Full Press Release Details
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On Sepetember 28, 2017, Aptevo Therapeutics Inc. ("Aptevo" or the "Company") completed the sale to Saol International Limited ("Saol") of three hyperimmune products marketed by the Company: WinRho SDF for autoimmune platelet disorder and hemolytic disease of the newborn; HepaGam B for the prevention of Hepatitis B following liver transplantation and for treatment following hepatitis B exposure; and VARIZIG for treatment following exposure to varicella zoster virus for individuals with compromised immune systems (the "Hyperimmune Business"). The purchase price is up to $74.5 million and includes an upfront payment of $65.0 million and an additional potential milestone payment totaling up to $7.5 million related to the achievement of certain gross profit based milestones. In addition, the Company may receive up to $2.0 million related to collection of certain accounts receivable after the closing. Saol has deposited $3.25 million of the upfront amount in an escrow account for the purposes of satisfying any indemnification claims brought by Soal pursuant to the LLC purchase agreement.
The unaudited pro forma condensed consolidated balance sheet as of June 30, 2017, gives effect to the disposition of the Hyperimmune Business as if it had occurred on June 30, 2017. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2017 and the year ended December 31, 2016 each give effect to the disposition of the Hyperimmune Business as if it had occurred on January 1, 2016. The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Rule 8-05 of Regulation S-X. Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed consolidated financial statements. In the Company's opinion, all adjustments that are necessary to present fairly the pro forma information have been made.
The unaudited pro forma condensed consolidated statements do not purport to represent what the Company's financial position or results of operations would have been had the disposition of the Hyperimmune Business actually occurred on the dates indicated above, nor are they indicative of future financial position or results of operations. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company's historical condensed consolidated financial statements and related notes for the periods presented.
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share amounts)
| ASSETS | Consolidated | |||||||||||||||||
| Historial | Hyperimmune | ProForma | ||||||||||||||||
| Aptevo Inc. | Business | Adjustments | Notes | Pro Forma | ||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 22,269 | $ | - | $ | 60,425 | (a) | $ | 82,694 | |||||||||
| Restricted cash | 400 | - | - | 400 | ||||||||||||||
| Short-term investments | 25,958 | - | - | 25,958 | ||||||||||||||
| Accounts receivable, net | 4,715 | (3,176 | ) | - | 1,539 | |||||||||||||
| Inventories | 7,984 | (6,055 | ) | - | 1,929 | |||||||||||||
| Prepaid expenses and other current assets | 5,867 | - | 3,250 | (b) | 9,117 | |||||||||||||
| Total current assets | 67,193 | (9,231 | ) | 63,675 | 121,637 | |||||||||||||
| Property and equipment, net | 6,205 | 6,205 | ||||||||||||||||
| Intangible assets, net | 13,493 | (6,998 | ) | - | 6,495 | |||||||||||||
| Total assets | $ | 86,891 | $ | (16,229 | ) | $ | 63,675 | $ | 134,337 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable and other accrued liabilities | $ | 5,349 | $ | (472 | ) | $ | - | $ | 4,877 | |||||||||
| Accrued compensation | 2,944 | (102 | ) | - | 2,842 | |||||||||||||
| Sales rebates and discounts | 2,146 | (1,781 | ) | - | 365 | |||||||||||||
| Deferred revenue, current portion | 1,444 | (574 | ) | - | 870 | |||||||||||||
| Total current liabilities | 11,883 | (2,929 | ) | - | 8,954 | |||||||||||||
| Deferred revenue, net of current portion | 2,796 | - | - | 2,796 | ||||||||||||||
| Long-term debt, net | 18,745 | - | - | 18,745 | ||||||||||||||
| Other liabilities | 2,047 | - | - | 2,047 | ||||||||||||||
| Total liabilities | 35,471 | (2,929 | ) | - | 32,542 | |||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares issued or outstanding | - | - | - | - | ||||||||||||||
| Common stock: $0.001 par value; 500,000,000 shares authorized; 21,309,744 shares issued and outstanding at June 30, 2017 | 21 | - | - | 21 | ||||||||||||||
| Additional paid-in capital | 153,239 | - | - | 153,239 | ||||||||||||||
| Accumulated other comprehensive loss | (14 | ) | - | - | (14 | ) | ||||||||||||
| Contribution receivable from former parent | - | - | - | - | ||||||||||||||
| Accumulated deficit | (101,826 | ) | (13,300 | ) | 63,675 | (c) | (51,451 | ) | ||||||||||
| Total stockholders' equity | 51,420 | (13,300 | ) | 63,675 | 101,795 | |||||||||||||
| Total liabilities and stockholders' equity | $ | 86,891 | $ | (16,229 | ) | $ | 63,675 | $ | 134,337 |
See accompanying notes to unaudited pro forma condensed consolidated financial information.
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2017
(in thousands, except share and per share amounts)
| Historical | ||||||||||||
| Consolidated | Hyprimmune | |||||||||||
| Aptevo Inc. | Business | Pro Forma | ||||||||||
| Revenues: | ||||||||||||
| Product sales | $ | 18,131 | $ | (12,506 | ) | $ | 5,625 | |||||
| Collaborations | 42 | - | 42 | |||||||||
| Total revenues | 18,173 | (12,506 | ) | 5,667 | ||||||||
| Costs and expenses: | ||||||||||||
| Cost of product sales | 6,385 | (5,143 | ) | 1,242 | ||||||||
| Research and development | 12,701 | (41 | ) | 12,660 | ||||||||
| Selling, general and administrative | 19,302 | (993 | ) | 18,309 | ||||||||
| Loss from operations | (20,215 | ) | (6,329 | ) | (26,544 | ) | ||||||
| Other income (expense): | ||||||||||||
| Other income (expense), net | (919 | ) | - | (919 | ) | |||||||
| Total other income (expense), net | (919 | ) | - | (919 | ) | |||||||
| Loss before income taxes | (21,134 | ) | (6,329 | ) | (27,463 | ) | ||||||
| Benefit from income taxes | - | - | - | |||||||||
| Net loss | (21,134 | ) | (6,329 | ) | (27,463 | ) | ||||||
| Net loss per share - basic and diluted | $ | (1.01 | ) | - | $ | (1.31 | ) | |||||
| Shares used to compute net loss per share - basic and diluted | 21,012,760 | - | 21,012,760 |
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2016
(in thousands, except share and per share amounts)
| Historical | ||||||||||||
| Consolidated | Hyperimmune | |||||||||||
| Aptevo Inc. | Business | Pro Forma | ||||||||||
| Revenues: | ||||||||||||
| Product sales | $ | 36,254 | $ | (26,449 | ) | $ | 9,805 | |||||
| Collaborations | 180 | - | 180 | |||||||||
| Total revenues | 36,434 | (26,449 | ) | 9,985 | ||||||||
| Costs and expenses: | ||||||||||||
| Cost of product sales | 24,182 | (11,715 | ) | 12,467 | ||||||||
| Research and development | 29,518 | (398 | ) | 29,120 | ||||||||
| Selling, general and administrative | 38,666 | (3,096 | ) | 35,570 | ||||||||
| Impairment of goodwill and intangible assets | 71,013 | - | 71,013 | |||||||||
| Loss from operations | (126,945 | ) | (11,239 | ) | (138,184 | ) | ||||||
| Other income (expense): | ||||||||||||
| Other income (expense), net | (810 | ) | - | (810 | ) | |||||||
| Total other income (expense), net | (810 | ) | - | (810 | ) | |||||||
| Loss before income taxes | (127,755 | ) | (11,239 | ) | (138,994 | ) | ||||||
| Benefit from income taxes | 15,340 | - | 15,340 | |||||||||
| Net loss | (112,415 | ) | (11,239 | ) | (123,654 | ) | ||||||
| Net loss per share - basic and diluted | $ | (5.55 | ) | - | $ | (6.11 | ) | |||||
| Shares used to compute net loss per share - basic and diluted | 20,239,160 | - | 20,239,160 |
Aptevo Therapeutics Inc.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Note 1. Basis of Presentation
The historical consolidated financial statements have been adjusted in the pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable, and (3) with respect to the pro forma condensed consolidated statements of operations, expected to have a continuing impact on the Company.
The pro forma condensed consolidated financial statements do not necessarily reflect what the consolidated Company's financial condition or results of operations would have been had the transaction occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
Note 2. Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet
The following adjustments have been made to the accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2017: