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Egalet Reports Second Quarter 2014 Financial Results and Provides Business Update

--Webcast and conference call today at 8:30 a.m. EDT--

WAYNE, Pa., Aug 12, 2014 /PRNewswire/ -- Egalet Corporation (Nasdaq: EGLT) ("Egalet") today reported business highlights and financial results for the three months ended June 30, 2014. 

Egalet Logo.

Recent highlights include:

  • Appointed Jeffrey M. Dayno, M.D. as chief medical officer;
  • Initiated Category 2/3 abuse-deterrent study of Egalet-001;
  • Received positive results from the Category 1 abuse deterrence study which tested Egalet-001's ability to resist a broad range of common methods of chemical and physical manipulation, including showed Egalet-001 has strong abuse-deterrent characteristics to one of the most common routes of morphine abuse, intravenous injection; and
  • Announced top-line results from two of three bioequivalence studies for Egalet-001.

"Our mission is to bring medications to those living with chronic pain and offer patients and physicians peace of mind by delivering them in an abuse-deterrent formulation," said Bob Radie, Egalet's president and chief executive officer.  "Our top-line results from our Category 1 abuse deterrence studies demonstrated how our lead product candidate, Egalet-001, has strong abuse-deterrent characteristics, including resistance to one of the most common routes of morphine abuse, intravenous injection."

2014 Financial Results

  • Cash Position: Cash as of June 30, 2014 was $69.3 million compared to $77.5 million at March 31, 2014. Our primary use of capital was, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, manufacturing development and other regulatory expenses and general overhead costs. We expect our cash expenditures to increase in the near term as we fund our clinical development of Egalet-001 and Egalet-002, and continue to build-out our commercial manufacturing capability.
  • Revenue: Revenues increased from zero for the three months ended June 30, 2013 to $490,000 for the three months ended June 30, 2014, as a result of the amortization of deferred revenue and the performance of certain research and development services under our collaborative agreement with Shionogi Limited.
  • R&D Expenses: Research and development expenses increased to $7.4 million for the three months ended June 30, 2014 from $1.2 million for the three months ended June 30, 2013. The increase of $6.2 million was driven primarily by an increase in our development costs for Egalet-001 and Egalet-002 and employee and stock-based compensation expenses. 
  • G&A Expenses: General and administrative expenses increased to $4.7 million for the three months ended June 30, 2014 from $1.1 million for the three months ended June 30, 2013.  The increase was primarily attributable to the continued investment in our U.S. infrastructure, including the hiring of personnel, as well as the adoption of a stock compensation plan.
  • Interest Expense: Interest increased to $4,000 in interest income for the three months ended June 30, 2014 from an expense of $1.4 million for the three months ended June 30, 2013. This change was primarily attributable to the conversion of our related party convertible debt upon consummation of our initial public offering in February 2014, which was outstanding during the prior year period. 
  • Net (Loss) Income: Net loss increased to $11.7 million for the three months ended June 30, 2014 from a net loss of $3.7 million for the three months ended June 30, 2013. 

Upcoming Milestones

2014

  • Q3: Complete Egalet-001 15 mg bioequivalence study
  • Q4: Complete category 2/3 abuse-deterrent studies for Egalet-001
  • Q4: Initiate category 2 and 3 abuse deterrence studies for Egalet-002

2015

  • Q1: Initiate pivotal Phase 3 trials for Egalet-002

Conference Call Information
Egalet's management will host a conference call to discuss the second quarter 2014 financial results:

Date:

Tuesday, August 12, 2014

Time:

8:30 a.m. EDT

Webcast (live and archive):

http://egalet.investorroom.com/eventsandwebcasts

Dial-in numbers:

1-877-870-4263 (domestic)
1-412-317-0790 (international)

Replay dial-in numbers:

1-877-344-7529 (domestic)

1-412-317-0088 (international)

Conference Number: 10050459

 

About Egalet

Egalet's mission is to help ensure access to effective medications for individuals living with chronic pain while protecting physicians, families and communities from the burden of abuse. Prescription opioid abuse has reached epidemic levels in the United States, with 6.8 million current prescription drug abusers and drug abuse is now the leading cause of accidental death in the United States. With the majority of opioids abused in the United States originating from a prescription and most often coming from a friend or family, a safeguard against the unexpected is needed.  Egalet is committed to bringing peace of mind to the patients and physicians it serves by offering abuse-deterrent pain medications.  Using the proprietary Guardian™ Technology the Company has a pipeline of clinical-stage, opioid-based product candidates that are specifically designed to deter abuse by physical and chemical manipulation.  The Guardian Technology is customized to resist specific routes of abuse that often occur with the underlying active pharmaceutical ingredient.  The Company's lead program, Egalet-001, an abuse-deterrent, extended-release, oral morphine formulation, is in development for the management of pain severe enough to require daily, around-the-clock opioid treatment and for which alternative treatments are inadequate.  It was designed to resist common methods of abuse, including one of the most common routes for morphine via injection. With no abuse-deterrent formulations of morphine currently available, Egalet-001 which is in pivotal studies, if approved, could fill a significant unmet need in the marketplace. Egalet-002, an abuse-deterrent, extended-release, oral oxycodone formulation, is in development for the management of pain severe enough to require daily, around-the-clock opioid treatment and for which alternative treatments are inadequate. Egalet-002 was designed to resist common methods of abuse, including crushing and snorting the most common route of abuse for oxycodone. Egalet entered into a collaboration with Shionogi in November of 2013, to develop abuse-deterrent hydrocodone based products. Egalet's Guardian Technology can be applied broadly across different classes of pharmaceutical products and can be used to develop combination products that include multiple active pharmaceutical ingredients with similar or different release profiles. Egalet has a strong IP position of 58 granted patents and is continually enhancing its proprietary position.  Visit www.egalet.com for more information.

Safe Harbor

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations, and are subject to known and unknown uncertainties and risks.  Actual results could differ materially from those discussed due to a number of factors, including, but not limited to: the success of our clinical trials; our ability to obtain regulatory approval of our product candidates; competitive factors; general market conditions; and other risks factors described in Egalet's filings with the United States Securities and Exchange Commission. Egalet assumes no obligation to update or revise any forward-looking-statements contained in this press release whether as a result of new information or future events, except as may be required by law.

Investor and Media Contact:
BiotechComm
E. Blair Clark-Schoeb
Tel: 917-432-9275
Email: [email protected]

 

Tables Follow

 

Egalet Corporation and Subsidiaries

 

Consolidated Statements of Operations (Unaudited)






Three Months Ended


Six Months Ended




June 30,


June 30,




2013


2014


2013


2014


Related party revenues


$


$

490,000


$


$

746,000












Operating Expenses:










General and administrative


1,116,000


4,728,000


1,971,000


7,996,000


Research and development


1,200,000


7,361,000


2,163,000


10,141,000


Total operating expenses


2,316,000


12,089,000


4,134,000


18,137,000


Loss from operations


(2,316,000)


(11,599,000)


(4,134,000)


(17,391,000)












Other income (expense):










Interest expense (income)


1,367,000


(4,000)


1,367,000


7,088,000


Loss (gain) on foreign currency exchange


11,000


40,000


(11,000)


43,000




1,378,000


36,000


1,356,000


7,131,000


Loss before provision for income taxes


(3,694,000)


(11,635,000)


(5,490,000)


(24,522,000)


Provision for income taxes



16,000



51,000


Net loss


$

(3,694,000)


$

(11,651,000)


$

(5,490,000)


$

(24,573,000)












Per share information:










Net loss per share of common stock, basic and diluted


$

(2.86)


$

(0.73)


$

(4.25)


$

(1.92)


Weighted average shares outstanding, basic and diluted



1,292,307



15,887,503



1,292,307



12,780,145


 

Egalet Corporation and Subsidiaries

 

Consolidated Balance Sheets



December 31, 2013


June 30, 2014

Assets



(unaudited)

Current assets:




Cash and cash equivalents

$            15,700,000


$              69,259,000

Related party receivable


345,000

Prepaid expenses

1,774,000


526,000

Other receivables

231,000


230,000

Total current assets

17,705,000


70,360,000

Property and equipment, net

2,378,000


2,476,000

Intangible asset

209,000


208,000

Deposits and other assets

71,000


2,087,000

Total assets

$            20,363,000


$              75,131,000

Liabilities, redeemable convertible preferred stock and stockholders' (deficit) equity








Current liabilities:




Related party senior convertible debt, net of discount

$            17,209,000


$                            —

Accounts payable

1,046,000


2,507,000

Accrued expenses

1,755,000


1,551,000

Deferred revenue


551,000

Other current liabilities

55,000


74,000

Total current liabilities

20,065,000


4,683,000

Deferred income tax liability

22,000


22,000

Deferred revenue – non-current portion

10,149,000


9,188,000

Total liabilities

30,236,000


13,893,000





Commitments and contingencies (Note 6)




Redeemable convertible preferred stock:




Redeemable convertible Series A-1 preferred stock—$0.01 par value; 1,406,894 shares and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014, respectively

1,443,000


Redeemable convertible Series A-2 preferred stock—$0.01 par value; 593,106 shares and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014, respectively

770,000


Redeemable convertible Series B preferred stock—$0.01 par value; 2,327,301 shares and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014, respectively

12,628,000


Redeemable convertible Series B-1 preferred stock—$0.01 par value; 113,916 shares and 0 shares issued and outstanding at December 31, 2013 and June 30, 2014, respectively

116,000


Total redeemable convertible preferred stock

14,957,000


Stockholders' (deficit) equity:




Common stock—$0.01 par value and $0.001 par value at December 31, 2013 and June 30, 2014, respectively;  75,000,000 shares authorized at June 30, 2014, 1,292,307 and 17,258,663 shares issued and outstanding at December 31, 2013 and June 30, 2014, respectively

13,000


17,000

Additional paid‑in capital

7,431,000


118,017,000

Accumulated other comprehensive income

1,125,000


1,176,000

Accumulated deficit

(33,399,000)


(57,972,000)

Total stockholders' (deficit) equity

(24,830,000)


61,238,000

Total liabilities, redeemable convertible preferred stock and stockholders' (deficit) equity

$            20,363,000


$              75,131,000

 

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SOURCE Egalet Corporation

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