BioSpecifics Technologies Corp. Reports Fourth Quarter and Full Year 2018 Financial Results
LYNBROOK, N.Y., April 2, 2019 /PRNewswire/ -- BioSpecifics Technologies Corp. (NASDAQ: BSTC), a biopharmaceutical company that originated and continues to develop collagenase-based therapies with a first in class collagenase-based product marketed as XIAFLEX® in the U.S. and Xiapex® in Europe, today announced its financial results for the fourth quarter and full year ended December 31, 2018 and provided a corporate update.
"2018 has been a year of clinical progress for XIAFLEX. With the encouraging Phase 3 data from Endo's cellulite clinical trials reported in November, and more recently, the promising results from our BioSpecifics-sponsored Phase 1 clinical trial of CCH for the treatment of uterine fibroids reported this month, we are well poised for continued clinical and commercial advancements in 2019 and beyond," said Dr. Ron Law, Ph.D., J.D., Principal Executive Officer of BioSpecifics. "From a financial perspective, we were pleased to see strong XIAFLEX net sales for the whole year and a 30% increase in sales for the fourth quarter compared to the same quarter in 2017 and look forward to continued growth in both marketed indications."
Fourth Quarter and Full Year 2018 Financial Results
BioSpecifics reported net income of $6.2 million for the fourth quarter ended December 31, 2018, or $0.85 per basic share and $0.84 per share on a fully diluted basis, compared to net income of $2.6 million, or $0.37 per basic share and $0.36 per share on a fully diluted basis, for the same period in 2017. For the full year ended December 31, 2018, the Company reported a net income of $20.1 million, or $2.77 per basic share and $2.73 per share on a fully diluted basis, compared to a net income of $11.3 million, or $1.58 per basic share and $1.55 per share on a fully diluted basis for the same period in 2017.
Total revenue for the fourth quarter ended December 31, 2018 was $9.9 million, compared to $6.7 million for the same period in 2017. For the full year ended December 31, 2018, total revenue was $33.0 million, compared to $27.4 million for the same period in 2017. The increase in total revenues for the quarterly and year-end periods was primarily due to increased sales of XIAFLEX® for the treatment of Peyronie's Disease and Dupuytren's Contracture reported to us by Endo.
Royalty and mark-up on cost of goods sold (COGS) revenues recognized under BioSpecifics' agreement with Endo for the fourth quarter ended December 31, 2018 were $9.9 million compared to $6.7 million for the same period in 2017, an increase of $3.2 million or 48 percent. Total royalty and mark-up on COGS revenues for the year ended December 31, 2018 increased to $32.9 million as compared to $27.4 million in the same period in 2017. This increase in royalties and the mark-up on COGS in each quarterly and year end periods was primarily due to increased sales of XIAFLEX® for the treatment of Peyronie's Disease and Dupuytren's Contracture reported to us by Endo.
Licensing revenue consists of licensing fees, sublicensing fees and milestones. No licensing revenue was recognized for the fourth quarter ended December 31, 2018 as compared to approximately $4,000 for the same period in 2017. Licensing fees recognized for the years ended December 31, 2018 and 2017 were $40,000 and $18,000, respectively. Development licensing fees recognized for CCH are related to the cash payments received under the License Agreement in prior years and amortized over the expected development period. For the year ended December 31, 2018, we recognized the remaining nonrefundable upfront product license in accordance with ASC 606.
Research and development (R&D) expenses for the fourth quarter ended December 31, 2018 were $0.2 million compared to $0.3 million for the same period in 2017. For the year ended December 31, 2018, R&D expenses were $0.8 million, compared to $1.2 million in the same period in 2017.
General and administrative expenses for the fourth quarter ended December 31, 2018 were $2.5 million, compared to $1.6 million for the same period in 2017. For the year ended December 31, 2018, general administrative expenses were $8.8 million, compared to $8.5 million in the same period in 2017.
Provision for income taxes for the fourth quarter ended December 31, 2018 were $1.5 million, compared to $2.4 million for the same period in 2017. For the year ended December 31, 2018, provision for income taxes were $4.7 million as compared to $7.0 million in the same period of 2017.
As of December 31, 2018, BioSpecifics had cash and cash equivalents and investments of $82.0 million, compared to $65.1 million as of December 31, 2017.
As of December 31, 2018, BioSpecifics had 7.3 million shares of common stock outstanding.
Commercial & Pipeline Highlights and Anticipated Upcoming Milestones
-- XIAFLEX Commercial Franchise Expected to Grow in the Mid-to-High Teens
Percent Range in 2019: XIAFLEX future growth initiatives continue to
support the increase in consumer awareness for both Peyronie's Disease
and Dupuytren's Contracture. Endo reported expanded branded consumer
activation and unbranded disease state awareness programs for both
commercial indications in 2019.
-- Full Phase 1 Uterine Fibroids Data Presented at 66(th) Annual SRI
Scientific Meeting in March 2019: Data from the Phase 1 clinical trial
of CCH for the treatment of uterine fibroids were presented at the
66(th) Annual Meeting of the Society of Reproductive Investigation (SRI)
on March 14, 2019 in Paris, France. This presentation follows positive
top-line results announced in October 2018. The reported data showed
safety and statistically significant reductions in collagen content
compared to control fibroids with a median reduction of 39 percent
(p<0.05), as well as a 21 percent average reduction in density of
collagen bundles. BioSpecifics intends to use the Phase 1 data to inform
the development of future clinical studies.
-- Positive Phase 3 RELEASE-1 and RELEASE-2 Cellulite Data Reported: Endo
presented positive results from two Phase 3 studies, RELEASE-1 and
RELEASE-2, of CCH for the treatment of cellulite. Statistically
significant improvements with CCH versus placebo were observed for 8 of
8 (RELEASE-1) and 7 of 8 (RELEASE-2) secondary endpoints, in addition to
patient-centric endpoints. These data were presented at 2019 American
Academy of Dermatology Annual Meeting on March 2, 2019. In November
2018, Endo announced initial positive data from the two trials with
highly statistically significant levels of improvement in the appearance
in the target buttock at Day 71 reported. The study achieved the primary
endpoint (RELEASE-1, p=0.006 & RELEASE-2, p=0.002) of composite
responder analysis demonstrating at least a 2-level composite
improvement independently reported by patient and clinician on the
photonumeric scales of cellulite severity.
-- BLA filing for CCH for Cellulite Expected in 2H19: Endo expects to file
its Biologics License Application (BLA) with the U.S. Food and Drug
Administration (FDA) for CCH for the treatment of cellulite in the
second half of 2019 with an expected commercial launch in the second
half of 2020 upon approval.
Personnel Updates:
-- Promotion of Dr. Ron Law to Principal Executive Officer: In November
2018, BioSpecifics announced the appointment of Ron Law, Ph.D., J.D., as
Senior Vice President of Business Development and in March 2019, he was
promoted to Principal Executive Officer. In his new role, Dr. Law is
responsible for business development, day-to-day operations and investor
relations for BioSpecifics.
-- Promotion of Pat Caldwell to Principal Accounting Officer: In March
2019, BioSpecifics promoted Pat Caldwell to Principal Accounting
Officer. Mr. Caldwell has been a financial advisor and consultant for
the Company for 12 years. Previously, he was the Vice President of
Finance and Controller at PDL BioPharma (formerly Protein Design Labs)
for 13 years and later became a business and financial consultant for
the Company.
About BioSpecifics Technologies Corp.
BioSpecifics Technologies Corp. is a biopharmaceutical company that has developed injectable collagenase for thirteen clinical indications to date. Injectable collagenase is marketed as XIAFLEX® in the U.S. for the treatment of Dupuytren's contracture and Peyronie's disease by BioSpecifics' partner, Endo International plc (Endo). XIAFLEX® is also commercialized in Japan, Europe, Canada and Australia for Dupuytren's contracture and for Peyronie's disease in Canada, Europe and Australia. The CCH research and development pipeline includes several additional indications, including two Phase 3 clinical trials for the treatment of cellulite with top-line data reported in the fourth quarter of 2018 and a BLA submission expected in the second half of 2019 with an expected commercial launch in the second half of 2020. BioSpecifics is managing the development of CCH for the treatment of uterine fibroids with full Phase 1 data to be presented at the 66(th) Annual Society for Reproductive Investigation in March 2019. For more information, please visit www.biospecifics.com.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of, and made pursuant to the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding the Company's strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, expected revenue growth, and the assumptions underlying or relating to such statements, are "forward-looking statements." The forward-looking statements include statements concerning, among other things, whether revenue for Peyronie's disease and Dupuytren's contracture will continue to grow, whether and when the Company will hear from Endo International plc ("Endo") the results of their full commercial assessment and analysis regarding the XIAFLEX® research and development pipeline, the opportunity for minimally invasive non-surgical treatment XIAFLEX® in several potential pipeline indications, and whether BioSpecifics will achieve its corporate goals and remain profitable on an ongoing basis. In some cases, these statements can be identified by forward-looking words such as "expect," "plan," "anticipate," "potential," "estimate," "can," "will," "continue," the negative or plural of these words, and other similar expressions. These forward-looking statements are predictions based on our current expectations and our projections about future events and various assumptions. There can be no assurance that we will realize our expectations or that our beliefs will prove correct. There are a number of important factors that could cause BioSpecifics' actual results to differ materially from those indicated by such forward-looking statements, including the timing of regulatory filings and action; the ability of Endo and its partners, Asahi Kasei Pharma Corporation, Actelion Ltd. and Swedish Orphan Biovitrum AB, to achieve their objectives for XIAFLEX® in their applicable territories; the market for XIAFLEX® in, and timing, initiation and outcome of clinical trials for, additional indications, which will determine the amount of milestone, royalty, mark-up on cost of goods sold, license and sublicense income that BioSpecifics may receive; the potential of XIAFLEX® to be used in additional indications; Endo modifying its objectives or allocating resources other than to XIAFLEX®; and other risk factors identified in BioSpecifics' Annual Report on Form 10-K for the year ended December 31, 2017, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018, and September 30, 2018, and its Current Reports on Form 8-K filed or furnished with the Securities and Exchange Commission. All forward-looking statements included in this Report are made as of the date hereof, are expressly qualified in their entirety by the cautionary statements included in this Report and, except as may be required by law, we assume no obligation to update these forward-looking statements.
BioSpecifics Technologies Corp.
Consolidated Statements of Operations
Three months ended Twelve months ended
December 31
December 31
2018 2017 2018 2017
Revenues:
(Unaudited)
(Audited)
Royalties $9,853,179 $6,697,100 $32,921,764 $27,426,117
Licensing revenue 4,409 39,679 17,635
Total Revenues 9,853,179 6,701,509 32,961,443 27,443,752
Costs and expenses:
Research and development 187,128 273,918 756,776 1,223,277
General and administrative 2,460,327 1,625,823 8,805,989 8,542,324
Total costs and expenses 2,647,455 1,899,741 9,562,765 9,765,601
Operating income 7,205,724 4,801,768 23,398,678 17,678,151
Other income:
Interest Income 443,317 200,358 1,294,651 636,568
Other, net 7,285 10,422 103,948 51,074
450,602 210,780 1,398,599 687,642
Income before provision for income taxes 7,656,326 5,012,548 24,797,277 18,365,793
Provision for Income taxes (1,472,643) (2,367,958) (4,744,008) (7,037,527)
Net income $6,183,683 $2,644,590 $20,053,269 $11,328,266
Earnings per share:
Basic $0.85 $0.37 $2.77 $1.58
Diluted $0.84 $0.36 $2.73 $1.55
Shares used in calculation of earnings per share:
Basic 7,278,134 7,183,255 7,242,212 7,170,701
Diluted 7,341,864 7,309,469 7,333,368 7,321,805
BioSpecifics Technologies Corp.
Selected Consolidated Balance Sheet Data(1)
December 31
2018 2017
Cash and cash equivalents $13,176,452 $7,333,810
Investments 68,806,977 57,719,945
Accounts and income tax
receivable 16,518,687 4,655,105
Deferred tax assets 313,768 1,739,706
Working capital 95,730,439 64,241,667
Total assets 100,092,042 74,996,394
Deferred revenue 6,398,687
Total stockholders'
equity 97,588,520 67,516,838
(1)
The selected consolidated balance sheets for the years ended December 31, 2018 and 2017 have been
derived from the audited financial statements but do not include all of the information and footnotes required by
accounting principles generally accepted in the United States for complete financial statements
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