
expenses in the Condensed Consolidated Statement of Comprehensive
Loss over the life of the obligation. It is reviewed on a quarterly
basis and the appropriate finance charge is booked in the Condensed
Consolidated Statement of Comprehensive Loss on a quarterly basis.
The Group received positive top-line data from the phase 3 EASE
trial of Oleogel-S10 in September 2020. The Group expects this to
be followed by applications for approval from the FDA and the
EMA.
The total non-cash finance charge recognized in the Condensed
Consolidated Statement of Comprehensive Loss for the three months
and year ended December 31, 2020 is US$7,506,000 and US$12,004,000,
respectively (2019: US$1,511,000 and US$1,511,000,
respectively).
Acquisition of Amryt GmbH (previously "Birken")
Amryt DAC signed a conditional share purchase agreement to
acquire Amryt GmbH on October 16, 2015 ("Amryt GmbH SPA"). The
Amryt GmbH SPA was completed on April 18, 2016 with Amryt DAC
acquiring the entire issued share capital of Amryt GmbH. The
consideration included contingent consideration comprising
milestone payments and sales royalties as follows:
-- Milestone payments of:
o EUR10,000,000 on receipt of first marketing approval by the
EMA of Episalvan, paid on the completion date (April 18, 2016);
o Either (i) EUR5,000,000 once net ex-factory sales of Episalvan
have been at least EUR100,000 or (ii) if no commercial sales are
made within 24 months of EMA first marketing approval (being
January 14, 2016), EUR2,000,000 24 months after receipt of such
approval, which was paid in January 2018, and EUR3,000,000
following the first commercial sale;
o EUR10,000,000 on receipt of marketing approval by the EMA or
FDA of a pharmaceutical product containing Betulin as its API for
the treatment of EB;
o EUR10,000,000 once net ex-factory sales/net revenue first
exceed EUR50,000,000 in any calendar year;
o EUR15,000,000 once net ex-factory sales/ net revenue first
exceed EUR100,000,000 in any calendar year;
-- Cash consideration of EUR150,000, due and paid on the completion date (April 18, 2016); and
-- Royalties of 9% on sales of Oleogel-S10 products for 10 years from first commercial sale.
Fair Value Measurement of Contingent Consideration
As at December 31, 2020, the fair value of the contingent
consideration was estimated to be US$86,906,000 (2019:
US$53,048,000). The fair value of the royalty payments was
determined using probability weighted revenue forecasts and the
fair value of the milestone payments was determined using
probability adjusted present values (see Note 14, Fair value
measurement and financial risk management, for fair value hierarchy
applied and impact of key unobservable impact data). The
probability adjusted present values took into account published
orphan drug research data and statistics which were adjusted by
management to reflect the specific circumstances applicable to the
type of product acquired in the Amryt GmbH transaction. The
market-based probability chance of success is based on market
benchmarks for orphan drugs, was increased to 89% in 2020 (2019:
72%) following the positive results from our phase 3 EASE trial of
Oleogel-S10 earlier in the year. A discount rate of 14.4% (2019:
24.4%) was used in the calculation of the fair value of the
contingent consideration for the year ended December 31, 2020. The
decrease in the discount rate is mainly driven by the significant
change in Group over the last 12 months where the Group has
significantly de-risked with growth in commercial revenues,
positive top-line data on the phase 3 EASE trial of Oleogel-S10,
increasing cash balances during the year, increasing share price
and additional equity fund raises during the year.
The Group received positive top line results from the phase 3
EASE trial of Oleogel-S10 in September 2020, and the Group expects
this to be followed by applications for approval from the FDA and
the EMA. These factors have resulted in a change to the probability
weighted revenue forecasts and the probability of the adjusted
present values which are used in the calculation of the contingent
consideration balance and impact the amount being unwound to the
Condensed Consolidated Statement of Comprehensive Loss. Changes may
have a material impact on the assessment of the fair value of the
contingent consideration.
Amryt reviews the contingent consideration on a regular basis as
the probability adjusted fair values are being unwound as financing
expenses in the Condensed Consolidated Statement of Comprehensive
Loss over the life of the obligation. The finance charge is being
unwound as a financing expense in the Condensed Consolidated
Statement of Comprehensive Loss on a quarterly basis.
The total non-cash finance charge recognized in the Condensed
Consolidated Statement of Comprehensive Loss for the three months
and year ended December 31, 2020 is US$19,677,000 and
US$27,827,000, respectively (2019: US$1,441,000 and US$6,740,000,
respectively).
6. Loss per share - basic and diluted
The weighted average number of shares in the loss per share
("LPS") calculation, reflects the weighted average total actual
shares of Amryt Pharma plc in issue at December 31, 2020.
Issued share capital - ordinary shares of GBP0.06 each
Number of Weighted
shares average shares
------------ ----------------
December 31, 2020 (unaudited) 178,801,593 158,591,356
December 31, 2019 (audited) 154,498,887 75,871,562
The calculation of loss per share is based on the following:
Three months ended Year ended
December 31 December 31
------------------------------------- -------------------------------------
2020 (unaudited) 2019 2020 (unaudited) 2019
(unaudited) (unaudited)
restated*
----------------- ------------- ----------------- -------------
Loss after tax attributable to
equity holders of the Company
(US$'000) (46,990) (29,721) (104,527) (62,998)
Weighted average number of
ordinary
shares in issue 166,974,713 155,216,888 158,591,356 75,871,562
Fully diluted average number of
ordinary shares in issue 166,974,713 155,216,888 158,591,356 75,871,562
----------------- -------------
Basic and diluted loss per share
(US$) (0.28) (0.19) (0.66) (0.83)
================= ============= ================= =============
* see Note 15
Where a loss has occurred, basic and diluted LPS are the same
because the outstanding share options and warrants are
anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The
share options and warrants outstanding as at December 31, 2020
totaled 28,065,710 (2019: 32,023,535) and are potentially
dilutive.
7. Intangible assets and goodwill
The following table summarizes the Group's intangible assets and
goodwill:
Developed Developed Other Total
technology technology In process intangible intangible
- metreleptin - lomitapide R&D assets assets Goodwill
US$ ' US$ ' US$ ' US$ ' US$ ' US$ '
000 000 000 000 000 000
Cost
At January 1, 2019 (unaudited) - - 60,091 258 60,349 -
Additions - - - 74 74 -
Acquired assets, as
restated* 176,000 123,000 - 374 299,374 19,131
Impairment charge - - (4,670) - (4,670) -
Foreign exchange movement - - (1,160) (5) (1,165) -
--------------- -------------- ----------- ------------ ------------ ---------
At December 31, 2019,
as restated* (unaudited) 176,000 123,000 54,261 701 353,962 19,131
Additions - - - 372 372 -
Acquired assets - - 591 - 591 -
Disposals - - - (246) (246) -
Foreign exchange movement - - 5,276 39 5,315 -
--------------- -------------- ----------- ------------ ------------ ---------
At December 31, 2020
(unaudited) 176,000 123,000 60,128 866 359,994 19,131
=============== ============== =========== ============ ============ =========
Accumulated amortization
At January 1, 2019 (unaudited) - - - 52 52 -
Amortization charge,
as restated* 7,314 4,143 - 126 11,583 -
--------------- -------------- ----------- ------------ ------------ ---------
At December 31, 2019,
as restated* (unaudited) 7,314 4,143 - 178 11,635 -
Amortization charge 27,429 15,537 - 202 43,168 -
Accumulated amortization
on disposals - - - (246) (246) -
Foreign exchange movement - - - 68 68 -
--------------- -------------- ----------- ------------ ------------ ---------
At December 31, 2020(unaudited) 34,743 19,680 - 202 54,625 -
=============== ============== =========== ============ ============ =========
Net book value
--------------- -------------- ----------- ------------ ------------ ---------
At December 31, 2019,
as restated* (unaudited) 168,686 118,857 54,261 523 342,327 19,131
=============== ============== =========== ============ ============ =========
At December 31, 2020
(unaudited) 141,257 103,320 60,128 664 305,369 19,131
=============== ============== =========== ============ ============ =========
* see Note 15
Developed technology on commercially marketed products
In connection with the acquisition of Aegerion in September
2019, the Group acquired developed technology, metreleptin and
lomitapide. These intangible assets are amortized over their
estimated useful lives and the remaining useful lives for
metreleptin and lomitapide are approximately 5.2 and 6.7 years,
respectively, as of December 31, 2020 (2019: 6.2 and 7.7 years,
respectively).
The amortization associated with metreleptin and lomitapide is
recorded as part of cost of sales. As of December 31, 2020, the
estimated amortization expense related to these intangibles for
future periods is as follows:
Metreleptin Lomitapide
------------ -----------
Years Ending December 31, US$ ' 000 US$ ' 000
2021 27,429 15,537
2022 27,429 15,537
2023 27,429 15,537
2024 27,429 15,537
2025 27,429 15,537
Thereafter 4,112 25,635
------------ -----------
141,257 103,320
============ ===========
In-process R&D
On October 12, 2020, Amryt acquired Cala Medical Limited ("Cala
Medical") for a consideration of US$723,000. As a result of the
acquisition of Cala Medical the Group recognized in-process R&D
costs of US$591,000 as an intangible asset. This is related to the
Group's development project AP104, which is an early-stage drug
asset. Cala Medical is focused on the development of a therapeutic
enzyme (ScpA) targeting a molecule in the complement pathway, C5a,
that mediates immune responses and inflammation. Initial research
efforts focused on the use of a modified form of ScpA as part of a
medical device used to remove C5a from the circulation of patients
suffering from sepsis. Amryt has redirected efforts towards the
development of a pharmaceutical agent that may be administered
locally or systemically to address multiple other disease areas of
interest that may be favorably impacted by inhibition of C5a
activity.
As a result of the acquisition of Amryt GmbH, in 2016, the Group
recognized in-process R&D costs of US$54,268,000 which is
related to the Group's lead development asset, Oleogel-S10.
As a result of the acquisition of Som Therapeutics Corp., in
2016, the Group recognized in-process R&D costs of US$4,522,000
as an intangible. This is related to the Group's development
project AP102, which is an early-stage drug asset. AP102 may
represent a novel, next generation somatostatin analogue ("SSA")
peptide medicine for patients with rare neuroendocrine diseases,
where there is a high unmet medical need, including acromegaly.
Acromegaly is a rare endocrine disorder in which the body produces
excessive growth hormone, leading to abnormal growth throughout the
body over time.
In 2019, following the acquisition of Aegerion by the Group, a
decision was made not to pursue the development of AP102 and
therefore, the Group wrote off this asset, resulting in an
impairment charge of US$4,670,000 recognized as other expense
during the year ended December 31, 2019. The decision to impair
this intangible asset is primarily based on the grounds that the
acquisition of Aegerion has been transformational for the Group, as
it has now become a global, commercial-stage biopharmaceutical
company dedicated to commercializing and developing novel
therapeutics to treat patients suffering from serious and
life-threatening rare diseases. The Group's diversified portfolio
is comprised of two commercial rare disease products, as well as a
development-stage pipeline focused on rare skin diseases. Since the
commercial products, lomitapide for the treatment of homozygous
familial hypercholesterolemia ("HoFH"), and metreleptin for the
treatment of generalized lipodystrophy ("GL") and partial
lipodystrophy ("PL"), have each been sold globally through the
Group's commercial infrastructure for over six years, management
believes it is in the best interest of the Group to concentrate
resources on these new development pipeline activities which will
better complement the existing commercial products. The Group may
look to partner AP102 in the long-term future but in the short and
medium term, the Group will continue to concentrate on Oleogel-S10,
AP103 and expansion opportunities for the existing commercial
products.
Other intangible assets
Other intangible assets include website costs and the Group's
computer software and hardware. The amortization associated with
computer software, hardware and website costs is recorded in both
SG&A and R&D expenses. These assets are stated at cost and
amortized using the straight-line method based on the estimated
economic lives, ranging from 3 - 10 years.
Goodwill
During 2019, the Group completed the acquisition of Aegerion,
which resulted in aggregate goodwill of US$19,131,000, as restated
(See Note 15, Restatement of prior year comparatives). Refer to
Note 5, Business combinations and asset acquisitions , for further
details. The Group believes that the business, as a whole,
represents a single CGU, as it is the smallest identifiable group
of assets that generates cash inflows that are largely independent
of the cash inflows from other assets or groups of assets.
Additionally, the Group only operates in one business segment and
does not operate any separate lines of business or separate
business entities with respect to its products. Accordingly, the
Group does not accumulate discrete financial information with
respect to separate service lines and does not have separate
reportable segments.
Impairment
The Group reviews the carrying amount of intangible assets on an
annual basis or when there is a triggering event that may be an
indication of possible impairment. The Group conducts an impairment
review by determining recoverable amounts from value in use
calculations. The recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss. Impairment
indications include events causing significant changes in any of
the underlying assumptions used in the income approach utilized in
valuing intangible assets. The key assumptions are the probability
of success; the discount factor; the timing of future revenue
flows; market penetration and peak sales assumptions; and
expenditures required to complete development.
These cash flows are projected forward to the year 2032 using
projected revenue and cost growth to determine the basis for an
annuity-based terminal values. The terminal values are used in the
value in use calculation. The value in use represents the present
value of the future cash flows, including the terminal value,
discounted at a rate that is considered appropriate for the Group's
size and structure.
The key assumptions employed in arriving at the estimates of
future cash flows are subjective and include projected EBITDA, an
orphan drug market-based probability chance of success, net cash
flows, discount rates and the duration of the discounted cash flow
model. The assumptions and estimates used were derived from a
combination of internal and external factors based on historical
experience. The pre-tax discount rate used in 2020 and 2019 was
14.4% and 16.5%, respectively.
The value-in-use calculation is subject to significant
estimation, uncertainty and accounting judgements and key
sensitivities arise in the following areas:
-- In the event that there was a variation of 10% in the assumed
level of future growth in revenues, which would, in management's
view, represent a reasonably likely range of outcomes, this
variation would not result in an impairment loss at December 31,
2020.
-- In the event there was a 5% increase in the discount rate
used in the value in use model which would in management's view
represent a reasonably likely range of outcomes, this variation
would not result in an impairment loss at December 31, 2020.
Goodwill is subject to impairment testing on an annual basis.
The recoverable amount of the Group's CGU is determined based on a
value-in-use computation. The Group's value-in-use calculations
included the cash flow projections based on the 2021 budget which
has been approved by the Board of Directors and the Group's
strategic plan for a further three years using projected revenue
growth rates of between 10% - 33% and cost growth rates of between
-4% and 38%. At the end of the four-year forecast period, the
terminal value, based on a long-term growth rate of 2%, was used in
the value-in-use calculations. The value-in-use represents the
present value of the future cash flows, including the terminal
value, discounted at a rate appropriate to the Group. The key
assumptions employed in arriving at the estimates of future cash
flows are subjective and include projected EBITDA, net cash flows,
discount rates and the duration of the discounted cash flow model.
The Group have used a discount rate of 14.4% (2019: 16.5%) which we
believe is a realistic estimate for the Group as well as the
Group's risk profile.
The 2020 annual impairment testing process resulted in no
impairment for the year ended December 31, 2020 (2019: nil).
8. Trade and other receivables
December 31,
---------------------------------
2020 2019
(unaudited) (unaudited)
restated*
------------- -------------
US$ ' 000 US$ ' 000
Trade receivables 33,057 28,607
Accrued income and other debtors 8,423 5,493
VAT recoverable 1,705 1,400
------------- -------------
Trade and other receivables 43,185 35,500
============= =============
* see Note 15
Trade receivables at December 31, 2020 includes US$1,186,000
(2019: US$752,000) which is due greater than 120 days. No
impairment is considered necessary.
The December 31, 2020 accrued income and other debtors balance
includes US$287,000 (2019: US$857,000) in relation to prepaid phase
3 clinical trial costs.
9. Cash and cash equivalents
December 31,
-------------------------------
2020 2019
(unaudited) (audited)
------------- -----------
US$ ' 000 US$ ' 000
Cash at bank available on demand 118,575 65,197
Restricted cash 223 2,032
------------- -----------
Total cash and cash equivalents 118,798 67,229
============= ===========
Cash and cash equivalents include cash at bank available on
demand and restricted cash.
At Dec ember 31, 2020 and December 31, 2019, there was
US$223,000 and US$2,032,000 of restricted cash, respectively. The
balance at December 31, 2020 includes a deposit on a company credit
card facility for an amount of US$150,000 (December 31, 2019:
US$150,000). Of the US$2,032,000 held in restricted cash at
December 31, 2019, $1,069,000 was in an escrow account, which was
set-up in accordance with Aegerion's bankruptcy plan as approved by
the U.S. Bankruptcy Court, and it was fully utilized to pay the
costs associated with the bankruptcy process. Additionally, there
was US$73,000 held by a third-party distributor at December 31,
2020 (December 31, 2019: US$813,000).
10. Share capital and reserves
Details of the number of issued ordinary shares with a nominal
value of Sterling 6 pence (2019: 6 pence) each are in the table
below.
Ordinary shares Treasury shares Deferred shares
----------------------------- -------------------------- ----------------------------
2020 2019 2020 2019 2020 2019
(unaudited) (audited) (unaudited) (audited) (unaudited) (audited)
------------- -------------- ------------- ----------- ------------- -------------
At 1 January 154,498,887 274,817,283 4,864,656 - - 43,171,134
Share consolidation
in 2019 - (229,014,401) - - - (43,171,134)
Issue of shares in exchange
for warrants 8,229,753 1,645,105 - - - -
Issue of shares in equity
fund raises 16,000,000 34,888,133 - - - -
Issue of shares in
consideration
of Aegerion Acquisition - 77,027,423 - - - -
Issue of treasury shares
for share options exercised 72,953 - (72,953) - - -
Treasury shares acquired
in consideration for
additional warrants - (4,864,656) - 4,864,656 - -
------------- -------------- ------------- ----------- ------------- -------------
At December 31 178,801,593 154,498,887 4,791,703 4,864,656 - -
The components of equity are detailed in the Condensed
Consolidated Statement of Changes in Equity and described in more
detail below.
The total number of ordinary shares issued at December 31, 2020
of 183,593,296 (2019: 159,363,543), includes treasury shares of
4,791,703 (2019: 4,864,656).
In December 2020, the Company issued 3,200,000 American Deposit
Shares ("ADSs"), each representing five ordinary shares, as part of
a US$40,000,000 private placement equity raise to existing and new
shareholders.
The Company issued 4,000,000 and 4,229,753 ordinary shares on
July 15, 2020 and September 22, 2020, respectively, in exchange for
certain warrants.
On December 27, 2019, the Company issued 1,645,105 shares to
certain shareholders in consideration of warrants.
On September 24, 2019, the following equity issuances were
conducted:
-- 77,027,423 ordinary shares and 8,065,000 warrants for a
consideration of US$152,615,000 were issued as part of the Aegerion
acquisition whereby the company acquired the entire share capital
of Aegerion.
-- 27,541,944 ordinary shares and 5,911,722 warrants were issued
as part of a US$60,000,000 fund raising.
In an US$8,000,000 equity raise, the Company issued 7,346,189
ordinary shares, 4,580,288 shares in August 2019 and 2,765,901
shares in September 2019.
In July 2019, t he Company repurchased all of the 43,171,134
Deferred Ordinary Shares for an aggregate consideration of GBP0.01
and the Deferred Shares were immediately cancelled. Simultaneously
the Company allotted four additional ordinary shares of par value
GBP0.01 each in the capital of the Company, in connection with a 6
to 1 consolidation of the Company's share capital.
Share Capital
Share capital represents the cumulative par value arising upon
issue of ordinary shares of Sterling 6 pence each.
The ordinary shares have the right to receive notice of, attend
and vote at general meetings and participate in the profits of the
Company.
Share Premium
Share premium represents the consideration that has been
received in excess of the nominal value on issue of share capital
net of issue costs and transfers to distributable reserves.
Warrant reserve
The warrant reserve represents zero cost warrants issued as part
of the equity raise on September 24, 2019 net of issue costs
apportioned to warrants issued and additional warrants issued to
certain shareholders on November 14, 2019. Each warrant entitles
the holder to subscribe for one ordinary share at zero cost. The
Company issued 4,000,000 and 4,229,753 ordinary shares on July 15,
2020 and September 22, 2020, respectively, in exchange for certain
warrants. On December 27, 2019, the company issued 1,645,105
ordinary shares in consideration for certain warrants.
Treasury Shares
On November 14, 2019, the Company repurchased a combined
4,864,656 ordinary shares from certain shareholders. In exchange
for the ordinary shares, these shareholders were issued an
equivalent number of zero cost warrants. These ordinary shares are
now held as treasury shares. In October 2020, the Company issued
72,953 ordinary shares from treasury shares following the exercise
of share options.
Share based payment reserve
Share based payment reserve relates to the charge for share
based payments in accordance with IFRS 2.
Merger reserve
The merger reserve was created on the acquisition of Amryt DAC
by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma
plc were issued to acquire the entire issued share capital of Amryt
DAC. Under section 612 of the UK Companies Act 2006, the premium on
these shares has been included in a merger reserve.
Reverse acquisition reserve
The reverse acquisition reserve arose during the period ended
December 31, 2016 in respect of the reverse acquisition of Amryt
Pharma plc by Amryt DAC. Since the shareholders of Amryt DAC became
the majority shareholders of the enlarged Group, the acquisition is
accounted for as though there is a continuation of Amryt DAC's
financial statements. The reverse acquisition reserve is created to
maintain the equity structure of Amryt Pharma plc in compliance
with UK company law.
Equity component of convertible notes
The equity component of convertible notes represents the equity
component of the US$125,000,000 convertible debt and is measured by
determining the residual of the fair value of the instrument less
the estimated fair value of the liability component. The equity
component is recognized in equity and is not subsequently
remeasured.
Other distributable reserves
Other distributable reserves comprise the following:
-- Distribution of the share premium amount on November 6, 2019
of US$268,505,000. By special resolution of the Company duly passed
on September 23, 2019, in accordance with section 283 of the UK
Companies Act 2006, it was resolved that the entire amount
outstanding to the credit of the share premium account and capital
redemption reserve of the Company be cancelled. The reduction in
capital, amounting to US$268,505,000, representing the entire
amount of share premium at that time, was approved by the High
Court of Justice of England and Wales on November 5, 2019.
-- A deemed distribution of US$47,902,000 arising from the issuance of CVRs.
-- A deemed distribution of US$2,969,000 arising from the scheme
of arrangement in September 2019 whereby Amryt Pharma plc, which
was incorporated in July 2019, became a 100% shareholder of Amryt
Pharma Holdings Limited (formerly named Amryt Pharma plc) (the
"Acquisition of subsidiary without a change of control").
Currency translation reserve
The currency translation reserve arises on the retranslation of
non-U.S. dollar denominated foreign subsidiaries.
Accumulated deficit
Accumulated deficit represents losses accumulated in previous
periods and the current year.
11. Long term loan
December 31,
-------------------------------
2020 2019
(unaudited) (audited)
------------- -----------
US$ ' 000 US$ ' 000
Long term loan principal 88,037 82,456
Unamortized debt issuance costs (735) (846)
Long term loan 87,302 81,610
============= ===========
As part of the acquisition of Aegerion on September 24, 2019,
Aegerion entered into a new U.S. dollar denominated US$81,021,000
secured term loan debt facility ("Term Loan") with various lenders.
The Term Loan is made up of a US$54,469,000 loan that was in place
prior to the acquisition which was refinanced as part of the
acquisition and a US$26,552,000 additional loan that was drawn down
on September 24, 2019. The Term Loan has a five-year term from the
date of the draw down, September 24, 2019 and matures on September
24, 2024. Under the Term Loan, interest will be payable at the
option of the Group at the rate of 11% per annum paid in cash on a
quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in
kind that will be paid when the principal is repaid, which rolls up
and is included in the principal balance outstanding, on a
quarterly basis. Unpaid accrued interest of US$1,439,000 as at
December 31, 2020 is recognized in current liabilities with trade
and other payables (2019: nil). The Term Loan may be prepaid, in
whole or in part, by Aegerion at any time subject to payment of an
exit fee, which depending on the stage of the loan term, ranges
from 5.00% to 0.00% of the principal then outstanding on the Term
Loan.
In connection with the Term Loan, the Group incurred
approximately US$870,000 of debt issuance costs, which primarily
consisted of underwriting, legal and other professional fees. These
costs are being amortized over the expected life of the loan using
the effective interest method.
The Term Loan is guaranteed by Amryt and certain subsidiaries of
the Group. In connection with the loan agreement, fixed and
floating charges have been placed on property and undertakings of
Amryt and certain subsidiaries of the Group.
The Term Loan agreement includes affirmative and negative
covenants, including prohibitions on the incurrence of additional
indebtedness, granting of liens, certain asset dispositions,
investments, and restricted payments, in each case, subject to
certain exceptions set forth in the Loan Agreement. The Term Loan
agreement also includes customary events of default for a
transaction of this type and includes (i) a cross-default to the
occurrence of any event of default under material indebtedness of
Aegerion and certain subsidiaries of the Group and Amryt, including
the convertible notes, and (ii) Amryt or any of its subsidiaries
being subject to bankruptcy or other insolvency proceedings. Upon
the occurrence of an event of default, the lenders may declare all
of the outstanding Term Loan and other obligations under the Term
Loan agreement to be immediately due and payable and exercise all
rights and remedies available to the lenders under the Term Loan
agreement and related documentation. There have been no events of
default or breaches of the covenants occurring for the year ended
December 31, 2020 (2019: no events).
Total
----------
US$ ' 000
Changes in long term loans from financing activities:
At January 1, 2020 (audited) 81,610
Cash-flows
Proceeds from loans and borrowings -
Repayment of loans and borrowings -
Liability related
Paid in kind interest 5,585
Amortization of debt costs 107
Accrued interest 1,439
----------
At December 31, 2020 (unaudited) 88,741
==========
12. Convertible notes
Total
----------
US$ ' 000
At January 1, 2019 -
Issuance of convertible notes 125,000
Amount classified as equity (29,210)
Accreted interest 1,066
At December 31, 2019 (audited) 96,856
Accreted interest 4,230
At December 31, 2020 (unaudited) 101,086
==========
As part of the acquisition, Aegerion issued convertible notes
with an aggregate principal amount of US$125,000,000 to Aegerion
creditors.
The convertible notes are senior unsecured obligations and bear
interest at a rate of 5.0% per year, payable semi-annually in
arrears on April 1 and October 1 of each year, beginning on April
1, 2020. The convertible notes will mature on April 1, 2025, unless
earlier repurchased or converted.
The convertible notes are convertible into Amryt's ordinary
shares at a conversion rate of 386.75 ordinary shares per US$1,000
principal amount of the convertible notes. If the holders elect to
convert the convertible notes, Aegerion can settle the conversion
of the convertible notes through payment or delivery of cash,
common shares, or a combination of cash and common shares, at its
discretion. As a result of the conversion feature in the
convertible notes, the convertible notes were assessed to have both
a debt and an equity component. The two components were assessed
separately and classified as a financial liability and equity
instrument. The financial liability component was measured at fair
value based on the discounted cash flows expected over the expected
term of the notes using a discount rate based on a market interest
rate that a similar debt instrument without a conversion feature
would be subject to. Refer to Note 10, Share capital and reserves,
for further details on the equity component of the convertible
notes.
From September 24, 2019 until the close of business on the
second scheduled trading day immediately preceding the maturity
date, holders may convert all or any portion of their convertible
notes, in multiples of US$1,000 principal amount, at the option of
the holder.
The indenture does not contain any financial covenants or
restrict the Group's ability to repurchase securities, pay
dividends or make restricted payments in the event of a transaction
that substantially increases the Group's level of indebtedness in
certain circumstances.
The indenture contains customary terms and covenants and events
of default. If an event of default (other than certain events of
bankruptcy, insolvency or reorganization involving Aegerion, Amryt
and certain subsidiaries of the Group) occurs and is continuing,
the trustee by notice to Aegerion, or the holders of at least 25%
in principal amount of the outstanding convertible notes by written
notice to Aegerion and the trustee, may declare 100% of the
principal of and accrued and unpaid interest, if any, on all of the
convertible notes to be due and payable. Upon such a declaration of
acceleration, such principal and accrued and unpaid interest, if
any, will be due and payable immediately. Upon the occurrence of
certain events of bankruptcy, insolvency or reorganization
involving Aegerion, 100% of the principal and accrued and unpaid
interest, if any, on the convertible notes will become due and
payable automatically. Notwithstanding the foregoing, the indenture
provides that, upon Aegerion's election, and for up to 180 days,
the sole remedy for an event of default relating to certain
failures by Aegerion to comply with certain reporting covenants in
the indenture consists exclusively of the right to receive
additional interest on the convertible notes. There have been no
events of default or breaches of the covenants occurring for the
year ended December 31, 2020 (2019: no events).
13. Provisions and other liabilities
December 31,
---------------------------------
2020 2019
(unaudited) (unaudited)
restated*
------------- -------------
US$ ' 000 US$ ' 000
Non-current liabilities
Provisions and other liabilities 21,382 3,910
Leases due greater than 1 year 4,569 1,053
------------- -------------
25,951 4,963
Current liabilities
Provisions and other liabilities 9,976 23,304
Leases due less than 1 year 963 571
------------- -------------
10,939 23,875
------------- -------------
Total provisions and other liabilities 36,890 28,838
============= =============
* see Note 15
Legal matters
Prior to the acquisition of Aegerion by Amryt, Aegerion entered
into settlement agreements with governmental entities including the
Department of Justice ("DOJ") and the FDA in connection with
Juxtapid investigations. The settlement agreements require Aegerion
to pay specified fines and engage in regulatory compliance efforts.
Subsequent to the acquisition, Aegerion made US$19,108,000 of
settlement payments, including interest. The settlements remaining
to be paid are due for payment in Q1 2021 and the amount totaling
US$3,976,000 is recognized in Other liabilities as a current
liability (2019: US$15,547,000). There is no non-current liability
at December 31, 2020 (2019: US$3,910,000).
Other matters
The Group recognizes a liability for legal contingencies when it
believes that it is both probable that a liability has been
incurred and that it can reasonably estimate the amount of the
loss. The Group reviews these accruals and adjusts them to reflect
ongoing negotiations, settlements, rulings, advice of legal counsel
and other relevant information. To the extent new information is
obtained and the Group's views on the probable outcomes of claims,
suits, assessments, investigations or legal proceedings change,
changes in the Group's liability accrual would be recorded in the
period in which such determination is made. At December 31, 2020
the Group had recognized liabilities of US$6,000,000 in relation to
ongoing legal matters (2019 US$7,757,000, as restated, see Note 15,
Restatement of prior year comparatives).
14. Fair value measurement and financial risk management
Categories of financial instruments
December 31,
-------------------------------
2020 2019
(unaudited) (audited)
restated*
------------- -----------
US$ ' 000 US$ ' 000
Financial assets (all at amortized cost):
Cash and cash equivalents 118,798 67,229
Trade receivables 33,057 28,607
------------- -----------
Total financial assets 151,855 95,836
Financial liabilities:
At amortized cost
Trade payables and accrued expenses 89,300 77,555
Lease liabilities 5,532 1,624
Other liabilities 25,358 19,457
Convertible notes 101,086 96,856
Long term loan 87,302 81,610
Contingent value rights 61,417 49,413
At fair value
Contingent consideration 86,906 53,048
------------- -----------
Total financial liabilities 456,901 379,563
------------- -----------
Net (305,046) (283,727)
============= ===========
* see Note 15
Financial instruments evaluated at fair value can be classified
according to the following valuation hierarchy, which reflects the
extent to which the fair value is observable:
-- Level 1: fair value evaluations using prices listed on active
markets (not adjusted) of identical assets or liabilities.
-- Level 2: fair value evaluations using input data for the
asset or liability that are either directly observable (as prices)
or indirectly observable (derived from prices), but which do not
constitute listed prices pursuant to Level 1.
-- Level 3: fair value evaluations using input data for the
asset or liability that are not based on observable market data
(unobservable input data).
The contingent consideration has been valued using Level 3. The
contingent consideration comprises:
-- Contingent consideration relating to the acquisition of Amryt
GmbH (see Note 5, Business combinations and asset acquisitions)
that was measured at US$86,906,000 as at December 31, 2020 (2019:
US$53,048,000). The fair value comprises royalty payments which was
determined using probability weighted revenue forecasts and the
fair value of the milestones payments which was determined using
probability adjusted present values. It also included a revision to
the discount rate used, and revenue and costs forecasts have been
amended to reflect management's current expectations.
Impact of key unobservable input data
-- An increase of 10% in estimated revenue forecasts would
result in an increase to the fair value of US$6,079,000. A decrease
would have the opposite effect.
-- A 5% increase in the discount factor used would result in a
decrease to the fair value of US$15,656,000. A decrease of 5% would
result in an increase to the fair value of US$20,965,000.
-- A six-month delay in the launch date for Oleogel-S10 would
result in a decrease to the fair value of US$8,667,000.
15. Restatement of prior year comparatives
As described in Note 5, Business combinations and asset
acquisitions, IFRS 3 requires fair value adjustments to be recorded
with effect from the date of acquisition and consequently result in
the restatement of previously reported financial results. The
impact on the statement of financial position as at December 31,
2019 is shown below:
As previously
reported Adjustments Note As restated
------------ ----- ------------
US$'000 US$'000 US$'000
Assets
Non-current assets
Goodwill 30,813 (11,682) 15a 19,131
Intangible assets 350,953 (8,626) 15b 342,327
Property, plant and equipment 3,036 - 3,036
Other non-current assets 2,306 (433) 15c 1,873
-------------- ------------ ------------
Total non-current assets 387,108 (20,741) 366,367
-------------- ------------ ------------
Current assets
Trade and other receivables 36,387 (887) 15c 35,500
Inventories 43,623 14,377 15d 58,000
Cash and cash equivalents, including
restricted cash 67,229 - 67,229
-------------- ------------ ------------
Total current assets 147,239 13,490 160,729
-------------- ------------ ------------
Total assets 534,347 (7,251) 527,096
============== ============ ============
Equity and liabilities
Equity attributable to owners of
the parent
Share capital 11,918 - 11,918
Share premium 2,422 - 2,422
Other reserves 248,656 (26) 248,630
Accumulated deficit (133,674) 2,537 (131,137)
-------------- ------------ ------------
Total equity 129,322 2,511 131,833
-------------- ------------ ------------
Non-current liabilities
Contingent consideration and contingent
value rights 102,461 - 102,461
Deferred tax liability 18,921 (11,774) 15e 7,147
Long term loan 81,610 - 81,610
Convertible notes 96,856 - 96,856
Provisions and other liabilities 4,963 - 4,963
-------------- ------------ ------------
Total non-current liabilities 304,811 (11,774) 293,037
-------------- ------------ ------------
Current liabilities
Trade and other payables 76,596 1,755 15c 78,351
Provisions and other liabilities 23,618 257 15c 23,875
-------------- ------------ ------------
Total current liabilities 100,214 2,012 102,226
-------------- ------------ ------------
Total liabilities 405,025 (9,762) 395,263
-------------- ------------ ------------
Total equity and liabilities 534,347 (7,251) 527,096
============== ============ ============
The above adjustments to the statement of financial position
relate to the completion of the fair value assignment to
identifiable assets and liabilities acquired as part of the
Aegerion acquisition, the following adjustments have been reflected
in the condensed consolidated interim financial statements:
a) The adjustments to goodwill are a consequence of the fair
value adjustments described in more detail below, which primarily
relate to the measurement of intangible assets, valuation of
inventory and associated deferred tax liabilities.
b) The fair value of intangible assets acquired, consisting of
developed technology for metreleptin and lomitapide, was adjusted
as a consequence of the detailed review and update to the expected
future usage of inventory, the valuation of which was a factor in
determining the fair value of acquired developed technology. See
more detail on the update to the inventory valuation below.
c) Accruals, provisions, and prepayments as at the acquisition
date were reviewed during the twelve months following the
acquisition and the fair values as at the acquisition date were
updated based on the results of a review of the conditions that
existed at this date.
d) Fair value of inventory recognized at the date of acquisition
was updated to reflect the results of detailed reviews of both raw
material and finished good acquired. This involved a review the
expected timing of transition from usage of acquired finished goods
to usage of new inventory, including the review of expected timing
of manufacture runs and the review of expected inventory usage.
Additionally, a review was conducted on the demand and production
that would be saleable in the future. The review resulted in a
change in the assumptions and estimates regarding the usage of
acquired inventory, leading to an increase in the estimated usage
of acquired inventory and consequently resulting in an increase in
the fair value of acquired inventory.
e) Deferred tax was updated to reflect the above changes to the
fair value of the inventory and of intangible assets. In addition,
deferred tax was updated to reflect the results of a review of the
historic tax basis of US intangible assets included in the Aegerion
acquisition. This review identified that the tax basis of the asset
in question was understated at the time of the acquisition. The
closing deferred tax liability as of December 31, 2019 was adjusted
for the correct tax basis.
As noted above, IFRS 3 requires fair value adjustments to be
recorded as if the accounting for the business combination had been
completed at the acquisition date. Consequently, the comparative
information for prior periods presented in financial statements
were revised, including changes in inventory fair value step-up
amortization, intangible amortization and deferred tax effects
recognized in completing the acquisition accounting. The impact on
the Condensed Consolidated Statement of Comprehensive Loss of the
fair value adjustments for the year ended December 31, 2019 is
shown below:
As previously
reported Adjustments Note As restated
-------------- ------------ ----- ------------
US$'000 US$'000 US$'000
Revenue 58,124 - 58,124
Cost of sales (42,001) 3,268 15f (38,733)
-------------- ------------ ------------
Gross profit 16,123 3,268 19,391
Research and development expenses (15,827) - (15,827)
Selling, general and administrative
expenses (35,498) - (35,498)
Restructuring and acquisition costs (13,038) - (13,038)
Share based payment expenses (841) - (841)
Impairment charge (4,670) - (4,670)
-------------- ------------ ------------
Operating loss before finance expense (53,751) 3,268 (50,483)
============== ============ ============
Non-cash change in fair value of
contingent consideration (6,740) - (6,740)
Non-cash contingent value rights
finance expense (1,511) - (1,511)
Net finance expense - other (4,759) - (4,759)
-------------- ------------ ------------
Loss on ordinary activities before
taxation (66,761) 3,268 (63,493)
-------------- ------------ ------------
Tax credit on loss on ordinary activities 1,226 (731) 15g 495
-------------- ------------ ------------
Loss for the year attributable to
the equity holders of the Company (65,535) 2,537 (62,998)
============== ============ ============
Exchange translation differences
which may be reclassified through
profit or loss 781 (26) 755
-------------- ------------ ------------
Total other comprehensive income 781 (26) 755
-------------- ------------ ------------
Total comprehensive loss for the
year attributable to the equity holders
of the Company (64,754) 2,511 (62,243)
============== ============ ============
Loss per share
Loss per share - basic and diluted,
attributable to ordinary equity holders
of the parent (US$) (0.86) (0.83)
============== ============ ============
The above adjustments relate to the impact on the statement of
comprehensive loss as result of the fair value adjustments
following the completion of the fair value assignment to
identifiable assets and liabilities acquired as part of the
Aegerion acquisition.
Non-cash adjustments to the statement of comprehensive loss:
f) Cost of sales has been adjusted for the impact on the
non-cash amortization of inventory fair value step-up and acquired
intangibles, for the period from the date of acquisition to the
year end, as a result of the update to acquired inventory and
intangible fair values following the finalization of acquisition
accounting for the Aegerion acquisition. See Note 15b and 15d,
above, for further detail on the fair value adjustments to acquired
inventory and intangible.
g) As a result of a change in the measurement of the deferred
tax liability at the acquisition date, there was a non-cash
adjustment to the tax charge for the period from the date of
acquisition to the year end.
16. Events after the reporting period
There were no significant events since the end of the reporting
period.
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END
FR FLFVLVTISIIL
(END) Dow Jones Newswires
March 04, 2021 07:00 ET (12:00 GMT)
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