Theravance Reports Third Quarter 2015 Financial Results
"We saw positive trends in prescriptions and market share for both RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® in the third quarter, even though summer traditionally is a slower season for COPD and Asthma products," said
As part of the repurchase plan,
Highlights
Theravance paid a cash dividend of$0.25 per share onSeptember 30, 2015 to stockholders of record as of the close of business onSeptember 10, 2015 .
- In the third quarter of 2015, net sales of RELVAR®/BREO® ELLIPTA® by GSK were
$97.8 million , comprised of$40.4 million in the U.S. market (an increase of 44 percent from the prior quarter in the U.S.) and$57.4 million in non-U.S. markets (a smaller increase of 7 percent from the prior quarter primarily due to slower summer sales inEurope ).
- As of
September 30, 2015 , RELVAR®/BREO® ELLIPTA® has been approved in 73 countries for marketing and has been launched in 42 countries.
- In the third quarter of 2015, sales of ANORO®ELLIPTA® by GSK were
$32.7 million , an increase of approximately 38 percent compared to the prior quarter. Sales were$22.0 million in the U.S. market (an increase of 23 percent from the prior quarter) and$10.7 million in non-U.S. markets (an increase of 82% from the prior quarter).
- As of
September 30, 2015 , ANORO® ELLIPTA® has been approved in 61 countries for marketing and has been launched in 33 countries.
Financial Results for the Third Quarter vs. Second Quarter of 2015
Total revenue for the third quarter of 2015 was
Research and development expenses for the third quarter of 2015 were
Income from operations increased by 65 percent to
Cash and cash equivalents, short-term investments and marketable securities totaled
2014 Spin-Off
On
The results of operations for
Information Regarding the Planned Tender Offer
The discussion of the planned tender offer is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of the company's common stock. The tender offer described in this press release has not yet commenced, and there can be no assurance that the company will commence the tender offer on the terms described in this press release or at all. If the company commences the tender offer, the tender offer will be made solely by an Offer to Purchase and the related Letter of Transmittal, as they may be amended or supplemented. Stockholders and investors are urged to read any Tender Offer Statement on Schedule TO, filed by the company with the
Note Regarding Share Repurchase Program
The company's announcement of its share repurchase program does not obligate the company to repurchase any specific dollar amount or number of its shares of common stock. The company will determine when, if and how to proceed with any repurchase transactions under the program, as well as the amount of any such repurchase transactions, based upon, among other things, the results of the tender offer and the company's evaluation of its liquidity and capital needs (including for strategic and other opportunities), its business, results of operations, and financial position and prospects, general financial, economic and market conditions, prevailing market prices for the company's shares of common stock, corporate, regulatory and legal requirements, and other conditions and factors deemed relevant by the company's management and Board of Directors from time to time. The share repurchase program may be suspended or discontinued at any time. There can be no assurance as to the actual volume of share repurchases in any given period or over the term of the program, if any, or as to the manner or terms of any such repurchases. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Conference Call and Webcast Information
A replay of the conference call will be available on
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles in
- the financial performance of
Theravance's assets without regard to financing methods, capital structure or historical cost basis;
- the ability of
Theravance's assets to generate cash sufficient to pay interest costs and support its indebtedness; and
Theravance's operating performance and return on investment as compared to those of other companies, without regard to financing or capital structures.
Adjusted EBITDA is determined by taking GAAP net income from operations and adding back stock-based compensation expense from continuing operations, depreciation expense from continuing operations and amortization of capitalized fees paid to a related party.
Adjusted EBITDA should not be considered in isolation or as a substitute to net income (loss), income (loss) from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA is not intended to represent cash flow and does not represent the measure of cash available for distribution. The principal limitation of this non-GAAP financial measure is that it excludes significant elements that are required by GAAP to be recorded in
About
ANORO®, RELVAR®, BREO® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.
Forward Looking Statements
This press release contains and the conference call will contain certain "forward-looking" statements regarding, among other things, statements relating to goals, plans, objectives and future events. Such forward-looking statements involve substantial risks, uncertainties and assumptions. Examples of such statements include statements relating to: the commercialization of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® in the jurisdictions in which these products have been approved, the strategies, plans and objectives of the company (including the company's growth strategy and corporate development initiatives beyond the existing respiratory portfolio), the
timing, manner and amount of anticipated potential capital returns to stockholders (including without limitation statements, the company's share repurchase plan, the company's planned tender offer and expectations of future cash dividends and the potential for future share repurchases), the status and timing of clinical studies, data analysis and communication of results, the potential benefits and mechanisms of action of product candidates, expectations for product candidates through development and commercialization, the timing of seeking regulatory approval of product candidates, and projections of revenue, expenses and other financial items. These statements are based on the current estimates and assumptions of the management of
(THRX-F)
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| (in thousands, except per share data) | ||||||||||
| Three Months Ended | ||||||||||
| 2015 | 2015 | |||||||||
| (unaudited) | ||||||||||
| Revenue: | ||||||||||
| Royalty revenue from a related party, net | $ | 13,341 | $ | 10,434 | ||||||
| Revenue from collaborative arrangements from a related party, net | 221 | 221 | ||||||||
| Total revenue | 13,562 | 10,655 | ||||||||
| Operating expenses: | ||||||||||
| Research and development | 547 | 638 | ||||||||
| General and administrative | 4,581 | 4,909 | ||||||||
| Total operating expenses | 5,128 | 5,547 | ||||||||
| Income from operations | 8,434 | 5,108 | ||||||||
| Other income (expense), net | (45 | ) | (16 | ) | ||||||
| Interest income | 90 | 85 | ||||||||
| Interest expense | (13,063 | ) | (12,987 | ) | ||||||
| Net loss | $ | (4,584 | ) | $ | (7,810 | ) | ||||
| Basic and diluted net loss per share: | $ | (0.04 | ) | $ | (0.07 | ) | ||||
| Cash dividends declared per common share | $ | 0.25 | $ | 0.25 | ||||||
| Shares used to compute basic and diluted net loss per share | 115,787 | 115,309 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||
| Revenue: | ||||||||||||||||||
| Royalty revenue from a related party, net | $ | 13,341 | $ | 729 | $ | 30,449 | $ | 342 | ||||||||||
| Revenue from collaborative arrangements from a related party, net | 221 | 270 | 664 | 811 | ||||||||||||||
| Total revenue (1) | 13,562 | 999 | 31,113 | 1,153 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development (2) | 547 | 1,909 | 1,897 | 6,721 | ||||||||||||||
| General and administrative (2) | 4,581 | 8,632 | 14,929 | 28,491 | ||||||||||||||
| Total operating expenses | 5,128 | 10,541 | 16,826 | 35,212 | ||||||||||||||
| Income (Loss) from operations | 8,434 | (9,542 | ) | 14,287 | (34,059 | ) | ||||||||||||
| Other income (expense), net | (45 | ) | 255 | 1,117 | 335 | |||||||||||||
| Interest income | 90 | 93 | 291 | 446 | ||||||||||||||
| Interest expense | (13,063 | ) | (12,355 | ) | (38,756 | ) | (24,326 | ) | ||||||||||
| Loss from continuing operations before income taxes | (4,584 | ) | (21,549 | ) | (23,061 | ) | (57,604 | ) | ||||||||||
| Income tax benefit | - | 278 | - | - | ||||||||||||||
| Loss from continuing operations, net of tax | (4,584 | ) | (21,271 | ) | (23,061 | ) | (57,604 | ) | ||||||||||
| Loss from discontinued operations | - | - | - | (94,934 | ) | |||||||||||||
| Net loss | $ | (4,584 | ) | $ | (21,271 | ) | $ | (23,061 | ) | $ | (152,538 | ) | ||||||
| Basic and diluted net loss per share: | ||||||||||||||||||
| Continuing operations | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.20 | ) | $ | (0.52 | ) | ||||||
| Discontinued operations | - | - | - | (0.85 | ) | |||||||||||||
| Basic and diluted net loss per share | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.20 | ) | $ | (1.37 | ) | ||||||
| Cash dividends declared per common share | $ | 0.25 | $ | 0.25 | $ | 0.75 | $ | 0.25 | ||||||||||
| Shares used to compute basic and diluted net loss per share | 115,787 | 113,100 | 115,381 | 111,306 | ||||||||||||||
| (1) Revenue is comprised of the following (in thousands): | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Royalties from a related party | $ | 16,796 | $ | 3,962 | $ | 40,816 | $ | 7,953 | |||||||||
| Amortization of capitalized fees paid to a related party | (3,455 | ) | (3,233 | ) | (10,367 | ) | (7,611 | ) | |||||||||
| Royalty revenue | 13,341 | 729 | 30,449 | 342 | |||||||||||||
| Strategic alliance - MABA program | 221 | 270 | 664 | 811 | |||||||||||||
| Total revenue from a related party | $ | 13,562 | $ | 999 | $ | 31,113 | $ | 1,153 | |||||||||
| (2) Amounts include stock-based compensation expense as follows (in thousands): | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||||
| Research and development | $ | 220 | $ | 1,357 | $ | 687 | $ | 2,589 | |||||
| General and administrative | 1,248 | 3,375 | 4,536 | 11,795 | |||||||||
| Discontinued operations | - | - | - | 11,629 | |||||||||
| Total stock-based compensation expense | $ | 1,468 | $ | 4,732 | $ | 5,223 | $ | 26,013 | |||||
| Consolidated Balance Sheet Data | ||||||||||
| (in thousands) | ||||||||||
| 2015 | 2014 | |||||||||
| (unaudited) | (1) | |||||||||
| Assets | ||||||||||
| Cash, cash equivalents and marketable securities | $ | 206,192 | $ | 283,354 | ||||||
| Other current assets | 17,562 | 11,684 | ||||||||
| Property and equipment, net | 248 | 324 | ||||||||
| Capitalized fees paid to a related party, net | 197,824 | 208,191 | ||||||||
| Other assets | 15,805 | 18,101 | ||||||||
| Total assets | $ | 437,631 | $ | 521,654 | ||||||
| Liabilities and stockholders' deficit | ||||||||||
| Other current liabilities | $ | 4,003 | $ | 4,067 | ||||||
| Payable to Theravance Biopharma, Inc. | - | 1,056 | ||||||||
| Accrued interest payable | 6,390 | 7,551 | ||||||||
| Deferred revenue | 4,205 | 4,870 | ||||||||
| Convertible subordinated notes | 255,109 | 255,109 | ||||||||
| Non-recourse notes payable, due 2029 | 488,976 | 470,527 | ||||||||
| Other long-term liabilities | 1,947 | 1,823 | ||||||||
| Stockholders' deficit | (322,999 | ) | (223,349 | ) | ||||||
| Total liabilities and stockholders' deficit | $ | 437,631 | $ | 521,654 | ||||||
| (1) The selected consolidated balance sheet amounts at |
||||||||||
Non-GAAP Financial Measures
As previously mentioned, a reconciliation of adjusted EBITDA to its most directly comparable GAAP measures has been provided in the table below:
| Reconciliation of GAAP to Non-GAAP Operating Results | |||||||||
| (in thousands) | |||||||||
| Three Months Ended | |||||||||
| 2015 | 2015 | ||||||||
| (unaudited) | |||||||||
| Reconciliation from GAAP net income from operations to adjusted EBITDA: | |||||||||
| GAAP net income from operations | $ | 8,434 | $ | 5,108 | |||||
| Non-GAAP adjustments: | |||||||||
| Stock-based compensation | 1,468 | 1,822 | |||||||
| Depreciation | 28 | 27 | |||||||
| Amortization of capitalized fees paid to a related party | 3,455 | 3,456 | |||||||
| Adjusted EBITDA | $ | 13,385 | $ | 10,413 | |||||
| Reconciliation of GAAP to Non-GAAP Operating Results | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Reconciliation from GAAP net income (loss) from operations to adjusted EBITDA: | |||||||||||||||||
| GAAP net income (loss) from operations | $ | 8,434 | $ | (9,542 | ) | $ | 14,287 | $ | (34,059 | ) | |||||||
| Non-GAAP adjustments: | |||||||||||||||||
| Stock-based compensation from continuing operations | 1,468 | 4,732 | 5,223 | 14,384 | |||||||||||||
| Depreciation from continuing operations | 28 | - | 82 | - | |||||||||||||
| Amortization of capitalized fees paid to a related party | 3,455 | 3,233 | 10,367 | 7,611 | |||||||||||||
| Adjusted EBITDA | $ | 13,385 | $ | (1,577 | ) | $ | 29,959 | $ | (12,064 | ) | |||||||
Contact Information:
Eric d'Esparbes
Sr. Vice President and Chief Financial Officer
650-238-9640
investor.relations@thrxinc.com
Source:
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