On March 30, 2022 KemPharm, Inc. (NasdaqGS: KMPH) (KemPharm, or the Company), a specialty pharmaceutical company focused on the discovery and development of novel treatments for rare central nervous system (CNS) diseases, reported its financial results for the fourth quarter and year ended December 31, 2021 (Press release, KemPharm, MAR 30, 2022, View Source [SID1234611307]).
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"KemPharm advanced on multiple fronts during the fourth quarter of 2021 and into early 2022, cementing the past twelve months as the most substantial in KemPharm’s history," stated Travis Mickle, Ph.D., President and Chief Executive Officer of KemPharm. "In January, we announced our strategic focus on developing and commercializing therapeutics targeting rare CNS and neurodegenerative conditions starting with KP1077. The data released earlier this month from the Phase 1 clinical trial exploring the safety and PK of ‘higher dose SDX,’ affirms the opportunity to develop multiple SDX-based drug candidates, led by KP1077 for the treatment of IH, a rare sleep disorder with limited treatment options. Our recent interactions with the FDA have confirmed that we may proceed with the submission of an IND application for KP1077, which we expect to file as early as the second quarter of 2022. Upon clearance of the IND, we plan to initiate a Phase 2 clinical trial of KP1077 in IH later this year with a second trial in narcolepsy targeted to begin as early as the second half of 2022. In addition, we remain active on the business development front with the goal of acquiring or licensing complimentary clinical stage assets in rare CNS and neurodegenerative diseases."
"As KemPharm focuses on advancing KP1077 and expanding our development pipeline, we remain bullish on the potential for the commercial success of AZSTARYS, which is now being commercialized nationally by Corium. There have been significant gains in payor access, and prescription volume is beginning to grow. If this growth continues along the same trajectory observed since the beginning of 2022, the potential to achieve the initial sales milestones provided in the licensing agreement with an affiliate of Gurnet Point Capital becomes more tangible."
"Supporting these strategic and product development efforts is our strong financial position. With $127.8 million in cash, cash equivalents and long-term investments as of December 31, 2021, our current capital resources enable us to advance our internal pipeline while also potentially seeking external opportunities. The strength of our capital position sets us apart from many other development-stage biopharmaceutical companies, particularly in this challenging capital market environment. Our existing $50 million share repurchase program, which extends through 2023, also provides a mechanism to return value to shareholders as we achieve success."
Q4 and Full-Year 2021 Financial Results:
KemPharm’s revenue for Q4 2021 was $2.6 million, as compared to Q4 2020 revenue of $2.4 million. Q4 2021 revenue was derived primarily from $2.0 million in service fee revenue, and approximately $0.6 million of various royalty payments under the license agreement which covers AZSTARYS. The contracts under which service fee revenue is derived will end on March 31, 2022, although some amount of service fee revenue is expected to continue beyond that date.
KemPharm’s net loss for Q4 2021 was ($2.7) million, or ($0.08) per basic and diluted share, compared to a net loss of ($4.9) million, or a loss of ($1.07) per basic and diluted share for the same period in 2020. Net loss for Q4 2021 was driven primarily by a loss from operations of ($2.8) million, partially offset by net interest and other income of $0.1 million. The net operating loss of ($2.8) million for Q4 2021 was a decrease of ($0.4) million compared to net operating loss of ($3.2) million in the same period in 2020.
For FY 2021, KemPharm reported revenue of $28.7 million, which was primarily driven by $20.6 million in milestone and royalty revenue received under the license agreement which covers AZSTARYS, and approximately $8.1 million derived under service fee arrangements and related reimbursements. FY 2020 revenue was $13.3 million.
KemPharm’s net loss attributable to common stockholders for FY 2021 was ($62.9) million, or ($2.11) per basic and diluted share, compared to net loss attributable to common stockholders of ($12.8) million, or ($3.21) per basic and diluted share for FY 2020. Net loss attributable to common stockholders for FY 2021 was driven primarily by aggregate non-cash deemed dividends of ($54.3) million, or ($1.83) per basic and diluted share, which were recognized as a result of the warrant inducement transactions completed in the first half of 2021, a non-cash net loss on extinguishment of debt of ($16.1) million, or ($0.54) per basic and diluted share related to the debt extinguishment in Q1 2021, partially offset by net income from operations of $7.7 million.
As of December 31, 2021, total cash, cash equivalents and long-term investments was $127.8 million, which was a decrease of $3.7 million compared to $131.5 million as of September 30, 2021, driven in part by share repurchases of $2.4 million which were settled during Q4 2021. Based on the Company’s current operating forecast, existing cash, cash equivalents and long-term investments are expected to be sufficient to continue operations through and beyond 2025.
Conference Call Information:
KemPharm will host a conference call and live audio webcast with slide presentation today at 5:00 p.m. ET, to discuss its corporate and financial results for the fourth quarter of 2021 and fiscal year of 2021.
Telephone Access: To access the conference call telephonically, interested participants and investors will be required to register via the following online form: View Source
Once registered, all individuals will be provided with participant dial-in numbers, a passcode, and a registrant ID, which can then be used to access the conference call.
Participants may register at any time. It is recommended that the registration process be completed at least 15 minutes prior to the start of the call.
Webcast Access: The live audio webcast with slide presentation will be accessible via the Investor Relations section of KemPharm’s website, View Source An archive of the webcast and presentation will be available for 90 days beginning at approximately 6:00 p.m. ET, on Wednesday, March 30, 2022.