TORONTO--(BUSINESS WIRE)--Acerus Pharmaceuticals Corporation (TSX: ASP) today reported its financial results for the three month period ended March 31, 2017. Unless otherwise noted, all amounts are in U.S. dollars.
“The Canadian launch of Natesto® is off to a very strong start and prescriptions in the U.S. have been accelerating at an increased rate over the last weeks,” says Tom Rossi. “We have also begun to prepare for the launch of GynoflorTM in Canada which, if approved, could be an important growth driver for the Company. We continue to advance our efforts to partner Natesto® on a global scale and hope to close an additional deal in the second quarter.”
Financial Results for the Three Months Ended March 31, 2017
Product revenue for the first quarter 2017 totalled $1.0 million versus $1.9 million for the same prior year period. Product revenues mainly relate to the sale of Estrace®. On a Canadian dollar basis, product sales of Estrace® in the first quarter 2017 decreased by 50% over first quarter 2016 due to a third-party generic obtaining public reimbursement across major provinces in July 2016. On a cumulative Canadian dollar basis, product sales of Estrace® from July 1, 2016 to March 31, 2017 have decreased by 35% over the same prior year period.
Research and development (“R&D”) expenses for the first quarter 2017 and 2016 were $0.7 million and $0.5 million respectively. The higher expenses in the current quarter are mainly due to the New Drug Submission (“NDS”) fees for GynoflorTM. Selling, general and administrative expenses (“SG&A”) were $1.6 million and $1.0 million for first quarter 2017 and 2016 respectively.
Earnings before interest, tax, depreciation and amortization (“EBITDA”) (see “Non-IFRS Financial Measures” below) for first quarter 2017 was a loss of $1.7 million compared to a loss of $1.5 million in the same prior year period. Adjusted EBITDA (see “Non-IFRS Financial Measures” below) for first quarter 2017 was a loss of $1.4 million compared to an income of $0.3 million in the same prior year period.
On March 31, 2017, the Company had current assets of $8.6 million and current liabilities of $4.4 million. The remaining $4.0 million of the Aytu upfront payment was received in January 2017. The Company used these funds to extinguish its outstanding long-term debt with an affiliate of MidCap Financial LLC.
Basic and diluted loss per share for first quarter 2017 was a loss of $0.01.
Natesto® is a nasal gel formulation of testosterone developed by Acerus Pharmaceutical Corporation and indicated as a replacement therapy for men diagnosed with conditions associated with a deficiency or absence of endogenous testosterone (hypogonadism). It is the first and only nasally-administered testosterone product approved by the U.S. FDA and Health Canada and available in a ‘no-touch’ dispenser with a metered dose pump. A copy of the Natesto® Canadian product monograph can be found at: http://www.aceruspharma.com/English/products-and-pipeline/NATESTO®/default.aspx. For further information, specific to the U.S. product dosing and administration, please visit: www.NATESTO®.com.
On April 5, 2017, the Company announced that Hyundai Pharm Co., Ltd filed an application for the marketing approval of Natesto® with the Ministry of Food and Drug Safety (MFDS) in South Korea. Hyundai Pharm acquired an exclusive license to market NATESTO® in South Korea from Acerus in December 2016. If approved by MFDS, NATESTO® will be the first and only testosterone nasal gel indicated for the treatment of low testosterone in South Korea.
The Corporation is currently pursuing commercial partnerships for Natesto® globally.
On November 16, 2015, Health Canada granted a Notice of Compliance (NOC) for a third party generic version of Estrace®, which is commercially available in Canada and obtained public reimbursement across major provinces as of July 2016.
On February 28, 2017, the Corporation filed a New Drug Submission (“NDS”) with Health Canada to obtain marketing approval for GynoflorTM in Canada. If approved, GynoflorTM will be the first estriol + lactobacilli product on the Canadian market.
Gynoflor™ is an ultra-low dose estrogen (estriol) and probiotic (Lactobacillus acidophilus) combination vaginal tablet, which, if approved, may be used for the treatment of symptoms of vaginal atrophy, for the restoration of vaginal flora following the use of anti-infectives and for the treatment of mild vaginal infections.
Gynoflor™ is approved in 41 countries across Europe, Asia-Pacific, the Middle East, Africa and South America, and it is estimated that up to 32.7 million women worldwide have been treated with the product to date.
Appointment of Ken Yoon to the position of Chief Financial Officer
Mr. Yoon will officially join Acerus on June 1, 2017. He is a Chartered Professional Accountant (CPA, CA) and also holds a Bachelor of Science degree from the University of Western Ontario, a Bachelor of Laws from Queen’s University and an MBA from the University of Toronto.
Most recently, Ken held the position of CFO and Vice President of Corporate Development as well as Corporate Secretary at Vive Crop Protection Inc. Previous to his time at Vive, he was with VG Private Equity Partners as their Senior Associate, Investments – Advanced Life Sciences Fund. He also held the position of Strategist, Entrepreneurial Business Centre (EBC) at Ernst & Young.
Update on Litigation Initiated by Mr. Eugene Melnyk
On December 21, 2016, the Honourable Mr. Justice Wilton-Siegel of the Ontario Superior Court of Justice heard a motion brought by Mr. Eugene Melnyk for leave to commence a derivative action in the name of the Company against certain of the Company’s directors and officers. The motion was dismissed by Mr. Justice Wilton-Siegel with written reasons to follow. On February 22, 2017, Justice Wilton-Siegel issued his written reasons dismissing Mr. Melnyk's claim with costs. On April 6, 2017, Mr. Eugene Melnyk served a Notice of Appeal to the Divisional Court of the Ontario Superior Court of Justice in order to appeal the decision of Justice Wilton-Siegel. A hearing date for the appeal to the Divisional Court has not yet been set.
The above information is in summary form and readers are encouraged to consult the documents noted below for further details at the links indicated or on SEDAR at www.sedar.com.
Shareholders are reminded of the conference call to discuss the Company’s first quarter 2017 results to be held on Monday, May 15, 2017 at 8:30 a.m. Eastern Time. To access the call live, please dial 416-340-2216 or 1-866-225-2055. Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays.
A replay of the conference call will be available until 11:59 p.m. Eastern Time on Monday, May 22, 2017 by dialing 905-694-9451 or 1-800-408-3053, using access code: 7380968#.
Acerus Pharmaceuticals Corporation is a fully- integrated, Canadian specialty pharmaceutical company engaged in the development, manufacture, marketing and distribution of innovative, branded products in Men’s and Women’s Health. Acerus’ shares trade on TSX under the symbol ASP. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.
Non-IFRS Financial Measures
The non-IFRS measures included in this press release are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. When used, these measures are defined in such terms as to allow the reconciliation to the closest IFRS measure. These measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from our perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Despite the importance of these measures to management in goal setting and performance measurement, we stress that these are non-IFRS measures that may have limits in their usefulness to investors.
We use non-IFRS measures, such as EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the valuation of issuers. We also use non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and to assess our ability to meet our future debt service, capital expenditure and working capital requirements.
The definition and reconciliation of EBITDA and Adjusted EBITDA used and presented by the Company to the most directly comparable IFRS measures refer to the section “Non-IFRS Financial Measures” in our 2016 Annual MD&A available on SEDAR at www.sedar.com.
Notice Regarding Forward-Looking Statements
Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including with respect to the ability of Acerus to obtain regulatory approval for GYNOFLOR™, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 7, 2017 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.