Advanced Accelerator Applications Reports 15.4% Sales Growth In The Third Quarter Of 2016 And Feedback From The FDA For Lutathera®, An Investigational Treatment For Neuroendocrine Tumors

Conference Call Today at 4:30 p.m. ET

Highlights:
  • Sales for the third quarter of 2016 increased 15.4% compared to the third quarter of 2015
  • Closed $150 million follow-on public offering and subsequent underwriters option to purchase additional $22.5 million
  • The U.S. Food and Drug Administration (FDA) issued feedback via a Discipline Review Letter on the New Drug Application (NDA) for Lutathera ® for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs)
  • The European Medicines Agency (EMA) issued a positive opinion on the Marketing Authorization Application for SomaKit TOC ®
  • Achieved marketing authorization in Switzerland for DOPAVIEW and AAACholine
  • Initiated two Phase II clinical studies evaluating 99MTc-rhAnnexin V-128 (Annexin) in cardiovascular and cardio-oncology indications

SAINT-GENIS-POUILLY, France, Nov. 28, 2016 (GLOBE NEWSWIRE) -- Advanced Accelerator Applications S.A. (NASDAQ:AAAP) ("AAA" or "the Company"), an international specialist in Molecular Nuclear Medicine (MNM), today announced its financial results for the third quarter of 2016 and that the U.S. Food and Drug Administration (FDA) issued feedback on its New Drug Application (NDA) for Lutathera ® for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs) in adults.

Third Quarter 2016 Financial Results

Total sales for the third quarter of 2016 were €26.72 million (USD (1) 30.03 million), a 15.4% year-on-year increase compared to €23.16 million (USD (1) 26.03 million) in the prior year period.

Operating loss for the third quarter of 2016 was €5.14 million (USD (1) 5.78 million), compared to a loss of €0.61 million (USD (1)  0.69 million) for the prior year period.

For the third quarter of 2016, the Company reported a net loss of €6.24 million (USD (1) 7.02 million), compared to €1.82 million (USD (1) 2.04 million) for the prior year period.

For the third quarter of 2016, adjusted EBITDA (see corresponding reconciliation exhibit below) was a loss of €1.73 million (USD (1) 1.95 million) compared to a profit of €2.13 million (USD (1) 2.4 million) for the prior year period.

In October, AAA closed a $150 million follow-on public offering of American Depositary Shares ("ADSs") representing ordinary shares of the Company at a public offering price of $38.00 per ADS, before underwriting discounts and offering expenses. After the closing of the public offering, the underwriters exercised their option to purchase up to $22.5 million of additional ADSs at the public offering price, less the underwriting discount.

(1) Translated solely for convenience into USD at the noon buying rate of¿€1.00=1.1238 at September 30, 2016.

Lutathera ® Update

Last week, the FDA issued feedback to the NDA for Lutathera ® for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs) in adults. The FDA feedback identified issues with the format, traceability, uniformity, and completeness relating to the NETTER-1 and Erasmus clinical datasets, which are precluding FDA reviewers from performing the required independent analysis of these clinical studies.

AAA will work closely with the FDA and the company's Contract Research Organizations to resolve these issues and revise the data format to permit FDA review. AAA has concluded at this time that approval of Lutathera ® is unlikely to occur by the PDUFA date of December 28, 2016. The FDA comments were provided via a Discipline Review Letter, which is a letter sent to an applicant to convey early thoughts on possible deficiencies of an application. The letter refers to reviews of the Clinical, Statistical, and Clinical Pharmacology sections of the submission. The FDA noted that their feedback does not reflect a final decision, is preliminary and subject to change.

Stefano Buono, Chief Executive Officer of AAA, commented, "Our belief in Lutathera's potential to benefit patients remains steadfast. We are disappointed by the delay that we expect this development to cause in the FDA's consideration of Lutathera's NDA and are focused on addressing these issues as soon as possible. We are engaging additional resources to facilitate the delivery of datasets meeting the requirements outlined by the FDA."

Buono continued , "To help address the needs of the U.S. NET patient community until this situation is resolved, we are planning to extend our Expanded Access Program (EAP). More than 30 patients across seven centers in the U.S. have received Lutathera ® since the EAP's initiation in July 2016, and several additional centers will become active before the end of the year. In addition, our medical team will be using this time to continue their work with NET centers and providers around the country to ensure that they have the infrastructure and processes necessary to properly manage the administration of a Peptide Receptor Radionuclide Therapy (PRRT)."

In September, AAA announced that the Accelerated Assessment timeline for the EMA's review of the Marketing Authorization Application for Lutathera ®, had been modified to a standard review period due to additional clarifications requested by the EMA, as well as their request to inspect one of AAA's contract research organizations.

Additional Operational Updates

In October, AAA announced that the EMA issued a positive opinion on the Marketing Authorization Application for SomaKit TOC ® 40 µg, a kit for radiopharmaceutical preparation of gallium Ga 68 edotreotide solution for injection, for PET imaging of somatostatin receptor overexpression in adult patients with confirmed or suspected well-differentiated gastroenteropancreatic neuroendocrine tumors (GEPNET) for localizing primary tumors and their metastases.

In November, AAA announced that marketing authorization in Switzerland for two Positron Emission Tomography (PET) products, DOPAVIEW and AAACholine.

In September, AAA announced initiation of two Phase II clinical studies evaluating 99MTc-rhAnnexin V-128 (Annexin), a single-photon emission computed tomography (SPECT) diagnostic candidate for the assessment of apoptosis and necrosis, forms of cell death in cardiovascular and cardio-oncology indications.

Conference Call Information

Advanced Accelerator Applications management will host a conference call today at 4:30 p.m. ET. Interested parties may participate by dialing 877-407-8133 (US) or +1-201-689-8040 (International), approximately five minutes before the call start time. A live webcast of the conference call will be available at: http://www.investorcalendar.com/IC/CEPage.asp?ID=175484. A replay of the call will be available through December 28, 2016, at 11:59 p.m. ET. Interested parties may access the replay by dialing 877-481-4010 (US) or +1-919-882-2331 (International) and entering ID number 10163. An archived webcast of the conference call will be available for 90 days on the Investor Relations page of the Advanced Accelerator Applications website: www.adacap.com.

About Lutathera ®

Lutathera ® (or lutetium Lu 177 dotatate) is a Lu-177-labeled somatostatin analogue peptide currently in development for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs), including foregut, midgut, and hindgut neuroendocrine tumors in adults. Lutathera ® belongs to an emerging form of treatments called Peptide Receptor Radionuclide Therapy (PRRT), which involves targeting neuroendocrine tumors with radiolabeled somatostatin analogue peptides. This novel compound has received orphan drug designation from the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA). Currently, Lutathera ® is administered on a compassionate use and named patient basis for the treatment of NETs and other tumors over-expressing somatostatin receptors in ten European countries and in the US under an Expanded Access Program (EAP) for midgut NETs. In the analysis of the Lutathera ® Phase III NETTER-1 trial's primary endpoint of Progression Free Survival (PFS), the number of patients having disease progression or death was 23 in the Lutathera ® arm and 68 in the Octreotide LAR 60 mg arm. The NETTER-1 study met its primary endpoint by demonstrating that treatment with Lutathera ® was associated with a statistically significant and clinically meaningful risk reduction of 79% of disease progression or death versus Octreotide LAR 60 mg (hazard ratio 0.21, 95% CI: 0.13-0.33; p<0.0001).  New Drug Application and Marketing Authorization Application submissions to the FDA and EMA are currently under review.    About Advanced Accelerator Applications

Advanced Accelerator Applications (AAA) is an innovative radiopharmaceutical company that develops, produces and commercializes Molecular Nuclear Medicine (MNM) products. AAA's lead therapeutic product candidate, Lutathera ®, is a novel MNM compound that AAA is currently developing for the treatment of Neuro Endocrine Tumors, a significant unmet medical need. Founded in 2002, AAA has its headquarters in Saint-Genis-Pouilly, France. AAA currently has 22 production and R&D facilities able to manufacture both diagnostics and therapeutic MNM products, and has over 480 employees in 13 countries (France, Italy, UK, Germany, Switzerland, Spain, Poland, Portugal, The Netherlands, Belgium, Israel, U.S. and Canada). AAA reported sales of €88.6 million in 2015 (+26.8% vs. 2014). AAA is listed on the Nasdaq Global Select Market under the ticker "AAAP". For more information, please visit: www.adacap.com.

About Molecular Nuclear Medicine ("MNM")

Molecular Nuclear Medicine is a medical specialty using trace amounts of active substances, called radiopharmaceuticals, to create images of organs and lesions and to treat various diseases, like cancer. The technique works by injecting targeted radiopharmaceuticals into the patient's body that accumulate in the organs or lesions and reveal specific biochemical processes. MNM can be divided in two branches: Molecular Nuclear Diagnostics and Molecular Nuclear Therapy. Molecular nuclear diagnostics employs a variety of imaging devices and radiopharmaceuticals. PET (Positron Emission Tomography) and SPECT (Single Photon Emission Tomography) are highly sensitive imaging technologies that enable physicians to diagnose different types of cancer, cardiovascular diseases, neurological disorders and other diseases in their early stages. Molecular nuclear therapy uses radioactive sources (radionuclides) to treat a range of tumor types. Using short-range particles, this therapy can target tumors with little effect on normal tissues.

Reconciliation of adjusted EBITDA to net loss for the year from continuing operations for the three and nine months ended September 30, 2016 and 2015

      Three months   Three months   Nine months
      September 30, 2016   September 30, 2016 September 30, 2015   September 30, 2016 September 30, 2015
      in USD thousands (1)   In € thousands   In € thousands
                   
  Net loss for the period from continuing operations         (7,016 )       (6,243 )     (1,818 )       (10,651 )     (10,281 )
                   
  Adjustments                
  Finance income (including changes in fair value of contingent consideration)       (480 )       (427 )     (447 )       (812 )     (160 )
  Finance costs (including changes in fair value of contingent consideration)       1,688         1,502       1,358         4,659       5,297  
  Income taxes       28         25       293         (422 )     982  
  Depreciation and amortization       3,834         3,411       2,748         9,838       8,208  
                   
  Adjusted EBITDA       (1,946 )       (1,732 )     2,134         2,612       4,046  
  Sales       30,031         26,723       23,164         81,282       66,138  
  Adjusted EBITDA margin     -6.48 %     -6.48 %   9.21 %     3.21 %   6.12 %
                   
  (1)Translated solely for convenience into dollars at the noon buying rate of¿EUR 1.00=USD 1.1238 at September 30, 2016.  

  Cautionary Statement Regarding Forward-Looking Statements

This press release may contain forward-looking statements. All statements, other than statements of historical facts, contained in this press release, including statements regarding the Company's strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements relating to PDUFA target action date, reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the timing of our submission of applications for regulatory approvals, EMA, FDA and other regulatory approvals for our product candidates, the occurrence of side effects or serious adverse events caused by or associated with our products and product candidates; our ability to procure adequate quantities of necessary supplies and raw materials for Lutathera and other chemical compounds acceptable for use in our manufacturing processes from our suppliers; our ability to organize timely and safe delivery of our products or product candidates by third parties; any problems with the manufacture, quality or performance of our products or product candidates; the rate and degree of market acceptance and the clinical utility of Lutathera and our other products or product candidates; our estimates regarding the market opportunity for Lutathera, our other product candidates and our existing products; our anticipation that we will generate higher sales as we diversify our products; our ability to implement our growth strategy including expansion in the U.S.; our ability to sustain and create additional sales, marketing and distribution capabilities; our intellectual property and licensing position; legislation or regulation in countries where we sell our products that affect product pricing, taxation, reimbursement, access or distribution channels; and general economic, political, demographic and business conditions in Europe, the U.S. and elsewhere. Except as required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015
                 
                 
    Three months   Nine months    
  In € thousands September 30, 2016 September 30, 2015   September 30, 2016 September 30, 2015    
                 
  Sales     26,723       23,164         81,282       66,138      
  Raw materials and consumables used     (6,072 )     (4,827 )       (17,268 )     (13,918 )    
  Personnel costs     (10,789 )     (7,535 )       (29,716 )     (20,505 )    
  Other operating expenses     (12,098 )     (10,201 )       (34,925 )     (31,879 )    
  Other operating income     504       1,533         3,239       4,210      
  Depreciation and amortization     (3,411 )     (2,748 )       (9,838 )     (8,208 )    
                 
  Operating loss     (5,143 )     (614 )       (7,226 )     (4,162 )    
                 
  Finance income (including changes in fair value of contingent consideration)     427       447         812       160      
  Finance costs (including changes in fair value of contingent consideration)     (1,502 )     (1,358 )       (4,659 )     (5,297 )    
                 
  Net finance loss     (1,075 )     (911 )       (3,847 )     (5,137 )    
                 
  Loss before income taxes     (6,218 )     (1,525 )       (11,073 )     (9,299 )    
                 
  Income taxes     (25 )     (293 )       422       (982 )    
                 
  Loss for the period     (6,243 )     (1,818 )       (10,651 )     (10,281 )    
                 
  Attributable to:                
  Owners of the company     (6,243 )     (1,818 )       (10,651 )     (10,281 )    
                 
  Loss per share              
  Basic (€ per share)     (0.08 )     (0.03 )       (0.14 )     (0.16 )    
  Diluted (€ per share)     (0.08 )     (0.03 )       (0.14 )     (0.16 )    
                 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015
                 
      Three months   Nine months    
    In € thousands September 30, 2016 September 30, 2015   September 30, 2016 September 30, 2015    
    Loss for the period     (6,243 )     (1,818 )       (10,651 )     (10,281 )    
                   
    Other comprehensive income / (expense):                
                   
    Items that may be reclassified subsequently to profit or loss              
      Exchange differences on translating foreign operations     25       (1,714 )       (374 )     2,173      
                   
    Items that will never be reclassified subsequently to profit or loss              
      Remeasurement of defined benefit liability     9       1         (34 )     38      
                   
    Other comprehensive income / (expense) net of tax (1)     34       (1,713 )       (408 )     2,211      
    Total comprehensive loss for the year     (6,209 )     (3,531 )       (11,059 )     (8,070 )    
                   
    Total comprehensive loss attributable to:                
      Owner of the company     (6,209 )     (3,531 )       (11,059 )     (8,070 )    
                   
    (1) Negative tax effect of €5 thousand at Q3 2016 and nil tax effect at Q3 2015. Positive tax effect of €17 thousand for the nine months ended September 30, 2016 and negative tax effect of €19 thousand for the nine months ended September 30, 2015.    
                   

     

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AT SEPTEMBER 30, 2016
  ASSETS (in € thousands) September 30, 2016 December 31, 2015
    Non-current assets   149,524     116,872  
      Goodwill   33,487     22,662  
      Other intangible assets   45,010     31,884  
      Property, plant and equipment   62,463     56,332  
      Financial assets   1,404     1,512  
      Other non-current assets   6,523     4,185  
      Defered Tax assets   637     297  
    Current assets   119,640     157,231  
      Inventories   6,886     4,105  
      Trade and other receivables   29,366     23,625  
      Other current assets   10,511     10,615  
      Cash and cash equivalents   72,877     118,886  
  TOTAL ASSETS     269,164       274,103  
           
  EQUITY AND LIABILITIES (in € thousands) September 30, 2016 December 31, 2015
    Equity attributable to owners of the Company   162,915     169,754  
      Share capital   7,856     7,856  
      Share premium   213,982     213,982  
      Reserves and retained earnings   (48,272 )   (35,083 )
      Net loss for the period/year   (10,651 )   (17,001 )
    Total equity   162,915     169,754  
    Non-current liabilities   67,417     68,341  
      Non-current provisions   10,719     9,968  
      Non-current financial liabilities   13,403     16,205  
      Deferred tax liabilities   4,816     2,804  
      Other non-current liabilities   38,479     39,364  
    Current liabilities   38,832     36,008  
      Current provisions   1,018       -   
      Current financial liabilities   3,909     5,560  
      Trade and other payables   15,422     14,710  
      Other current liabilities   18,483     15,738  
    Total liabilities   106,249     104,349  
  TOTAL EQUITY AND LIABILITIES     269,164       274,103  
                           

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015
         
    Nine months  
  In € thousands September 30, 2016 September 30, 2015  
  Cash flows from operating activities      
  Net loss for the period   (10,651 )   (10,281 )  
         
  Adjustments:        
  Depreciation, amortization and impairment of non-current assets   9,838     8,208    
  Share based payment expense   4,220     1,145    
  Loss / (Gain) on disposal of property, plant and equipment   265     (3 )  
  Financial result   3,847     5,137    
  Income tax expense   (422 )   982    
  Negative goodwill   (127 )     -     
   Subtotal   6,970     5,188    
         
  (Increase)/decrease in inventories   (2,140 )   (994 )  
  (Increase)/decrease in trade receivables   (4,836 )   (7,236 )  
  Increase/(decrease) in trade payables   1,900     247    
  Change in other receivables and payables   (5,326 )   (937 )  
  Increase / (decrease) in provisions   864     224    
  Change in working capital     (9,538 )   (8,697 )  
         
  Income tax paid    (1,754 )   (1,138 )  
  Net cash used in operating activities   (4,322 )   (4,647 )  
         
  Cash flows from investing activities      
  Acquisition of property, plant and equipment   (10,234 )   (7,451 )  
  Acquisition of intangible assets   (1,241 )   (723 )  
  Acquisition of financial assets   (62 )   (70 )  
  Reimbursement of financial assets   383     278    
  Interests received   389     230    
  Proceeds from disposal of property, plant and equipment   86     115    
  Proceeds from government grants   37       -     
  Acquisition of subsidiaries, net of cash acquired   (22,453 )     -     
  Net cash used in investing activities   (33,095 )   (7,621 )  
         
  Net cash from financing activities      
  Payment of deferred and contingent liabilities to former owners of acquired subsidiaries   (2,878 )   (200 )  
  Issuance of share capital     -      23,297    
  Repayment of borrowings    (4,397 )   (3,719 )  
  Interests paid   (405 )   (427 )  
  Net cash (used) / generated in   financing activities   (7,680 )   18,951    
         
  Net (decrease) / increase in cash and cash equivalents   (45,097 )   6,683    
         
  Cash and cash equivalents at the beginning of the period   118,886     45,096    
  Effect of exchange rate changes on cash and cash equivalents   (912 )   506    
  Cash and cash equivalents at the end of the period   72,877     52,285    
         
Contacts:AAA Investor RelationsJordan SilversteinDirector of Investor Relationsjordan.silverstein@adacap.comTel: + 1-212-235-2394AAA Corporate CommunicationsRachel LevineDirector of Communicationsrachel.levine@adacap.comTel: + 1-212-235-2395Media inquiries:Makovsky & CompanyLee Daviesldavies@makovsky.comTel: +212-508-9651Axess Public Relations (Italy)Dario Francolinodario.francolino@axesspr.comTel: +39 3488818029

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