Antares Pharma Reports Third Quarter 2013 Operating And Financial Results

Antares Pharma, Inc. (NASDAQ:ATRS) today reported operating and financial results for the third quarter ended September 30, 2013.

Quarter and Recent Highlights
  • Received approval from the U.S. Food and Drug Administration (FDA) for OTREXUP™.
  • Initiated a clinical study evaluating testosterone enanthate administered weekly by subcutaneous injection and dosed the first testosterone deficient adult males using the VIBEX® Quick Shot auto injector device.
  • Data from three OTREXUP (methotrexate) clinical studies were presented at the annual American College of Rheumatology meeting. The clinical study data comparing the systemic availability of methotrexate (MTX) using OTREXUP compared with MTX taken orally was selected for a prestigious podium presentation.
  • Issuance of a new U.S. patent number 8,562,564 entitled "Prefilled Syringe Jet Injector.” This patent is designed to protect the use of medicament containing prefilled syringe based auto injectors such as those used in OTREXUP and Quick Shot testosterone. The Company expects to receive at least one additional patent in 2014 that will also protect OTREXUPbringing the number of patents that specifically cover the product to seven.
  • Elected Robert P Roche Jr. to the Board of Directors. Mr. Roche brings to Antares extensive commercial and product launch experience.
  • Appointed Dr. Bruce Freundlich as Senior Vice President, Medical. Dr. Freundlich’s experience both in industry and academia as a practicing and highly regarded rheumatologist will be valuable as we commercialize OTREXUP.
  • Ended the quarter with $70.0 million in cash and investments and no debt.

Paul K. Wotton, Ph.D., President and Chief Executive Officer, stated, “Last month’s approval of OTREXUP represented a strategic milestone in the transformation of Antares from a royalty based business to a specialty pharmaceutical company generating potential product revenue from proprietary in-house development programs. More importantly, we believe that this approval is a validation of our auto injector technology, our deep combination drug/device pipeline and commercial strategy. The upcoming launch of OTREXUP coupled with the Quick Shot testosterone program demonstrates our ability to deliver on multiple projects simultaneously with our unique technology platform.” He continued, “Our commercial organization has developed a comprehensive launch plan, and we have begun to appoint top-tier sales representatives with many years of experience in promoting rheumatology products. We believe that OTREXUP could become an important part of the treatment continuum for RA patients and look forward to launching the product in early 2014.”

Third Quarter and First Nine Months Results

Total revenues were $5.5 million and $5.7 million for the three months ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013, the Company’s total revenue was $15.9 million compared to $17.1 million in the first nine months of 2012. Product sales were $3.0 million in the third quarter of 2013 compared to $2.1 million in 2012, an increase of 48%. For the nine months ended September 30, 2013, product sales increased 30% to $10.1 million compared to $7.8 million in the prior year. The product sales increases were primarily due to sales to Teva of our VIBEX ® auto injector for Teva’s generic epinephrine auto injector product.

Development revenues were $1.3 million in the three month period ended September 30, 2013 compared to $2.6 million in the prior year period. For the nine months ended September 30, 2013, the Company’s development revenue was $2.7 million compared to $6.3 million in the first nine months of 2012. The revenue in the first nine months of 2013 was primarily due to auto injector and pen injector development work for Teva. The revenue in the first nine months of 2012 was primarily due to a non-recurring FDA approval milestone payment of $2.5 million recognized in connection with our license agreement with Actavis (Watson), along with development revenue from Teva. The development revenue in the three and nine month periods of 2012 also included $750,000 from Pfizer after the achievement of a development milestone related to its undisclosed Consumer Healthcare product.

Licensing revenues were $0.1 million in each of the three month periods ended September 30, 2013 and 2012. For the first nine months of 2013 licensing revenues were $0.2 million compared to $0.8 million in the first nine months of 2012. The licensing revenue in the third quarter and first nine months of 2013 was primarily due to recognition of revenue deferred in prior years under agreements with Ferring. The licensing revenue in the first nine months of 2012 was primarily due to an upfront license fee received in connection with our licensing agreement with Daewoong Pharmaceuticals for our 3% oxybutynin gel for South Korea signed in January of 2012, along with license revenue recognized in connection with our license agreement with Actavis.

Royalty revenues were $1.1 million in the three month period ended September 30, 2013 compared to $0.9 million in the same period of the prior year. For the nine month periods ended September 30, 2013 and 2012, royalty revenues were $2.9 million and $2.2 million, respectively. We receive royalties from Teva and Ferring related to needle-free injector device sales and/or hGH sales, from Actavis on sales of Gelnique, and from Meda Pharma on sales of Elestrin ®. The primary reason for the increase in royalty revenue in 2013 compared to 2012 were royalties received from Actavis on sales of Gelnique.

Total gross profit was $2.5 million and $2.4 million in the third quarters of 2013 and 2012, respectively, and was $7.4 million for the first nine months of 2013 compared to $9.3 million for the first nine months of 2012. The decrease in the first nine months of 2013 compared to 2012 was mainly due to the non-recurring FDA approval milestone payment of $2.5 million from Actavis recognized as revenue in 2012.

Total operating expenses were approximately $8.9 million and $5.9 million for the three months ended September 30, 2013 and 2012, respectively, and were $22.3 million and $15.7 million for the nine months ended September 30, 2013 and 2012, respectively. The increases were primarily due to an increase in OTREXUP™ commercialization and marketing activities in anticipation of an early 2014 product launch and increased development activity related to VIBEX® QS T which is under development for testosterone replacement therapy, along with an increase in personnel to support our growing pharmaceutical business.

Net loss per share was $0.05 and $0.03 for the third quarters of 2013 and 2012, respectively, and was $0.12 and $0.06 for the nine month periods ended September 30, 2013 and 2012, respectively.

At September 30, 2013, Antares had approximately $70.0 million in cash and investments, compared to approximately $85.2 million at December 31, 2012.

Conference Call, Call Replay and Webcast

Dr. Paul K. Wotton, President and Chief Executive Officer, and Robert F. Apple, EVP, Chief Financial Officer, and President of the Parenteral Products Division will provide a company update and review third quarter 2013 results via webcast and conference call on Wednesday, November 6, 2013, at 8:30 a.m. Eastern Daylight Time (EDT). A webcast of the call will be available from the investors/media section of the Company's web site at www.antarespharma.com. Alternatively, callers may participate in the conference call by dialing 1-800-762-8795 (US), or 1-480-629-9773 (International). Participants should reference the Antares Pharma conference call. Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call through 12 p.m. EDT on November 20, 2013. To access the replay, callers should dial 1-800-406-7325 (US) or 1-303-590-3030 (International) and enter passcode 4647461.

About Antares Pharma

Antares Pharma focuses on self-administered parenteral pharmaceutical products and topical gel-based medicines. The Company has received marketing approval from the U.S. Food and Drug Administration for OTREXUP™ (methotrexate) injection for the treatment of adults with severe active rheumatoid arthritis, children with active polyarticular juvenile idiopathic arthritis and adults with severe recalcitrant psoriasis. Antares Pharma is also developing VIBEX ® QS T for testosterone replacement therapy. The Company's technology platforms include VIBEX ® disposable Medi-Jet, disposable multi-use pen injectors and Vision™ reusable needle-free injectors marketed as Tjet ® and Zomajet ® by Teva Pharmaceutical Industries, Ltd (Teva) and Ferring Pharmaceuticals (Ferring), respectively. Antares Pharma has a multi-product deal with Teva that includes Tev-Tropin ® [somatropin (rDNA origin) for injection] human growth hormone (hGH), VIBEX ® epinephrine and several other products. Antares Pharma’s partnership with Ferring includes Zomacton ® hGH (somatropin) injection. In the U.S. Antares has received FDA approval for Gelnique 3%™ (oxybutynin) gel, a treatment for overactive bladder that is marketed by Actavis. Elestrin ® (estradiol gel) is FDA approved for the treatment of moderate-to-severe vasomotor symptoms associated with menopause, and is marketed in the U.S. by Meda Pharma. Antares Pharma has two facilities in the U.S. The Parenteral Products Group located in Minneapolis, Minnesota directs the manufacturing and marketing of the Company’s reusable needle-free injection devices and related disposables, and develops its disposable pressure-assisted Medi-Jet and pen injector systems. The Company’s corporate office and Product Development and Commercial Groups are located in Ewing, New Jersey.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are indicated by the words “may,” “will,” “plans,” “intends,” “believes,” “expects,” “anticipates,” “potential,” “could,” “would,” “should,” and similar expressions. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, among others, changes in revenue growth and difficulties or delays in the commercial launch of OTREXUP™, market acceptance by physicians and patients of new products, delays in product development and changes or delays in the regulatory process for existing or new product candidates. In addition, the Quick Shot testosterone and the VIBEX ® epinephrine products referred to in this press release have not yet been approved by the FDA, and the commercialization of Quick Shot testosterone and VIBEX ® epinephrine are dependent on the FDA approving these products. Additional information concerning these and other factors that may cause actual results to differ materially from those anticipated in the forward-looking statements is contained in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2012, and in the Company's other periodic reports and filings with the Securities and Exchange Commission. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. All forward-looking statements are based on information currently available to the Company on the date hereof, and the Company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this press release, except as required by law.

TABLES FOLLOW
 

ANTARES PHARMA, INC.CONSOLIDATED CONDENSED BALANCE SHEETS(amounts in thousands)
 
     

September 30, 2013
   

December 31, 2012
(Unaudited)
Assets
Cash and investments $ 70,014 $ 85,226
Accounts receivable 3,405 2,229
Inventory 1,805 1,003
Equipment, molds, furniture and fixtures, net 6,014 3,583
Patent rights 1,218 1,124
Goodwill 1,095 1,095
Other assets   1,380   1,267
Total Assets $ 84,931 $ 95,527
 
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses $ 9,554 $ 5,781
Deferred revenue 1,509 3,195
Stockholder’s equity   73,868   86,551
Total Liabilities and Stockholders’ Equity $ 84,931 $ 95,527
 
 

ANTARES PHARMA, INC.CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS(amounts in thousands except per share amounts)(Unaudited)
 
     

For the Three Months Ended September 30,
     

For the Nine Months Ended September 30,
  2013         2012     2013         2012  
Product sales $ 3,047 $ 2,052 $ 10,052 $ 7,758
Development revenue 1,300 2,606 2,681 6,330
Licensing revenue 69 77 207 812
Royalties   1,092     950     2,933     2,174  
Total Revenue 5,508 5,685 15,873 17,074
 
Cost of revenue   3,005     3,296     8,512     7,818  
Gross Profit 2,503 2,389 7,361 9,256
 
Research and development 4,318 3,900 11,786 9,260
Sales and marketing 2,576 237 4,616 528
Business development 142 220 487 785
General and administrative   1,836     1,551     5,375     5,090  
Total Operating Expenses   8,872     5,908     22,264     15,663  
 
Operating loss (6,369 ) (3,519 ) (14,903 ) (6,407 )
 
Other income and expenses   9     (15 )   31     (9 )
 
Net loss $ (6,360 ) $ (3,534 ) $ (14,872 ) $ (6,416 )
 
Basic and diluted net loss per common share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ (0.06 )
 
Basic and diluted weighted average common shares outstanding

127,162

108,962

126,581

105,736
 

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