Menlo Reports First Quarter 2020 Financial Results and Provides Business Update
Conference Call Today at
“The launch of AMZEEQ® at the beginning of 2020 marked the transition of Menlo to a commercial company,” said
“Our NDA for FMX103 for the potential treatment of papulopustular rosacea is currently being reviewed by the FDA, with a PDUFA action date of June 2nd,” continued
First Quarter and Recent highlights:
January 2020, we commercially launched AMZEEQ (minocycline) topical foam, 4%, for the treatment of inflammatory lesions of non-nodular moderate-to-severe acne vulgaris in patients 9 years of age and older. AMZEEQ is the first topical formulation of minocycline to be approved by the FDA for any condition.
April 2020, Menlo’s wholly owned subsidiary, Foamix Pharmaceuticals Ltd.(“Foamix”), entered into an exclusive licensing agreement with an affiliate of Cutia Therapeutics (“Cutia”), a specialty pharmaceutical company based in mainland China, for the sale of AMZEEQ and its other topical minocycline product candidates, once approved, in Greater China.
° Foamix will receive an upfront cash payment of $10 million and will be eligible for an additional $1 million payment upon the receipt of marketing approval in China of the first licensed product.
° Foamix is also entitled to receive mid-single digit royalties on net sales of any licensed products.
- Announced top line results from two Phase 3 clinical trials evaluating the safety and efficacy of oral serlopitant for the treatment of pruritus (itch) associated with prurigo nodularis (PN). The studies did not meet their respective primary endpoints of demonstrating statistically significant reduction in pruritus compared with placebo. Menlo does not intend to pursue further development of serlopitant.
- Entered into a settlement and license agreement to resolve the remaining pending patent litigation involving Finacea® foam.
Andrew Saikas Chief Financial Officer and Treasurer.
Financial Results for the First Quarter Ended
Cost of Goods Sold
Cost of goods sold was
Our gross margin percentage of 85% was favorably impacted during the three months ended March 31, 2020 due to the fact that some inventory was produced prior to FDA approval and therefore expensed in prior periods. If inventory sold during the three months ended March 31, 2020 was valued at cost, our gross margin for the period then ended would have been 79%.
Research and Development Expenses
Our research and development expenses for the three months ended
Selling, General and Administrative Expenses
Our selling, general and administrative expenses for the three months ended
Our operating loss for the three months ended
During the three months ended
Our net loss for the three months ended
Cash & Cash Equivalents
There will be a conference call at
A replay of the call will be archived on the Company’s website at www.menlotherapeutics.com promptly after the conference call.
With expertise in topical medicine innovation as a springboard, the Company is working to develop and commercialize a variety of solutions using its proprietary Molecule Stabilizing Technology (MST™), and has received FDA approval for the world’s first topical minocycline, AMZEEQ® (minocycline) topical foam, 4%.
For more information about Menlo or its investigational products, visit www.menlotherapeutics.com. Menlo may use its website to comply with its disclosure obligations under Regulation FD. Therefore, investors should monitor Menlo’s website in addition to following its press releases, filings with the
Cautionary Statement Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding expectations with respect to the financial results of Menlo and statements regarding the development and commercialization of Menlo’s products and product candidates and other statements regarding the future expectations, plans and prospects of Menlo. All statements in this press release which are not historical facts are forward-looking statements. Any forward-looking statements are based on Menlo’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those set forth or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to the COVID-19 pandemic and its impact on our business operations; adverse events associated with the commercialization of AMZEEQ; the achievement of certain expected cost synergies related to the Merger; the outcome and cost of clinical trials for current and future product candidates; determination by the FDA that results from Menlo’s clinical trials are not sufficient to support registration or marketing approval of product candidates; the outcome of pricing, coverage and reimbursement negotiations with third party payors for AMZEEQ or any other products or product candidates that Menlo may commercialize in the future; whether, and to what extent, third party payors impose additional requirements before approving AMZEEQ prescription reimbursement; the eligible patient base and commercial potential of AMZEEQ or any of Menlo’s other product or product candidates; risks that Menlo’s intellectual property rights, such as patents, may fail to provide adequate protection, may be challenged and one or more claims may be revoked or interpreted narrowly or will not be infringed; risks that any of Menlo’s patents may be held to be narrowed, invalid or unenforceable or one or more of Menlo’s patent applications may not be granted and potential competitors may also seek to design around Menlo’s granted patents or patent applications; additional competition in the acne and dermatology markets; risks related to our indebtedness; inability to raise additional capital on favorable terms or at all; Menlo’s ability to recruit and retain key employees; and Menlo’s ability to stay in compliance with applicable laws, rules and regulations. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Menlo’s actual results to differ from those contained in the forward-looking statements, see the section titled “Risk Factors” in Menlo’s Quarterly Report on Form 10-Q for the quarter ended
CONDENSED CONSOLIDATED BALANCE SHEETS
|A s s e t s|
|Cash and cash equivalents||$||57,601||$||43,759|
|Short-term bank deposits||-||12,102|
|Investment in marketable securities||23,790||16,246|
|Restricted investment in marketable securities||421||434|
|Prepaid and other assets||4,236||1,557|
|TOTAL CURRENT ASSETS||98,441||76,414|
|Property and equipment, net||2,834||2,885|
|Operating lease right-of-use assets||1,721||1,694|
|In-process research & development||50,300||-|
|Prepaid and other assets||3,192||166|
|TOTAL NON-CURRENT ASSETS||62,092||4,745|
CONDENSED CONSOLIDATED BALANCE SHEETS
|Liabilities and shareholders’ equity|
|Employee related obligations||7,803||5,231|
|Operating lease liabilities||1,009||1,092|
|Contingent Stock Right||19,636||-|
|TOTAL CURRENT LIABILITIES||56,586||29,326|
|Liability for employee severance benefits||411||424|
|Operating lease liabilities||727||653|
|TOTAL LONG-TERM LIABILITIES||34,412||34,258|
|Additional paid-in capital||420,430||328,154|
|Accumulated other comprehensive income (loss)||(40||)||5|
|TOTAL SHAREHOLDERS' EQUITY||69,535||17,575|
|TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY||$||160,533||$||81,159|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|Three months ended
|Cost of goods sold||271||-|
|Research and development||15,953||10,848|
|Selling, general and administrative||25,415||5,344|
|LOSS BEFORE INCOME TAX||40,233||15,380|
|NET LOSS FOR THE PERIOD||$||40,233||$||15,204|
|LOSS PER SHARE BASIC AND DILUTED||$||0.95||$||0.47|
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE IN THOUSANDS||42,510||32,209|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|Three months ended|
|OTHER COMPREHENSIVE LOSS (INCOME):|
|Net unrealized losses (gains) from marketable securities||44||(36||)|
|Gains on marketable securities reclassified into net loss||1||-|
|Net unrealized gains on derivative financial instruments||-||(15||)|
|TOTAL OTHER COMPREHENSIVE LOSS (INCOME)||45||(51||)|
|TOTAL COMPREHENSIVE LOSS||$||40,278||$||15,153|
Source: Menlo Therapeutics Inc.