La Jolla Pharmaceutical Company (Nasdaq: LJPC), which is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases, today announced financial results for the three months ended March 31, 2021 and highlighted corporate progress.
Corporate Progress
- Operating Cash Flow Improved: La Jolla’s net cash provided by (used for) operating activities for the three months ended March 31, 2021 was $17.2 million, compared to $(12.2) million for the same period in 2020. La Jolla’s net cash provided by (used for) operating activities excluding net receipts in connection with license agreements and payments related to reductions in headcount for the three months ended March 31, 2021 was $(1.8) million, compared to $(9.2) million for the same period in 2020.
- $3.0 Million Milestone Payment Associated with NDA Submission for XERAVA™ (Eravacycline) in China by Licensee Everest Received: In March 2021, under its license agreement with Everest Medicines Limited, the Company received a $3.0 million milestone payment associated with the submission of a New Drug Application (NDA) with the China National Medical Products Administration (NMPA) for XERAVA for the treatment of cIAI in patients in China. The Company previously granted Everest an exclusive license to develop and commercialize XERAVA for the treatment of cIAI and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines. The Company is eligible to receive an additional $8.0 million regulatory milestone payment and up to an aggregate of $20.0 million in sales milestone payments. The Company is also entitled to receive royalties from Everest on sales, if any, by Everest of products containing eravacycline.
- License Agreement for GIAPREZA™ (Angiotensin II) and XERAVA in Europe, which Included a $22.5 Million Upfront Payment, Executed with PAION: In January 2021, the Company entered into a license agreement with PAION AG to commercialize GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland. Pursuant to the agreement: (i) the Company has received an upfront cash payment of $22.5 million, less a 15% refundable withholding tax; and (ii) the Company is entitled to receive potential commercial milestone payments of up to $109.5 million and royalties on net sales of GIAPREZA and XERAVA.
“We are pleased to report continued progress toward our goal of becoming cash flow positive from operations,” said Larry Edwards, President and Chief Executive Officer of La Jolla. “The filing of an NDA for XERAVA in China by our licensee Everest and the execution of our license agreement with PAION for GIAPREZA and XERAVA in Europe position us well to serve the needs of patients suffering from life-threatening diseases globally while significantly strengthening our balance sheet. We continue to focus on growing net sales of both GIAPREZA and XERAVA while managing operating costs.”
Financial Results
For the three months ended March 31, 2021, La Jolla’s total revenue was $34.1 million, compared to $7.6 million for the same period in 2020. For the three months ended March 31, 2021, La Jolla’s net product sales were $8.7 million, compared to $7.6 million for the same period in 2020. GIAPREZA U.S. net sales were $6.9 million for the three months ended March 31, 2021, compared to $7.6 million for the same period in 2020. XERAVA U.S. net sales were $1.8 million for the three months ended March 31, 2021, compared to zero for the same period in 2020. La Jolla acquired Tetraphase, which commercialized XERAVA, on July 28, 2020.
La Jolla’s net income (loss) for the three months ended March 31, 2021 was $14.4 million, or $0.42 per diluted share, compared to $(8.6) million, or $(0.32) per diluted share, for the same period in 2020.
As of March 31, 2021 and December 31, 2020, La Jolla had cash and cash equivalents of $38.6 million and $21.2 million, respectively.
La Jolla’s net cash provided by (used for) operating activities for the three months ended March 31, 2021 was $17.2 million, compared to $(12.2) million for the same period in 2020. La Jolla’s net cash provided by (used for) operating activities excluding net receipts in connection with license agreements and payments related to reductions in headcount for the three months ended March 31, 2021 was $(1.8) million, compared to $(9.2) million for the same period in 2020. Net receipts in connection with license agreements were $19.8 million for the three months ended March 31, 2021, compared to zero for the same period in 2020. Payments related to reductions in headcount were $0.8 million for the three months ended March 31, 2021, compared to $3.0 million for the same period in 2020.
About GIAPREZA
GIAPREZA™ (angiotensin II) injection is approved by the U.S. Food and Drug Administration (FDA) as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA is approved by the European Commission (EC) for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. GIAPREZA mimics the body’s endogenous angiotensin II peptide, which is central to the renin-angiotensin-aldosterone system, which in turn regulates blood pressure. Prescribing information for GIAPREZA is available at http://www.giapreza.com. The European Summary of Product Characteristics is available at www.ema.europa.eu/en/medicines/human/EPAR/giapreza. GIAPREZA is marketed in the U.S. by La Jolla Pharmaceutical Company on behalf of La Jolla Pharma, LLC, its wholly owned subsidiary, and will be marketed in Europe by PAION AG on behalf of La Jolla Pharma, LLC.
GIAPREZA Important Safety Information
Contraindications
None.
Warnings and Precautions
There is a potential for venous and arterial thrombotic and thromboembolic events in patients who receive GIAPREZA. Use concurrent venous thromboembolism (VTE) prophylaxis.
Adverse Reactions
The most common adverse reactions that were reported in greater than 10% of GIAPREZA-treated patients were thromboembolic events.
Drug Interactions
Angiotensin converting enzyme (ACE) inhibitors may increase response to GIAPREZA. Angiotensin II receptor blockers (ARBs) may reduce response to GIAPREZA.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.
For additional information, please see Full Prescribing Information for the United States and the Summary of Product Characteristics for the European Union.
About XERAVA
XERAVA™ (eravacycline) for injection is approved by the U.S. Food and Drug Administration (FDA) as a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections (cIAI) in patients 18 years of age and older. XERAVA is approved by the European Commission (EC) for the treatment of cIAI in adults. Prescribing information for XERAVA is available at www.xerava.com. The European Summary of Product Characteristics is available at www.ema.europa.eu/en/medicines/human/EPAR/xerava. XERAVA is marketed in the U.S. by Tetraphase Pharmaceuticals, Inc., a wholly owned subsidiary of La Jolla, and will be marketed in Europe by PAION AG on behalf of Tetraphase Pharmaceuticals, Inc. Everest, the Company’s licensee for mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines, recently submitted an NDA in China.
XERAVA Important Safety Information
XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections in patients 18 years of age and older.
XERAVA is not indicated for the treatment of complicated urinary tract infections.
To reduce the development of drug-resistant bacteria and maintain the effectiveness of XERAVA and other antibacterial drugs, XERAVA should be used only to treat or prevent infections that are proven or strongly suspected to be caused by susceptible bacteria.
XERAVA is contraindicated for use in patients with known hypersensitivity to eravacycline, tetracycline-class antibacterial drugs or to any of the excipients. Life-threatening hypersensitivity (anaphylactic) reactions have been reported with XERAVA.
The use of XERAVA during tooth development (last half of pregnancy, infancy and childhood to the age of eight years) may cause permanent discoloration of the teeth (yellow-gray-brown) and enamel hypoplasia.
The use of XERAVA during the second and third trimester of pregnancy, infancy and childhood up to the age of eight years may cause reversible inhibition of bone growth.
Clostridium difficile associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents and may range in severity from mild diarrhea to fatal colitis.
The most common adverse reactions observed in clinical trials (incidence ≥ 3%) were infusion site reactions, nausea and vomiting.
XERAVA is structurally similar to tetracycline-class antibacterial drugs and may have similar adverse reactions. Adverse reactions including photosensitivity, pseudotumor cerebri and anti-anabolic action, which has led to increased blood urea nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis and abnormal liver function tests, have been reported for other tetracycline-class antibacterial drugs, and may occur with XERAVA. Discontinue XERAVA if any of these adverse reactions are suspected.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.
For additional information, please see Full Prescribing Information for the United States.
About La Jolla Pharmaceutical Company
La Jolla Pharmaceutical Company is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. GIAPREZA™ (angiotensin II) is approved by the U.S. FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. XERAVA™ (eravacycline) is approved by the U.S. FDA for the treatment of complicated intra-abdominal infections. For more information, please visit www.ljpc.com.
Forward-looking Statements
This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and involve substantial risks and uncertainties that could cause the actual outcomes to differ materially from what we currently expect. These risks and uncertainties include, but are not limited to, those associated with: GIAPREZA™ (angiotensin II) and XERAVA™ (eravacycline) sales; regulatory actions relating to La Jolla’s products by the U.S. FDA, European Commission, China National Medical Products Administration and/or other regulatory authorities; expected future cash flows of La Jolla, including upfront, milestone, royalty and other payments resulting from La Jolla’s out-license agreements and commercial supply agreements; and other risks and uncertainties identified in our filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release apply only as of the date made, and we undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Balance Sheets (in thousands, except par value and share amounts) | ||||||||
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 38,634 | $ | 21,221 | ||||
Accounts receivable, net | 4,153 | 5,834 | ||||||
Inventory, net | 5,374 | 6,013 | ||||||
Prepaid expenses and other current assets | 6,104 | 3,388 | ||||||
Total current assets | 54,265 | 36,456 | ||||||
Goodwill | 20,123 | 20,123 | ||||||
Intangible assets, net | 14,485 | 14,873 | ||||||
Right-of-use lease assets | 490 | 536 | ||||||
Property and equipment, net | 186 | 215 | ||||||
Restricted cash | 40 | 40 | ||||||
Total assets | $ | 89,589 | $ | 72,243 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,098 | $ | 2,762 | ||||
Accrued expenses | 8,721 | 6,494 | ||||||
Accrued payroll and related expenses | 1,693 | 2,878 | ||||||
Lease liabilities, current portion | 196 | 204 | ||||||
Total current liabilities | 11,708 | 12,338 | ||||||
Deferred royalty obligation, net | 124,453 | 124,437 | ||||||
Accrued interest expense on deferred royalty obligation, less current portion | 20,884 | 19,111 | ||||||
Lease liabilities, less current portion | 294 | 332 | ||||||
Other noncurrent liabilities | 4,568 | 4,112 | ||||||
Total liabilities | 161,907 | 160,330 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ deficit: | ||||||||
Common Stock, $0.0001 par value; 100,000,000 shares authorized, 27,448,571 and 27,402,648 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 3 | 3 | ||||||
Series C-12 Convertible Preferred Stock, $0.0001 par value; 11,000 shares authorized, 3,906 shares issued and outstanding at March 31, 2021 and December 31, 2020; and liquidation preference of $3,906 at March 31, 2021 and December 31, 2020 | 3,906 | 3,906 | ||||||
Additional paid-in capital | 986,107 | 984,756 | ||||||
Accumulated deficit | (1,062,334 | ) | (1,076,752 | ) | ||||
Total shareholders’ deficit | (72,318 | ) | (88,087 | ) | ||||
Total liabilities and shareholders’ deficit | $ | 89,589 | $ | 72,243 | ||||
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Revenue | ||||||||
Net product sales | $ | 8,637 | $ | 7,591 | ||||
License revenue | 25,500 | - | ||||||
Total revenue | 34,137 | 7,591 | ||||||
Operating expenses | ||||||||
Cost of product sales | 2,731 | 716 | ||||||
Cost of license revenue | 3,600 | - | ||||||
Selling, general and administrative | 8,755 | 8,152 | ||||||
Research and development | 1,558 | 9,183 | ||||||
Total operating expenses | 16,644 | 18,051 | ||||||
Income (loss) from operations | 17,493 | (10,460 | ) | |||||
Other (expense) income | ||||||||
Interest expense | (2,609 | ) | (2,406 | ) | ||||
Interest income | 2 | 190 | ||||||
Other income—related party | - | 4,085 | ||||||
Other expense | (450 | ) | - | |||||
Total other (expense) income, net | (3,057 | ) | 1,869 | |||||
Income (loss) before income taxes | 14,436 | (8,591 | ) | |||||
Provision for income taxes | 18 | - | ||||||
Net income (loss) | $ | 14,418 | $ | (8,591 | ) | |||
Earnings (loss) per share | ||||||||
Basic | $ | 0.53 | $ | (0.32 | ) | |||
Diluted | $ | 0.42 | $ | (0.32 | ) | |||
Shares used in computing earnings (loss) per share | ||||||||
Basic | 27,427 | 27,238 | ||||||
Diluted | 34,183 | 27,238 | ||||||
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
Operating activities | ||||||||
Net income (loss) | $ | 14,418 | $ | (8,591 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||
Share-based compensation expense | 1,116 | 2,407 | ||||||
Depreciation expense | 29 | 1,060 | ||||||
Non-cash interest expense | 1,736 | 1,682 | ||||||
Inventory fair value step-up adjustment included in cost of product sales | 850 | - | ||||||
Amortization of intangible assets | 388 | - | ||||||
Loss on change in fair value of contingent value rights | 450 | - | ||||||
Amortization of right-of-use lease assets | 46 | 345 | ||||||
Loss on disposal of property and equipment | - | 148 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 1,681 | (592 | ) | |||||
Inventory, net | (211 | ) | 251 | |||||
Prepaid expenses and other current assets | (2,716 | ) | 1,084 | |||||
Accounts payable | (1,664 | ) | (2,282 | ) | ||||
Accrued expenses | 2,286 | (2,404 | ) | |||||
Accrued payroll and related expenses | (1,185 | ) | (4,683 | ) | ||||
Lease liabilities | (46 | ) | (674 | ) | ||||
Net cash provided by (used for) operating activities | 17,178 | (12,249 | ) | |||||
Investing activities | ||||||||
Proceeds from the sale of property and equipment | - | 1,143 | ||||||
Net cash provided by investing activities | - | 1,143 | ||||||
Financing activities | ||||||||
Net proceeds from issuance of common stock under 2013 Equity Plan | 154 | 305 | ||||||
Net proceeds from issuance of common stock under ESPP | 81 | 200 | ||||||
Net cash provided by financing activities | 235 | 505 | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 17,413 | (10,601 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 21,261 | 88,729 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 38,674 | $ | 78,128 | ||||
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets | ||||||||
Cash and cash equivalents | $ | 38,634 | $ | 77,219 | ||||
Restricted cash | 40 | 909 | ||||||
Total cash, cash equivalents and restricted cash | $ | 38,674 | $ | 78,128 | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210507005115/en/
Contacts:
Michael Hearne
Chief Financial Officer
La Jolla Pharmaceutical Company
(617) 715-3598
mhearne@ljpc.com
