On August 8, 2023 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three and six months ended June 30, 2023 (Press release, Eagle Pharmaceuticals, AUG 8, 2023, View Source [SID1234633965]).
"We delivered a strong second quarter with impressive earnings and revenue, continuing the positive trajectory from an outstanding 18 months of business performance," stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals. "Our marketed drugs across oncology and our hospital business are performing well. We’re particularly excited with the revenue ramp for Barhemsys and Byfavo; our share of the commercial U.S. pemetrexed market has more than tripled since the end of 2022, and Bendeka and Belrapzo continue to outperform. In light of these and other positive factors, which we believe reflect a broader continuation of strength, we recently raised our full-year 2023 guidance and resumed our share repurchase program."
Adjusted non-GAAP net income, adjusted non-GAAP earnings per share, adjusted non-GAAP EBITDA, adjusted non-GAAP gross margin, adjusted non-GAAP gross profit, adjusted non-GAAP R&D expense and adjusted non-GAAP SG&A expense are non-GAAP financial measures. For descriptions and reconciliations of these non-GAAP financial measures for historical periods to their most comparable GAAP financial measures, please see below and the tables at the end of this press release.
"Our expectation is that the growth that began in 2022 will continue, and we have confidence that 2023 will be another great year for Eagle," stated Tarriff. "Going forward, we intend to build on our sales momentum and also to leverage our commercial infrastructure and working capital position to add complementary products, either through R&D or acquisition."
Recent Business Highlights:
· An estimated 19,000 patients were dosed with Barhemsys or Byfavo during the second quarter of 2023, and 275 health care facilities purchased the products out of a total targeted market of approximately 4,000.2 Combined sales of Barhemsys and Byfavo were $1.2 million, representing approximately 30% sequential growth for the last two quarters. A summary of the sequential quarter sales growth for Barhemsys and Byfavo is provided below:
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· The Company completed the expansion of its hospital and oncology commercial teams. Eagle believes the new commercial infrastructure of approximately 80 people enables the Company to bring in additional products, through R&D or acquisition, with minimal additional commercialization costs.
· Eagle is scheduled to have a Type C meeting with the U.S. Food and Drug Administration (FDA) in August 2023 for EA-114, its estrogen receptor antagonist product candidate for the treatment of HR+/HER- advanced breast cancer.
· FDA granted Qualified Infectious Disease Product (QIDP) Designation and Fast Track Designation for CAL02, a novel first-in-class anti-toxin drug candidate, being developed to treat severe community-acquired bacterial pneumonia (SCABP) as an adjunctive therapy to standard of care, entitling Eagle to an additional five years of marketing exclusivity upon approval.
· First patients were randomized in a multi-center adaptive, randomized, double-blind, placebo-controlled Phase 2 study designed to assess the efficacy and safety of CAL02 administered intravenously in addition to standard of care in patients with SCABP. The study plans to enroll approximately 276 patients at more than 100 sites in over 20 countries worldwide, with 100 sites expected to be up by year-end in time for the northern hemisphere’s pneumonia season. Depending upon recruitment rates, Eagle anticipates having its 50% interim report around the first half of 2024.
Second Quarter 2023 Financial Results
Total revenue for the second quarter of 2023, was $64.6 million, as compared to $74.1 million for the second quarter of 2022.
Second quarter 2023 royalty revenue was $21.7 million, compared to $24.9 million in the prior year quarter.
A summary of total revenue is outlined below:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue (in thousands):
Product sales, net $ 42,993 $ 49,201 $ 89,214 $ 139,289
Royalty revenue 21,653 24,935 41,737 50,721
Total revenue $ 64,646 $ 74,136 $ 130,951 $ 190,010
Gross margin was 74% during the second quarter of 2023, compared to 68% in the second quarter of 2022.
R&D expense was $9.8 million for the second quarter of 2023, compared to $11.4 million for the second quarter of 2022. The decrease was primarily due to lower spend on the Company’s EA-114 program, which was in a large-scale study during the second quarter of 2022.
SG&A expenses in the second quarter of 2023 were $27.7 million compared to $36.8 million in the second quarter of 2022. This decrease was driven largely by the non-recurrence of Acacia-related acquisition costs and severance, partially offset by higher personnel related costs given the Company’s expanded hospital and oncology sales teams as well as higher selling and marketing costs for Barhemsys and Byfavo.
Net income for the second quarter of 2023 was $5.2 million, or $0.39 per basic and diluted share, compared to net loss of $(9.5) million, or $(0.74) per basic and diluted share, in the second quarter of 2022, primarily as a result of the factors discussed above.
Adjusted non-GAAP net income for the second quarter of 2023 was $15.5 million, or $1.18 per basic and diluted share, compared to adjusted non-GAAP net income of $20.3 million, or $1.58 per basic and $1.56 per diluted share, in the second quarter of 2022.
Adjusted non-GAAP EBITDA for the second quarter of 2023 was $20.7 million, compared to adjusted non-GAAP EBITDA of $25.9 million in the second quarter of 2022.
2023 Full-Year Guidance
The Company reiterated its recently announced raised guidance as follows:
· Adjusted non-GAAP EBITDA of $78.0-$84.0 million
· Adjusted non-GAAP earnings per share of $4.40-$4.70
· Adjusted non-GAAP R&D expense of $41.0-$45.0 million
· Adjusted non-GAAP SG&A expense of $86.0-$90.0 million
Liquidity
As of June 30, 2023, Eagle had $15.4 million in cash and cash equivalents, $115.1 million in accounts receivable, net, and $71.3 million in outstanding debt on the Company’s $150.0 million credit facility with JPMorgan. As of June 30, 2023, the Company had drawn $25.0 million on its $100.0 million revolving credit facility, which is included in outstanding debt.
As of June 30, 2023, Eagle had working capital of $100.6 million, after significant direct investment in R&D to fund the Company’s promising product candidates, the acquisition of Acacia Pharma Inc.’s outstanding shares and debt in 2022, and the purchase of an equity stake in and option to acquire Enalare Therapeutics Inc.
Conference Call
As previously announced, Eagle management will host its second quarter 2023 conference call as follows:
Date Tuesday, August 8, 2023
Time 8:30 a.m. ET
Toll free (U.S.) 800-343-4136
International 203-518-9814
Webcast (live and replay) www.eagleus.com, under the "Investor Relations" section