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Pernix Therapeutics Reports Second Quarter 2018 Financial Results | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
By: Nasdaq / GlobeNewswire - 09 Aug 2018 | Back to overview list |
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MORRISTOWN, N.J., Aug. 09, 2018 (GLOBE NEWSWIRE) -- Pernix Therapeutics Holdings, Inc. (NASDAQ: PTX), a specialty pharmaceutical company, announced today its financial results for the three and six months ended June 30, 2018.
Second Quarter 2018 Financial Highlights
Business Update
“We believe that our participation in Nalpropion and the acquisition of Contrave® provides an attractive opportunity to further enhance our financial profile and create sustainable enterprise value,” said John Sedor, Chairman and Chief Executive Officer of Pernix Therapeutics. “Importantly Pernix will recognize immediate benefits from this transaction, as we will receive a management fee and shared services reimbursement, while also having the opportunity to acquire up to 100% of the rights to Contrave over time.”
“In regard to our existing business, we anticipated the loss of exclusivity of branded Treximet and proactively realigned our business to focus on Zohydro ER and Silenor. Notably, net revenues of both Zohydro ER and Silenor increased more than 20% year-over-year in the second quarter.”
Financial Results
Three Months Ended June 30, 2018 vs. June 30, 2017
For the second quarter of 2018, net revenues were $21.1 million, a 39% decrease from the $34.3 million in the second quarter of 2017. A summary of net revenues is outlined below:
Treximet brand net revenues decreased by $15.3 million, or 91%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017, due to the loss of exclusivity of Treximet in February 2018, as Pernix experienced generic competition, including the company’s own authorized generic (“AG”), which was launched on February 15, 2018. Pernix expects that future Treximet brand revenues will continue to decrease year-over-year due to the loss of exclusivity.
Treximet AG net revenues were $3.0 million during the three months ended June 30, 2018, following its launch on February 15, 2018. There were no sales of Treximet AG prior to its launch.
Zohydro ER net revenues increased by $1.8 million, or 28%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. The increase was due to an increase in net price of $1.4 million (primarily related to favorable gross-to-net accrual rates) and sales volume of $400,000.
Silenor net revenues increased by $1.2 million, or 23%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. The increase was due to an increase in net price of $700,000 (primarily related to favorable gross-to-net accrual rates) and sales volume of $500,000.
Net product revenues – other decreased by $4.2 million, or 72%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. Of this decrease, $2.8 million was due to the discontinuation of products no longer sold by Pernix.
Cost of product sales decreased by $4.9 million, or 47%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. The decrease in cost of product sales was due primarily to a $3.7 million decrease in costs associated with the Treximet brand as a result of lower volume due to the entry of generic competition, as well as a $2.3 million decrease in costs associated with our other product revenue category. These decreases were partially offset by increased Zohydro ER, Treximet AG and Silenor product costs of $0.4 million, $0.3 million and $0.4 million, respectively, due to increased volume.
Selling, general and administrative expense decreased by $0.8 million, or 4%, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. The decrease was driven primarily by lower sales force-related expenses of $1.9 million due to the restructuring announced in January 2018 and lower marketing and selling expenditures of $0.8 million related primarily to the loss of exclusivity of Treximet, partially offset by higher legal fees of $2.1 million related primarily to patent defense and legal settlements.
Research and development expense decreased by $76,000 during the three months ended June 30, 2018, compared to the three months ended June 30, 2017, due primarily to the discontinuation of certain Zohydro-related research projects.
Net loss was $13.5 million, or $1.13 per basic and diluted share, for the three months ended June 30, 2018, compared to a net loss of $21.6 million, or $2.16 per basic and diluted share, in the same period last year.
Adjusted EBITDA was $(0.2) million for the three months ended June 30, 2018, compared to adjusted EBITDA of $5.7 million for three months ended June 30, 2017, a decrease of $5.9 million.
Six Months Ended June 30, 2018 vs. June 30, 2017
For the six months ended June 30, 2018, net revenues were $49.2 million, a 23% decrease from the $64.1 million in the six months ended June 30, 2017. A summary of net revenues is outlined below:
Treximet brand net revenues decreased by $16.8 million, or 55%, during the six months ended June 30, 2018, compared to the six months ended June 30, 2017, due to the loss of exclusivity of Treximet in February 2018, as the company experienced generic competition.
Treximet AG net revenues were $4.9 million during the six months ended June 30, 2018, following its launch on February 15, 2018.
Zohydro ER net revenues increased by $3.6 million, or 31%, during the six months ended June 30, 2018, compared to the six months ended June 30, 2017. The increase was due to an increase in net price of $1.2 million (primarily related to favorable gross-to-net accrual rates) and sales volume of $2.4 million. Sales volume was favorably impacted by the relaunch of the 20mg strength of Zohydro ER during the first quarter of 2018.
Silenor net revenues increased by $3.0 million, or 35%, during the six months ended June 30, 2018 compared to the six months ended June 30, 2017. The increase was due to an increase in net price of $1.4 million (primarily related to favorable gross-to-net accrual rates) and sales volume of $1.6 million.
Net product revenues – other decreased by $9.8 million, or 76%, during the six months ended June 30, 2018, compared to the six months ended June 30, 2017. Of this decrease, $7.2 million was due to the discontinuation of products no longer sold by the company.
Cost of product sales decreased by $6.0 million, or 29%, during the six months ended June 30, 2018, compared to the six months ended June 30, 2017. The decrease in cost of product sales was due primarily to a $3.9 million decrease in costs associated with Treximet brand as a result of lower volume due to the entry of generic competition, as well as $3.9 million decrease in costs associated with other product revenue category. These decreases were partially offset by increased Zohydro ER, Treximet AG and Silenor product costs of $0.9 million, $0.4 million and $0.5 million, respectively, due to increased volume.
Selling, general and administrative expense decreased by $3.8 million, or 10%, during the six months ended June 30, 2018, compared to the six months ended June 30, 2017. The decrease was driven primarily by lower sales force-related expenses of $4.2 million due to the restructuring announced in January 2018, lower marketing and selling expenditures of $1.7 million related primarily to the loss of exclusivity of Treximet, as well as $0.6 million of lower spend across numerous areas, partially offset by higher legal fees of $2.7 million related to patent defense and legal settlements.
Research and development expense decreased by $600,000 during the six months ended June 30, 2018, compared to the six months ended June 30, 2017, due primarily to the discontinuation of certain Zohydro-related research projects.
Net loss was $32.1 million, or $2.70 per basic and diluted share, for the six months ended June 30, 2018, compared to a net loss of $51.1 million, or $5.10 per basic and diluted share, in the same period last year.
Adjusted EBITDA was $2.3 million for the six months ended June 30, 2018, compared to adjusted EBITDA of $5.4 million for six months ended June 30, 2017, a decrease of $3.1 million.
Liquidity
As of June 30, 2018, Pernix had cash and cash equivalents of $19.9 million and borrowing availability of $7.9 million under the ABL Facility.
As a result of the Exchange Transactions announced on August 1, 2018, the principal amount of our Senior Secured Notes outstanding at June 30, 2018, was reduced by $12.2 million to $154.5 million, resulting in an annual interest savings of $1.5 million. The amendment to our delayed draw term loan facility provides Pernix with access to up to $5.8 million of the delayed draw feature for working capital purposes, further enhancing the company’s liquidity. In addition, the ABL Facility amendment includes changes to the borrowing base calculation, which provides for, among other revisions, the inclusion of Contrave® inventory owned by Pernix going forward. As such, Pernix believes that this amendment will create additional borrowing capacity under the ABL Facility.
Conference Call
About Pernix Therapeutics
To learn more about Pernix Therapeutics, visit www.pernixtx.com.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure that excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. This non-GAAP financial measure excludes from net loss: interest expense; depreciation and amortization; income tax expense; sale of non-core assets; selling, general and administrative adjustments; change in fair value of contingent consideration; change in fair value of derivative liability; restructuring costs; and foreign currency transactions. In addition, from time to time in the future there may be other items that we may exclude for the purposes of our use of adjusted EBITDA; likewise, we may in the future cease to exclude items that we have historically excluded for the purpose of adjusted EBITDA. We believe that adjusted EBITDA provides meaningful supplemental information regarding our operating results because it excludes or adjusts amounts that management and the board of directors do not consider part of core operating results or that are non-recurring when assessing the performance of the organization. We believe that inclusion of adjusted EBITDA provides consistency and comparability with past reports of financial results and provides consistency in calculations by outside analysts reviewing our results. Accordingly, we believe that adjusted EBITDA is useful to investors in allowing for greater transparency of supplemental information used by management.
We believe that these non-GAAP financial measures are helpful in understanding our past financial performance and potential future results, but there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Adjustment items that are excluded from our non-GAAP financial measures can have a material impact on net earnings. As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, net loss, cash flow from operations or other measures of performance prepared in accordance with GAAP. We compensate for these limitations by using these non-GAAP financial measures as a supplement to GAAP financial measures and by reconciling the non-GAAP financial measure to its most comparable GAAP financial measure. Investors are encouraged to review the reconciliations of the non-GAAP financial measure to its most comparable GAAP financial measure that is included below in this Press Release.
Forward-Looking Statements
CONTACT
PERNIX THERAPEUTICS HOLDINGS, INC. AND SUBSIDIARIES
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Copyright 2018 Nasdaq / GlobeNewswire | Back to overview list |