EX-99.1 2 d73716dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Contact:

Retrophin, Inc.

Chris Cline, CFA

Director, Investor Relations

646-564-3680

IR@retrophin.com

Retrophin Reports Second Quarter 2015 Financial Results

Second quarter revenue of $24.1 million

Full year 2015 revenue projected to be $95 to $100 million

SAN DIEGO (August 4, 2015) –Retrophin, Inc. (NASDAQ: RTRX) today reported its second quarter 2015 financial results.

 

    Net product sales for the second quarter 2015 were $24.1 million, compared to net product sales of $5.7 million in the second quarter of 2014

 

    Non-GAAP operating income for the second quarter 2015 was $3.2 million, compared to a non-GAAP operating loss of $11.5 million for the same period in 2014

 

    Cash, cash equivalents and marketable securities as of June 30, 2015 totaled $133.6 million

“We are very pleased with the ongoing progress made in the second quarter,” said Stephen Aselage, Chief Executive Officer of Retrophin. “The 39 percent top-line increase over the first quarter illustrates continued robust growth of Thiola® and a strong start to the Cholbam® launch. With the advancement of RE-024 into the clinic and the recent sale of our Priority Review Voucher for $245 million, we continued to take meaningful steps to deliver long-term shareholder value.”

Quarter Ended June 30, 2015

Net product sales for the second quarter of 2015 were $24.1 million, compared to $5.7 million for the second quarter of 2014. The increase is due to the acquisition and subsequent commercial launch of two additional orphan disease products, Thiola and Cholbam.

Selling, general and administrative expenses for the second quarter of 2015 were $19.7 million on a GAAP basis, compared to $9.6 million for the same period in 2014. On a non-GAAP adjusted basis, selling, general and administrative expenses were $11.6 million for the second quarter of 2015, compared to $5.1 million for the same period in 2014. The increase is primarily driven by operational and commercialization efforts to support Thiola and Cholbam.

Research and development expenses for the second quarter of 2015 were $10.6 million on a GAAP basis, compared to $13.3 million for the same period in 2014. On a non-GAAP adjusted basis, research and development expenses were $8.6 million for the second quarter of 2015, compared to $12.1 million for the same period in 2014. The decrease is largely due to the


elimination of spend on non-core research and development efforts and timing of preclinical studies.

Total other expense for the second quarter of 2015 was $18.7 million, compared to other income of $26.5 million for the same period in 2014. The change is primarily due to a $62.4 million increase in expense related to the Company’s derivative instruments and a $2.3 million expense related to the prepayment of the Company’s $45 million credit facility due 2018. The increase in expense was offset by a $15.5 million gain resulting from the legal settlement with Questcor Pharmaceuticals, Inc. and a decrease in finance expense of $4.7 million related to the issuance of the Company’s senior convertible notes in the second quarter of 2014.

Income tax expense for the second quarter of 2015 was $0.02 million compared to a benefit of $2.5 million for the same period in 2014.

Net loss for the second quarter of 2015 was $25.5 million, or $0.73 per basic share on a GAAP basis, compared to net income of $11.8 million, or $0.46 per basic share for the same period in 2014. Non-GAAP adjusted net income for the second quarter of 2015 was $13.9 million, or $0.40 per basic share, compared to a net loss of $13.3 million, or $0.52 per basic share for the same period in 2014.

Commercial Product Updates

Thiola® (tiopronin)

 

    Retrophin continued to add Thiola patients on a weekly basis and expanded the number of prescribing physicians in the second quarter.

 

    The Company’s recently expanded 24-member salesforce began marketing on July 1, 2015 and is expected to significantly expand Thiola coverage.

Cholbam® (cholic acid)

 

    Retrophin successfully completed the transfer of approximately 30 patients from the clinical trial extension to Cholbam commercial therapy. Additionally, new patients have been identified and have started therapy.

 

    The Company is currently restructuring relationships with its distribution partners in both Europe and Asia to optimize commercial market opportunities outside of the United States.

Chenodal® (chenodeoxycholic acid)

 

    Chenodal experienced moderate growth of new cerebrotendinous xanthomatosis (CTX) patients initiating therapy in the second quarter.

 

    Retrophin continues progress towards creating an acceptable submission to the U.S. Food and Drug Administration (FDA) for the addition of CTX to the Chenodal label.

Pipeline Updates


Sparsentan

 

    The Phase 2 DUET study of sparsentan for the treatment of focal segmental glomerulosclerosis (FSGS) continues to enroll toward the target of 100 patients by year-end 2015.

RE-024

 

    The Company’s Investigational New Drug (IND) application for RE-024 was cleared by the FDA during the second quarter, and a Phase 1 study to evaluate safety and tolerability in healthy volunteers is currently being conducted. Pending a positive outcome in the Phase 1 study, the Company will request a meeting with the FDA to discuss the next clinical study for RE-024.

 

    RE-024 received orphan drug designation from the FDA for the treatment of pantothenate kinase-associated neurodegeneration (PKAN), which will provide seven years of U.S. marketing exclusivity if approved.

 

    The FDA also granted RE-024 Fast Track designation which allows for more frequent interaction with the agency during the development process and may lead to an expedited drug approval and earlier patient access.

RE-034

 

    Retrophin continues preclinical development of RE-034, which could include initiation of IND-enabling studies within the next 12 months.

Second-Half 2015 Outlook

The Company expects full year 2015 net product sales to be in the range of $95 to $100 million. Going forward, management will provide annual top-line financial guidance when year-end financial results are announced.

Conference Call Information

Retrophin will host a conference call and webcast today, Tuesday, August 4, at 4:30 p.m. ET to discuss second quarter 2015 financial results. To participate in the conference call, dial +1 855-219-9219 (U.S.) or +1-315-625-6891 (International), confirmation code 91222829 shortly before 4:30 p.m. ET. The webcast can be accessed at www.retrophin.com, in the Events and Presentations section. A replay of the call will be available 7:30 p.m. ET, August 4, 2015 to 11:59 p.m., August 11, 2015. The replay number is 855-859-2056 (U.S.) or 404-537-3406 (International), confirmation code 91222829.

Use of Non-GAAP Financial Measures

To supplement Retrophin’s financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP adjusted financial measures in this press release and the accompanying tables. The Company believes that these non-GAAP financial measures are helpful in understanding its past financial


performance and potential future results. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP. Retrophin’s management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. In addition, Retrophin believes that the use of these non-GAAP measures enhances the ability of investors to compare its results from period to period and allows for greater transparency with respect to key financial metrics the Company uses in making operating decisions.

Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future the Company may exclude other items, or cease to exclude items that it has historically excluded, for purposes of its non-GAAP financial measures; Because of the non-standardized definitions, the non-GAAP financial measures as used by the Company in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the Company’s competitors and other companies.

As used in this press release, (i) the historical non-GAAP net income (loss) measures exclude from GAAP net income (loss), as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, change in fair value of derivative liabilities, depreciation expense, non-cash interest and finance expenses; adjust the income tax provision to the estimated amount of taxes that are payable in cash; (ii) the historical non-GAAP SG&A expense measures exclude from GAAP SG&A expenses, as applicable, intangible asset amortization, stock-based compensation expense, executive severance charges, transaction and license fees, legal fee and settlements, and depreciation expense; (iii) the historical non-GAAP R&D expense measures exclude from GAAP R&D expenses, as applicable, intangible asset amortization, stock-based compensation expense, transaction and license fees and depreciation expense.

About Retrophin

Retrophin is a pharmaceutical company focused on the development, acquisition and commercialization of drugs for the treatment of serious, catastrophic or rare diseases for which there are currently no viable options for patients. The Company’s approved products include Chenodal®, Cholbam®, and Thiola®, and its pipeline includes compounds for several catastrophic diseases, including focal segmental glomerulosclerosis (FSGS), pantothenate kinase-associated neurodegeneration (PKAN), infantile spasms, nephrotic syndrome and others. For additional information, please visit www.retrophin.com.

Forward-Looking Statements

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding the research, development and commercialization of pharmaceutical products. Without limiting the foregoing, these statements


are often identified by the words “may”, “might”, “believes”, “thinks”, “anticipates”, “plans”, “expects”, “intends” or similar expressions. In addition, expressions of our strategies, intentions or plans are also forward-looking statements. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the Company’s business and finances in general, as well as risks and uncertainties associated with the Company’s pre-clinical and clinical stage pipeline as well as its sales and marketing strategies. Specifically, the risks and uncertainties the Company faces with respect to its pre-clinical and clinical stage pipeline include risk that the Company’s research programs will not identify pre-clinical candidates for further development and risk that the Company’s clinical candidates will not be found to be safe or effective. Specifically, the Company faces risk that the sparsentan Phase 2 clinical trials will fail to demonstrate that sparsentan is safe or effective; risk that the sparsentan Phase 2 program will be delayed for regulatory or other reasons; risk that the Company will be unable to complete Phase 1 clinical trials of RE-024, risk that RE-024 will not progress to Phase 2 or later clinical trials for safety, regulatory or other reasons; risk that the Company will be unable to file an IND for RE-034 or initiate Phase 1 clinical trials for regulatory or other reasons, and for each of the programs risk associated with enrollment of clinical trials for rare diseases. The Company faces risks associated with market acceptance and competition for its marketed products. The Company faces risk that it will be unable to raise additional funding required to complete development of any or all of its product candidates; risk relating to the Company’s dependence on contractors for clinical drug supply and commercial manufacturing; uncertainties relating to patent protection and intellectual property rights of third parties; risks and uncertainties relating to competitive products and technological changes that may limit demand for the Company’s products. You are cautioned not to place undue reliance on these forward-looking statements as there are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. The Company undertakes no obligation to publicly update forward-looking statement, whether as a result of new information, future events, or otherwise. Investors are referred to the full discussion of risks and uncertainties as included in the Company’s filings with the Securities and Exchange Commission.


RETROPHIN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2015

(in thousands)

 

     June 30, 2015
(unaudited)
    December 31,
2014
 

Assets

    

Current assets:

    

Cash

   $ 127,746      $ 18,204   

Marketable securities

     5,862        9,556   

Accounts receivable, net

     11,467        7,960   

Inventory, net

     2,005        801   

Pediatric priority review voucher, held for sale

     96,250        —     

Prepaid expenses and other current assets

     1,407        813   
  

 

 

   

 

 

 

Total current assets

     244,737        37,334   

Property and equipment, net

     509        671   

Other asset

     2,016        2,265   

Intangible assets, net

     168,251        94,265   

Goodwill

     936        936   

Deferred tax asset

     8,691        —     
  

 

 

   

 

 

 

Total assets

   $ 425,140      $ 135,471   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

    

Current liabilities:

    

Deferred technology purchase liability

   $ 1,000      $ 1,000   

Accounts payable

     4,778        7,124   

Accrued expenses

     20,328        27,883   

Other liability

     897        938   

Acquisition-related contingent consideration

     4,363        2,118   

Derivative financial instruments, warrants

     91,200        27,990   

Deferred income tax liability

     8,691        —     

Note payable

     41,125        40,486   
  

 

 

   

 

 

 

Total current liabilities

     172,382        107,539   

Convertible debt

     43,593        43,288   

Other liability

     12,149        12,234   

Acquisition-related contingent consideration, less current portion

     46,235        9,520   

Deferred income tax liability, net

     —          141   
  

 

 

   

 

 

 

Total liabilities

     274,359        172,722   
  

 

 

   

 

 

 

Commitments and contingencies

    

Stockholders’ Deficit:

    

Preferred stock Series A $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding

     —          —     

Common stock $0.0001 par value; 100,000,000 shares authorized; 35,072,757 and 26,428,071 issued and 35,072,757 and 26,048,480 outstanding, respectively

     3        3   

Additional paid-in capital

     318,280        140,851   

Treasury stock, at cost, none and 379,591, respectively

     —          (3,215

Accumulated deficit

     (168,262     (179,175

Accumulated other comprehensive income

     760        4,285   
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

     150,781        (37,251
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 425,140      $ 135,471   
  

 

 

   

 

 

 


RETROPHIN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

June 30, 2015

(in thousands)

 

     Three months ended June 30,     Six months ended June 30,  
     2015
(unaudited)
    2014
(restated)
    2015
(unaudited)
    2014
(restated)
 

Net product sales

   $ 24,068      $ 5,742      $ 41,440      $ 5,770   

Operating expenses:

        

Cost of goods sold

     637        35        912        36   

Research and development

     10,563        13,310        20,910        20,253   

Selling, general and administrative

     19,692        9,579        34,547        24,725   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     30,892        22,924        56,369        45,014   
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING LOSS

     (6,824     (17,182     (14,929     (39,244
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER INCOME (EXPENSE):

        

Litigation settlement gain

     15,500        —          15,500        —     

Early prepayment penalty

     (2,250     —          (2,250     —     

Other income (expense), net

     402        370        229        375   

Interest income (expense), net

     (2,922     (2,179     (6,720     (2,179

Finance expense

     —          (4,708     (600     (4,708

Change in fair value of derivative instruments-loss

     (29,418     32,979        (66,171     (20,635

Bargain purchase gain

     —          —          49,063        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     (18,688     26,462        (10,949     (27,147
  

 

 

   

 

 

   

 

 

   

 

 

 

LOSS BEFORE INCOME TAXES

     (25,512     9,280        (25,878     (66,391

Income tax benefit (provision)

     (15     2,525        40,006        2,460   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (25,527   $ 11,805      $ 14,128      $ (63,931
  

 

 

   

 

 

   

 

 

   

 

 

 

PER SHARE DATA:

        

Net income (loss) per common share, basic

   $ (0.73   $ 0.46      $ 0.45      $ (2.61
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per common share, diluted

   $ (0.73   $ (0.77   $ 0.44      $ (2.61
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding, basic

     34,957,134        25,635,277        31,079,053        24,491,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding, diluted

     34,957,134        27,326,442        34,825,722        24,491,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive Income (Loss):

        

Net income (loss)

   $ (25,527   $ 11,805      $ 14,128      $ (63,931

Unrealized gain (loss)

     (30     (103     (7     519   

Foreign currency translation

     (298     —          (3,519     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive Income (loss)

   $ (25,855   $ 11,702      $ 10,602      $ (63,412
  

 

 

   

 

 

   

 

 

   

 

 

 


RETROPHIN, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

June 30, 2015

(unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2015     2014     2015     2014  

GAAP OPERATING LOSS

   $ (6,824   $ (17,182   $ (14,929   $ (39,244

R&D Operating Expense

     (10,563     (13,310     (20,910     (20,253

Stock Compensation

     1,748        410        3,968        958   

Transaction & license fees

     —          696        150        1,565   

Amortization & Depreciation

     193        63        414        305   
  

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal non-GAAP items

     1,941        1,169        4,532        2,828   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP R&D EXPENSE

     (8,622     (12,141     (16,378     (17,425
  

 

 

   

 

 

   

 

 

   

 

 

 

SG&A Operating Expense

     (19,692     (9,579     (34,547     (24,725

Legal Expense (A)

     1,388        2,095        3,351        2,095   

Stock Compensation

     3,244        2,218        6,598        5,075   

Amortization & Depreciation

     3,463        166        5,021        179   
  

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal non-GAAP items

     8,095        4,479        14,970        7,349   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP SG&A EXPENSE

     (11,597     (5,100     (19,577     (17,376
  

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal non-GAAP items

     10,037        5,648        19,502        10,177   
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP OPERATING INCOME (LOSS)

     3,213        (11,534     4,573        (29,067
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP NET INCOME /(LOSS)

     (25,527     11,805        14,128        (63,931

Non-GAAP Operating Loss Adjustments

     10,037        5,648        19,502        10,177   

Finance Expense

     —          4,708        1,650        4,708   

Change in fair value of derivative instruments-income (loss)

     29,418        (32,979     66,171        20,635   

Bargain purchase gain, net (A)

     —          —          (49,063     —     

Income Tax (benefit)/provision (A)

     15        (2,525     (40,006     (2,460
  

 

 

   

 

 

   

 

 

   

 

 

 

NON-GAAP NET INCOME (LOSS)

   $ 13,943      $ (13,343   $ 12,382      $ (30,871
  

 

 

   

 

 

   

 

 

   

 

 

 

PER SHARE DATA:

        

Net gain (loss) per common share, basic

   $ 0.40      $ (0.52   $ 0.40      $ (1.26
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding, basic

     34,957,134        25,635,277        31,079,053        24,491,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(A) Non-recurring items