Full Press Release Details
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On February 28, 2020, Aptevo Therapeutics Inc. ( Aptevo or the Company ) entered into an LLC Purchase Agreement
(the Purchase Agreement ) with Medexus Pharma, Inc. ( Medexus ), pursuant to which Aptevo sold all of the issued and outstanding limited liability company interests of Aptevo BioTherapeutics LLC ( Aptevo BioT ), a
wholly owned subsidiary of Aptevo (the Sale ). On the same date, the closing under the Purchase Agreement occurred. As a result of the Sale, Medexus acquired IXINITY (coagulation factor IX (recombinant)), a third-generation recombinant
human coagulation factor IX marketed in the United States for the control and prevention of bleeding episodes and for perioperative management in adults and children 12 years of age or older with hemophilia B (the IXINITY Business ).
As consideration for the Sale, at closing Aptevo received an amount equal to thirty million dollars ($30 million) in cash, subject to certain
customary adjustments in respect of Aptevo s estimates of cash, indebtedness, working capital and transaction expenses of Aptevo BioT as of the closing (the Closing Consideration ). Such Closing Consideration will be subject to a
final post-closing adjustment pursuant to the terms of the Purchase Agreement. Medexus deposited nine hundred and twelve thousand five hundred dollars ($912,500) with an escrow agent (i) to fund potential payment obligations of Apevo with
respect to the final post-closing adjustment and (ii) to fund potential post-closing indemnification obligations of Aptevo. Aptevo may also earn milestone and deferred payments from Medexus in the future.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2019, gives effect to the disposition of the IXINITY
Business as if it had occurred on September 30, 2019. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2019 and the year ended December 31, 2018 each give effect to the
disposition of the IXINITY Business as if it had occurred on January 1, 2018. 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 IXINITY 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.
This unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is based on assumptions
and estimates considered appropriate by Aptevo management; however, they are not necessarily indicative of what results of operations actually would have been assuming the sale to Medexus had been consummated as of the dates indicated, nor do they
purport to represent Aptevo consolidated results of operations for future periods. The unaudited pro forma condensed financial information does not reflect any cost savings that may be realized. Actual adjustments may differ from the amounts
reflected in the unaudited pro forma condensed combined financial statements and the differences may be material.
financial information has been adjusted to give effect to matters that are (i) directly attributable to the sale of the IXINITY Business, (ii) factually supportable and (iii) with respect to the statement of operations, expected to
have a continuing impact on the operating results of Aptevo.
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2019
(in thousands, except share and per share amounts)
See accompanying notes to unaudited pro forma condensed consolidated financial information
| Consolidated Historical Aptevo Inc. | IXINITY Business | Pro Forma Adjustments | Notes | Pro Forma Debt Repayment | Notes | Pro Forma | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 17,683 | $ | 27,370 | (a) | $ | (17,104 | ) | (c) | $ | 27,949 | |||||||||||||||
| Accounts receivable, net | 7,918 | (7,918 | ) | |||||||||||||||||||||||
| Inventories | 7,482 | (7,482 | ) | |||||||||||||||||||||||
| Prepaid expenses | 2,215 | (981 | ) | 1,234 | ||||||||||||||||||||||
| Other current assets | 1,491 | (343 | ) | 913 | (a) | 2,061 | ||||||||||||||||||||
| Total current assets | 36,789 | (16,724 | ) | 28,282 | (17,104 | ) | 31,243 | |||||||||||||||||||
| Restricted cash | 7,498 | (5,000 | ) | (c) | 2,498 | |||||||||||||||||||||
| Property and equipment, net | 4,271 | 4,271 | ||||||||||||||||||||||||
| Intangible assets, net | 4,628 | (4,628 | ) | |||||||||||||||||||||||
| Operating lease right-of-use asset | 3,981 | 3,981 | ||||||||||||||||||||||||
| Other assets | 3,389 | (2,632 | ) | 757 | ||||||||||||||||||||||
| Total assets | $ | 60,556 | $ | (23,984 | ) | $ | 28,282 | $ | (22,104 | ) | $ | 42,750 | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||
| Accounts payable | $ | 12,073 | $ | (6,036 | ) | $ | $ | 6,037 | ||||||||||||||||||
| Accrued compensation | 3,483 | (786 | ) | 98 | (e) | 2,795 | ||||||||||||||||||||
| Sales rebates and discounts payable | 868 | (868 | ) | |||||||||||||||||||||||
| Loan payable | 19,707 | (19,707 | ) | (c) | ||||||||||||||||||||||
| Other short term liabilities | 1,121 | (531 | ) | 590 | ||||||||||||||||||||||
| Total current liabilities | 37,252 | (8,221 | ) | 98 | (19,707 | ) | 9,422 | |||||||||||||||||||
| Operating lease liability, net of current portion | 3,547 | 3,547 | ||||||||||||||||||||||||
| Other liabilities | 12 | 12 | ||||||||||||||||||||||||
| Total liabilities | 40,811 | (8,221 | ) | 98 | (19,707 | ) | 12,981 | |||||||||||||||||||
| 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; 45,279,244 shares issued and outstanding at September 30 2019 | 45 | 45 | ||||||||||||||||||||||||
| Additional paid-in capital | 179,382 | 179,382 | ||||||||||||||||||||||||
| Accumulated deficit | (159,682 | ) | (15,763 | ) | 28,184 | (b) | (2,397 | ) | (d) | (149,657 | ) | |||||||||||||||
| Total stockholders equity | 19,745 | (15,763 | ) | 28,184 | (2,397 | ) | 29,770 | |||||||||||||||||||
| Total liabilities and stockholders equity | $ | 60,556 | $ | (23,984 | ) | $ | 28,282 | $ | (22,104 | ) | $ | 42,751 |
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
Months Ended September 30, 2019
(in thousands, except share and per share amounts)
| Historical Consolidated Aptevo Inc. | IXINITY Business | Pro Forma Debt Repayment | Notes | Pro Forma | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Product sales | $ | 23,393 | $ | (23,393 | ) | $ | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of product sales | 13,791 | (13,791 | ) | |||||||||||||||||
| Research and development | 24,143 | (3,811 | ) | 20,332 | ||||||||||||||||
| Selling, general and administrative | 20,344 | (7,674 | ) | 12,670 | ||||||||||||||||
| Income (loss) from operations | (34,885 | ) | 1,883 | (33,002 | ) | |||||||||||||||
| Other expense from continuing operations | (1,639 | ) | 1,951 | (f) | 312 | |||||||||||||||
| Income (loss) before income taxes | (36,524 | ) | 1,883 | 1,951 | (32,690 | ) | ||||||||||||||
| Benefit from income taxes | 999 | 999 | ||||||||||||||||||
| Net income (loss) from continuing operations | (35,525 | ) | 1,883 | 1,951 | (31,691 | ) | ||||||||||||||
| Discontinued operations | ||||||||||||||||||||
| Income from discontinued operations, before income taxes | 4,250 | 4,250 | ||||||||||||||||||
| Income tax expense | (999 | ) | (999 | ) | ||||||||||||||||
| Income from discontinued operations | 3,251 | 3,251 | ||||||||||||||||||
| Net income (loss) | $ | (32,274 | ) | $ | 1,883 | $ | 1,951 | $ | (28,440 | ) | ||||||||||
| Basic and diluted per share amounts: | ||||||||||||||||||||
| Net loss from continuing operations | $ | (0.90 | ) | $ | 0.05 | $ | 0.05 | $ | (0.80 | ) | ||||||||||
| Income from discontinued operations | $ | 0.08 | $ | $ | $ | 0.08 | ||||||||||||||
| Net loss per basic and diluted share | $ | (0.82 | ) | $ | 0.05 | $ | 0.05 | $ | (0.82 | ) | ||||||||||
| Weighted-average shares used to compute per share calculations | 39,341,974 | 39,341,974 | 39,341,974 | 39,341,974 |
Aptevo Therapeutics Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
Ended December 31, 2018
(in thousands, except share and per share amounts)
| Historical Consolidated Aptevo Inc. | IXINITY Business | Pro Forma Debt Repayment | Notes | Pro Forma | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Product sales | $ | 23,067 | $ | (23,067 | ) | $ | $ | |||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of product sales | 11,214 | (11,214 | ) | |||||||||||||||||
| Research and development | 35,385 | (1,256 | ) | 34,129 | ||||||||||||||||
| Selling, general and administrative | 28,133 | (9,963 | ) | 18,170 | ||||||||||||||||
| Loss from operations | (51,665 | ) | (634 | ) | (52,299 | ) | ||||||||||||||
| Other expense from continuing operations | (2,024 | ) | 2,766 | (g) | 742 | |||||||||||||||
| Loss before income taxes | (53,689 | ) | (634 | ) | 2,766 | (51,557 | ) | |||||||||||||
| Benefit from income taxes | ||||||||||||||||||||
| Net loss | $ | (53,689 | ) | $ | (634 | ) | $ | 2,766 | $ | (51,557 | ) | |||||||||
| Basic and diluted per share amounts: | ||||||||||||||||||||
| Net loss per basic and diluted share | $ | (2.39 | ) | $ | (0.03 | ) | $ | 0.12 | $ | (2.30 | ) | |||||||||
| Weighted-average shares used to compute per share calculations | 22,500,053 | 22,500,053 | 22,500,053 | 22,500,053 |
Aptevo Therapeutics Inc.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Note 1. Basis of Presentation
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 September 30, 2019:
Note 3. Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement of Operations
The following adjustments have been made to the accompanying unaudited pro forma condensed consolidated statement of operations for the nine
months period ended September 30, 2019:
The following adjustments have been made to the accompanying unaudited pro forma
condensed consolidated statement of operations for the year ended December 31, 2018: