☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2020
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Symbol(s)
Large accelerated filer | ☐ | Accelerated Filer | ☒ | |||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||
Emerging growth company | ☐ |
Item 1. | FINANCIAL STATEMENTS | ||||||||
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Item 2. | 23 | ||||||||
Item 3. | 34 | ||||||||
Item 4. | 35 | ||||||||
PART II. OTHER INFORMATION | |||||||||
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Item 1. | 35 | ||||||||
Item 1A. | 36 | ||||||||
Item 2. | 36 | ||||||||
Item 3. | 36 | ||||||||
Item 4. | 36 | ||||||||
Item 5. | 36 | ||||||||
Item 6. | 36 | ||||||||
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37 |
September 30, 2019 | December 31, 2018 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 44,983,218 | $ | 16,559,400 | ||||
Short-term investments | 31,561,673 | 36,922,213 | ||||||
Accounts receivable, net | 10,095,352 | — | ||||||
Inventory | 599,801 | 56,012 | ||||||
Prepaid expenses and other current assets | 3,339,399 | 1,649,781 | ||||||
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Total current assets | 90,579,443 | 55,187,406 | ||||||
Investments | 5,008,800 | 5,008,243 | ||||||
Operating leaseright-of-use asset | 952,340 | — | ||||||
Property and equipment, net | 141,088 | 245,425 | ||||||
Deposits | 8,888 | 8,888 | ||||||
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Total assets | $ | 96,690,559 | $ | 60,449,962 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 4,147,029 | $ | 2,337,367 | ||||
Accrued expenses and other liabilities | 13,835,292 | 7,173,987 | ||||||
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Total current liabilities | 17,982,321 | 9,511,354 | ||||||
Accrued expenses and other liabilities,non-current | — | 154,799 | ||||||
Operating lease liability, net of current portion | 725,700 | — | ||||||
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Total liabilities | 18,708,021 | 9,666,153 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: none issued and outstanding at September 30, 2019 and December 31, 2018 | — | — | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 103,041,033 shares and 102,739,257 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 103,041 | 102,739 | ||||||
Additionalpaid-in capital | 214,478,406 | 211,265,279 | ||||||
Accumulated deficit | (136,618,337 | ) | (160,563,961 | ) | ||||
Accumulated other comprehensive income (loss) | 19,428 | (20,248 | ) | |||||
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Total stockholders’ equity | 77,982,538 | 50,783,809 | ||||||
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Total liabilities and stockholders’ equity | $ | 96,690,559 | $ | 60,449,962 | ||||
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September 30, 2020 | December 31, 2019 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 117,105,973 | $ | 89,511,710 | ||||
Short-term investments | 10,002,749 | 5,007,050 | ||||||
Accounts receivable, net | 5,871,893 | 10,536,997 | ||||||
Inventory | 4,747,538 | 1,956,792 | ||||||
Prepaid expenses and other current assets | 5,614,052 | 4,351,074 | ||||||
Total current assets | 143,342,205 | 111,363,623 | ||||||
Deferred tax assets | 31,347,442 | — | ||||||
Operating lease right-of-use | 12,167 | 793,252 | ||||||
Property and equipment, net | 149,119 | 210,467 | ||||||
Deposits | 8,888 | 8,888 | ||||||
Total assets | $ | 174,859,821 | $ | 112,376,230 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 2,005,340 | $ | 4,117,447 | ||||
Accrued expenses and other liabilities | 16,226,609 | 19,981,295 | ||||||
Total current liabilities | 18,231,949 | 24,098,742 | ||||||
Operating lease liability, net of current portion | — | 647,532 | ||||||
Total liabilities | 18,231,949 | 24,746,274 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: NaN issued and outstanding at September 30, 2020 and December 31, 2019 | 0 | — | ||||||
Common stock, $0.001 par value, 200,000,000 and 150,000,000 shares authorized; 103,648,224 shares and 103,397,033 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 103,648 | 103,397 | ||||||
Additional paid-in capital | 221,673,450 | 216,205,678 | ||||||
Accumulated deficit | (65,142,755 | ) | (128,688,624 | ) | ||||
Accumulated other comprehensive income (loss) | (6,471 | ) | 9,505 | |||||
156,627,872 | 87,629,956 | |||||||
$ | 174,859,821 | $ | 112,376,230 | |||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Product revenue, net | $ | 30,897,444 | $ | — | $ | 72,183,782 | $ | — | ||||||||
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Operating costs and expenses: | ||||||||||||||||
Cost of sales | 4,387,461 | — | 10,360,874 | — | ||||||||||||
Research and development | 4,597,039 | 4,538,369 | 12,534,362 | 11,502,235 | ||||||||||||
Selling, general and administrative | 8,067,792 | 3,644,234 | 25,471,974 | 8,949,663 | ||||||||||||
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Total operating costs and expenses | 17,052,292 | 8,182,603 | 48,367,210 | 20,451,898 | ||||||||||||
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Operating income (loss) | 13,845,152 | (8,182,603 | ) | 23,816,572 | (20,451,898 | ) | ||||||||||
Other income, net | 393,415 | 343,730 | 1,187,091 | 947,993 | ||||||||||||
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Net income (loss) before income taxes | 14,238,567 | (7,838,873 | ) | 25,003,663 | (19,503,905 | ) | ||||||||||
Provision for income taxes | 608,388 | — | 1,058,039 | — | ||||||||||||
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Net income (loss) | $ | 13,630,179 | $ | (7,838,873 | ) | $ | 23,945,624 | $ | (19,503,905 | ) | ||||||
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Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.13 | $ | (0.08 | ) | $ | 0.23 | $ | (0.19 | ) | ||||||
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Diluted | $ | 0.13 | $ | (0.08 | ) | $ | 0.23 | $ | (0.19 | ) | ||||||
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Weighted average shares outstanding: | ||||||||||||||||
Basic | 102,974,105 | 102,641,504 | 102,864,571 | 102,598,740 | ||||||||||||
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Diluted | 107,045,234 | 102,641,504 | 105,821,609 | 102,598,740 | ||||||||||||
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Net income (loss) | $ | 13,630,179 | $ | (7,838,873 | ) | $ | 23,945,624 | $ | (19,503,905 | ) | ||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized gain (loss) onavailable-for-sale securities | (2,330 | ) | (9,450 | ) | 39,676 | (45,948 | ) | |||||||||
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Comprehensive income (loss) | $ | 13,627,849 | $ | (7,848,323 | ) | $ | 23,985,300 | $ | (19,549,853 | ) | ||||||
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For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenues: | ||||||||||||||||
Product revenue, net | $ | 29,166,658 | $ | 30,897,444 | $ | 87,907,894 | $ | 72,183,782 | ||||||||
Revenues from collaborative arrangements | 150,000 | — | 150,000 | — | ||||||||||||
Total revenues | 29,316,658 | 30,897,444 | 88,057,894 | 72,183,782 | ||||||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of sales | 3,878,760 | 4,387,461 | 12,169,499 | 10,360,874 | ||||||||||||
Research and development | 3,749,233 | 4,597,039 | 12,321,687 | 12,534,362 | ||||||||||||
Selling, general and administrative | �� | 9,984,961 | 8,067,792 | 30,881,367 | 25,471,974 | |||||||||||
Total operating costs and expenses | 17,612,954 | 17,052,292 | 55,372,553 | 48,367,210 | ||||||||||||
Operating income (loss) | 11,703,704 | 13,845,152 | 32,685,341 | 23,816,572 | ||||||||||||
Other income, net | 33,567 | 393,415 | 481,069 | 1,187,091 | ||||||||||||
Net income (loss) before income taxes | 11,737,271 | 14,238,567 | 33,166,410 | 25,003,663 | ||||||||||||
Income tax provision (benefit) | (31,602,596 | ) | 608,388 | (30,379,459 | ) | 1,058,039 | ||||||||||
Net income (loss) | $ | 43,339,867 | $ | 13,630,179 | $ | 63,545,869 | $ | 23,945,624 | ||||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.42 | $ | 0.13 | $ | 0.61 | $ | 0.23 | ||||||||
Diluted | $ | 0.41 | $ | 0.13 | $ | 0.60 | $ | 0.23 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 103,535,431 | 102,974,105 | 103,452,025 | 102,864,571 | ||||||||||||
Diluted | 106,316,241 | 107,045,234 | 106,386,617 | 105,821,609 | ||||||||||||
Net income (loss) | $ | 43,339,867 | $ | 13,630,179 | $ | 63,545,869 | $ | 23,945,624 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized gain (loss) on available-for-sale | (5,280 | ) | (2,330 | ) | (15,976 | ) | 39,676 | |||||||||
Comprehensive income (loss) | $ | 43,334,587 | $ | 13,627,849 | $ | 63,529,893 | $ | 23,985,300 | ||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||
Balance at December 31, 2018 | $ | — | $ | 102,739 | $ | 211,265,279 | $ | (160,563,961 | ) | $ | (20,248 | ) | $ | 50,783,809 | ||||||||||
Issuance of stock options for services | — | — | 933,411 | — | — | 933,411 | ||||||||||||||||||
Exercise of stock options for common stock | — | 65 | 89,285 | — | — | 89,350 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | 13,560 | 13,560 | ||||||||||||||||||
Net income (loss) | — | — | — | (644,503 | ) | — | (644,503 | ) | ||||||||||||||||
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Balance at March 31, 2019 | — | 102,804 | 212,287,975 | (161,208,464 | ) | (6,688 | ) | 51,175,627 | ||||||||||||||||
Issuance of stock options for services | — | — | 924,996 | — | — | 924,996 | ||||||||||||||||||
Exercise of stock options for common stock | — | 125 | 192,425 | — | — | 192,550 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | 28,446 | 28,446 | ||||||||||||||||||
Net income (loss) | — | — | — | 10,959,948 | — | 10,959,948 | ||||||||||||||||||
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Balance at June 30, 2019 | — | 102,929 | 213,405,396 | (150,248,516 | ) | 21,758 | 63,281,567 | |||||||||||||||||
Issuance of stock options for services | — | — | 817,060 | — | — | 817,060 | ||||||||||||||||||
Exercise of stock options for common stock | — | 112 | 255,950 | — | — | 256,062 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | (2,330 | ) | (2,330 | ) | ||||||||||||||||
Net income (loss) | — | — | — | 13,630,179 | — | 13,630,179 | ||||||||||||||||||
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Balance at September 30, 2019 | $ | — | $ | 103,041 | $ | 214,478,406 | $ | (136,618,337 | ) | $ | 19,428 | $ | 77,982,538 | |||||||||||
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Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||
Balance at December 31, 2017 | $ | — | $ | 102,549 | $ | 207,421,710 | $ | (126,560,447 | ) | $ | — | $ | 80,963,812 | |||||||||||
Issuance of stock options for services | — | — | 971,340 | — | — | 971,340 | ||||||||||||||||||
Exercise of stock options for common stock | — | 37 | 32,995 | — | — | 33,032 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | (21,826 | ) | (21,826 | ) | ||||||||||||||||
Net income (loss) | — | — | — | (5,699,892 | ) | — | (5,699,892 | ) | ||||||||||||||||
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Balance at March 31, 2018 | — | 102,586 | 208,426,045 | (132,260,339 | ) | (21,826 | ) | 76,246,466 | ||||||||||||||||
Issuance of common stock, net | — | 3 | 10,546 | — | — | 10,549 | ||||||||||||||||||
Issuance of stock options for services | — | — | 776,510 | — | — | 776,510 | ||||||||||||||||||
Exercise of stock options for common stock | — | 10 | 8,490 | — | — | 8,500 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | (14,672 | ) | (14,672 | ) | ||||||||||||||||
Net income (loss) | — | — | — | (5,965,140 | ) | — | (5,965,140 | ) | ||||||||||||||||
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Balance at June 30, 2018 | — | 102,599 | 209,221,591 | (138,225,479 | ) | (36,498 | ) | 71,062,213 | ||||||||||||||||
Issuance of stock options for services | — | — | 758,176 | — | — | 758,176 | ||||||||||||||||||
Exercise of stock options for common stock | — | 90 | 104,442 | — | — | 104,532 | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | (9,450 | ) | (9,450 | ) | ||||||||||||||||
Net income (loss) | — | — | — | (7,838,873 | ) | — | (7,838,873 | ) | ||||||||||||||||
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Balance at September 30, 2018 | $ | — | $ | 102,689 | $ | 210,084,209 | $ | (146,064,352 | ) | $ | (45,948 | ) | $ | 64,076,598 | ||||||||||
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2019
Preferred | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
Stock | Shares | Amount | Capital | Deficit | Gain (Loss) | Total | ||||||||||||||||||||||
Balance at December 31, 2019 | $ | — | 103,397,033 | $ | 103,397 | $ | 216,205,678 | $ | (128,688,624 | ) | $ | 9,505 | $ | 87,629,956 | ||||||||||||||
Issuance of stock options for services | — | — | — | 1,383,672 | — | — | 1,383,672 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 11,666 | 12 | 26,137 | — | — | 26,149 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 135,679 | — | — | 135,679 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 74,246 | 74,246 | |||||||||||||||||||||
Net income (loss) | — | — | — | — | 10,426,015 | — | 10,426,015 | |||||||||||||||||||||
Balance at March 31, 2020 | — | 103,408,699 | 103,409 | 217,751,166 | (118,262,609 | ) | 83,751 | 99,675,717 | ||||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,627,105 | — | — | 1,627,105 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 13,333 | 13 | 36,188 | — | — | 36,201 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 167,357 | — | — | 167,357 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (84,942 | ) | (84,942 | ) | |||||||||||||||||||
Net income (loss) | — | — | — | — | 9,779,987 | — | 9,779,987 | |||||||||||||||||||||
Balance at June 30, 2020 | — | 103,422,032 | 103,422 | 219,581,816 | (108,482,622 | ) | (1,191 | ) | 111,201,425 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,345,962 | — | — | 1,345,962 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 215,097 | 215 | 630,833 | — | — | 631,048 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 131,884 | — | — | 131,884 | |||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock | — | 11,095 | 11 | (17,045 | ) | — | — | (17,034 | ) | |||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (5,280 | ) | (5,280 | ) | |||||||||||||||||||
Net income (loss) | — | — | — | — | 43,339,867 | — | 43,339,867 | |||||||||||||||||||||
Balance at September 30, 2020 | $ | — | 103,648,224 | $ | 103,648 | $ | 221,673,450 | $ | (65,142,755 | ) | $ | (6,471 | ) | $ | 156,627,872 | |||||||||||||
Preferred | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
Stock | Shares | Amount | Capital | Deficit | Gain (Loss) | Total | ||||||||||||||||||||||
Balance at December 31, 2018 | $ | — | 102,739,257 | $ | 102,739 | $ | 211,265,279 | $ | (160,563,961 | ) | $ | (20,248 | ) | $ | 50,783,809 | |||||||||||||
Issuance of stock options for services | — | — | — | 933,411 | — | — | 933,411 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 65,000 | 65 | 89,285 | — | — | 89,350 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 13,560 | 13,560 | |||||||||||||||||||||
Net income (loss) | — | — | — | — | (644,503 | ) | — | (644,503 | ) | |||||||||||||||||||
Balance at March 31, 2019 | — | 102,804,257 | 102,804 | 212,287,975 | (161,208,464 | ) | (6,688 | ) | 51,175,627 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 924,996 | — | — | 924,996 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 125,000 | 125 | 192,425 | — | — | 192,550 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 28,446 | 28,446 | |||||||||||||||||||||
Net income (loss) | — | — | — | — | 10,959,948 | — | 10,959,948 | |||||||||||||||||||||
Balance at June 30, 2019 | — | 102,929,257 | 102,929 | 213,405,396 | (150,248,516 | ) | 21,758 | 63,281,567 | ||||||||||||||||||||
Issuance of stock options for services | — | — | — | 817,060 | — | — | 817,060 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 111,776 | 112 | 255,950 | — | — | 256,062 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (2,330 | ) | (2,330 | ) | |||||||||||||||||||
Net income (loss) | — | — | — | — | 13,630,179 | — | 13,630,179 | |||||||||||||||||||||
Balance at September 30, 2019 | $ | — | 103,041,033 | $ | 103,041 | $ | 214,478,406 | $ | (136,618,337 | ) | $ | 19,428 | $ | 77,982,538 | ||||||||||||||
For the Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Operating Activities: | ||||||||
Net income (loss) | $ | 23,945,624 | $ | (19,503,905 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 26,718 | 25,485 | ||||||
Non-cash change inright-of-use asset | 181,301 | — | ||||||
Stock-based compensation | 2,675,467 | 2,521,023 | ||||||
Change in accrued interest and accretion of discount on investments | (185,536 | ) | (405,082 | ) | ||||
(Increase) decrease in: | ||||||||
Accounts receivable, net | (10,095,352 | ) | — | |||||
Inventory | (543,789 | ) | — | |||||
Prepaid expenses and other current assets and deposits | (1,689,618 | ) | 356,924 | |||||
Increase (decrease) in: | ||||||||
Accounts payable | 1,809,662 | (604,591 | ) | |||||
Accrued expenses and other liabilities | 6,400,279 | (185,812 | ) | |||||
Operating lease liability | (204,724 | ) | — | |||||
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Net cash provided by (used in) operating activities | 22,320,032 | (17,795,958 | ) | |||||
Investing Activities: | ||||||||
Purchases of property and equipment | (19,370 | ) | (35,193 | ) | ||||
Purchases of investments | (34,725,401 | ) | (36,790,854 | ) | ||||
Proceeds from sales/maturities of investments | 40,310,595 | 7,600,000 | ||||||
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Net cash provided by (used in) investing activities | 5,565,824 | (29,226,047 | ) | |||||
Financing Activities: | ||||||||
Payment of employee withholding tax related to stock-based compensation | — | (4,448 | ) | |||||
Proceeds from exercise of stock options | 537,962 | 146,064 | ||||||
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Net cash provided by (used in) financing activities | 537,962 | 141,616 | ||||||
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|
| |||||
Net increase (decrease) in cash and cash equivalents | 28,423,818 | (46,880,389 | ) | |||||
Cash and cash equivalents - beginning of period | 16,559,400 | 57,496,702 | ||||||
|
|
|
| |||||
Cash and cash equivalents - end of period | $ | 44,983,218 | $ | 10,616,313 | ||||
|
|
|
| |||||
Non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) onavailable-for-sale securities | $ | 39,676 | $ | (45,948 | ) |
For the Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Operating Activities: | ||||||||
Net income (loss) | $ | 63,545,869 | $ | 23,945,624 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 72,746 | 26,718 | ||||||
Amortization of right-of-use | 781,085 | 181,301 | ||||||
Stock-based compensation | 4,791,659 | 2,675,467 | ||||||
Deferred taxes | (31,347,442 | ) | — | |||||
Change in accrued interest and accretion of discount on investments | (11,675 | ) | (185,536 | ) | ||||
(Increase) decrease in: | ||||||||
Accounts receivable, net | 4,665,104 | (10,095,352 | ) | |||||
Inventory | (2,790,746 | ) | (543,789 | ) | ||||
Prepaid expenses and other current assets and deposits | (1,262,978 | ) | (1,689,618 | ) | ||||
Increase (decrease) in: | ||||||||
Accounts payable | (2,112,107 | ) | 1,809,662 | |||||
Accrued expenses and other liabilities | (3,568,729 | ) | 6,400,279 | |||||
Operating lease liability | (833,489 | ) | (204,724 | ) | ||||
Net cash provided by (used in) operating activities | 31,929,297 | 22,320,032 | ||||||
Investing Activities: | ||||||||
Purchases of property and equipment | (11,398 | ) | (19,370 | ) | ||||
Purchases of investments | (10,000,000 | ) | (34,725,401 | ) | ||||
Proceeds from maturities and sales of investments | 5,000,000 | 40,310,595 | ||||||
Net cash provided by (used in) investing activities | (5,011,398 | ) | 5,565,824 | |||||
Financing Activities: | ||||||||
Payment of employee withholding tax related to stock-based compensation | (17,034 | ) | — | |||||
Proceeds from exercise of stock options | 693,398 | 537,962 | ||||||
Net cash provided by (used in) financing activities | 676,364 | 537,962 | ||||||
Net increase (decrease) in cash and cash equivalents | 27,594,263 | 28,423,818 | ||||||
Cash and cash equivalents—beginning of period | 89,511,710 | 16,559,400 | ||||||
Cash and cash equivalents—end of period | $ | 117,105,973 | $ | 44,983,218 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | $ | 2,195,000 | $ | — | ||||
Non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) on available-for-sale | $ | (15,976 | ) | $ | 39,676 |
1. | Organization and Description of Business. |
LEMS.
11 (Stockholders’ Equity).
2. | Basis of Presentation and Significant Accounting Policies. |
a. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
b. |
|
c. |
|
d. |
|
e. |
|
Short-Term Bond Fund
U.S. Treasuries
U.S. Treasuries are classifiedCompany’s operations, asavailable-for-sale securities. necessary. The Company classifiesavailable-for-sale securities U.S. Treasuries with stated maturities of greater than three months and less than one year from the date of purchase asin short-term investments.Available-for-sale securitiesinvestments, U.S Treasuries with stated maturities greater than one year are classified asthe accompanyingits consolidated balance sheets.
|
f. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
g. |
|
h. |
|
i. |
|
|
j. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Balances as of September 30, 2019 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 43,011,647 | $ | 43,011,647 | $ | — | $ | — | ||||||||
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|
|
|
|
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| |||||||||
Short-term investments: | ||||||||||||||||
Short-term bond fund | $ | 16,604,773 | $ | 16,604,773 | $ | — | $ | — | ||||||||
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| |||||||||
U.S. Treasuries | $ | 14,956,900 | $ | — | $ | 14,956,900 | $ | — | ||||||||
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|
|
|
|
|
|
| |||||||||
Investments: | ||||||||||||||||
U.S. Treasuries | $ | 5,008,800 | $ | — | $ | 5,008,800 | $ | — | ||||||||
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|
|
|
|
|
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| |||||||||
Balances as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 14,462,087 | $ | 14,462,087 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Short-term investments: | ||||||||||||||||
Short-term bond fund | $ | 26,541,349 | $ | 26,541,349 | $ | — | $ | — | ||||||||
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| |||||||||
U.S. Treasuries | $ | 10,380,864 | $ | — | $ | 10,380,864 | $ | — | ||||||||
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|
|
|
| |||||||||
Investments: | ||||||||||||||||
U.S. Treasuries | $ | 5,008,243 | $ | — | $ | 5,008,243 | $ | — | ||||||||
|
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|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Balances as of September 30, 2020 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 12,635,927 | $ | 12,635,927 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 94,992,100 | $ | — | $ | 94,992,100 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 10,002,749 | $ | 10,002,749 | $ | — | $ | — | ||||||||
Balances as of December 31, 2019 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 23,963,617 | $ | 23,963,617 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 59,932,200 | $ | — | $ | 59,932,200 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
U.S. Treasuries | $ | 5,007,050 | $ | — | $ | 5,007,050 | $ | — | ||||||||
k. |
|
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms do not include options to extend or terminate the lease as it is not reasonably certain that it will exercise these options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease andnon-lease components, which are generally accounted for separately. Refer to Note 2.r. for discussion on adoption method.
l. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
|
As of September 30,2020 and 2019, all of the Company’s sales arewere to its Customer.
2. | Basis of Presentation and Significant Accounting Policies (continued). |
|
receivables,receivable, net on the consolidated balance sheets.
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
operations and comprehensive income (loss).
from sales of the collaborative product.
m. |
RESEARCH AND DEVELOPMENT. |
The Company currently has a single product with limited commercial sales experience, which makes it difficult to evaluate its current business, predict its future prospects and forecast financial performance and growth. The Company has invested a significant portion
2. | Basis of Presentation and Significant Accounting Policies (continued). |
n. |
|
|
o. |
|
p. | ROYALTIES. |
q. | INCOME TAXES. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
r. | COMPREHENSIVE INCOME (LOSS). available-for-sale |
s. |
|
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Basic weighted average common shares outstanding | 102,974,105 | 102,641,504 | 102,864,571 | 102,598,740 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Common stock issuable upon the exercise of stock options | 4,071,129 | — | 2,957,038 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted weighted average common shares outstanding | 107,045,234 | 102,641,504 | 105,821,609 | 102,598,740 | ||||||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Basic weighted average common shares outstanding | 103,535,431 | 102,974,105 | 103,452,025 | 102,864,571 | ||||||||||||
Effect of dilutive securities | 2,780,810 | 4,071,129 | 2,934,592 | 2,957,038 | ||||||||||||
Dilutive weighted average common shares outstanding | 106,316,241 | 107,045,234 | 106,386,617 | 105,821,609 | ||||||||||||
|
t. |
|
u. | RECENTLY ISSUED ACCOUNTING STANDARDS. 2018-18, Collaborative Arrangements (Topic 2014-09 (codified in ASC 606). The amendments require the application of ASC 606 existing guidance to determine the units of account that are distinct in a collaborative arrangement for purposes of identifying transactions with customers. If a unit of account within the collaborative arrangement is distinct and is with a customer, an entity shall apply the guidance in Topic 606 to 2018-18 from presenting a transaction together with “revenue from contracts with customers” unless the unit of account is within the scope of ASC 606 and |
In June 2018, the FASB issued ASUNo. 2018-07,Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting that largely aligns the accounting for share-based payment awards issued to employees and nonemployees. Under this ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. ASU2018-07 is effective for all entities for annual reporting periods beginning after December 15, 2018, including interim reporting periods within each annual reporting period, with early adoption permitted. The Company has adopted this standard as of January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
|
2. |
Basis of Presentation and Significant Accounting Policies (continued). |
At September 30, 2019: U.S. Treasuries - ST U.S. Treasuries - LT Total At December 31, 2018: U.S. Treasuries - ST U.S. Treasuries - LT Total 2019. The Company did not hold any securities in an unrealized 2020. Due in one year or less Due after one year Prepaid research fees Prepaid insurance Prepaid commercialization fees Prepaid subscription fees Prepaid manufacturing Other Total prepaid expenses and other current assets Estimated
Fair Value Gross
Unrealized
Gains Gross
Unrealized
Losses Amortized
Cost $ 14,956,900 $ 9,794 $ — $ 14,947,106 5,008,800 9,634 — 4,999,166 $ 19,965,700 $ 19,428 $ — $ 19,946,272 $ 10,380,864 $ — $ (1,835 ) $ 10,382,699 5,008,243 — (18,413 ) 5,026,656 $ 15,389,107 $ — $ (20,248 ) $ 15,409,355
Unrealized
Gains
Unrealized
Losses $ 94,992,100 $ — $ (1,195 ) $ 94,993,295 10,002,749 — (5,276 ) 10,008,025 $ 104,994,849 $ — $ (6,471 ) $ 105,001,320 $ 59,932,200 $ 2,042 $ — $ 59,930,158 5,007,050 7,463 — 4,999,587 $ 64,939,250 $ 9,505 $ — $ 64,929,745 no0 realized gains or losses from20192020 or 2018.loss position for more than 12 months as of September 30, 2019.2019,2020, by contractual maturity, are summarized as follows: September 30, 2019 $ 19,965,700 — $ 19,965,700 $ 104,994,849 September 30, 2019 December 31, 2018 $ 372,784 $ 358,209 151,474 800,261 112,356 17,030 537,587 170,552 1,734,360 — 430,838 303,729 $ 3,339,399 $ 1,649,781 $ 3,268,032 $ 1,526,013 247,610 1,263,129 561,430 501,251 472,093 481,057 168,611 62,959 306,678 — 589,598 516,665 $ 5,614,052 $ 4,351,074
5. | Operating Leases. |
For the Three Months Ended September 30, 2019 | For the Nine Months Ended September 30, 2019 | |||||||
Operating lease cost | $ | 74,079 | $ | 222,237 |
For the Three Months Ended September 30, 2020 | For the Nine Months Ended September 30, 2020 | |||||||
Operating lease cost | $ | 61,111 | $ | 200,624 |
September 30, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows | $ | 245,663 | ||
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ | 15,915 |
September 30, 2020 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows | $ | 253,024 | ||
Right-of-use | ||||
Operating leases | $ | 37,528 |
September 30, 2019 | ||||
Operating leaseright-of-use assets | $ | 952,340 | ||
|
| |||
Other current liabilities | $ | 294,433 | ||
Operating lease liabilities, net of current portion | 725,700 | |||
|
| |||
Total operating lease liabilities | $ | 1,020,133 | ||
|
|
| ||||
|
Payments
September 30, 2020 | ||||
Operating lease right-of-use | $ | 12,167 | ||
Other current liabilities | $ | 114,563 | ||
Operating lease liabilities, net of current portion | — | |||
Total operating lease liabilities | $ | 114,563 | ||
Weighted average remaining lease term | 0.3 years | |||
Weighted average discount rate | 3.68 | % |
2019 (remaining three months) | $ | 84,061 | ||
2020 | 339,605 | |||
2021 | 349,788 | |||
2022 | 329,662 | |||
|
| |||
Total lease payments | 1,103,116 | |||
Less imputed interest | (82,983 | ) | ||
|
| |||
Total | $ | 1,020,133 | ||
|
|
2020 (remaining three months) | $ | 86,582 | ||
2021 | 28,860 | |||
2022 | — | |||
Total lease payments | 115,442 | |||
Less imputed interest | (879 | ) | ||
Total | $ | 114,563 | ||
6. |
|
Property and equipment, net consists of the following:
September 30, 2019 | December 31, 2018 | |||||||
Computer equipment | $ | 50,904 | $ | 52,704 | ||||
Furniture and equipment | 230,741 | 212,451 | ||||||
Leasehold improvements | — | 177,417 | ||||||
|
|
|
| |||||
281,645 | 442,572 | |||||||
Less: Accumulated depreciation | (140,557 | ) | (197,147 | ) | ||||
|
|
|
| |||||
Total property and equipment, net | $ | 141,088 | $ | 245,425 | ||||
|
|
|
|
Depreciation expense was $6,532 and $26,718, respectively, for the three and nine-month periods ended September 30, 2019 and $9,294 and $25,485, respectively for the three and nine-month periods ended September 30, 2018.
Accrued Expenses and Other Liabilities. |
September 30, 2019 | December 31, 2018 | |||||||
Accrued preclinical and clinical trial expenses | $ | 768,114 | $ | 821,633 | ||||
Accrued professional fees | 1,232,567 | 1,311,061 | ||||||
Accrued compensation and benefits | 1,739,719 | 1,941,449 | ||||||
Accrued license fees | 6,880,265 | 3,000,000 | ||||||
Operating lease liability | 294,433 | — | ||||||
Accrued variable consideration | 1,330,981 | — | ||||||
Deferred rent and lease incentive | — | 33,408 | ||||||
Accrued income tax | 1,058,039 | — | ||||||
Other | 531,174 | 66,436 | ||||||
|
|
|
| |||||
Current accrued expenses and other liabilities | 13,835,292 | 7,173,987 | ||||||
Lease liability -non-current | 725,700 | — | ||||||
Deferred rent and lease incentive –non-current | — | 154,799 | ||||||
|
|
|
| |||||
Non-current accrued expenses and other liabilities | 725,700 | 154,799 | ||||||
|
|
|
| |||||
Total accrued expenses and other liabilities | $ | 14,560,992 | $ | 7,328,786 | ||||
|
|
|
|
September 30, 2020 | December 31, 2019 | |||||||
Accrued preclinical and clinical trial expenses | $ | 643,578 | $ | 1,183,513 | ||||
Accrued professional fees | 1,923,164 | 1,241,526 | ||||||
Accrued compensation and benefits | 2,877,077 | 3,064,645 | ||||||
Accrued license fees | 7,840,955 | 8,751,991 | ||||||
Accrued purchases | 1,332,190 | 1,313,310 | ||||||
Accrued contributions | — | 1,535,000 | ||||||
Operating lease liability | 114,563 | 300,518 | ||||||
Accrued variable consideration | 859,399 | 884,764 | ||||||
Accrued income tax | 566,075 | 1,533,696 | ||||||
Other | 69,608 | 172,332 | ||||||
Current accrued expenses and other liabilities | 16,226,609 | 19,981,295 | ||||||
Lease liability—non-current | — | 647,532 | ||||||
Non-current accrued expenses and other liabilities | — | 647,532 | ||||||
Total accrued expenses and other liabilities | $ | 16,226,609 | $ | 20,628,827 | ||||
7. | Collaborative |
For$2.0 million milestone payment on the commercial launch of the product by Par. As of September 30, 2020 and 2019, 0 milestone payments have been earned.
7. | Collaborative Arrangement s (continued). |
8. | Commitments and Contingencies. |
9. | Agreements. |
a. |
|
|
b. |
|
10. | Income Taxes. |
expense.
11. | Stockholders’ Equity. |
|
20162019. NaN shares of preferred stock were outstanding at September 30, 2020 and December 31, 2019.
2017 Shelf Registration Statement
On July 12, 2017, the Company filed a universal shelf Registration Statement on FormS-3 (the 2017 Shelf Registration Statement) with the SEC to sell up to $150$200 million of common stock, preferred stock, warrants to purchase common stock, or debt securities (including debtand units consisting of one or more of such securities that may be convertible or exchangeable for common stock or other securities), which securities may be offered separately or together in units or multiple series.(the “2020 Shelf Registration Statement”). The 20172020 Shelf Registration Statement (fileNo. 333-219259) no.
On November 28, 2017,31, 2020. As of the Company filed a prospectus supplement and offered for sale 16,428,572 sharesdate of its common stock at a price of $3.50 per share in an underwritten public offeringthis report, no offerings have been completed under the 2017 Shelf Registration. The Company received gross proceeds in the public offering of approximately $57.5 million before underwriting commission and incurred expenses of approximately $3.7 million.
At September 30, 2019, there is approximately $92.5 million available for future sale under the 2017Company’s 2020 Shelf Registration Statement.
12. | Stock Compensation. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Research and development | $ | 242,867 | $ | 240,122 | $ | 803,800 | $ | 820,062 | ||||||||
Selling, general and administrative | 574,193 | 518,054 | 1,871,667 | 1,700,961 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total stock-based compensation | $ | 817,060 | $ | 758,176 | $ | 2,675,467 | $ | 2,521,023 | ||||||||
|
|
|
|
|
|
|
|
|
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Research and development | $ | 399,247 | $ | 242,867 | $ | 1,238,521 | $ | 803,800 | ||||||||
Selling, general and administrative | 1,078,599 | 574,193 | 3,553,138 | 1,871,667 | ||||||||||||
Total stock-based compensation | $ | 1,477,846 | $ | 817,060 | $ | 4,791,659 | $ | 2,675,467 | ||||||||
2020.
Company.
During the three and nine-month periods ended September 30, 2018, options to purchase 89,999 shares and 136,665 shares, respectively, of the Company’s common stock were exercised, with proceeds of $104,532 and $146,064, respectively, to the Company.
Common
Units
13. | Subsequent Events. |
|
|
|
|
|
|
Overview
In order to help adult LEMS patients afford their medication, we, like other pharmaceutical companies which are marketing drugs for ultra-orphan conditions, have developed an array of financial assistance programs that are available to reduce$0.00not more than $10.00 per month is available for all LEMS patients prescribed Firdapse
We are currently conducting asuch proceeding.
We previously conducted
future scientific forum.
There can be no assurance as to whether we will be permitted to submit an sNDA for this indication, or, even if we are permitted to submit such application, whether it will ever be approved (and, even if it is approved, for what genetic subtypes of CMS it will be approved).
Because the FDA has granted Orphan Drug Designation for Firdapse® for the treatment of patients with CMS and Myasthenia Gravis (MG), if we are the first to receive approvals in the future for Firdapse® for the treatment of CMS orMuSK-MG, of which there can be no assurance, we would be eligible to receive seven years of marketing exclusivity for those indications added to our Firdapse® labeling.
We are conducting have completed
report top-line results
In October 2019, we submitted an NDS
Firdapse
Further, thererights.
On December 18, 2018, we entered into a definitive agreement with Endo International plc’s subsidiary, Endo Ventures Limited (“Endo”), for the further development and commercialization of generic Sabrilhave received$500,000, and$500,000. We will be entitled to receive a milestone payment of $2.0 million on the commercial launch of the product. Further, we will receive milestone payments based on achievement of regulatory approvals, and a sharing of defined net profits upon commercialization and we are obligated to share the costs of certain expenses for development.
development expenses.
Available
Prior to the launch of Firdapse® in January 2019 we did not generate revenues for product sales. In the periods ended
the Endo collaborative agreement to fluctuate in future periods based on our collaborator’s ability to meet various regulatory milestones set forth in such agreement. At September 30, 2020, we generated revenues of $150,000 from
manufactured and distributed.
2019. We recognized $150,000 in revenues from our collaborative arrangements for the three and nine-month periods ended September 30, 2020. We had no revenues from our collaborative arrangement for the three and nine-month periods ended September 30, 2019.
FDA approval of Firdapse
Three months ended September 30, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Research and development expenses | $ | 4,354,172 | $ | 4,298,247 | 55,925 | 1.3 | % | |||||||||
Employee stock-based compensation | 242,867 | 240,122 | 2,745 | 1.1 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total research and development expenses | $ | 4,597,039 | $ | 4,538,369 | 58,670 | 1.3 | % | |||||||||
|
|
|
|
|
|
|
|
For the three months ended September 30, 2020 and 2019 research and development were in-line with those in the same period in 2018.
as follows:
Three months ended September 30, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Research and development expenses | $ | 3,349,986 | $ | 4,354,172 | (1,004,186 | ) | (23.1 | ) | ||||||||
Employee stock-based compensation | 399,247 | 242,867 | 156,380 | 64.4 | ||||||||||||
Total research and development expenses | $ | 3,749,233 | $ | 4,597,039 | (847,806 | ) | (18.4 | ) | ||||||||
Nine months ended September 30, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Research and development expenses | $ | 11,730,562 | $ | 10,682,173 | 1,048,389 | 9.8 | % | |||||||||
Employee stock-based compensation | 803,800 | 820,062 | (16,262 | ) | (2.0 | %) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total research and development expenses | $ | 12,534,362 | $ | 11,502,235 | 1,032,127 | 9.0 | % | |||||||||
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2020 and 2019 were as follows:
Nine months ended September 30, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Research and development expenses | $ | 11,083,166 | $ | 11,730,562 | (647,396 | ) | (5.5 | ) | ||||||||
Employee stock-based compensation | 1,238,521 | 803,800 | 434,721 | 54.1 | ||||||||||||
Total research and development expenses | $ | 12,321,687 | $ | 12,534,362 | (212,675 | ) | (1.7 | ) | ||||||||
expense of stock options awards to certain employees and stock option awards due to headcount increases.
Three months ended September 30, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Selling | $ | 4,670,568 | $ | — | 4,670,568 | 0 | % | |||||||||
General and administrative | 2,823,031 | 3,126,180 | (303,149 | ) | (9.7 | %) | ||||||||||
Employee stock-based compensation | 574,193 | 518,054 | 56,139 | 10.8 | % | |||||||||||
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Total selling, general and administrative expenses | $ | 8,067,792 | $ | 3,644,234 | 4,423,558 | 121.4 | % | |||||||||
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Three months ended September 30, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Selling | $ | 5,578,521 | $ | 4,670,568 | 907,953 | 19.4 | ||||||||||
General and administrative | 3,327,841 | 2,823,031 | 504,810 | 17.9 | ||||||||||||
Employee stock-based compensation | 1,078,599 | 574,193 | 504,406 | 87.8 | ||||||||||||
Total selling, general and administrative expenses | $ | 9,984,961 | $ | 8,067,792 | 1,917,169 | 23.8 | ||||||||||
Nine months ended September 30, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Selling | $ | 14,655,613 | $ | — | 14,655,613 | 0 | % | |||||||||
General and administrative | 8,944,694 | 7,248,702 | 1,695,992 | 23.4 | % | |||||||||||
Employee stock-based compensation | 1,871,667 | 1,700,961 | 170,706 | 10.0 | % | |||||||||||
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Total selling, general and administrative expenses | $ | 25,471,974 | $ | 8,949,663 | 16,522,311 | 184.6 | % | |||||||||
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Nine months ended September 30, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Selling | $ | 17,004,447 | $ | 14,655,613 | 2,348,834 | 16.0 | ||||||||||
General and administrative | 10,323,782 | 8,944,694 | 1,379,088 | 15.4 | ||||||||||||
Employee stock-based compensation | 3,553,138 | 1,871,667 | 1,681,471 | 89.8 | ||||||||||||
Total selling, general and administrative expenses | $ | 30,881,367 | $ | 25,471,974 | 5,409,393 | 21.2 | ||||||||||
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business.
Income Taxes.
March 31, 2019. Our effective income tax rate was 4.18%2.79% and 0.00%4.18% for the nine months ended September 30, 20192020 and 2018,2019, respectively. Differences in the effective tax and the statutory federal income tax rate of 21% isare driven by state income taxes and anticipated annual permanent differences, including orphan drug credit expense limitations and other items.
Our
We
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On December 23, 2016, we filed a shelf registration statement with the SEC to sell up to $33.8 million of common stock (the “2016 Shelf Registration Statement”). This shelf registration statement was declared effective by the SEC on January 9, 2017. We have made no sales under the 2016 Shelf Registration Statement.
31, 2020. As of the date of this Form10-Q,report, no offerings have been completed under the full amount of our 20162020 Shelf Registration Statement and $92.5 million of our 2017 Shelf Registration Statement remains available for future sales.
Statement.
Net cash provided by investing activities was $5,565,824 for the nine-month period ended September 30, 2019, consisting primarily of sales/proceeds from sales and maturities of investments of $40,310,595, and partially offset by purchases of investments of $34,725,401. Net cash used in investing activities was $29,226,047, for the nine-month period ended September 30, 2018, consisting primarily of purchases of investments of $36,790,854 and partially offset by sales/maturities of investments of $7,600,000.
Obligations and Arrangements.
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limiting the foregoing, “believes”, “anticipates”, “proposes”, “plans”, “expects”, “intends”, “may”, and other similar expressions are intended to identify forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or other achievements to be materially different from any future results, performanceperformances or achievements expressed or implied by such forward lookingforward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the section entitled “Item 1A – Risk Factors” in our 2019 Annual Report on Form
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our estimates regarding anticipated capital requirementsstate laws, rules and our needs for additional financing in the future;
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whether
whether
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whether
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changes
the
our
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whether
whether we will be the first company to receive approval of3,4-DAPfor the treatment of CMS;
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whether
even
whether Catalyst
the ability of our third-party suppliers and contract manufacturers to maintain compliance with current Good Manufacturing Practices (cGMP);
the ability of our distributor and the specialty pharmacies that distribute our product to maintain compliance with applicable law; and
our ability to maintain compliance with applicable rules relating to our patient assistance programs and our contributions to 501(c)(3) organizations that support LEMS patients.
Our current plans and objectives are based on assumptions relating to the commercialization of Firdapse
a. | We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of September 30, |
b. | During the three months ended September 30, |
United StatesITEM 1.LEGAL PROCEEDINGSIn 2018, we became aware that certain patents granted to Northwestern University (which patents have been licensed by Northwestern to a third party) for a new GABA aminotransferase inhibitor were developed fromCPP-115, which had previously been licensed to us by Northwestern. As a result, on October 26, 2018, we terminated the license agreement forCPP-115 and commenced an arbitration proceeding against Northwestern seeking damages for alleged breachesthe license agreement. Shortly thereafter, Northwestern filed counterclaims against us Ruzurgiarbitration action seeking damages for alleged breaches by us of the license agreement. On May 21, 2019, we entered into a settlement agreement with Northwestern that resolved all pending disputes between the parties with no admission of liability by either party, released all claims of liability or wrongdoing between us and Northwestern, and dismissed the pending arbitration. Under the settlement agreement, we received $100,000 at the time the settlement agreement was executed and we will also be entitled to receive certain contingent compensation that will be reported when and if it is received.In May 2019, the FDA approved an NDA for Jacobus Pharmaceuticals for Ruzurgi®, their version of amifampridine(3,4-DAP), for the treatment of pediatric LEMS patients (ages 6 to under 17). We believe that Jacobus is offering Ruzurgi® at a lower price than we are offering Firdapse®. In addition, while the NDA for Ruzurgi® only covers pediatric patients, we believe that Ruzurgi® is being prescribed off-label to adult LEMS patients. If Jacobus is able to successfully sell Ruzurgi®off-label to adult LEMS patients, it could have a material adverse effect on our business, financial condition and results of operations.allegesalleged that the FDA’s approval of Ruzurgiseekssought an order vacating the FDA’s approval of RuzurgiFDACompany has answered our complaint andappealed the matter is currently inresult to the discovery phase.Eleventh Circuit Court of Appeals. There can be no assurance as to the outcome of this lawsuit.Additionally,
The following is an additional risk factor regarding factors that you should consider that has recently arisen:
The FDA has approved Ruzurgi®, another formulation of amifampridine(3,4-DAP) for LEMS for the treatment of pediatric patients.
In May 2019, we became aware that Jacobus Pharmaceutical had been granted approval of an NDA for Ruzurgi®, their version of amifampridine(3,4-DAP) for pediatric LEMS patients (ages 6 to under 17). We believe that Jacobus is offering Ruzurgi® at a lower price than we are offering Firdapse®. In addition, while the NDA for Ruzurgi® only covers pediatric patients, we believe Ruzurgi® is being prescribedoff-label in adult patients. While we believe that this approval was violative of our statutory rights and was in multiple other respects arbitrary, capricious, and contrary to law, and we have filed suit to that effect, there can be no assurance that our claims will be successful. If Jacobus is able to successfully sell Ruzurgi®off-label for adult LEMS patients, it could have a material adverse effect on our business, financial condition and results of operations.
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, has been formatted in Inline XBRL. |
Catalyst Pharmaceuticals, Inc. | ||
By: | /s/ Alicia Grande | |
Alicia Grande | ||
Vice President, Treasurer and Chief Financial Officer |
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