Correvio Reports Second Quarter 2018 Financial Results
Management to Host Conference Call and Webcast Today,
August 14, 2018 at 4:30 p.m. Eastern (1:30 p.m. Pacific)
NASDAQ: CORV TSX: CORV
VANCOUVER, Aug. 14, 2018 /PRNewswire/ - Correvio Pharma Corp. (NASDAQ: CORV) (TSX: CORV), a revenue-generating, specialty pharmaceutical company focused on commercializing hospital drugs, today reported financial results for its second quarter ended June 30, 2018 and commented on recent accomplishments and plans.
"The first half of 2018 was marked by several important achievements, including the confirmed ability to resubmit the Brinavess(®) (vernakalant hydrochloride, IV) New Drug Application (NDA) to the Food and Drug Administration in the United States, completion of enrollment in the SPECTRUM study in Europe, and the closing of the acquisition by Cipher Pharmaceuticals Inc. of our Canadian commercial business," commented William Hunter, MD, CEO and President of Correvio. "On the revenue front, we continue to generate strong sales momentum. Year to date, our sales were up 16% year-over-year, but most importantly, our direct sales were up 64% year-over year. As we look ahead to the remainder of 2018, we believe we are well positioned to execute on our stated goal of providing meaningful revenue growth of 20-25% over 2017."
Second Quarter 2018 and Recent Highlights
Brinavess
-- Correvio received communication from the U.S. Food and Drug
Administration (FDA) regarding the regulatory path forward for Brinavess
in the U.S. In the written communication, the FDA informed the Company
that it would be permissible to resubmit the Brinavess NDA and agreed
that a pre-NDA meeting could be scheduled. Correvio currently expects
that a pre-NDA meeting with the FDA will take place during the fourth
quarter of 2018.
-- Correvio completed enrollment in the Phase 4 SPECTRUM study evaluating
Brinavess in the post-authorization setting in the European Union (EU).
In this prospective and retrospective, observational registry, 2,000
patients were enrolled and assessed to characterize normal conditions of
use, dosing and safety following administration of Brinavess. We expect
that top-line data will be available in the third quarter and the full
clinical study report will be available during fourth quarter of 2018.
Correvio plans to publish these data either in late 2018 or early 2019.
-- Correvio's Brinavess study, titled "Vernakalant in hospital emergency
practice: safety and effectiveness," published by José Carbajosa Dalmau
(Alicante, Spain), was awarded first prize for the best work published
during the year 2017 in the medical journal EMERGENCIAS, a prestigious,
emergency room focused medical journal in Spain. The award was presented
to Dr. Carbajosa Dalmau at a ceremony at the Spanish Society of
Emergency Medicine 30(th) National Congress 2018 in Toledo, Spain.
-- Correvio recently initiated the commercial launch of Brinavess in the
United Arab Emirates.
Zevtera(®)/Mabelio(®) and Xydalba(TM)
-- Fifteen abstracts were presented at the 28(th) European Congress of
Clinical Microbiology and Infectious Disease (ECCMID) highlighting
clinical and preclinical data for Correvio's commercial anti-infective
assets, Xydalba and Zevtera/Mabelio (ceftobiprole). For Xydalba, the
presentations highlight areas of unmet need and preliminary data in
treatment areas of interest beyond acute bacterial skin and skin
structure infections (ABSSSI), the indication Xydalba is currently
marketed for. Key Zevtera/Mabelio (ceftobiprole) presentations feature
important preclinical research conducted in new treatment areas of
interest, including in resistant bloodstream infections and in certain
Gram-positive bacteria.
-- Zevtera/Mabelio was launched in Spain. Xydalba received approval and was
launched in Wales and Luxembourg for the second-line treatment of ABSSSI
in adult patients.
Trevyent(®)
-- Correvio highlighted progress by SteadyMed Ltd. toward the resubmission
of an NDA for Trevyent for the treatment of pulmonary arterial
hypertension to the U.S. FDA. SteadyMed announced that it plans to
resubmit the Trevyent NDA and, subject to review by the Agency, have it
accepted for filing by the end of 2018. Correvio plans to submit a
regulatory filing for Trevyent in Europe shortly following the
acceptance of SteadyMed's NDA resubmission by the FDA.
-- SteadyMed shareholders voted to approve the previously announced
acquisition of the company by United Therapeutics Corporation at an
extraordinary general meeting of shareholders held on July 30, 2018. The
parties have announced that they expect closing of the transaction will
occur in the third quarter of this year, subject to the satisfaction of
customary closing conditions.
Corporate and Financial
-- Correvio and Cipher Pharmaceuticals Inc. completed the transfer of
Correvio's Canadian business portfolio to Cipher, including four
commercial and pipeline hospital products administered in the acute care
setting: Brinavess, Aggrastat(®) (tirofiban hydrochloride), Xydalba,
and Trevyent. Correvio received a one-time upfront payment of $24.5
million (CAD), and is scheduled to receive an additional $1 million
(CAD) from four equal quarterly installments until the second quarter
2019. This transaction only impacted Correvio's commercial operations in
Canada. Since the closing of the transaction, all of the non-Canadian
portfolio assets previously held by Cardiome Pharma Corp. are now held
by the newly-created Correvio Pharma Corp.
-- Correvio entered into an At the Market Sales Issuance Agreement with B.
Riley FBR, Inc. ("BRFBR"), pursuant to which the Company may, from time
to time sell, through "at-the-market" offerings on the Nasdaq Capital
Market, or another existing trading market in the United States with
BRFBR as agent, such number of common shares as would have an aggregate
offer price of up to $30.0 million (USD) subject to an initial limit of
$13.0 million (USD). BRFBR, at Correvio's discretion and instruction,
will use its commercially reasonable efforts to sell the common shares
at market prices from time to time. No offers or sales of common shares
will be made in Canada or through the facilities of the Toronto Stock
Exchange.
-- The Company completed changes to its stock ticker symbols. Correvio's
common shares are now trading under the trading symbol "CORV" on both
the Nasdaq and TSX.
Second Quarter 2018 Financial Results
Amounts, unless specified otherwise, are expressed in U.S. dollars and in accordance with generally accepted accounting principles used in the United States of America (U.S. GAAP).
Correvio recorded net income of $5.4 million (basic earnings per share of $0.16) for the three months ended June 30, 2018, compared to a net loss of $8.5 million (basic loss per share of $0.26) for the three months ended June 30, 2017. Net income is a direct result of the $18.5 million gain on the sale of the Canadian operations to Cipher.
Revenue for the three months ended June 30, 2018 was $6.2 million, compared to revenue of $5.8 million for the three months ended June 30, 2017. The 7% increase in revenue was primarily attributable to the commercial rollout of Xydalba and sales of Zevtera/Mabelio, which Correvio acquired from Basilea in the third quarter of 2017. Revenues generated from our direct sales grew 46% compared to the second quarter of 2017. Revenue is earned through the sale of Correvio's commercialized products. Revenue may fluctuate between periods based on the timing of large and infrequent distributor orders. These distributor orders may impact both quarterly and annual revenue figures, and the related variance compared to prior periods, because a large order may comprise a relatively large proportion of the period's total revenue. As a result, changes in revenues on a period-to-period basis may not provide a clear indication of actual sales trends. For the three months ended June 30, 2018, revenue from Correvio's cardiology products was $4.7 million and revenue from Correvio's antibiotic products was $1.5 million. For the three months ended June 30, 2017, revenue from Correvio's cardiology products accounted for $5.6 million of its total revenue of $5.8 million.
Cost of goods sold ("COGS") for the three months ended June 30, 2018 was $2.0 million, compared to COGS of $1.7 million for the three months ended June 30, 2017.
SG&A expense for the three months ended June 30, 2018 was $12.6 million, compared to $9.6 million for the three months ended June 30, 2017. The increase in SG&A expense was primarily due to expansion of Correvio's direct sales force in Europe related to the launch of its antibiotic products. Additionally, Correvio incurred business development and transaction costs in connection with the arrangement agreement with Cipher.
Interest expense was $1.7 million for the three months ended June 30, 2018, compared to $1.2 million for the three months ended June 30, 2017. The increase was due to interest being accrued on a higher long-term debt principal balance quarter over quarter, as we drew $10 million in May 2017 and an additional $10 million in August 2017.
Liquidity and Outstanding Share Capital
At June 30, 2018, the Company had cash, cash equivalents, and restricted cash of $23.9 million. As of August 13, 2018, there were 34,871,471 common shares issued and outstanding, and 3,664,874 common shares issuable upon the exercise of outstanding stock options (of which 2,113,391 were exercisable) at a weighted average exercise price of CAD $5.00 per share, and 47,872 restricted share units outstanding.
Conference Call
Correvio will hold a teleconference and webcast on August 14, 2018 at 4:30 p.m. Eastern (1:30 p.m. Pacific). To access the conference call, please dial 416-764-8688 or 888-390-0546 and use conference ID 12980324. The webcast can be accessed through the following link:
https://event.on24.com/wcc/r/1806440/C0B9D6FC0E2132792B5ECB68F02E7308
Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call through August 28, 2018. Please dial 416-764-8677 or 888-390-0541 and enter code 980324 # to access the replay.
About Correvio Pharma Corp.
Correvio Pharma Corp. is a revenue-generating, specialty pharmaceutical company focused on providing innovative, high-quality brands that meet the needs of acute care physicians and patients. With a commercial presence and distribution network covering over 60 countries worldwide, Correvio develops, acquires and commercializes brands for the in-hospital, acute care market segment. The Company's portfolio of approved and marketed brands includes: Xydalba((TM)) (dalbavancin hydrochloride), for the treatment of acute bacterial skin and skin structure infections (ABSSSI); Zevtera(®)/Mabelio(®) (ceftobiprole medocaril sodium), a cephalosporin antibiotic for the treatment of community- and hospital-acquired pneumonia (CAP, HAP); Brinavess(®) (vernakalant IV) for the rapid conversion of recent onset atrial fibrillation to sinus rhythm; Aggrastat(®) (tirofiban hydrochloride) for the reduction of thrombotic cardiovascular events in patients with acute coronary syndrome, and Esmocard(®) and Esmocard Lyo(®) (esmolol hydrochloride), a short-acting betablocker used to control rapid heart rate in a number of cardiovascular indications. Correvio's pipeline of product candidates includes Trevyent(®), a drug device combination that is designed to deliver treprostinil, the world's leading treatment for pulmonary arterial hypertension. Correvio is traded on the NASDAQ Capital Market (CORV) and the Toronto Stock Exchange (CORV). For more information, please visit our web site www.correvio.com.
Forward-Looking Statement Disclaimer
Certain statements in this news release contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 or "forward-looking information" under applicable Canadian securities legislation (collectively, "forward-looking statements"). Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that may not be based on historical fact. Forward-looking statements can often be identified by the use of terminology such as "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and similar expressions. Forward-looking statements are necessarily based on estimates and assumptions made by us based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate.
These forward-looking statements may include, but are not limited to: possible future meetings with the FDA, including the timing of any such meetings, and any possible regulatory path forward with respect to BRINAVESS®; our plans to develop and commercialize product candidates in various countries and the timing of development and commercialization; whether we or our partners will receive, and the timing and costs of obtaining, regulatory approvals for our products in various countries; clinical development of our product candidates, including the results of current and future clinical trials and the timing associated with the receipt of clinical trial results; the ability to enroll and to maintain enrollment of patients in our clinical trials; our estimates of the size of the markets and potential markets for our products; our estimates of revenues and anticipated revenues for the commercialization of products and product candidates; the range and degree of market acceptance of our products; the pricing of our products; and whether we will receive, and the timing of, reimbursement for our products in various countries.
By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. A detailed discussion of the risks and uncertainties facing Correvio are discussed in the recent annual and quarterly reports of our former parent company Cardiome Pharma Corp., the Short Form Base Shelf Prospectus filed on July 5, 2018 by Correvio, the Prospectus Supplement filed July 10, 2018 by Correvio and those risks and uncertainties detailed from time to time in our other filings with the Securities and Exchange Commission ("SEC") available at www.sec.gov and the Canadian securities regulatory authorities at www.sedar.com. All of the risks and certainties disclosed in those filings are hereby incorporated by reference in their entirety into this news release.
While Correvio makes these forward-looking statements in good faith, given these risks, uncertainties and factors, you are cautioned not to place undue reliance on any forward-looking statements made in this presentation. All forward-looking statements made herein are based on our current expectations and we undertake no obligation to revise or update such forward-looking statements to reflect subsequent events or circumstances, except as required by law. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to their inherent uncertainty.
Correvio(®) and the Correvio Logo are the proprietary trademarks of Correvio Pharma Corp.
Aggrastat(®) and Brinavess(®) are trademarks owned by Correvio and its affiliates worldwide.
Xydalba((TM)) is a trademark of Allergan Pharmaceuticals International Limited, and used under license. Zevtera(®) and Mabelio(®) are trademarks owned by Basilea Pharmaceutica International Ltd., and used under license.
Esmocard(®) and Esmocard Lyo(®) are trademarks owned by Orpha-Devel Handels und Vertriebs GmbH, and used under license.
Trevyent(®) is a trademark of SteadyMed and used under license.
All other trademarks are the property of their respective owners.
CORREVIO PHARMA CORP.
(formerly Cardiome Pharma Corp.)
Interim Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except share amounts)
June 30, December 31,
2018 2017
---- ----
Assets
Current assets:
Cash and cash equivalents $21,867 $22,081
Restricted cash 2,079 2,100
Accounts receivable, net of allowance for doubtful accounts of $135 (2017 - 6,547 6,383
$125)
Inventories 5,550 6,427
Prepaid expenses and other assets 770 961
--------------------------------- --- ---
36,813 37,952
Property and equipment 566 416
Intangible assets 28,546 27,806
Goodwill 318 318
Deferred income tax assets 320 320
-------------------------- --- ---
$66,563 $66,812
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $8,666 $7,701
Current portion of deferred revenue 303 207
----------------------------------- --- ---
8,969 7,908
Long-term debt, net of unamortized debt issuance costs and discount 39,951 40,000
Deferred revenue 2,685 2,502
Other long-term liabilities 197 212
--------------------------- --- ---
51,802 50,622
------ ------
Stockholders' equity:
Common stock 354,134 353,483
Authorized - unlimited number without par value
Issued and outstanding - 34,871,471 (2017 - 34,637,312)
Additional paid-in capital 39,929 38,443
Deficit (396,197) (392,865)
Accumulated other comprehensive income 16,895 17,129
-------------------------------------- ------ ------
14,761 16,190
------ ------
$66,563 $66,812
======= =======
CORREVIO PHARMA CORP.
(formerly Cardiome Pharma Corp.)
Interim Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(Expressed in thousands of U.S. dollars, except share and per share amounts)
Three months ended Six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Revenue:
Product and royalty revenues $6,155 $5,705 $12,673 $10,858
Licensing and other fees 23 49 48 95
------------------------ --- --- --- ---
6,178 5,754 12,721 10,953
Cost of goods sold 1,962 1,721 4,263 3,357
------------------ ----- ----- ----- -----
Gross margin 4,216 4,033 8,458 7,596
Expenses:
Selling, general and administration 12,631 9,576 23,533 17,796
Amortization 1,217 842 2,172 1,677
------------ ----- --- ----- -----
13,848 10,418 25,705 19,473
------ ------ ------ ------
Operating loss (9,632) (6,385) (17,247) (11,877)
Other income (expense):
Other expense on modification of long-term - (1,422) - (1,422)
debt
Gain on disposal of Canadian Operations 18,489 - 18,489 -
Interest expense (1,667) (1,247) (2,730) (2,034)
Other expense (39) (29) (152) (107)
Foreign exchange gain (loss) (1,677) 559 (1,291) 626
--------------------------- ------ --- ------ ---
15,106 (2,139) 14,316 (2,937)
------ ------ ------ ------
Income (loss) before income taxes 5,474 (8,524) (2,931) (14,814)
Income tax expense (recovery) 46 (12) 101 31
---------------------------- --- --- --- ---
Net income (loss) $5,428 $(8,512) $(3,032) $(14,845)
---------------- ------ ------- ------- --------
Other comprehensive income (loss):
Foreign currency translation adjustments (379) 441 (234) 527
---------------------------------------- ---- --- ---- ---
Comprehensive income (loss) $5,049 $(8,071) $(3,266) $(14,318)
========================== ====== ======= ======= ========
Earnings (loss) per common share
Basic $0.16 $(0.26) $(0.09) $(0.46)
Diluted $0.16 $(0.26) $(0.09) $(0.46)
======= ===== ====== ====== ======
Weighted average common shares
outstanding
Basic 34,871,443 32,441,211 34,763,067 32,168,840
Diluted 34,979,771 32,441,211 34,763,067 32,168,840
------- ---------- ---------- ---------- ----------
CORREVIO PHARMA CORP.
(formerly Cardiome Pharma Corp.)
Interim Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in thousands of U.S. dollars)
Three months ended Six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Operating activities:
Net income (loss) $5,428 $(8,512) $(3,032) $(14,845)
Items not affecting cash:
Amortization 1,217 842 2,172 1,677
Accretion of long-term debt 324 82 83 128
Interest paid in-kind on long-term debt 416 - 824 -
Write-down of inventory 49 - 167 70
Gain on disposal of Canadian Operations (18,489) - (18,489) -
Stock-based compensation expense 865 937 1,260 1,330
Unrealized foreign exchange gain (loss) 1,955 (800) 1,427 (972)
Changes in operating assets and liabilities:
Accounts receivable 546 447 (344) 1,176
Inventories 449 (351) 761 (1,482)
Prepaid expenses and other assets 368 285 191 102
Accounts payable and accrued liabilities 1,373 (411) 986 (1,259)
Deferred revenue 97 (49) 72 (95)
Other long-term liabilities (7) 268 (15) 260
--------------------------- --- --- --- ---
Net cash used in operating activities (5,409) (7,262) (13,937) (13,910)
Investing activities:
Proceeds on disposal of Canadian Operations 18,665 - 18,665 -
Purchase of property and equipment (64) (5) (266) (5)
Purchase of intangible assets (4,664) (1) (4,664) (13)
----------------------------- ------ --- ------ ---
Net cash provided by (used in) investing activities 13,937 (6) 13,735 (18)
Financing activities:
Issuance of common stock - 6,890 - 6,890
Share issue costs - (342) - (342)
Issuance of common stock upon exercise of stock options - 364 258 384
Income tax withholdings on vesting of restricted share units (2) (47) (23) (49)
Proceeds from issuance of long-term debt - 10,000 - 10,000
Financing fees on issuance of long-term debt - (150) (21) (150)
Payment of deferred consideration - (547) - (1,145)
--------------------------------- --- ---- --- ------
Net cash (used in) provided by financing activities (2) 16,168 214 15,588
Increase in cash, cash equivalents, and restricted cash during the period 8,526 8,900 12 1,660
------------------------------------------------------------------------- ----- ----- --- -----
Effect of foreign exchange rate changes on cash, cash equivalents and (338) 226 (247) 301
restricted cash
Cash, cash equivalents, and restricted cash, beginning of period 15,758 22,140 24,181 29,305
---------------------------------------------------------------- ------ ------ ------ ------
Cash, cash equivalents, and restricted cash, end of period $23,946 $31,266 $23,946 $31,266
========================================================== ======= ======= ======= =======
Supplemental cash flow information:
Interest paid $926 $889 $1,823 $1,636
Net income taxes paid (received) 44 35 60 (353)
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SOURCE Correvio Pharma Corp
