Aerie Pharmaceuticals, Inc. (NASDAQ:AERI), an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma, retinal diseases and other diseases of the eye, today reported financial results for the fourth quarter and full year ended December 31, 2018, along with 2019 cash burn guidance and a general business update.
Aerie Highlights
- Rhopressa® (netarsudil ophthalmic solution) 0.02% generated fourth quarter net revenues on a U.S. GAAP (generally accepted accounting principles) basis of $14.5 million, representing $129.53 per bottle. For full-year 2018, net revenues totaled $24.2 million, in line with previous guidance, representing $127.77 per bottle. Year-end 2018 wholesaler inventory levels remained consistent with the end of the third-quarter 2018, at approximately two weeks of demand.
- At the time of this press release, Rhopressa® market access increased to approximately 90% of commercial lives, including 55% in preferred brand Tier 2 and 35% in Tier 3, and Medicare Part D Tier 2 coverage currently represents approximately 40% of Medicare Part D lives. We expect Medicare Part D Tier 2 equivalent coverage to increase to well over 70% within the next few weeks. As we gain more utilization from covered lives, particularly in Medicare Part D, we expect our net revenue per bottle to ultimately decline to approximately $100 during 2019.
- The Rocklatan™ (netarsudil/latanoprost ophthalmic solution) 0.02%/0.005% PDUFA (Prescription Drug User Fee Act) date remains set for March 14, 2019 and the related training of our sales force is well underway.
- International expansion activities are progressing with the ongoing Rocklatan™ Mercury 3 Phase 3 clinical trial in Europe, and expansion into Japan with the Rhopressa® Phase 2 clinical trial commencing in March 2019 in preparation for potential regulatory submission in Japan.
- Aerie’s retina program continues to advance, with preclinical candidate AR-1105 (dexamethasone steroid implant) clinical trials expected to begin in March 2019 for RVO (retinal vein occlusion). The IND (Investigational New Drug application) for AR-13503 (Rho kinase and Protein kinase C inhibitor implant) is expected to be filed with the FDA (the U.S. Food and Drug Administration) in March 2019, and, if accepted, we expect to begin clinical trials in the second quarter of 2019 for wet age-related macular degeneration and DME (diabetic macular edema).
- Cash burn for the year ended December 31, 2018 totaled approximately $215.5 million, consistent with previous guidance, resulting in $202.8 million in cash and cash equivalents as of December 31, 2018. In addition, we have the $100 million undrawn credit facility available, bringing total liquidity to over $300 million. Shares outstanding at December 31, 2018 totaled 45.5 million.
- Guidance for 2019 full-year cash burn is consistent with full-year 2018 actual results, in the range of $210 million to $220 million.
We plan to communicate full-year 2019 net revenue guidance following the completion of the FDA’s review of the NDA (New Drug Application) for Rocklatan™.
“We are delighted to have achieved the revenue guidance that we announced a full year ago, well before Rhopressa® launched in the United States. With Rhopressa® net sales having doubled from third-quarter to fourth-quarter 2018, and our significant progress in gaining market access, we are confident in the continued meaningful growth prospects for this very well-received product. Since we are just two weeks away from the Rocklatan™ PDUFA date, we will communicate full-year 2019 net revenue guidance after the FDA completes its review of Rocklatan™. As we continue to successfully build our glaucoma franchise in the United States, we are making excellent progress in expanding this franchise to Europe and Japan, which have the potential to be very large markets for us. Further, our retina program is proceeding very quickly, and we believe our unique sustained-release implant product candidates and technologies create a highly innovative and leverageable platform to potentially drive the next generation of treatments in the very large retinal disease market,” said Vicente Anido, Jr., Ph.D., Chairman and Chief Executive Officer.
“We are entering 2019 very well financed, with over $300 million in available liquidity, and have no current intention of raising additional equity capital to fund our ongoing operations. Also, our receivable collections have been quite strong, and as we progress through 2019 this will become an increasingly important source of cash for us, further bolstering our liquidity.”
Fourth Quarter 2018 Financial Results
As of December 31, 2018, Aerie had cash and cash equivalents of $202.8 million and available borrowing capacity of $100 million through its undrawn credit facility. For the fourth quarter ended December 31, 2018, Aerie reported a GAAP net loss of $51.5 million, or $1.14 loss per share, compared to a net loss of $58.5 million and $1.60 loss per share for the fourth quarter of 2017. The weighted average number of shares outstanding utilized in the calculation of net loss per share was 45,101,458 and 36,487,669 for the fourth quarters of 2018 and 2017, respectively. Total shares outstanding as of December 31, 2018 were 45,478,883.
The $51.5 million net loss for the fourth quarter of 2018 is comprised of $14.1 million of gross profit, and $66.0 million in total operating expenses, including $31.9 million in selling, general and administrative expenses, $7.6 million in pre-approval commercial manufacturing expenses and $26.5 million in research and development expenses. Excluding $9.7 million of stock-based compensation expense, adjusted total operating expenses for the fourth quarter of 2018 were $56.3 million, with adjusted selling, general and administrative expenses of $25.5 million, adjusted pre-approval commercial manufacturing expenses of $6.8 million and adjusted research and development expenses of $24.0 million. Total adjusted net loss for the fourth quarter of 2018 was $41.7 million, and adjusted net loss per share was $0.92.
The $58.5 million net loss for the fourth quarter of 2017, a period in which no gross profit was reported, is comprised of $60.3 million in total operating expenses, including $38.1 million in research and development expenses, which reflects $24.8 million of expense resulting from the acquisition of assets from Envisia Therapeutics Inc. in the fourth quarter of 2017, $18.5 million in selling, general and administrative expenses and $3.7 million in pre-approval commercial manufacturing expenses. Excluding $8.0 million of stock-based compensation expense, adjusted total operating expenses for the fourth quarter of 2017 were $52.3 million, with adjusted research and development expenses of $36.0 million, adjusted selling, general and administrative expenses of $13.0 million and adjusted pre-approval commercial manufacturing expenses of $3.3 million. Total adjusted net loss for the fourth quarter of 2017 was $50.5 million, and adjusted net loss per share was $1.38.
Conference Call / Webcast Information
Aerie management will host a live conference call and webcast at 5:00 p.m. Eastern Time today to discuss Aerie’s financial results and provide a general business update.
The live webcast and a replay may be accessed by visiting the Company’s website at http://investors.aeriepharma.com. Please connect to the Company’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. Alternatively, please call (888) 734-0328 (U.S.) or (678) 894-3054 (international) to listen to the live conference call. The conference ID number for the live call is 7633869. Please dial in approximately 10 minutes prior to the call. Telephone replay will be available approximately two hours after the call. To access the replay, please call (855) 859-2056 (U.S.) or (404) 537-3406 (international). The conference ID number for the replay is 7633869. The telephone replay will be available until March 5, 2019.
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