Zyla Life Sciences Reports Second Quarter 2019 Financial Results
WAYNE, Pa., Aug. 13, 2019 /PRNewswire/ -- Zyla Life Sciences (OTCQX: ZCOR) ("Zyla"), a commercial-stage life sciences company, today reported financial results for the second quarter ended June 30, 2019 including net sales from commercial products: SPRIX(®) (ketorolac tromethamine) Nasal Spray, the SoluMatrix(®) products, VIVLODEX(® )(meloxicam), TIVORBEX(® )(indomethacin) and ZORVOLEX(® )(diclofenac), INDOCIN(®) (indomethacin) suppositories, INDOCIN(®) oral suspension and OXAYDO(®) (oxycodone HCI, USP) tablets for oral use only -CII.
"The second quarter was our first full period with sales from all seven of our products, including the five new products acquired at the end of January, which resulted in net product sales of $22.0 million, almost triple the second quarter 2018 results, and positive cash flow of $1.7 million," said Bob Radie, president and chief executive officer of Zyla. "In addition, our second quarter sales and marketing, research and development and general and administrative costs remained in line with those expenses for the second quarter of 2018, demonstrating our ability to substantially increase our net product sales while keeping our expenses the same. With this second quarter performance, we believe that we are on track to achieve net product sales of between $80 and $85 million for 2019."
2019 Second Quarter Highlights
-- Appointed Dr. Gary M. Phillips to board of directors;
-- Appointed Dr. H. Jeffrey Wilkins as chief medical officer; and
-- Completed buyout of a royalty obligation associated with the
SoluMatrix(® )products.
2019 Second Quarter Financial Results
-- Cash Position: As of June 30, 2019, Zyla had cash and restricted cash
totaling $12.5 million. Cash generated from operating activities for the
three months ended June 30, 2019 was $2.6 million.
-- Net Product Sales: Net product sales were $22.0 million for the three
months ended June 30, 2019 compared to $7.4 million for the three months
ended June 30, 2018. The increase was largely due to the addition of the
five acquired products at the end of January 2019.
-- Cost of Sales (excluding product rights amortization): Cost of sales was
$14.2 million for the three months ended June 30, 2019 compared to $1.6
million for the three months ended June 30, 2018. The increase was
driven by higher product sales as a result of the five new products
acquired at the end of January, the revaluation of inventory in
connection with the reorganization and the buyout of a royalty
obligation associated with SoluMatrix products.
-- G&A Expenses: General and administrative expenses were $7.4 million for
the three months ended June 30, 2019 compared to $6.7 million for the
three months ended June 30, 2018. The increase was attributable to
administrative expense of $1.5 million which was partially offset by a
decrease in post-marketing study fees related to ARYMO(®) ER (morphine
sulfate) extended-release tablets for oral use --CII and OXAYDO, as well
as a decrease in salary expense due to reduced headcount.
-- S&M Expenses: Sales and marketing expenses were $9.1 million for the
three months ended June 30, 2019 compared to $9.0 million for the three
months ended June 30, 2018.
-- R&D Expenses: Research and development expenses were essentially zero
for the three months ended June 30, 2019 compared to $1.0 million for
the three months ended June 30, 2018. This decrease was driven by a
discontinuation of R&D programs that did not directly support the growth
of Zyla's commercial business.
-- Interest Expense: Interest expense was $3.6 million for the three months
ended June 30, 2019 compared to $3.8 million for the three months ended
June 30, 2018.
-- Net Loss: Net loss for the three months ended June 30, 2019 was $19.6
million compared to a net loss of $12.0 million for the three months
ended June 30, 2018.
Earnings Conference Call Information
Zyla's management will host a conference call to discuss the second quarter 2019 financial results today:
Date:
Tuesday, August 13, 2019
Time:
4:30 p.m. EDT
Webcast (live and archive): zyla.com (Events & Webcasts,
Investor page)
Dial-in numbers:
1-888-346-2615 (domestic)
1-412-902-4253 (international)
Replay numbers:
1-877-344-7529 (domestic)
1-412-317-0088 (international)
Conference number: 10134065
About Zyla Life Sciences
Zyla is a commercial life sciences business committed to bringing important products to patients and healthcare providers. The company is currently focused on marketing its portfolio of products for pain and inflammation. Zyla's portfolio includes seven products: SPRIX(®) (ketorolac tromethamine) Nasal Spray, ZORVOLEX(®) (diclofenac), VIVLODEX(®) (meloxicam), TIVORBEX(®) indomethacin), INDOCIN(®) (indomethacin) suppositories, INDOCIN(®) oral suspension and OXAYDO(®) (oxycodone HCI, USP) tablets for oral use only --CII. To augment its product portfolio, Zyla is seeking to acquire additional product candidates or approved products to develop and commercialize.
For full prescribing information, boxed warnings and medication guides, please visit the following sites for each product: sprix.com, vivlodex.com, zorvolex.com, tivorbex.com, and oxaydo.com. Prescribing information, the boxed warning and medication guide for INDOCIN suppositories and oral suspension can be found at dailymed.nlm.nih.gov.
Safe Harbor
Statements included in this press release that are not historical in nature and contain the words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "suggest," "target," "potential," "will," "would," "could," "should," "continue," "look forward to" and other similar expressions are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to known and unknown uncertainties and risks. Actual results could differ materially from those discussed due to a number of factors, including, but not limited to: the company's ability to continue as a going concern; the impact of Zyla's bankruptcy on its business going forward, including with regard to relationships with vendors and customers, employee attrition, and the costs and expenses resulting from its bankruptcy; the impact of the company's acquisition of five products from Iroko Pharmaceuticals, Inc., including its assumption of related liabilities, potential exposure to successor liability and credit risk of Iroko and its affiliates; Zyla's estimates regarding expenses, future revenues, capital requirements and needs for additional financing; the company's current and future indebtedness; its ability to maintain compliance with the covenants in the company's debt documents; the level of commercial success of Zyla's products; coverage of the company's products by payors and pharmacy benefit managers; Zyla's ability to execute on its sales and marketing strategy, including developing relationships with customers, physicians, payors and other constituencies; the rate and degree of market acceptance of any of Zyla's products; the success of competing products that are or become available; the entry of any generic products for any of the company's products, or any delay in or inability to reformulate SPRIX; recently enacted and future legislation and regulations regarding the healthcare system; the accuracy of Zyla's estimates of the size and characteristics of the potential markets for its products and its ability to serve those markets; the company's failure to recruit or retain key personnel, including its executive officers; obtaining and maintaining intellectual property protection for Zyla's products; the company's ability to operate its business without infringing the intellectual property rights of others; Zyla's ability to integrate and grow any businesses or products that it may acquire; the outcome of any litigation or disputes in which the company is or may be involved; general market conditions; and other risk factors set forth in Zyla's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the United States Securities and Exchange Commission (SEC) and in other filings Zyla makes with the SEC from time to time. While Zyla may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to update or revise any forward-looking-statements contained in this press release whether as a result of new information or future events, except as may be required by law.
Media and Investor Contact:
E. Blair Clark-Schoeb
Senior Vice President, Communications
Email: ir@zyla.com
Tel: 484-259-7370
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
Successor Predecessor
June 30, 2019 December 31, 2018
(unaudited)
Assets
Current assets:
Cash and cash equivalents $
12,054 $
35,323
Marketable securities, available for
sale 4,988
Accounts receivable, net 21,217 8,006
Inventory 14,585 2,639
Prepaid expenses and other current
assets 2,181 2,715
Other receivables 160 846
Total current assets 50,197 54,517
Intangible assets, net 117,477 4,281
Restricted cash 400 400
Property and equipment, net 3,752 1,059
Right of use assets, net 1,577
Goodwill 58,747
Deposits and other assets 3,423 1,676
Total assets $
235,573 $
61,933
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $
7,011 $
8,561
Accrued expenses 49,602 24,584
Debt - current, net 4,428
Acquisition-related contingent
consideration 2,500
Other current liabilities 994
Total current liabilities 64,535 33,145
Debt - non-current portion, net 93,247
Acquisition-related contingent
consideration 15,200
Deferred income tax liability 24 24
Credit agreement 3,953
Other liabilities 935 536
Total liabilities not subject to
compromise 177,894 33,705
Liabilities subject to compromise 139,588
Stockholders' equity (deficit):
Predecessor common stock--$0.001 par
value; 275,000,000 shares authorized;
56,547,101 shares issued and
outstanding at December 31, 2018 55
Successor common stock--$0.001 par
value; 100,000,000 shares authorized;
9,360,968 shares issued and outstanding
at June 30, 2019 9
Additional paid-in capital 87,806 276,569
Accumulated other comprehensive (loss)
income (10) 869
Accumulated deficit (30,126) (388,853)
Total stockholders' equity (deficit) 57,679 (111,360)
Total liabilities and stockholders'
equity $
235,573 $
61,933
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
(in thousands)
Three months ended
June 30,
2019 2018 Change
Revenue
Net product sales $
22,034 $
7,443 $
14,591
Total revenue 22,034 7,443 14,591
Costs and Expenses
Cost of sales (excluding amortization of product rights) 14,172 1,565 12,607
Amortization of product rights 3,497 531 2,966
General and administrative 7,417 6,694 723
Sales and marketing 9,135 9,019 116
Research and development 4 999 (995)
Restructuring & other charges 648 648
Change in fair value of contingent consideration payable 2,700 2,700
Total costs and expenses 37,573 18,808 18,765
Loss from operations (15,539) (11,365) (4,174)
Other (income) expense:
Change in fair value of warrant and derivative liability (3,181) 3,181
Interest expense, net 3,636 3,804 (168)
Other (gain) loss (135) (25) (110)
Loss (gain) on foreign currency exchange
Total other (income) expense 3,501 598 2,903
Reorganization items 603 603
Loss after reorganization charges and before provision (benefit) for income taxes (19,643) (11,963) (7,680)
Provision (benefit) for income taxes
Net loss $
(19,643) $
(11,963) $
(7,680)
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SOURCE Zyla Life Sciences
