RVL Pharmaceuticals plc Reports Second Quarter 2022 Financial Results; Provides Commercial Update
-- Second quarter 2022 UPNEEQ® net product sales of $8.4 million; 42% above first quarter --
-- Opportunity for cash runway to extend through 2023 following recently announced financings --
-- Expanded Board of Directors with the appointment of Alisa Lask, Aesthetic industry veteran with pharmaceutical experience in both sales and marketing --
-- Continued sequential expansion among key UPNEEQ demographics, including pharmacy-paid prescribers and medical aesthetics practices --
BRIDGEWATER, N.J., Aug. 11, 2022 (GLOBE NEWSWIRE) -- RVL Pharmaceuticals plc (Nasdaq: RVLP) (“RVL” or the “Company”), a specialty pharmaceutical company, today announced financial results and business highlights for the three months ended June 30, 2022.
“Our recent financing and addition of Alisa Lask to our Board of Directors are strong signals of our growing belief in UPNEEQ® (oxymetazoline hydrochloride ophthalmic solution), 0.1%. Ms. Lask brings over 20 years of commercial experience in pharmaceuticals and medical aesthetics. Of note, she held senior leadership roles at Galderma and Allergan and currently holds the position of Chief Commercial Officer at RION, a development stage biotechnology company focused on regenerative medicine in medical and aesthetic applications. Our recent track record of growth and growing evidence of social proof have enabled us to attract outstanding talent from the industry and entertain a number of potentially exciting partnerships,” stated Brian Markison, Chief Executive Officer of RVL Pharmaceuticals plc.
“The second quarter was another strong quarter of growth for RVL and UPNEEQ. As we continue to build this market, we expect to leverage our multi-channel business strategy as a strong foundation to accelerate growth. Establishing UPNEEQ as a daily part of the non-invasive facial aesthetic practice remains our number one priority, and we believe the performance thus far directly supports our ambitions,” said James “JD” Schaub, Chief Operating Officer of RVL.
Second Quarter 2022 Financial Highlights and Recent Developments
- UPNEEQ net product sales of $8.4 million, up $6.9 million year-over-year, and up $2.5 million, or 42%, from the first quarter of 2022.
- Approximately 15,000 cumulative unique pharmacy-paid prescribers at quarter end, an increase of 16% compared to the end of the first quarter of 2022.
- At quarter end, our optometry and ophthalmology customer base accounted for 67% and 33%, respectively, of our total unique prescriber base.
- Approximately 2,200 cumulative unique medical aesthetics practices had placed orders for UPNEEQ at quarter end, an increase of 100% from the end of the first quarter of 2022.
- Total revenues of $8.4 million, entirely from net product sales from UPNEEQ, compared to $11.5 million in the second quarter of 2021, which included $10.0 million of licensing revenue from Santen during the period.
- Net loss from continuing operations of $(12.1) million, compared to a loss of $(22.0) million in the prior year period. Adjusted EBITDA1 loss of $(11.8) million, compared to a loss of $(8.4) million in the prior year period.
- At June 30, 2022, cash and cash equivalents were $27.4 million and debt and financing obligations had an aggregate principal amount of $55.6 million.
- On August 8, 2022, the Company raised an aggregate of $43.9 million, comprised of $23.9 million in aggregate gross proceeds from the private placement of ordinary shares and, concurrently, $20.0 million from the issuance of second tranche senior secured notes.
Second Quarter 2022 Financial Results
Total revenues decreased $3.1 million to $8.4 million in the three months ended June 30, 2022, as compared to $11.5 million in the three months ended June 30, 2021, primarily due to the absence of licensing revenue from Santen during the 2022 period, partially offset by a $6.9 million year over year increase in net product sales of UPNEEQ.
Net product sales, entirely from sales of UPNEEQ, increased by $6.9 million to $8.4 million in the 2022 period, as compared to $1.5 million in the 2021 period. The increase in net product sales was primarily attributable to a year over year increase in sales volume reflecting expanded commercialization into eyecare markets and, effective February 2022, the medical aesthetics market.
1 Adjusted EBITDA is a non-GAAP financial measurement, see “Presentation of Non-GAAP Financial Measures.”
Total cost of goods sold increased $1.5 million in the three months ended June 30, 2022 to $2.2 million, as compared to $0.7 million in the three months ended June 30, 2021. The year over year increase in cost of goods sold was primarily driven by $0.9 million in higher product costs for UPNEEQ due to higher sales volume and $0.7 million related to increased royalties and contingent milestone payments due under an intellectual property license agreement, each attributable to sales of UPNEEQ.
Gross profit percentage decreased to 74% in the three months ended June 30, 2022, as compared to 94% in the 2021 period, largely due to the absence of licensing revenue from Santen during the 2022 period. Excluding licensing revenues, gross profit percentage from net product sales was 52% in the 2021 period.
Selling, general and administrative expenses decreased $0.8 million in the three months ended June 30, 2022 to $20.2 million, as compared to $21.0 million in the three months ended June 30, 2021. The year over year decrease in selling, general and administrative expenses was primarily driven by approximately $1.1 million of lower legal and other professional fees and $0.6 million of lower marketing expenses for UPNEEQ partially offset by $1.0 million in higher net compensation and training costs relating to our expanded salesforce.
Research and development expenses decreased by $0.9 million in the three months ended June 30, 2022 to $1.2 million, as compared to $2.1 million in the three months ended June 30, 2021. The year over year decrease in R&D expenses primarily reflects $1.2 million in restructuring expenses unique to the 2021 period.
Unique to the three months ended June 30, 2021, the Company recognized impairment charges of $7.9 million related to delays in the anticipated commercialization of arbaclofen extended release tablets. No such impairments were recognized in the three months ended June 30, 2022.
Total other non-operating activities contributed $3.3 million of net income in the 2022 period, largely reflecting $4.2 million of gains from the change in fair value of the Company’s debt and warrant liability, partially offset by $1.0 million of amortization expense from its financial commitment asset. Total other non-operating activities in the 2021 period contributed a $(1.7) million loss, consisting of $1.3 million of asset disposal costs recognized under a restructuring program and $0.4 million for interest expense and amortization of debt discount.
Net loss from continuing operations for the three months ended June 30, 2022 was $(12.1) million, compared to a loss of $(22.0) million in the three months ended June 30, 2021. Adjusted EBITDA loss for the 2022 period was $(11.8) million, compared to a loss of $(8.4) million for the 2021 period. See “Presentation of Non-GAAP Financial Measures” below.
At June 30, 2022, the Company had cash and cash equivalents of $27.4 million and debt and financing obligations with aggregate principal amounts of $55.6 million, including $55.0 million of long-term debt that is reflected on our balance sheet at fair value of $42.9 million.
On August 8, 2022, the Company closed a private placement of 15,451,612 ordinary shares of the Company for $23.9 million in aggregate gross proceeds. Concurrently, the Company closed on the issuance of second tranche notes in an aggregate principal amount equal to $20.0 million following an amendment of its Note Purchase Agreement with funds managed by Athyrium Capital Management (“Athyrium”). Under the amendment, among other things, an affiliate of Athyrium also agreed to make available up to $25.0 million in cash from the issuance of third tranche notes through April 2023, subject to a minimum revenue target.
Presentation of Non-GAAP Financial Measures
In addition to our results determined in accordance with accounting principles generally accepted in the United States of America (or “GAAP”) throughout this press release, we also present Adjusted EBITDA, which is a non-GAAP financial measurement. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (or “EBITDA”) adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, non-recurring or other items that are included in net loss from continuing operations and EBITDA that we do not consider indicative of our ongoing operating performance. In particular, our measurement of Adjusted EBITDA excludes the following from EBITDA: impairments of intangible assets and fixed assets, share-based compensation expense, gains and losses on disposals of fixed assets, foreign currency translation, severance expenses, gains and losses on the sale of product rights, changes in the fair value of our debt and warrants recognized through earnings, non-product related licensing and milestone revenues, legal and contractual settlements and related litigation reserves and professional fees incurred.
We use Adjusted EBITDA for business planning purposes, in assessing our performance and in measuring our performance relative to that of our competitors. We also believe that Adjusted EBITDA provides investors with useful information to understand our operating results and analyze financial and business trends on a period-to-period basis. Adjusted EBITDA has important limitations as an analytical tool, however, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA is not intended to replace, and should not be considered superior to, the presentation of our financial results in accordance with GAAP. Our definition of Adjusted EBITDA may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. Adjusted EBITDA is reconciled from net income or loss from continuing operations, the most comparable GAAP financial measure, in the attached table “RVL Pharmaceuticals plc - GAAP to Non-GAAP Reconciliations” at the end of this press release.
Forward Looking Statements
This press release includes statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” The Company’s actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms “believes,” “expects,” “may,” “will,” “should,” “seeks,” “projects,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, its results of operations, financial condition, liquidity, prospects, financial guidance, growth plan, strategies, trends and other events, particularly relating to sales of UPNEEQ and FDA and other regulatory applications, approvals and actions, the continuation of historical trends, our ability to manage costs and service our debt and the sufficiency of our cash balances and cash generated from operating and financing activities for future liquidity and capital resource needs. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include the following: UPNEEQ’s ability to reach market acceptance by clinicians and patients; our ability to successfully commercialize UPNEEQ; our customers’ willingness to pay the price we charge for UPNEEQ; the results of our marketing and sales expenditures; our dependence on third-party suppliers and distributors for UPNEEQ; UPNEEQ’s ability to produce its intended effects; failures of or delays in clinical trials or other delays in obtaining regulatory approval or commencing product sales for new products; the impact of legal proceedings; and other risks and uncertainties more fully described in the “Risk Factors” section of our Annual Report on Form 10-K filed on March 30, 2022 and other filings that the Company makes with the Securities and Exchange Commission. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.
As previously announced, RVL management will host its second quarter 2022 financial results conference call as follows:
|Date:||Thursday, August 11, 2022|
|Time:||8:30 a.m. ET|
|Register (audio only):||Click Here|
|Webcast (live and replay):||ir.rvlpharma.com under the “Investors & News” section|
The webcast will be archived at the aforementioned URL.
IMPORTANT SAFETY INFORMATION
UPNEEQ® (oxymetazoline hydrochloride ophthalmic solution), 0.1% is indicated for the treatment of acquired blepharoptosis in adults.
WARNINGS AND PRECAUTIONS
- Ptosis may be associated with neurologic or orbital diseases such as stroke and/or cerebral aneurysm, Horner syndrome, myasthenia gravis, external ophthalmoplegia, orbital infection and orbital masses. Consideration should be given to these conditions in the presence of ptosis with decreased levator muscle function and/or other neurologic signs.
- Alpha-adrenergic agonists as a class may impact blood pressure. Advise UPNEEQ patients with cardiovascular disease, orthostatic hypotension, and/or uncontrolled hypertension or hypotension to seek medical care if their condition worsens.
- Use UPNEEQ with caution in patients with cerebral or coronary insufficiency or Sjögren’s syndrome. Advise patients to seek medical care if signs and symptoms of potentiation of vascular insufficiency develop.
- UPNEEQ may increase the risk of angle closure glaucoma in patients with untreated narrow-angle glaucoma. Advise patients to seek immediate medical care if signs and symptoms of acute narrow-angle glaucoma develop.
- Patients should not touch the tip of the single patient-use container to their eye or to any surface, in order to avoid eye injury or contamination of the solution.
Adverse reactions that occurred in 1-5% of subjects treated with UPNEEQ were punctate keratitis, conjunctival hyperemia, dry eye, blurred vision, instillation site pain, eye irritation and headache.
- Alpha-adrenergic agonists, as a class, may impact blood pressure. Caution in using drugs such as betablockers, anti-hypertensives, and/or cardiac glycosides is advised. Caution should also be exercised in patients receiving alpha adrenergic receptor antagonists such as in the treatment of cardiovascular disease, or benign prostatic hypertrophy.
- Caution is advised in patients taking monoamine oxidase inhibitors which can affect the metabolism and uptake of circulating amines.
About RVL Pharmaceuticals plc
RVL Pharmaceuticals plc is a specialty pharmaceutical company focused on the commercialization of UPNEEQ® (oxymetazoline hydrochloride ophthalmic solution), 0.1%, for the treatment of acquired blepharoptosis, or low-lying eyelid, in adults. UPNEEQ is the first non-surgical treatment option approved by the FDA for acquired blepharoptosis.
Investor and Media Relations for RVL Pharmaceuticals plc
Lisa M. Wilson
In-Site Communications, Inc.
-Financial Tables Follow-
|RVL Pharmaceuticals plc|
|Unaudited Condensed Consolidated Balance Sheets|
|June 30, 2022||December 31, 2021|
|Cash and cash equivalents||$||27,413||$||40,444|
|Prepaid expenses and other current assets||9,287||12,901|
|Financial commitment asset||1,128||3,063|
|Total current assets||40,189||59,379|
|Property, plant and equipment, net||713||866|
|Operating lease assets||871||1,368|
|Indefinite-lived intangible assets||27,210||27,210|
|Liabilities and Shareholders' Equity|
|Trade accounts payable||$||5,437||$||3,777|
|Current portion of debt||607||2,409|
|Current portion of obligations under finance leases||1||5|
|Current portion of lease liability||552||839|
|Income taxes payable - current portion||11||1|
|Total current liabilities||18,555||20,108|
|Long-term debt (measured at fair value and representing $55,000 of aggregate unpaid principal)||42,900||43,800|
|Long-term portion of lease liability||349||592|
|Income taxes payable-long term portion||68||66|
|Commitments and contingencies|
|Additional paid in capital||594,132||591,730|
|Accumulated other comprehensive income||—||1,700|
|Total shareholders' equity||58,511||76,733|
|Total liabilities and shareholders' equity||$||124,830||$||144,670|
|RVL Pharmaceuticals plc|
|Unaudited Condensed Consolidated Statements of Operations|
|(in thousands, except share and per share data)|
|Three Months Ended June 30,||Six Months Ended June 30,|
|Net product sales||$||8,448||$||1,482||$||14,392||$||2,255|
|Cost of goods sold||2,227||709||4,371||1,388|
|Selling, general and administrative expenses||20,169||21,047||44,003||37,999|
|Research and development expenses||1,176||2,052||2,038||4,256|
|Impairment of intangible assets||—||7,880||—||7,880|
|Total operating expenses||21,345||30,979||46,041||50,135|
|Operating loss before gain on sales of product rights, net||(15,124||)||(20,178||)||(20,520||)||(39,078||)|
|Gain on sales of product rights, net||—||—||—||5,636|
|Interest expense and amortization of debt discount||978||494||1,963||1,015|
|Change in fair value of debt and interest expense||(740||)||—||304||—|
|Change in fair value of warrants||(3,455||)||—||1,053||—|
|Other non-operating (income) expense, net||(78||)||1,202||(5,115||)||1,193|
|Total other non-operating (income) expense||(3,295||)||1,696||(1,795||)||2,208|
|Loss before income taxes||(11,829||)||(21,874||)||(18,725||)||(35,650||)|
|Income tax expense, continuing operations||277||94||202||90|
|Loss from continuing operations||(12,106||)||(21,968||)||(18,927||)||(35,740||)|
|Income from discontinued operations before income taxes||—||4,454||—||9,153|
|Income tax expense, discontinued operations||—||213||—||752|
|Income from discontinued operations, net of tax||—||4,241||—||8,401|
|Change in fair value of debt due to change in credit risk, net of tax||—||—||(1,700||)||—|
|(Loss) earnings per ordinary share:|
|Basic and diluted, continuing operations||$||(0.14||)||$||(0.35||)||$||(0.23||)||$||(0.57||)|
|Basic and diluted, discontinued operations||$||—||$||0.07||$||—||$||0.13|
|Basic and diluted||$||(0.14||)||$||(0.28||)||$||(0.23||)||$||(0.44||)|
|Weighted average ordinary shares outstanding:|
|Basic and diluted||83,580,906||62,767,400||83,535,655||62,723,011|
|RVL Pharmaceuticals plc|
|Unaudited Condensed Consolidated Statements of Cash Flows|
|Six Months Ended June 30,|
|Cash Flows from Operating Activities:|
|Net loss from continuing operations||$||(18,927||)||$||(35,740||)|
|Net income from discontinued operations||—||8,401|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||180||7,914|
|Change in fair value of debt||(2,600||)||—|
|Change in fair value of warrants||1,053||—|
|Impairment of intangible assets||—||7,880|
|Deferred income tax benefit||23||267|
|(Gain) loss on sale of fixed and leased assets||(94||)||1,244|
|Gain on sales of product rights, net||—||(5,636||)|
|Amortization of deferred financing and loan origination fees||1,935||552|
|Write off of deferred financing and loan origination fees||—||37|
|Change in operating assets and liabilities:|
|Prepaid expenses and other current assets||3,614||(1,004||)|
|Trade accounts payable||1,659||(1,004||)|
|Accrued and other current liabilities||(1,151||)||(5,209||)|
|Net cash used in operating activities||(11,280||)||(14,408||)|
|Cash Flows from Investing Activities:|
|Proceeds from product rights disposal||—||7,300|
|Proceeds from sale of fixed and leased assets||94||25|
|Purchase of property, plant and equipment||(27||)||(1,398||)|
|Net cash provided by investing activities||67||5,927|
|Cash Flows from Financing Activities:|
|Payments on finance lease obligations||(4||)||(27||)|
|Payments on insurance financing loan||(1,802||)||—|
|Payments for taxes related to net share settlement of share-based awards||(131||)||(607||)|
|Proceeds from issuance of ordinary shares under ESPP||119||139|
|Net cash used in financing activities||(1,818||)||(5,795||)|
|Net change in cash and cash equivalents||(13,031||)||(14,276||)|
|Cash and cash equivalents, beginning of period||40,444||114,053|
|Cash and cash equivalents, end of period||$||27,413||$||99,777|
|RVL Pharmaceuticals plc|
|GAAP to Non-GAAP Reconciliations|
|Adjusted EBITDA (Unaudited)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Loss from continuing operations||$||(12,106||)||$||(21,968||)||$||(18,927||)||$||(35,740||)|
|Interest expense and amortization of debt discount||978||494||1,963||1,015|
|Income tax benefit||277||94||202||90|
|Depreciation and amortization expense||91||285||180||1,331|
|Licensing-related revenues, net of transaction costs(1)||—||—||(15,000||)||—|
|Divestiture-related contingent milestone payments, net of fees(2)||—||—||(4,850||)||—|
|Change in fair value of debt and interest expense(3)||(740||)||—||304||—|
|Change in fair value of warrants(3)||(3,455||)||—||1,053||—|
|Gain on sales of product rights(4)||—||—||—||(5,636||)|
|Impairment of intangible assets(5)||—||7,880||—||7,880|
|Asset disposal charge(6)||—||1,245||—||1,245|
|Share-based compensation expense||1,209||1,131||2,418||2,205|
|Foreign currency translation||48||(857||)||62||(791||)|
|Legal settlements and expenses||—||373||—||391|
|(1) - Includes $15,500 in licensing revenue recognized in connection with an amendment of our License Agreement with Santen, effective March 31, 2022, net of a $500 transaction fee expense classified in selling, general and administrative expenses.|
|(2) - Includes $5,000 in contingent gains related to milestone payments earned subsequent to the sale of our legacy business to Alora Pharmaceuticals, net of $150 in consent fees classified in selling, general and administrative expenses. The fees were incurred with our lendor upon the issuance of waivers of mandatory repayments of debt.|
|(3) - Our senior secured notes issued under our Note Purchase Agreement, a material component of long-term debt, and our warrant liabilities, a material component of total liabilities have each been measured and carried at fair value since their issuance in October 2021. Changes in the fair value of debt and warrants that are accounted for at fair value, inclusive of related accrued interest expense in respect of debt, are presented as periodic gains or losses in our consolidated statements of operations and comprehensive loss.|
|(4) - Relates to our sale of global rights to Osmolex ER to Adamas Pharmaceuticals, Inc., which closed in January 2021 and resulted in our recognition of a gain of $5,636.|
|(5) - Relates to impairment charges recognized upon delays in anticipated commercialization of arbaclofen extended release tablets.|
|(6) - Relates to restructuring charges associated with a curtailment of Argentinian operations, specifically asset disposal costs related to leasehold improvements at our former Buenos Aires location.|