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Eagle Pharmaceuticals, Inc. Reports Second Quarter 2017 Results

WOODCLIFF LAKE, N.J.--(BUSINESS WIRE)--Eagle Pharmaceuticals, Inc. (“Eagle” or “the Company”) (Nasdaq:EGRX) today announced its financial results for the three and six months ended June 30, 2017. Highlights of and subsequent to the second quarter of 2017 include:

Business Highlights:

  • Bendeka® total market share of 96%, as of June 30, 2017;
  • Sales of RYANODEX® grew 54% to $5.2 million during the second quarter of 2017 compared to $3.4 million in Q2 2016, and up from $4.4 million in the first quarter of 2017 and $3.9 million during the fourth quarter of 2016, and also added 120 new accounts for a total of 1300 accounts stocking RYANODEX;
  • Received a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) regarding the Company’s 505(b)(2) New Drug Application for RYANODEX (dantrolene sodium) for the treatment of exertional heat stroke (EHS), in conjunction with external cooling methods;
  • Requested a “Type A” meeting with the FDA regarding the CRL for RYANODEX for EHS;
  • Board of Directors approved an additional share buyback program of $100 million;
  • Entered into a $150 million Amended and Restated Credit Agreement comprised of a senior secured $100 million, three-year term loan facility at LIBOR + 225 basis points and a senior secured $50 million, three-year revolving credit facility, adding $100 million to the Company’s available credit capacity. JPMorgan was the lead arranger. Cantor Fitzgerald acted as a financial advisor to the Company;
  • Implemented an initial expense reduction program, and have identified $10 million in expense reductions on an annualized basis; these expense reduction initiatives will begin impacting the Company’s P&L in 2018; and,
  • 2017 SG&A and R&D guidance remains unchanged:
    • FY 2017 SG&A expense expected to be in the range of $65 - million, or $50 - $53 million excluding stock based compensation and other non-cash items; and,
    • FY 2017 R&D expense expected to be in the range of $31 - $35 million, or $26 - $30 million excluding stock based compensation, reflecting ongoing expenses for the anticipated commencement and completion of the fulvestrant and RYANODEX for Ecstasy and methamphetamine intoxication clinical trials, as well as second sourcing of drug product and API manufacturers for fulvestrant.

Financial Highlights:

Second Quarter

  • Total revenue for the second quarter of 2017 grew 22% to $50.1 million compared to $40.9 million in the second quarter of 2016;
    • Product sales increased to $12.7 million compared to $9.6 million in Q2 2016;
    • Royalty revenue increased to $37.4 million compared to $31.3 million in Q2 2016;
  • Q2 2017 income before income tax provision was $5.9 million;
  • Q2 2017 net income was $4.5 million, or $0.30 per basic and $0.28 per diluted share, compared to a net income of $13.1 million, or $0.84 per basic and $0.80 per diluted share in Q2 2016;
  • Q2 2017 Adjusted Non-GAAP net income was $7.9 million, or $0.52 per basic and $0.49 per diluted share, compared to Adjusted Non-GAAP net income of $15.9 million, or $1.02 per basic and $0.97 per diluted share in the prior year quarter. For a full reconciliation of Adjusted Non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of this press release; and,
  • Cash and cash equivalents were $55.4 million and accounts receivable were $53.2 million as of June 30, 2017.

“We continue to be pleased with our top line growth, driven by Bendeka and RYANODEX, with sequential and year-over-year growth in revenue. While we are extremely disappointed by the CRL that we received for RYANODEX for exertional heat stroke, we remain committed to gaining approval for this important indication and have requested a meeting with the FDA. We believe this will provide us with further clarity regarding EHS. We intend to manage our cash prudently by investing in our robust pipeline and reducing our SG&A spend. We remain committed to advancing fulvestrant, and RYANODEX for EHS, and Ecstasy and methamphetamine intoxication, for which we plan to initiate trials shortly. The Board’s approval of the periodic return of capital to shareholders through an additional share repurchase program reflects our belief in the potential of our business to continue to deliver value over the long term,” stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.

Second Quarter 2017 Financial Results

Total revenue for the three months ended June 30, 2017 was $50.1 million, as compared to $40.9 million for the three months ended June 30, 2016. A summary of total revenue is outlined below:

Three Months Ended June 30,
2017 2016
Revenue:
Product sales $ 12,704 $ 9,607
Royalty revenue 37,404 31,311
Total revenue 50,108 40,918

Product sales increased to $12.7 million on net product sales of Bendeka, RYANODEX, docetaxel injection non-alcohol formulation, and Argatroban, offset by a decrease in net product sales of diclofenac-misoprostol. Royalty revenue increased to $37.4 million, as a result of the increased sales of Bendeka.

Research and development expenses increased to $6.7 million in the three months ended June 30, 2017, compared to $3.8 million in the prior year quarter. The increase was due to continued spending on the Company’s R&D pipeline.

SG&A expenses increased to $23.7 million in the second quarter of 2017 compared to $12.0 million in the three months ended June 30, 2016. Sales and marketing pre-launch related expenses accounted for the bulk of the increase for the commercial launch of RYANODEX for EHS.

An income tax provision of $1.4 million was recorded during the second quarter of 2017.

Net income for the second quarter of 2017 was $4.5 million, or $0.30 per basic share and $0.28 per diluted share, compared to net income of $13.1 million, or $0.84 per basic and $0.80 per diluted share in the three months ended June 30, 2016, due to the factors discussed above.

Adjusted Non-GAAP net income for the second quarter of 2017 was $7.9 million, or $0.52 per basic and $0.49 per diluted share, compared to Adjusted Non-GAAP net income of $15.9 million or $1.02 per basic and $0.97 per diluted share in the prior year quarter. For a full reconciliation of Adjusted...


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