BioSpecifics Reports Second Quarter 2020 Financial and Operating Results
WILMINGTON, Del., Aug. 10, 2020 /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 North America, today announced its financial results for the second quarter ended June 30, 2020.
"While we anticipated an impact on second quarter 2020 royalty revenue due to COVID-19, our cash position remains strong, and we are projecting a rebound in XIAFLEX(®) royalties in the second half of 2020. With the recent addition of Alex Monteith as our CBO, the approval of Qwo(TM), or CCH-aaes, by the FDA and the initiation of patient dosing for XIAFLEX(®) in plantar fibromatosis and adhesive capsulitis, we are well positioned to continue to execute on our strategic initiatives of expanding the uses of the XIAFLEX platform and adding additional assets to the BioSpecifics portfolio," said Joseph Truitt, Chief Executive Officer of BioSpecifics.
Second Quarter 2020 Financial Results
As of June 30, 2020, BioSpecifics had cash and cash equivalents and investments of $119.8 million, compared to $105.8 million as of December 31, 2019.
BioSpecifics reported GAAP net income of $0.1 million for the second quarter ended June 30, 2020, or $0.02 per basic share and $0.02 per share on a fully diluted basis, compared to GAAP net income of $6.4 million, or $0.88 per basic share and $0.87 per share on a fully diluted basis, for the same period in 2019.
BioSpecifics reported non-GAAP net income of $0.8 million for the second quarter ended June 30, 2020, or $0.11 per basic share and $0.11 per share on a fully diluted basis, compared to non-GAAP net income of $6.5 million, or $0.89 per basic share and $0.89 per share on a fully diluted basis, for the same period in 2019.
Total revenue for the second quarter ended June 30, 2020 was $3.9 million, compared to $8.9 million for the same period in 2019. Revenues decreased 56% year-over-year in the second quarter ended June 30, 2020, and 60% from the first quarter ended March 31, 2020, due to the impacts of the COVID-19 pandemic, including, without limitation, the effect of significant office closures and less office visits for physician-administered products.
GAAP research and development expenses were $0.2 million for both the second quarter ended June 30, 2020 and for the same period in 2019. Non-GAAP research and development expenses for the second quarter ended June 30, 2020 were $0.1 million, compared to $0.2 million for the same period in 2019.
GAAP general and administrative expenses for the second quarter ended June 30, 2020 were $4.0 million, compared to $1.7 million for the same period in 2019. Non-GAAP general and administrative expenses for the second quarter ended June 30, 2020 were $3.2 million, compared to $1.6 million for the same period in 2019.
Provision for income taxes for the second quarter ended June 30, 2020 were $24,000, compared to $1.1 million for the same period in 2019.
As of June 30, 2020, BioSpecifics had 7,344,955 shares of common stock outstanding.
XIAFLEX(®) Franchise Highlights
-- BioSpecifics' royalty revenues from the XIAFLEX(®) commercial franchise
down 56% year-over-year: Royalty revenue from XIAFLEX(®) for the second
quarter was down as a result of the impacts of the COVID-19 pandemic,
including, without limitation, physician office closures and a decline
in patients electing to be treated. Endo expects quarter-over-quarter
revenue growth in the third quarter of 2020 to be in the mid to high 40
percent range as physician and patient activities continue returning
toward pre-COVID-19 levels.
-- Qwo(TM) (collagenase clostridium histolyticum-aaes), the first and only
U.S Food and Drug Administration (FDA)-approved injectable treatment for
cellulite: In July 2020, CCH-aaes was approved by the FDA for the
treatment of cellulite. Endo's commercial launch is expected to occur in
the first half of 2021.
-- New studies for plantar fibromatosis and adhesive capsulitis initiated
in June and July 2020, respectively: Endo dosed the first patient in a
clinical trial in plantar fibromatosis in June 2020 and adhesive
capsulitis in July 2020. Plantar fibromatosis is a non-malignant
thickening of the feet's deep connective tissue or fascia that occurs in
five to 11 percent of the adult population in the U.S. Adhesive
capsulitis, also known as frozen shoulder, is an inflammation and
thickening of the shoulder capsule due to collagen which causes
decreased motion in the shoulder that occurs in two to five percent of
the adult population in the U.S. There are currently no FDA-approved
pharmaceutical therapies available to treat either condition.
Corporate Highlights
-- Alex Monteith appointed Chief Business Officer: In July 2020,
BioSpecifics announced the appointment of Alex Monteith as Senior Vice
President and Chief Business Officer. Mr. Monteith has extensive
business development experience and industry knowledge, and last served
as Vice President of Business Development for Deerfield Management, LLC.
Non-GAAP Financial Information
This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), such as non-GAAP net income, non-GAAP net income per share, non-GAAP research and development expense, and non-GAAP general and administrative expense, because such measures exclude stock-based compensation, restructuring expense and separation costs.
These measures supplement BioSpecifics' financial results prepared in accordance with GAAP. BioSpecifics utilizes these financial measures, along with financial measures in accordance with GAAP, to evaluate the Company's operating performance. Additionally, the Company believes that non-GAAP financial measures will be used by certain investors to measure the Company's operating results. In management's opinion, these non-GAAP measures are useful to investors and other users of our financial statements by providing greater transparency into the operating performance of BioSpecifics and its future outlook. Such measures should not be deemed to be an alternative to GAAP requirements or a measure of BioSpecifics' liquidity. Non-GAAP measures are also unlikely to be comparable with non-GAAP disclosures released by other companies. See the tables below for a reconciliation of GAAP to non-GAAP measures.
About BioSpecifics Technologies Corp.
BioSpecifics Technologies Corp. is a commercial-stage biopharmaceutical company that discovered and developed a proprietary form of injectable collagenase (CCH), which is currently marketed by the Company's partner, Endo International plc (Endo), as XIAFLEX(®) in North America for the treatment of Dupuytren's contracture and Peyronie's disease. Following U.S. Food and Drug Administration approval of CCH-aaes for the treatment of moderate to severe cellulite in the buttocks of adult woman in July 2020, Endo expects Qwo(TM) to be commercially available in the first half of 2021. The XIAFLEX(®) research and development pipeline includes several additional potential indications including adhesive capsulitis and plantar fibromatosis, which are currently in clinical development by Endo. For more information, please visit www.biospecifics.com.
Forward-Looking Statements
This press release 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, shareholder value, the effect of recent management leadership changes, the timing and occurrence of commercial launches, potential indications, research and development plans, indications in development, and the assumptions underlying or relating to such statements, are "forward-looking statements." These forward-looking statements include statements regarding the commercial launch of CCH-aaes for the treatment of cellulite, as well as the impacts of the novel coronavirus (COVID-19) global pandemic. In some cases, these statements can be identified by forward-looking words such as "expect," "plan," "anticipate," "potential," "estimate," "can," "will," "continue," "believe," 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 the Company's actual results to differ materially from those indicated by such forward-looking statements, including, but not limited to: the timing of regulatory filings and action; the ability of Endo to achieve its objectives for XIAFLEX® and Qwo(TM); 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 the Company may receive; the potential of XIAFLEX® to be used in additional indications; Endo modifying its objectives or allocating resources other than to XIAFLEX® and Qwo(TM); the impacts of the novel coronavirus (COVID-19) global pandemic; and other risk factors identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, and otherwise in its filings and reports filed with the Securities and Exchange Commission. All forward-looking statements included in this press release are made as of the date hereof, are expressly qualified in their entirety by the cautionary statements included in this press release and, except as may be required by law, the Company assumes no obligation to update these forward-looking statements.
BioSpecifics Technologies Corporation
and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Three months ended Six months ended
June 30
June 30
---
2020 2019 2020 2019
---
Revenues:
Royalties $3,903,402 $8,852,986 $13,572,069 $16,982,127
Total revenues 3,903,402 8,852,986 13,572,069 16,982,127
Costs and expenses:
Research and
development 160,461 161,321 282,431 310,857
General and
administrative 3,993,861 1,728,125 7,161,907 4,635,284
Restructuring
expense 1,146,045 -
Total cost and
expenses 4,154,322 1,889,446 8,590,383 4,946,141
Operating income (250,920) 6,963,540 4,981,686 12,035,986
Other income:
Interest Income 390,888 517,156 870,597 966,580
Income before income
tax expense 139,968 7,480,696 5,852,283 13,002,566
Provision for income
tax expense (24,172) (1,054,236) (1,237,681) (2,159,511)
Net income $115,796 $6,426,460 $4,614,602 $10,843,055
Basic net income per
share $0.02 $0.88 $0.63 $1.49
Diluted net income
per share $0.02 $0.87 $0.63 $1.48
Shares used in
computation of
basic net income
per share 7,337,460 7,308,268 7,337,564 7,292,663
===
Shares used in
computation of
diluted net income
per share 7,361,764 7,349,696 7,361,256 7,344,008
===
BioSpecifics Technologies Corporation
and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Information
(unaudited)
Three months ended Six months ended
June 30 June 30
---
2020 2019 2020 2019
---
GAAP net income $115,796 $6,426,460 $4,614,602 $10,843,055
Non-GAAP adjustments:
Stock-based
compensation 162,464 118,678 472,338 260,466
Restructuring expense
(1) 1,146,045 -
Separation costs 672,025 672,025 290,439
Tax effect of
adjustments (144,116) (16,722) (484,421) (91,505)
Non-GAAP net income $806,168 $6,528,416 $6,420,588 $11,302,455
Basic net income per
share $0.11 $0.89 $0.88 $1.55
Diluted net income per
share $0.11 $0.89 $0.87 $1.54
Shares used in
computation of basic
net income per share 7,337,460 7,308,268 7,337,564 7,292,663
===
Shares used in
computation of diluted
net income per share 7,361,764 7,349,696 7,361,256 7,344,008
===
Notes to the Reconciliation of GAAP to Non-GAAP Financial Information:
(1) Restructuring expense includes $190,433 of stock-based compensation expense.
Research and development expense reconciliation:
GAAP research and
development expenses $160,461 $161,321 $282,431 $310,857
Separation costs (31,053) (31,053) -
Non-GAAP research and
development expenses $129,408 $161,321 $251,378 $310,857
General and Administrative expense reconciliation:
GAAP general and
administrative
expenses $3,993,861 $1,728,125 $7,161,907 $4,635,284
Stock-based
compensation (162,464) (118,678) (472,338) (260,466)
Separation costs (640,972) (640,972) (290,439)
Non-GAAP general and
administrative
expenses $3,190,425 $1,609,447 $6,048,597 $4,084,379
BioSpecifics Technologies Corp.
Selected Condensed Consolidated Balance Sheet Data
(Unaudited)
June 30,
December 31,
2020
2019 (1)
Cash and cash
equivalents $16,871,522 $4,999,183
Investments 102,972,062 100,808,942
Accounts
receivable 11,696,598 19,065,919
Working capital 108,217,625 107,848,984
Total assets 133,781,785 126,653,268
Deferred tax
liabilities 395,858 572,660
Total
stockholders'
equity 129,417,438 124,491,102
(1)
The selected consolidated balance sheet information for the year ended December 31,
2019 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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SOURCE BioSpecifics Technologies Corp.
