First Quarter Net Product Sales of
Rolvedon Growth Continues, with
“We are pleased to report a strong first quarter as our team continues to diligently execute our business plan and seeks to grow
“We are reiterating our guidance for 2024, calling for net product sales of
Financial Highlights (unaudited):
Three Months Ended | |||||||||||
(in millions, except per share amounts) | |||||||||||
Net Product Sales (GAAP) | $ | 31.9 | $ | 32.5 | $ | 41.8 | |||||
Net Loss (GAAP) | $ | (4.5 | ) | $ | (57.4 | ) | $ | (3.5 | ) | ||
Loss Per Share (GAAP) | $ | (0.05 | ) | $ | (0.61 | ) | $ | (0.07 | ) | ||
Adjusted EBITDA (Non-GAAP)2 | $ | 7.4 | $ | 4.5 | $ | 25.6 | |||||
Adjusted Earnings Per Share (Non-GAAP)2 | $ | 0.04 | $ | 0.11 | $ | 0.29 |
First quarter results included the following highlights (our discussion below focuses on a comparison of first quarter 2024 to fourth 2023 given the acquisition of Spectrum and the generic competition of Indocin in third quarter 2023):
- Rolvedon net product sales increased to
$14.5 million in the first quarter 2024, from$11.0 million in the fourth quarter 2023, (the first full quarter of Rolvedon sales atAssertio ) driven by volume growth. - Indocin net product sales in the first quarter 2024 were
$8.7 million , decreased from$10.8 million in the fourth quarter 2023, driven by generic competition that affected both volume and pricing.
- Gross margin3 in the first quarter 2024 was 65% and included
$4.1 million of amortization of Rolvedon purchase accounting inventory step-up amortization. Excluding step-up amortization, gross margin in the first quarter was 78% compared to 79% in fourth quarter 2023. - SG&A expense in the first quarter 2024 was
$18.5 million , decreased from$24.0 million in the fourth quarter 2023, benefiting from actions the Company has taken to reduce and align expenses to its current portfolio. - Adjusted EBITDA was
$7.4 million in the first quarter 2024, increased from$4.5 million in the fourth quarter 2023, primarily due to the impact of lower SG&A expense.
Balance Sheet and Cash Flow
Assertio generated approximately$7.5 million in cash flow from operations in the first quarter of 2024.- For the quarter ended
March 31, 2024 , cash and cash equivalents totaled$80 .7 million, - Convertible debt outstanding principal balance at
March 31, 2024 was$40 million and does not mature untilSeptember 2027 .
2024 Full Year Financial Guidance
Net Product Sales (GAAP) | |
Adjusted EBITDA (Non-GAAP)4 |
Conference Call and Investor Presentation Information
Assertio’s management will host a conference call to discuss its first quarter 2024 financial results today:
Date: | |
Time: | |
Webcast (live and archive): | http://investor.assertiotx.com/overview/default.aspx (Events & Webcasts, Investor Page) |
Dial-in numbers: | 1-646-307-1963, Conference ID 4502314 |
To access the live webcast, the recorded conference call replay, and other materials, please visit Assertio’s investor relations website at http://investor.assertiotx.com/overview/default.aspx. Please connect 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. The replay will be available approximately two hours after the call on Assertio’s investor website.
About
Investor Contact
M: 214-597-8200
mkreps@darrowir.com
Forward Looking Statements
The statements in this communication include forward-looking statements. Forward-looking statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs. Forward-looking statements speak only as of the date they are made or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as there can be no assurance that the events or circumstances reflected in these statements will be achieved or will occur. Forward-looking statements can often, but not always, be identified by the use of forward-looking terminology including such as “anticipate,” “approximate”, “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “opportunity,” “plan,” “potential,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements, including: Assertio’s ability to grow sales of Rolvedon and the commercial success and market acceptance of Rolvedon and Assertio’s other products; Assertio’s ability to successfully develop and execute its sales, marketing and promotion strategies using its sales force and non-personal promotion model capabilities; the impact on sales and profits from the entry and sales of generics of Assertio’s products and/or other products competitive with any of Assertio’s products (including indomethacin suppositories compounded by hospitals and other institutions including a 503B compounder which we believe to be violation of certain provisions of the Food, Drug and Cosmetic Act); the timing and impact of additional generic approvals and uncertainty around the recent approvals and launches of generic Indocin products (which are not patent protected and now face generic competition as a result of the
Non-GAAP Financial Measures
To supplement the Company’s financial results presented on a
This release also includes estimated full-year non-GAAP adjusted EBITDA information, which the Company believes enables investors to better understand the anticipated performance of the business, but should be considered a supplement to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP. No reconciliation of estimated non-GAAP adjusted EBITDA to estimated net income is provided in this release because some of the information necessary for estimated net income such as income taxes, fair value change in contingent consideration, and stock-based compensation is not yet ascertainable or accessible and the Company is unable to quantify these amounts that would be required to be included in estimated net income without unreasonable efforts.
Specified Items
Non-GAAP measures presented within this release exclude specified items. The Company considers specified items to be significant income/expense items not indicative of current operations. Specified items may include adjustments to interest expense and interest income, income tax expense (benefit), depreciation expense, amortization expense, sales reserves adjustments for products the Company is no longer selling, stock-based compensation expense, fair value adjustments to contingent consideration or derivative liability, restructuring charges, amortization of fair value inventory step-up as a result of purchase accounting, transaction-related costs, gains, losses or impairments from adjustments to long-lived assets and assets not part of current operations, changes in valuation allowances on deferred tax assets, and gains or losses resulting from debt refinancing or extinguishment.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||
(in thousands, except per share amounts) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
Revenues: | |||||||||||
Product sales, net | $ | 31,862 | $ | 32,462 | $ | 41,769 | |||||
Royalties and milestones | 586 | 523 | 697 | ||||||||
Total revenues | 32,448 | 32,985 | 42,466 | ||||||||
Costs and expenses: | |||||||||||
Cost of sales | 11,177 | 9,721 | 5,467 | ||||||||
Research and development expenses | 733 | 1,024 | — | ||||||||
Selling, general and administrative expenses | 18,524 | 23,958 | 16,904 | ||||||||
Change in fair value of contingent consideration | — | (17,414 | ) | 9,167 | |||||||
Amortization of intangible assets | 5,631 | 4,775 | 6,284 | ||||||||
Loss on impairment of intangible assets | — | 40,808 | — | ||||||||
Restructuring charges | 720 | 2,442 | — | ||||||||
Total costs and expenses | 36,785 | 65,314 | 37,822 | ||||||||
(Loss) income from operations | (4,337 | ) | (32,329 | ) | 4,644 | ||||||
Other (expense) income: | |||||||||||
Debt-related expenses | — | — | (9,918 | ) | |||||||
Interest expense | (757 | ) | (755 | ) | (1,122 | ) | |||||
Other gain | 716 | 1,179 | 802 | ||||||||
Total other expense (income) | (41 | ) | 424 | (10,238 | ) | ||||||
Net loss before income taxes | (4,378 | ) | (31,905 | ) | (5,594 | ) | |||||
Income tax (expense) benefit | (132 | ) | (25,479 | ) | 2,110 | ||||||
Net loss and comprehensive loss | $ | (4,510 | ) | $ | (57,384 | ) | $ | (3,484 | ) | ||
Basic and diluted net loss per share | $ | (0.05 | ) | $ | (0.61 | ) | $ | (0.07 | ) | ||
Shares used in computing basic and diluted net loss per share | 94,980 | 94,669 | 51,005 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except share and per share data) | |||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 80,743 | $ | 73,441 | |||
Accounts receivable, net | 42,610 | 47,663 | |||||
Inventories, net | 38,602 | 37,686 | |||||
Prepaid and other current assets | 10,519 | 12,272 | |||||
Total current assets | 172,474 | 171,062 | |||||
Property and equipment, net | 704 | 770 | |||||
Intangible assets, net | 105,701 | 111,332 | |||||
Other long-term assets | 3,086 | 3,255 | |||||
Total assets | $ | 281,965 | $ | 286,419 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 15,650 | $ | 13,439 | |||
Accrued rebates, returns and discounts | 57,870 | 58,137 | |||||
Accrued liabilities | 15,401 | 18,213 | |||||
Contingent consideration, current portion | 2,700 | 2,700 | |||||
Other current liabilities | 823 | 954 | |||||
Total current liabilities | 92,444 | 93,443 | |||||
Long-term debt | 38,621 | 38,514 | |||||
Other long-term liabilities | 16,406 | 16,459 | |||||
Total liabilities | 147,471 | 148,416 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, outstanding as of | 9 | 9 | |||||
Additional paid-in capital | 790,538 | 789,537 | |||||
Accumulated deficit | (656,053 | ) | (651,543 | ) | |||
Total shareholders’ equity | 134,494 | 138,003 | |||||
Total liabilities and shareholders' equity | $ | 281,965 | $ | 286,419 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Operating Activities | |||||||
Net loss | $ | (4,510 | ) | $ | (3,484 | ) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation and amortization | 5,696 | 6,484 | |||||
Amortization of debt issuance costs and Royalty Rights | 107 | 147 | |||||
Recurring fair value measurements of assets and liabilities | — | 9,167 | |||||
Debt-related expenses | — | 9,918 | |||||
Provisions for inventory and other assets | 1,428 | 1,072 | |||||
Stock-based compensation | 1,207 | 2,446 | |||||
Deferred income taxes | — | (1,367 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 5,054 | (1,109 | ) | ||||
Inventories | (2,344 | ) | (3,602 | ) | |||
Prepaid and other assets | 1,921 | 1,824 | |||||
Accounts payable and other accrued liabilities | (134 | ) | (290 | ) | |||
Accrued rebates, returns and discounts | (267 | ) | 2,887 | ||||
Interest payable | (650 | ) | (1,376 | ) | |||
Net cash provided by operating activities | 7,508 | 22,717 | |||||
Investing Activities | |||||||
Purchase of Sympazan | — | (105 | ) | ||||
Net cash used in investing activities | — | (105 | ) | ||||
Financing Activities | |||||||
Payments in connection with 2027 Convertible Notes | — | (10,500 | ) | ||||
Payment of direct transaction costs related to convertible debt inducement | — | (1,119 | ) | ||||
Payment of contingent consideration | — | (6,609 | ) | ||||
Payments related to the vesting and settlement of equity awards, net | (206 | ) | (722 | ) | |||
Net cash used in financing activities | (206 | ) | (18,950 | ) | |||
Net increase in cash and cash equivalents | 7,302 | 3,662 | |||||
Cash and cash equivalents at beginning of year | 73,441 | 64,941 | |||||
Cash and cash equivalents at end of period | $ | 80,743 | $ | 68,603 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Net cash paid for income taxes | $ | 11 | $ | 29 | |||
Cash paid for interest | $ | 1,300 | $ | 2,351 | |||
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP EBITDA and ADJUSTED EBITDA | ||||||||||||||
(in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
Financial Statement Classification | ||||||||||||||
GAAP Net Loss | $ | (4,510 | ) | $ | (57,384 | ) | $ | (3,484 | ) | |||||
Interest expense | 757 | 755 | 1,122 | Interest expense | ||||||||||
Income tax expense (benefit) | 132 | 25,479 | (2,110 | ) | Income tax (expense) benefit | |||||||||
Depreciation expense | 65 | 132 | 200 | Selling, general and administrative expenses | ||||||||||
Amortization of intangible assets | 5,631 | 4,775 | 6,284 | Amortization of intangible assets | ||||||||||
EBITDA (Non-GAAP) | $ | 2,075 | (26,243 | ) | $ | 2,012 | ||||||||
Adjustments: | ||||||||||||||
Stock-based compensation | 1,207 | 2,642 | 2,446 | Selling, general and administrative expenses | ||||||||||
Change in fair value of contingent consideration (1) | — | (17,414 | ) | 9,167 | Change in fair value of contingent consideration | |||||||||
Debt-related expenses (2) | — | — | 9,918 | Debt-related expenses | ||||||||||
Transaction-related expenses (3) | — | 361 | 2,355 | Selling, general and administrative expenses | ||||||||||
Loss on impairment of intangible assets (4) | — | 40,808 | — | Loss on impairment of intangible assets | ||||||||||
Restructuring costs(5) | 720 | 2,442 | — | Restructuring charges | ||||||||||
Other (6) | 3,377 | 1,855 | (295 | ) | Multiple | |||||||||
Adjusted EBITDA (Non-GAAP) | $ | 7,379 | $ | 4,451 | $ | 25,603 |
(1) | The fair value of the contingent consideration is remeasured each reporting period, with changes in the fair value resulting from changes in the underlying inputs being recognized as a benefit or expense in operating expenses until the contingent consideration arrangement is settled. | |
(2) | Debt-related expenses in the three months ended | |
(3) | Represents transaction-related expenses associated with the acquisition of Spectrum, which closed effective | |
(4) | Represents the loss recognized in the period for the impairment of intangible assets. | |
(5) | Restructuring costs represent non-recurring costs associated with the Company’s announced restructuring plans. | |
(6) | Other for the three months ended | |
Three Months Ended | ||||||||||||||
Financial Statement Classification | ||||||||||||||
Amortization of inventory step-up | $ | 4,088 | $ | 3,001 | $ | 164 | Cost of sales | |||||||
Interest income on cash equivalents | (711 | ) | (690 | ) | (459 | ) | Other gain (loss) | |||||||
Derivative fair value adjustment | — | (456 | ) | — | Other gain (loss) | |||||||||
Total Other | $ | 3,377 | $ | 1,855 | $ | (295 | ) | |||||||
RECONCILIATION OF GAAP NET LOSS and NET LOSS PER SHARE TO | |||||||||||||||||||||||
NON-GAAP ADJUSTED EARNINGS and ADJUSTED EARNINGS PER SHARE (1) | |||||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
Amount | Diluted EPS (2) | Amount | Diluted EPS (2) | Amount | Diluted EPS (2) | ||||||||||||||||||
Net loss (GAAP)(2) | $ | (4,510 | ) | $ | (0.05 | ) | $ | (57,384 | ) | $ | (0.61 | ) | $ | (3,484 | ) | $ | (0.07 | ) | |||||
Add: Convertible debt interest expense and other income statement impacts, net of tax(2) | — | 566 | 842 | ||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangible assets | $ | 5,631 | 4,775 | $ | 6,284 | ||||||||||||||||||
Stock-based compensation | 1,207 | 2,642 | 2,446 | ||||||||||||||||||||
Debt-related expenses, net | — | — | 9,639 | ||||||||||||||||||||
Change in fair value of contingent consideration | — | (17,414 | ) | 9,167 | |||||||||||||||||||
Contingent consideration cash payable (3) | — | (2,170 | ) | (2,069 | ) | ||||||||||||||||||
Transaction-related expenses | — | 361 | 2,355 | ||||||||||||||||||||
Loss on impairment of intangible assets | — | 40,808 | — | ||||||||||||||||||||
Restructuring costs | 720 | 2,442 | — | ||||||||||||||||||||
Other | 3,377 | 1,855 | (295 | ) | |||||||||||||||||||
Increase in deferred tax asset valuation allowance (4) | — | 33,165 | — | ||||||||||||||||||||
Income tax benefit expense, as adjusted (5) | (2,734 | ) | 1,877 | (4,472 | ) | ||||||||||||||||||
Adjusted earnings (Non-GAAP) | $ | 3,691 | $ | 0.04 | $ | 11,523 | $ | 0.11 | $ | 20,413 | $ | 0.29 | |||||||||||
Diluted shares used in calculation (GAAP)(2) | 94,980 | 94,669 | 51,005 | ||||||||||||||||||||
Add: Dilutive effect of stock-based awards and equivalents(2) | 271 | 325 | 4,436 | ||||||||||||||||||||
Add: Dilutive effect of 2027 Convertible Notes(2) | — | 9,768 | 14,489 | ||||||||||||||||||||
Diluted shares used in calculation (Non-GAAP)(2) | 95,251 | 104,762 | 69,930 |
(1) | Certain adjustments included here are the same as those reflected in the Company’s reconciliation of GAAP net loss to non-GAAP adjusted EBITDA and therefore should be read in conjunction with that reconciliation and respective footnotes. | |
(2) | The Company uses the if-converted method with respect to its convertible debt to compute GAAP and Non-GAAP diluted earnings per share when the effect is dilutive. Under the if-converted method, the Company assumes the 2027 Convertible Notes were converted at the beginning of each period presented and outstanding. As a result, interest expense, net of tax, and any other income statement impact associated with the 2027 Convertible Notes, net of tax, is added back to net income used in the diluted earnings per share calculation. | |
For the three months ended | ||
For both the three months ended | ||
(3) | Represents the accrued cash payable, if any, of the INDOCIN contingent consideration for the respective period based on 20% royalty for annual INDOCIN net sales over | |
(4) | For the three months ended | |
(5) | Represents the Company’s income tax expense adjustment from the tax effect of pre-tax adjustments excluded from adjusted earnings. The tax effect of pre-tax adjustments excluded from adjusted earnings is computed at the blended federal and state statutory rate of 25%. |
1 See “Non-GAAP Financial Measures” below for information about reconciling our Adjusted EBITDA guidance to Net Loss.
2 Non-GAAP measures are reconciled to the corresponding GAAP measures in the schedules attached.
3 Gross margin represents the ratio of net product sales less cost of sales to net product sales.
4 See “Non-GAAP Financial Measures” below for information about reconciling our Adjusted EBITDA guidance to Net Loss.
Source:
2024 GlobeNewswire, Inc., source