Full Press Release Details
Director, Investor Relations
Retrophin Reports Second Quarter 2015 Financial Results
Second quarter revenue of $24.1 million
Full year 2015 revenue projected to be $95 to $100 million
SAN DIEGO (August 4, 2015) Retrophin, Inc. (NASDAQ: RTRX) today reported its second quarter 2015 financial results.
very pleased with the ongoing progress made in the second quarter, said Stephen Aselage, Chief Executive Officer of Retrophin. The 39 percent top-line increase over the first quarter illustrates continued robust growth of Thiola and a strong start to the Cholbam launch. With the advancement of RE-024 into the clinic and the recent sale of our Priority Review
Voucher for $245 million, we continued to take meaningful steps to deliver long-term shareholder value.
Quarter Ended June 30, 2015
Net product sales for the second quarter of 2015 were $24.1 million, compared to $5.7 million for the second quarter of 2014. The increase is due
to the acquisition and subsequent commercial launch of two additional orphan disease products, Thiola and Cholbam.
Selling, general and administrative
expenses for the second quarter of 2015 were $19.7 million on a GAAP basis, compared to $9.6 million for the same period in 2014. On a non-GAAP adjusted basis, selling, general and administrative expenses were $11.6 million for the second quarter of
2015, compared to $5.1 million for the same period in 2014. The increase is primarily driven by operational and commercialization efforts to support Thiola and Cholbam.
Research and development expenses for the second quarter of 2015 were $10.6 million on a GAAP basis, compared to $13.3 million for the same period in 2014. On
a non-GAAP adjusted basis, research and development expenses were $8.6 million for the second quarter of 2015, compared to $12.1 million for the same period in 2014. The decrease is largely due to the
elimination of spend on non-core research and development efforts and timing of preclinical studies.
Total other expense for the second quarter of 2015 was $18.7 million, compared to other income of $26.5 million for the same period in 2014. The change is
primarily due to a $62.4 million increase in expense related to the Company s derivative instruments and a $2.3 million expense related to the prepayment of the Company s $45 million credit facility due 2018. The increase in expense was
offset by a $15.5 million gain resulting from the legal settlement with Questcor Pharmaceuticals, Inc. and a decrease in finance expense of $4.7 million related to the issuance of the Company s senior convertible notes in the second quarter of
Income tax expense for the second quarter of 2015 was $0.02 million compared to a benefit of $2.5 million for the same period in 2014.
Net loss for the second quarter of 2015 was $25.5 million, or $0.73 per basic share on a GAAP basis, compared to net income of $11.8 million, or $0.46 per
basic share for the same period in 2014. Non-GAAP adjusted net income for the second quarter of 2015 was $13.9 million, or $0.40 per basic share, compared to a net loss of $13.3 million, or $0.52 per basic share for the same period in 2014.
Commercial Product Updates
Cholbam (cholic acid)
Chenodal (chenodeoxycholic acid)
Second-Half 2015 Outlook
The Company expects full
year 2015 net product sales to be in the range of $95 to $100 million. Going forward, management will provide annual top-line financial guidance when year-end financial results are announced.
Conference Call Information
Retrophin will host a
conference call and webcast today, Tuesday, August 4, at 4:30 p.m. ET to discuss second quarter 2015 financial results. To participate in the conference call, dial +1 855-219-9219 (U.S.) or +1-315-625-6891 (International), confirmation code
91222829 shortly before 4:30 p.m. ET. The webcast can be accessed at www.retrophin.com, in the Events and Presentations section. A replay of the call will be available 7:30 p.m. ET, August 4, 2015 to 11:59 p.m., August 11, 2015. The replay
number is 855-859-2056 (U.S.) or 404-537-3406 (International), confirmation code 91222829.
Use of Non-GAAP Financial Measures
To supplement Retrophin s financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company
uses certain non-GAAP adjusted financial measures in this press release and the accompanying tables. The Company believes that these non-GAAP financial measures are helpful in understanding its past financial
performance and potential future results. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated
financial statements prepared in accordance with GAAP. Retrophin s management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. In addition,
Retrophin believes that the use of these non-GAAP measures enhances the ability of investors to compare its results from period to period and allows for greater transparency with respect to key financial metrics the Company uses in making operating
Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles
and do not reflect all of the amounts associated with the Company s results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP
and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future the Company may exclude other items, or cease to exclude items that it has historically excluded, for purposes of its non-GAAP financial
measures; Because of the non-standardized definitions, the non-GAAP financial measures as used by the Company in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to,
similarly titled measures used by the Company s competitors and other companies.
As used in this press release, (i) the historical non-GAAP net
income (loss) measures exclude from GAAP net income (loss), as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, change in fair value of derivative liabilities,
depreciation expense, non-cash interest and finance expenses; adjust the income tax provision to the estimated amount of taxes that are payable in cash; (ii) the historical non-GAAP SG&A expense measures exclude from GAAP SG&A expenses,
as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, legal fee and settlements, and depreciation expense; (iii) the historical non-GAAP R&D expense
measures exclude from GAAP R&D expenses, as applicable, intangible asset amortization, stock-based compensation expense, transaction and license fees and depreciation expense.
Retrophin is a pharmaceutical company
focused on the development, acquisition and commercialization of drugs for the treatment of serious, catastrophic or rare diseases for which there are currently no viable options for patients. The Company s approved products include Chenodal , Cholbam , and Thiola , and its pipeline includes compounds for several
catastrophic diseases, including focal segmental glomerulosclerosis (FSGS), pantothenate kinase-associated neurodegeneration (PKAN), infantile spasms, nephrotic syndrome and others. For additional information, please visit www.retrophin.com.
Forward-Looking Statements
contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding the research, development and commercialization of pharmaceutical products. Without limiting the foregoing,
are often identified by the words may , might , believes , thinks , anticipates , plans , expects ,
intends or similar expressions. In addition, expressions of our strategies, intentions or plans are also forward-looking statements. Such forward-looking statements are based on current expectations and involve inherent risks and
uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among the factors that could
cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the Company s business and finances in general, as well as risks and uncertainties associated with the
Company s pre-clinical and clinical stage pipeline as well as its sales and marketing strategies. Specifically, the risks and uncertainties the Company faces with respect to its pre-clinical and clinical stage pipeline include risk that the
Company s research programs will not identify pre-clinical candidates for further development and risk that the Company s clinical candidates will not be found to be safe or effective. Specifically, the Company faces risk that the
sparsentan Phase 2 clinical trials will fail to demonstrate that sparsentan is safe or effective; risk that the sparsentan Phase 2 program will be delayed for regulatory or other reasons; risk that the Company will be unable to complete Phase 1
clinical trials of RE-024, risk that RE-024 will not progress to Phase 2 or later clinical trials for safety, regulatory or other reasons; risk that the Company will be unable to file an IND for RE-034 or initiate Phase 1 clinical trials for
regulatory or other reasons, and for each of the programs risk associated with enrollment of clinical trials for rare diseases. The Company faces risks associated with market acceptance and competition for its marketed products. The Company faces
risk that it will be unable to raise additional funding required to complete development of any or all of its product candidates; risk relating to the Company s dependence on contractors for clinical drug supply and commercial manufacturing;
uncertainties relating to patent protection and intellectual property rights of third parties; risks and uncertainties relating to competitive products and technological changes that may limit demand for the Company s products. You are
cautioned not to place undue reliance on these forward-looking statements as there are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. The Company
undertakes no obligation to publicly update forward-looking statement, whether as a result of new information, future events, or otherwise. Investors are referred to the full discussion of risks and uncertainties as included in the Company s
filings with the Securities and Exchange Commission.
RETROPHIN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| June 30, 2015 (unaudited) | December 31, 2014 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 127,746 | $ | 18,204 | ||||
| Marketable securities | 5,862 | 9,556 | ||||||
| Accounts receivable, net | 11,467 | 7,960 | ||||||
| Inventory, net | 2,005 | 801 | ||||||
| Pediatric priority review voucher, held for sale | 96,250 | |||||||
| Prepaid expenses and other current assets | 1,407 | 813 | ||||||
| Total current assets | 244,737 | 37,334 | ||||||
| Property and equipment, net | 509 | 671 | ||||||
| Other asset | 2,016 | 2,265 | ||||||
| Intangible assets, net | 168,251 | 94,265 | ||||||
| Goodwill | 936 | 936 | ||||||
| Deferred tax asset | 8,691 | |||||||
| Total assets | $ | 425,140 | $ | 135,471 | ||||
| Liabilities and Stockholders Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Deferred technology purchase liability | $ | 1,000 | $ | 1,000 | ||||
| Accounts payable | 4,778 | 7,124 | ||||||
| Accrued expenses | 20,328 | 27,883 | ||||||
| Other liability | 897 | 938 | ||||||
| Acquisition-related contingent consideration | 4,363 | 2,118 | ||||||
| Derivative financial instruments, warrants | 91,200 | 27,990 | ||||||
| Deferred income tax liability | 8,691 | |||||||
| Note payable | 41,125 | 40,486 | ||||||
| Total current liabilities | 172,382 | 107,539 | ||||||
| Convertible debt | 43,593 | 43,288 | ||||||
| Other liability | 12,149 | 12,234 | ||||||
| Acquisition-related contingent consideration, less current portion | 46,235 | 9,520 | ||||||
| Deferred income tax liability, net | 141 | |||||||
| Total liabilities | 274,359 | 172,722 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders Deficit: | ||||||||
| Preferred stock Series A $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding | ||||||||
| Common stock $0.0001 par value; 100,000,000 shares authorized; 35,072,757 and 26,428,071 issued and 35,072,757 and 26,048,480 outstanding, respectively | 3 | 3 | ||||||
| Additional paid-in capital | 318,280 | 140,851 | ||||||
| Treasury stock, at cost, none and 379,591, respectively | (3,215 | ) | ||||||
| Accumulated deficit | (168,262 | ) | (179,175 | ) | ||||
| Accumulated other comprehensive income | 760 | 4,285 | ||||||
| Total stockholders equity (deficit) | 150,781 | (37,251 | ) | |||||
| Total liabilities and stockholders equity (deficit) | $ | 425,140 | $ | 135,471 |
RETROPHIN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2015 (unaudited) | 2014 (restated) | 2015 (unaudited) | 2014 (restated) | |||||||||||||
| Net product sales | $ | 24,068 | $ | 5,742 | $ | 41,440 | $ | 5,770 | ||||||||
| Operating expenses: | ||||||||||||||||
| Cost of goods sold | 637 | 35 | 912 | 36 | ||||||||||||
| Research and development | 10,563 | 13,310 | 20,910 | 20,253 | ||||||||||||
| Selling, general and administrative | 19,692 | 9,579 | 34,547 | 24,725 | ||||||||||||
| Total operating expenses | 30,892 | 22,924 | 56,369 | 45,014 | ||||||||||||
| OPERATING LOSS | (6,824 | ) | (17,182 | ) | (14,929 | ) | (39,244 | ) | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Litigation settlement gain | 15,500 | 15,500 | ||||||||||||||
| Early prepayment penalty | (2,250 | ) | (2,250 | ) | ||||||||||||
| Other income (expense), net | 402 | 370 | 229 | 375 | ||||||||||||
| Interest income (expense), net | (2,922 | ) | (2,179 | ) | (6,720 | ) | (2,179 | ) | ||||||||
| Finance expense | (4,708 | ) | (600 | ) | (4,708 | ) | ||||||||||
| Change in fair value of derivative instruments-loss | (29,418 | ) | 32,979 | (66,171 | ) | (20,635 | ) | |||||||||
| Bargain purchase gain | 49,063 | |||||||||||||||
| Total other income (expense), net | (18,688 | ) | 26,462 | (10,949 | ) | (27,147 | ) | |||||||||
| LOSS BEFORE INCOME TAXES | (25,512 | ) | 9,280 | (25,878 | ) | (66,391 | ) | |||||||||
| Income tax benefit (provision) | (15 | ) | 2,525 | 40,006 | 2,460 | |||||||||||
| NET INCOME (LOSS) | $ | (25,527 | ) | $ | 11,805 | $ | 14,128 | $ | (63,931 | ) | ||||||
| PER SHARE DATA: | ||||||||||||||||
| Net income (loss) per common share, basic | $ | (0.73 | ) | $ | 0.46 | $ | 0.45 | $ | (2.61 | ) | ||||||
| Net income (loss) per common share, diluted | $ | (0.73 | ) | $ | (0.77 | ) | $ | 0.44 | $ | (2.61 | ) | |||||
| Weighted average common shares outstanding, basic | 34,957,134 | 25,635,277 | 31,079,053 | 24,491,477 | ||||||||||||
| Weighted average common shares outstanding, diluted | 34,957,134 | 27,326,442 | 34,825,722 | 24,491,477 | ||||||||||||
| Comprehensive Income (Loss): | ||||||||||||||||
| Net income (loss) | $ | (25,527 | ) | $ | 11,805 | $ | 14,128 | $ | (63,931 | ) | ||||||
| Unrealized gain (loss) | (30 | ) | (103 | ) | (7 | ) | 519 | |||||||||
| Foreign currency translation | (298 | ) | (3,519 | ) | ||||||||||||
| Comprehensive Income (loss) | $ | (25,855 | ) | $ | 11,702 | $ | 10,602 | $ | (63,412 | ) |
RETROPHIN, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| GAAP OPERATING LOSS | $ | (6,824 | ) | $ | (17,182 | ) | $ | (14,929 | ) | $ | (39,244 | ) | ||||
| R&D Operating Expense | (10,563 | ) | (13,310 | ) | (20,910 | ) | (20,253 | ) | ||||||||
| Stock Compensation | 1,748 | 410 | 3,968 | 958 | ||||||||||||
| Transaction & license fees | 696 | 150 | 1,565 | |||||||||||||
| Amortization & Depreciation | 193 | 63 | 414 | 305 | ||||||||||||
| Subtotal non-GAAP items | 1,941 | 1,169 | 4,532 | 2,828 | ||||||||||||
| NON-GAAP R&D EXPENSE | (8,622 | ) | (12,141 | ) | (16,378 | ) | (17,425 | ) | ||||||||
| SG&A Operating Expense | (19,692 | ) | (9,579 | ) | (34,547 | ) | (24,725 | ) | ||||||||
| Legal Expense (A) | 1,388 | 2,095 | 3,351 | 2,095 | ||||||||||||
| Stock Compensation | 3,244 | 2,218 | 6,598 | 5,075 | ||||||||||||
| Amortization & Depreciation | 3,463 | 166 | 5,021 | 179 | ||||||||||||
| Subtotal non-GAAP items | 8,095 | 4,479 | 14,970 | 7,349 | ||||||||||||
| NON-GAAP SG&A EXPENSE | (11,597 | ) | (5,100 | ) | (19,577 | ) | (17,376 | ) | ||||||||
| Subtotal non-GAAP items | 10,037 | 5,648 | 19,502 | 10,177 | ||||||||||||
| NON-GAAP OPERATING INCOME (LOSS) | 3,213 | (11,534 | ) | 4,573 | (29,067 | ) | ||||||||||
| GAAP NET INCOME /(LOSS) | (25,527 | ) | 11,805 | 14,128 | (63,931 | ) | ||||||||||
| Non-GAAP Operating Loss Adjustments | 10,037 | 5,648 | 19,502 | 10,177 | ||||||||||||
| Finance Expense | 4,708 | 1,650 | 4,708 | |||||||||||||
| Change in fair value of derivative instruments-income (loss) | 29,418 | (32,979 | ) | 66,171 | 20,635 | |||||||||||
| Bargain purchase gain, net (A) | (49,063 | ) | ||||||||||||||
| Income Tax (benefit)/provision (A) | 15 | (2,525 | ) | (40,006 | ) | (2,460 | ) | |||||||||
| NON-GAAP NET INCOME (LOSS) | $ | 13,943 | $ | (13,343 | ) | $ | 12,382 | $ | (30,871 | ) | ||||||
| PER SHARE DATA: | ||||||||||||||||
| Net gain (loss) per common share, basic | $ | 0.40 | $ | (0.52 | ) | $ | 0.40 | $ | (1.26 | ) | ||||||
| Weighted average common shares outstanding, basic | 34,957,134 | 25,635,277 | 31,079,053 | 24,491,477 |