On July 25, 2017 RedHill Biopharma Ltd. (NASDAQ:RDHL) (Tel-Aviv Stock Exchange:RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company primarily focused on late clinical-stage development and commercialization of proprietary, orally-administered, small molecule drugs for gastrointestinal and inflammatory diseases and cancer, reported its financial results for the quarter ended June 30, 2017 (Press release, RedHill Biopharma, JUL 25, 2017, View Source [SID1234519868]).

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The Company will host a conference call on Tuesday, July 25, 2017 at 9:00 am EDT to review the financial results and business highlights. Dial-in details are included below.

Financial highlights for the quarter ended June 30, 20172
Net Revenues for the second quarter of 2017 were approximately $0.5 million, compared to immaterial Net Revenues in the second quarter of 2016 and in the first quarter of 2017. The increase was due to the initiation, in mid-June 2017, of the U.S. promotional activities of Donnatal (Phenobarbital, Hyoscyamine Sulfate, Atropine Sulfate, Scopolamine Hydrobromide)3 and the sale of EnteraGam (serum-derived bovine immunoglobulin/protein isolate, SBI)4.

Cost of Revenues for the second quarter of 2017 were $0.3 million, reflecting costs related to the initiation of the sale of EnteraGam in mid-June 2017.

Research and Development Expenses for the second quarter of 2017 were $8.4 million, an increase of $2.4 million or 40% compared to the second quarter of 2016. The increase was mainly due to the ongoing Phase III and Phase II studies with BEKINDA (RHB-102) for gastroenteritis and IBS-D, respectively, the ongoing Phase III study with RHB-104 for Crohn’s disease, the ongoing and planned studies with YELIVA (ABC294640) for multiple indications, and the initiation of the ongoing confirmatory Phase III study with TALICIA (RHB-105)5 for H. pylori infection. Research and Development Expenses for the second quarter of 2017 increased by $0.3 million or 4% compared to the first quarter of 2017.

General and Administrative Expenses for the second quarter of 2017 were $1.9 million, an increase of $1.2 million compared to the second quarter of 2016. General and Administrative Expenses for the second quarter of 2017 increased by $0.6 million or 48% compared to the first quarter of 2017. The increase from the comparable periods was mainly due to the establishment and advancement of the Company’s U.S. commercial operations in the first quarter of 2017 and enhanced professional services.

Selling, Marketing and Business Development Expenses for the second quarter of 2017 were $3.4 million, an increase of $3.0 million compared to $0.4 million in the second quarter of 2016, comprised only of Business Development Expenses. The increase was mainly due to the establishment and advancement of the Company’s U.S. commercial operations. The Company recognized Selling and Marketing Expenses in 2017 for the first time.

Operating Loss for the second quarter of 2017 was $13.5 million, an increase of $6.3 million or 88% compared to the second quarter of 2016. The increase was mainly due to an increase in Research and Development Expenses and Selling, Marketing and Business Development Expenses, as detailed above. Operating Loss for the second quarter of 2017 increased by $3.4 million or 34% compared to the first quarter of 2017. The increase was mainly due to an increase in Selling, Marketing and Business Development Expenses, as detailed above.

Financial Income, net for the second quarter of 2017 was $2.5 million, an increase of $1.9 million compared to the second quarter of 2016. Financial Income, net for the second quarter of 2017 increased by $1.0 million or 67% compared to the first quarter of 2017. The increase from the comparable periods was mainly due to a fair value gain on derivative financial instruments.

Net Cash Used in Operating Activities for the second quarter of 2017 was $9.7 million, an increase of $4 million or 70% compared to the second quarter of 2016. The increase was mainly due to the increase in Operating Loss, as detailed above. Net Cash Used in Operating Activities for the second quarter of 2017 decreased by $0.6 million or 6% compared to the first quarter of 2017.

Net Cash Used in Investing Activities for the second quarter of 2017 was $4.9 million, an increase of $1.9 million or 67% compared to the second quarter of 2016. Net Cash Used in Investing Activities for the second quarter of 2017 decreased by $13.7 million compared to the first quarter of 2017. The decrease was mainly due to change in short-term investments.

Cash Balance6 as of June 30, 2017, was $51 million, a decrease of $15 million, compared to $66 million as of December 31, 2016, and a decrease of $10 million compared to March 31, 2017. The decrease was a result of the ongoing operations, mainly related to research and development activities and the establishment of the U.S. commercial operations.

Micha Ben Chorin, RedHill’s CFO, said: "We are pleased with the important milestones achieved during the second quarter, including positive top-line results from the Phase III GUARD study with BEKINDA 24 mg for acute gastroenteritis, initiation of the confirmatory Phase III study with TALICIA for the treatment of H. pylori infection, and the initiation of promotional activities in the U.S. by our GI-focused sales force with Donnatal and EnteraGam, which generated encouraging initial net revenues of approximately $0.5 million in the second half of June alone. Our cash position of $51 million at the end of the second quarter should allow us to continue to execute our strategic plans, diligently advance our late-stage clinical programs and pursue the acquisition of additional commercial GI products in the U.S."