Full Press Release Details
Aquestive Therapeutics, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results and Recent Business Highlights
Warren, NJ, March 14, 2019 - Aquestive Therapeutics, Inc. (NASDAQ: AQST), a specialty pharmaceutical company focused on developing and commercializing
differentiated products to solve therapeutic problems, today reported financial results for the fourth quarter and full year ended December 31, 2018 and provided an update on recent developments in its business.
"Aquestive made significant progress in 2018 by launching our first proprietary product and continuing our transformation into a commercial-stage,
specialty pharmaceutical company," said Keith J. Kendall, Chief Executive Officer of Aquestive. "As requested by the FDA in our meeting with them in late December, we have initiated the crossover study for Libervant. We are also moving forward
with our plans to file Libervant and an additional NDA for Exservan in 2019. Along with this activity, we are advancing early stage assets in our pipeline and will continue to lever our expertise in drug development and commercialization to
further grow our business."
Proprietary Pipeline Overview and Business Update
Aquestive is working to create a portfolio of medicines that can offer patients and physicians, who have difficulty using currently available treatment
options, alternatives with meaningful improvements utilizing the Company's PharmFilm technology. The Company's late stage proprietary products are focused on CNS conditions.
"Caregivers recognize the value SYMPAZAN offers LGS patients who have difficulty consuming tablets or liquid medications," said Ken
Marshall, Chief Commercial Officer. "We anticipate that, as clinicians gain experience with SYMPAZAN and see the positive difference it makes for these patients and their families, adoption will accelerate. Our priority over the next few months
is to expand SYMPAZAN access and continue our effective marketing and peer education efforts in order to drive appropriate product use."
Fourth Quarter 2018 Financials
Total revenues were $16.8 million in the fourth quarter 2018, compared to $12.2 million reported for the fourth quarter 2017. This year-over-year increase
was driven by higher license and royalty revenue.
Aquestive's net loss for the fourth quarter 2018 was $13.9 million, or $0.56 loss per share. The net loss for the fourth quarter 2017 was $10.0 million.
The increase in net loss in the fourth quarter of 2018 compared to same period in 2017 was driven primarily by higher investments in selling, general and
administrative expenses from the launch of SYMPAZAN in December, and higher costs from becoming a public company.
Full Year 2018 Financials
As of December 31, 2018, Aquestive's cash and cash equivalents were $60.6 million, as compared to $17.4 million as of December 31, 2017. In the third
quarter of 2018, Aquestive received net proceeds from its IPO of $63.5 million.
Total revenues were $67.4 million in the full year 2018, compared to $66.9 million for the full year 2017. This year-over-year increase came primarily
from higher license and royalty revenue, followed by an increase in co-development and research fees, offset in part by lower manufacture and supply revenue.
Aquestive's net loss for the full year 2018 was $61.4 million, or $2.96 loss per share. The net loss for the full year 2017 was $8.9 million. The
increase in net loss in the full year 2018 was driven by investments in the commercial launch of SYMPAZAN, increases in public company costs, and $27.3 million of one-time expenses related to the termination of the Company's previous performance
unit plan in contemplation of the Company's IPO.
Aquestive provided full year 2019 financial outlook as follows. The Company expects:
Today's Conference Call and Webcast Reminder
The management team will host an investment community conference call today, March 14, 2019, at 8:00 a.m. ET. Investors and analysts may participate in the
conference call by dialing (866) 417-5886 from the U.S. and (409) 217-8235 internationally, followed by the conference ID: 2673065.
There will also be a simultaneous, live webcast available on the Investors section of the
Company's website at https://investors.aquestive.com/events-and-presentations. The recorded
webcast will be available approximately two hours after the completion of the call and will be archived for 30 days.
About Aquestive Therapeutics
Aquestive Therapeutics is a specialty pharmaceutical company that applies innovative technology to solve therapeutic problems and improve medicines for
patients. Aquestive is advancing a late-stage proprietary product pipeline to treat CNS conditions and provide alternatives to invasively-administered standard of care therapies. The Company also collaborates with pharmaceutical partners to
bring new molecules to market using proprietary, best in class technologies, like PharmFilm , and has proven capabilities for drug development and commercialization.
Non-GAAP Financial Information
This press release and our webcast earnings call regarding our fourth quarter and full year 2018 financial results contains financial measures that do
not comply with U.S. generally accepted accounting principles (GAAP), such as adjusted EBITDA, non-GAAP gross margins, non-GAAP costs and expenses, and non-GAAP net income (loss), because such measures exclude as applicable share-based
compensation, interest expense, interest income, depreciation, amortization, and income taxes.
Specifically, the Company adjusts net income (loss) for one-time IPO related expenditures, including IPO-related share-based compensation and change in
fair value of warrants; for recurring non-cash expenditures, including share compensation expenses - post-IPO, depreciation and amortization; and for interest expense, interest income and income taxes with a result of Adjusted EBITDA.
Similarly, manufacturing and supply expense, research and development expense and selling, general and administrative expense were adjusted for the one-time IPO-related share-based compensation and recurring non-cash expenditures of share
compensation expenses - post-IPO and depreciation and amortization. Adjusted EBITDA and these non-GAAP expense categories are used as a supplement to the corresponding GAAP measures to provide additional insights regarding the Company's
ongoing operations performance.
These measures supplement the company's financial results prepared in accordance with GAAP. Aquestive management uses these measures to analyze its
financial results, its future manufacturing and supply expenses, gross margins, research and development expense and selling, general and administrative expense and to help make managerial decisions. In management's opinion, these non-GAAP
measures provide added transparency into the operating performance of Aquestive and added insight into the effectiveness of our operating strategies and actions. We may provide one or more revenue measures adjusted for certain discrete items,
such as fees collected on certain licensed products, in order to provide investors added insight into our revenue stream and breakdown, along with providing our GAAP revenue. Such measures are intended to supplement, not act as substitutes
for, comparable GAAP measures and should not be read as a measure of liquidity for Aquestive. Adjusted EBITDA and the other non-GAAP measures are also likely calculated in a way that is not comparable to similarly titled measures reported by
In providing outlook for non-GAAP adjusted EBITDA and non-GAAP gross margin we exclude certain items which are otherwise included in determining the
comparable GAAP financial measures. A description of the adjustments which have been applicable in determining adjusted EBITDA are reflected in the table below. In providing outlook for non-GAAP gross margin, we adjust for non-cash
share-based compensation and depreciation and amortization. We are providing such outlook only on a non-GAAP basis because the Company is unable to predict with reasonable certainty the totality or ultimate outcome or occurrence of these
adjustments for the forward-looking period such as share-based compensation expense, income tax, amortization, and certain other adjusted items, which can be dependent on future events that may not be reliably predicted. Based on past
reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to reported results.
Forward-Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as
"anticipate," "believe," "could," "estimate," "expects," "intend," "may," "plan," "potential," "project," "will," "would," or the negative of those terms, and similar expressions, are intended to identify forward-looking statements. Such
statements include, but are not limited to, statements about regulatory approvals and pathways, clinical trial timing and plans, the achievement of clinical and commercial milestones, future financial and operating results, business
strategies, market opportunities, financing, and other statements that are not historical facts.
These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with the Company's development work, including any delays or
changes to the timing, cost and success of our product development activities and clinical trials; the risks of delays in FDA approval of our drug candidates or failure to receive approval; the risks inherent in commercializing a new product
(including technology risks, financial risks, market risks and implementation risks and regulatory limitations); development of our sales and marketing capabilities; issues related to the outsourcing of certain operational and staff functions
to third parties; the rate and degree of market acceptance of our products and product candidates; the success of any competing products, including generics; the size and growth of our product markets; the effectiveness and safety of our
product candidates; risks associated with intellectual property rights and infringement, including the outcome of any patent infringement litigation relating to the Company's products; unexpected patent developments; the impact of existing
and future legislation and regulatory provisions on product exclusivity; legislation or regulatory action affecting pharmaceutical product pricing, reimbursement or access; claims and concerns that may arise regarding the safety or efficacy
of the Company's products and product candidates; risks related to legal proceedings, including ongoing patent infringement, investigative and antitrust litigation matters; changes in governmental laws and regulations; the impact of product
recalls and withdrawals; uncertainties related to general economic, political, business, industry, regulatory and market conditions and other unusual items; and other risks and uncertainties affecting the Company including those described in
the "Risk Factors" section included in the Company's Annual Report on Form 10-K to be filed with the SEC on March 14, 2019 . Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only
as of the date made. All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. The Company assumes no obligation to update our
forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as may be required under applicable law.
SYMPAZAN IMPORTANT SAFETY INFORMATION
BOXED WARNING: RISKS FROM CONCOMITANT USE WITH OPIOIDS
Concomitant use of benzodiazepines and opioids may result in profound sedation, respiratory depression, coma, and death.
SYMPAZAN is contraindicated in patients with a history of hypersensitivity to the drug or its ingredients. Hypersensitivity reactions have included
serious dermatological reactions.
WARNINGS AND PRECAUTIONS
Potentiation of Sedation from Concomitant Use with Central Nervous System (CNS) Depressants
SYMPAZAN has a CNS depressant effect. Caution patients and/or caregivers against simultaneous use with other CNS depressants or alcohol as the effects of
other CNS depressants or alcohol may be potentiated.
Somnolence or Sedation
SYMPAZAN causes dose-related somnolence and sedation, which generally begins within the first month of treatment and may diminish with continued
treatment. Monitor patients for somnolence and sedation, particularly with concomitant use of other CNS depressants. Caution patients against engaging in hazardous activities requiring mental alertness, i.e., operating dangerous machinery or
motor vehicles, until the effect of SYMPAZAN is known.
Abrupt discontinuation of SYMPAZAN should be avoided. The risk of withdrawal symptoms is greater with higher doses. Withdraw SYMPAZAN gradually to
minimize the risk of precipitating seizures, seizure exacerbation, or status epilepticus.
Serious Dermatological Reactions
Serious skin reactions, including Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), have been reported with clobazam in both children
and adults. Discontinue SYMPAZAN at the first sign of rash, unless the rash is clearly not drug-related.
Physical and Psychological Dependence
Patients with a history of substance abuse should be under careful surveillance when receiving SYMPAZAN.
Suicidal Behavior and Ideation
AEDs, including SYMPAZAN, increase the risk of suicidal thoughts or behavior in patients. Patients treated with SYMPAZAN should be monitored for the
emergence or worsening of depression, suicidal thoughts or behavior, and/or any unusual changes in mood or behavior. Inform patients, their caregivers, and families of the increased risk of suicidal thoughts and behaviors. Advise them to be
alert for and report immediately to healthcare providers any emergence or worsening signs and symptoms of depression, any unusual changes in mood or behavior, or the emergence of suicidal thoughts, behavior, or thoughts of self-harm.
Adverse reactions ( 10% and more frequently than placebo) included constipation, somnolence or sedation, pyrexia, lethargy, and drooling.
The concomitant use of benzodiazepines and opioids increases the risk of respiratory depression. Limit dosage and duration of concomitant use of