Correvio Reports Second Quarter 2019 Financial Results
FDA Accepts New Drug Application for Brinavess(TM); PDUFA Date Set for December 24, 2019
Recently Strengthened Balance Sheet Extends Cash Runway Into Mid-2020
Management to Host Conference Call and Webcast Today,
August 14, 2019 at 8:30 a.m. Eastern (5:30 a.m. Pacific)
NASDAQ: CORV TSX: CORV
VANCOUVER, Aug. 14, 2019 /PRNewswire/ - Correvio Pharma Corp. (NASDAQ: CORV) (TSX: CORV), a specialty pharmaceutical company focused on commercializing hospital drugs, today reported financial results for its second quarter ended June 30, 2019 and commented on recent accomplishments and plans.
"The first half of 2019 has been marked by several positive achievements, culminating in acceptance by the U.S. Food and Drug Administration (FDA) of our resubmitted New Drug Application (NDA) seeking approval for Brinavess (vernakalant hydrochloride, IV) for the treatment of adult patients with recent onset atrial fibrillation (AF)," said Mark H.N. Corrigan, MD, Chief Executive Officer of Correvio. "We will be working closely with the FDA during the next several months as they work toward the target action date of December 24, 2019. On the commercial front, we saw another strong period with second quarter revenues totaling $7.4 million, a 20% increase in U.S. dollars and a 25% increase in local currencies, compared to the same prior year period. These sales increases continue to be driven by our anti-infective assets, Xydalba(TM) and Zevtera(®)/Mabelio(®)."
Second Quarter 2019 and Recent Highlights
Corporate and Financial
-- Correvio completed an underwritten public offering whereby it issued 9.2
million shares of its common stock, which included the exercise of the
underwriter's over-allotment option in full, at a price to the public of
$1.50 per common share. Aggregate gross proceeds to Correvio totaled
$13.8 million, before deducting the underwriting commission and
estimated offering expenses payable by the Company.
Brinavess(®)
-- The U.S. FDA accepted for filing Correvio's resubmitted NDA seeking
approval for Brinavess for the rapid conversion of adult patients with
recent onset AF. The FDA assigned a target action date of December 24,
2019 under the Prescription Drug User Fee Act (PDUFA).
-- An abstract highlighting the results of the SPECTRUM study was selected
for a poster presentation at the upcoming European Society of Cardiology
(ESC) 2019 Congress taking place August 31 - September 4, 2019, in
Paris. The Brinavess NDA is supported by data from SPECTRUM, which is a
post-approval safety study that was conducted in Europe and evaluated
1,778 unique patients across a total of 2,009 treatment episodes
following administration of Brinavess. In the previously reported
top-line data from SPECTRUM, it was demonstrated that treatment with
Brinavess successfully converted 70.2% (95% confidence interval; 68.1 -
72.2) of all treated patients.
Trevyent(®)
-- Trevyent licensor SteadyMed Ltd., a subsidiary of United Therapeutics
(NASDAQ:UTHR), resubmitted to the FDA its NDA seeking approval for
Trevyent for the treatment of pulmonary arterial hypertension. The NDA
was resubmitted on June 27, 2019. United Therapeutics has granted
Correvio access to the Trevyent NDA and Correvio plans to submit a
regulatory filing for Trevyent in Europe in mid-2020.
Aggrastat(®)/Esmocard(®)
-- In July, Correvio returned commercialization rights to Esmocard and
Esmocard Lyo in Italy and France to licensor Amomed Pharma GmbH. In
exchange, Correvio regained from Amomed commercialization rights to
Aggrastat in Austria, Switzerland, and the Balkans. Correvio expects
this transaction to have a net positive impact on product revenues
beginning in the third quarter of 2019.
Zevtera(®)/Mabelio(®) and Xydalba((TM))
-- Twenty-two abstracts were presented at the 29(th) European Congress of
Clinical Microbiology and Infectious Disease (ECCMID) highlighting
clinical, preclinical and surveillance data for Correvio's marketed
anti-infective assets, Xydalba (dalbavancin hydrochloride) and
Zevtera/Mabelio (ceftobiprole).
Second Quarter 2019 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 a net loss of $10.5 million (basic loss per share of $0.26) for the three months ended June 30, 2019, compared to a net income of $5.4 million (basic earnings per share of $0.16) for the three months ended June 30, 2018.
Revenue earned through the sales of Correvio's commercialized products for the three months ended June 30, 2019 was $7.4 million, compared to revenue of $6.2 million for the three months ended June 30, 2018. The 20% increase in revenue was primarily attributable to an increase in sales of the Company's antibiotic products, Xydalba and Zevtera/Mabelio. 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.
Cost of goods sold (COGS) for the three months ended June 30, 2019 was $2.4 million, compared to COGS of $2.0 million for the three months ended June 30, 2018.
Sales, general and administrative (SG&A) expense for the three months ended June 30, 2019 and the three months ended June 30, 2018 were $12.6 million. During the second quarter of 2019, the Company had higher regulatory and medical costs associated with the resubmission of the Brinavess NDA, and the second quarter of 2018 included one-time business development and transaction costs associated with the Cipher Pharmaceuticals transaction.
Interest expense was $1.9 million for the three months ended June 30, 2019, compared to $1.7 million for the three months ended June 30, 2018. The increase was due to interest being accrued on a higher long-term debt principal amount.
Liquidity and Outstanding Share Capital
At June 30, 2019, the Company had cash, cash equivalents, and restricted cash of $14.8 million. As of August 13, 2019, there were 50,505,875 common shares issued and outstanding, and 4,867,400 common shares issuable upon the exercise of outstanding stock options (of which 3,150,729 were exercisable) at a weighted average exercise price of CAD $4.89 per share, and 129,904 restricted share units outstanding.
Conference Call
Correvio will hold a teleconference and webcast on August 14, 2019 at 8:30 a.m. Eastern (5:30 a.m. Pacific). To access the conference call, please dial (416) 764-8688 or (888) 390-0546 and use conference ID 16136170. The webcast can be accessed through the following link:
https://event.on24.com/wcc/r/2065041/13F074EBA4F3409ADD4B14B5E7967036
Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call through August 28, 2019. Please dial (416) 764-8677 or (888) 390-0541 and enter code 136170# to access the replay.
About Correvio Pharma Corp.
Correvio Pharma Corp. is a 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(®(TM)) (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. 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", "look forward to" 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.
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. These forward-looking statements include, but are not limited to, statements relating to; the Company's plans to submit a regulatory filing for Trevyent in Europe in mid-2020; the Company's expectation that the return of commercialization rights to Esmocard and Esmocard Lyo to Amomed Pharma GmbH in exchange for the reacquisition by the Company of the rights to Aggrastat in Austria, Switzerland and the Balkans will have a net positive impact on revenue beginning in the third quarter of 2019; the FDA's acceptance of the refiling as a complete resubmission and the FDA's continued willingness to work with the Company on the resubmission. In particular, no statement herein should be understood to mean that: (i) that out resubmission will be deemed to be complete by the FDA; (ii) that the FDA will find our underlying clinical trial data to be acceptable; (iii) that the FDA will find our manufacturing sites acceptable and validate them; or (iv) that our NDA will ultimately be approved by the FDA. Furthermore, the timing of any action by the FDA and possible regulatory paths forward cannot be guaranteed, in that, for example: (i) the FDA plans to hold an Advisory Committee meeting; (ii) the FDA may miss its own required deadlines (including for example, the PDFUA date); and (iii) the FDA may require further information or additional clinical studies. Finally, no statement provided herein should be understood to provide an estimate of the current or future prevalence of atrial fibrillation or the market potential for Brinavess in the United States.
A detailed discussion of the risks and uncertainties facing Correvio are discussed in the annual report and 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. In particular, we direct your attention to Correvio's Annual Report on Form 40-F for the year ended December 31, 2018 and its quarterly report filed May 8, 2019 for the first quarter of 2019. 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 press release. 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(®(TM)) 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.
Trevyent(®) is a trademark of SteadyMed Ltd. 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
(In thousands of U.S. dollars, except share amounts)
June 30, December 31,
2019 2018
(unaudited)
Assets
Current assets:
Cash and cash equivalents $
12,882 $
15,596
Restricted cash 1,966 1,974
Accounts receivable, net of allowance for doubtful accounts of $103 (2018 - $102) 8,207 7,723
Inventories 3,930 4,158
Prepaid expenses and other assets 2,140 841
---
29,125 30,292
Property and equipment 537 512
Right-of-use assets from operating leases 2,225
Intangible assets 24,418 26,469
Long-term inventories 1,753 1,663
Goodwill 318 318
Deferred income tax assets 372 383
$
58,748 $
59,637
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $
12,097 $
9,403
Current portion of long-term debt, net of unamortized debt issuance costs 4,520
Current operating lease liabilities 739
---
17,356 9,403
Long-term debt, net of unamortized debt issuance costs 38,626 41,517
Deferred revenue 1,243 1,252
Long-term operating lease liabilities 1,741
Other long-term liabilities 555
---
58,966 52,727
Stockholders' equity:
Common stock 370,486 359,295
Authorized - unlimited number without par value
Issued and outstanding - 41,305,709 (2018 - 36,233,162)
Additional paid-in capital 41,737 40,456
Deficit (429,209) (409,744)
Accumulated other comprehensive income 16,768 16,903
---
(218) 6,910
$
58,748 $
59,637
CORREVIO PHARMA CORP.
(formerly Cardiome Pharma Corp.)
Interim Consolidated Statements of Operations and Comprehensive Loss
For the three and six months ended June 30, 2019 and 2018
(In thousands of U.S. dollars, except share and per share amounts)
(Unaudited)
Three months ended Six months ended
---
June 30, June 30, June 30, June 30,
2019 2018 2019 2018
---
Revenue:
Product and royalty revenues $
7,389 $
6,155 $
14,640 $
12,673
Licensing and other fees - 23 48
--- ---
7,389 6,178 14,640 12,721
Cost of goods sold 2,413 1,962 4,654 4,263
--- ---
Gross margin 4,976 4,216 9,986 8,458
Expenses:
Selling, general and administration 12,615 12,631 23,806 23,533
Amortization and depreciation 976 1,217 1,960 2,172
13,591 13,848 25,766 25,705
---
Operating loss (8,615) (9,632) (15,780) (17,247)
Other (expense) income:
Gain on disposal of Canadian Operations - 18,489 18,489
Interest expense (1,912) (1,667) (3,602) (2,730)
Other expense (9) (39) (107) (152)
Foreign exchange gain (loss) 97 (1,677) 81 (1,291)
--- ---
(1,824) 15,106 (3,628) 14,316
---
(Loss) income before income taxes (10,439) 5,474 (19,408) (2,931)
Income tax expense (30) (46) (57) (101)
--- ---
Net (loss) income $
(10,469) $
5,428 $
(19,465) $
(3,032)
--- ---
Other comprehensive (loss) income:
Foreign currency translation adjustments 205 (379) (135) (234)
--- ---
Comprehensive (loss) income $
(10,264) $
5,049 $
(19,600) $
(3,266)
--- ---
(Loss) earnings per common share
Basic and diluted $
(0.26) $
0.16 $
(0.49) $
(0.09)
=== ===
Weighted average common shares
outstanding
Basic 40,301,286 34,871,443 39,564,238 34,763,067
Diluted 40,301,286 34,979,771 39,564,238 34,763,067
--- ---
CORREVIO PHARMA CORP.
(formerly Cardiome Pharma Corp.)
Interim Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2019 and 2018
(In thousands of U.S. dollars)
(Unaudited)
Three months ended Six months ended
---
June 30, June 30, June 30, June 30,
2019 2018 2019 2018
---
Operating activities:
Net (loss) income $
(10,469) $
5,428 $
(19,465) $
(3,032)
Items not affecting cash:
Amortization and depreciation 976 1,217 1,960 2,172
Accretion of long-term debt 542 324 915 83
Interest paid in-kind on long-term debt 434 416 859 824
Write-down of inventory 131 49 181 167
Gain on disposal of Canadian Operations (18,489) (18,489)
Stock-based compensation expense 766 865 1,384 1,260
Unrealized foreign exchange (gain) loss (208) 1,955 109 1,427
Changes in operating assets and liabilities:
Accounts receivable (301) 546 (896) (344)
Inventories 339 449 (80) 761
Prepaid expenses and other assets 729 368 (1,153) 191
Accounts payable and accrued liabilities 913 1,373 2,447 986
Deferred revenue 97 72
Other long-term liabilities (2) (7) (22) (15)
Net cash used in operating activities (6,150) (5,409) (13,761) (13,937)
Investing activities:
Proceeds on disposal of Canadian Operations 186 18,665 376 18,665
Purchase of property and equipment (30) (64) (98) (266)
Purchase of intangible assets (1) (4,664) (13) (4,664)
Net cash provided by investing activities 155 13,937 265 13,735
Financing activities:
Issuance of common stock 3,271 11,618 -
Share issue costs (139) (543) -
Issuance of common stock upon exercise of stock options 258
Income tax withholdings on vesting of restricted share units (2) (23)
Financing fees on issuance of long-term debt (288) (288) (21)
Net cash provided by (used in) financing activities 2,844 (2) 10,787 214
(Decrease) increase in cash, cash equivalents, and restricted (3,151) 8,526 (2,709) 12
cash during the period
--- ---
Effect of foreign exchange rate changes on cash, cash 98 (338) (13) (247)
equivalents and restricted cash
Cash, cash equivalents, and restricted cash, beginning of period 17,901 15,758 17,570 24,181
--- ---
Cash, cash equivalents, and restricted cash, end of period $
14,848 $
23,946 $
14,848 $
23,946
=== ===
Supplemental cash flow information:
Interest paid $
936 $
926 $
1,828 $
1,823
Net income taxes paid 70 44 70 60
=== ===
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SOURCE Correvio Pharma Corp
