Cadence Pharmaceuticals Reports First Quarter 2013 Financial Results
SAN DIEGO, May 2, 2013
SAN DIEGO, May 2, 2013 /PRNewswire/ --Cadence Pharmaceuticals, Inc. (NASDAQ:
CADX), a biopharmaceutical company focused on acquiring, in-licensing,
developing and commercializing proprietary products principally for use in the
hospital setting, today reported financial results for the first quarter ended
March 31, 2013.
During the first quarter of 2013, Cadencereported net product revenue from
sales of OFIRMEV^® (acetaminophen) injection of $23.6 million, which includes
the one-time recognition of $2.6 million in deferred revenue on previously
shipped product. Consistent with other companies with products at this stage
of commercialization, and based upon its determination it had obtained
sufficient product return history to reasonably estimate future wholesaler
returns, beginning on January 1, 2013, the company began to recognize revenue
at the time that the product is sold to a wholesaler.
Excluding the recognition of $2.6 million in previously deferred revenue, net
product revenue for the first quarter of 2013 was $21.0 million, which
represents an increase of more than 160% from the $8.0 million in net product
revenue recognized for the first quarter of 2012, and an increase of 23% from
the $17.1 million recognized for the fourth quarter of 2012.
Highlights for the first quarter of 2013 included:
oThe gross margin on sales of OFIRMEV was 65% for the first quarter of
2013, as compared to 47% for the first quarter of 2012.
oAs of March 31, 2013, the company had over 4,000 unique customer accounts,
an increase of nearly 50% from the first quarter of 2012.
oThe average order size by end-user customers increased 28% during the
first quarter of 2013 as compared to the first quarter of 2012.
oOn March 12, 2013, the company announced that the Department of Veterans
Affairs added OFIRMEV to the VA National Formulary, which is a list of
products generally covered under VA pharmacy benefits.
oOn March 4, 2013, the company entered into an agreement with Laboratorios
Grifols, S.A., for the development, manufacture and supply of commercial
quantities of OFIRMEV in flexible plastic bags. Cadence plans to submit a
supplemental NDA to the FDA in the second half of 2013 seeking approval of
the product to be manufactured by Grifols.
oIn January 2013, Cadence received a total of $14.6 million from the waiver
of its option to purchase Incline Therapeutics, Inc., and the sale of the
shares of Incline stock held by Cadence, resulting in a gain of $7.7
oOn February 22, 2013, Cadence amended its existing supply agreement for
OFIRMEV with Lawrence Laboratories, a member of the Bristol-Myers Squibb
Company group of companies, extending the term of the Agreement through
oOn March 6, 2013, Cadence and Baxter Healthcare Corporation announced the
termination of the development and supply agreement for OFIRMEV between
the two companies.
"In the first quarter we delivered strong sales growth, strengthened our
balance sheet and solidified our supply chain for OFIRMEV. Our extended
relationship with Lawrence Laboratories and agreement with Grifols to develop
flexible plastic bags for OFIRMEV should enable us to meet increasing customer
demand for OFIRMEV," said Ted Schroeder, President and CEO of Cadence.
Cadence's net product revenue was $23.6 million for the three months ended
March 31, 2013, which represents an increase of $15.6 million from the $8.0
million in net product revenue reported for the three months ended March 31,
2012. As of January 1, 2013, Cadence began to recognize revenue at the time
that product is sold to a wholesaler, consistent with other companies with
products at this stage of commercialization. Previously, revenue was
recognized only when wholesalers sold the product to the end-user customer.
Cadence recognized this deferred revenue during the period as it determined it
had obtained sufficient product return history as of January 1, 2013, to
reasonably estimate future wholesaler returns. As a result, the company
recorded a one-time adjustment during the three months ended March 31, 2013,
to recognize deferred revenue on previously shipped product, resulting in
additional net revenue of $2.6 million and cost of sales of $0.9 million, for
a net gross margin impact of $1.7 million.
For the three months ended March 31, 2013, Cadence reported a net loss of $1.4
million, or $0.02per share, compared to a net loss of $22.7 million, or $0.27
per share, for the comparable period in 2012. Included in the company's net
loss for the three months ended March 31, 2013, was a gain of $7.7 million
Cadence recorded on the waiver, termination and sale of its Incline assets in
January 2013, for which the company received cash payments totaling $14.6
million. Excluding the $7.7 million gain from the Incline transaction, and the
$1.7 million gross margin impact from the change in the company's revenue
recognition accounting estimate, Cadence's net loss for the three months ended
March 31, 2013, was $10.8 million, or $0.13 per share.
Gross margin for the three months ended March 31, 2013, was 65%, compared to
47% for the comparable period in 2012. The increase in margin was primarily a
result of higher freight costs incurred during the first quarter of 2012 that
were not incurred in 2013, the impact of price increases implemented in July
2012 and January 2013, and a one-time credit of $0.3 million recorded during
the three months ended March 31, 2013, in connection with the termination of
the company's supply agreement with Baxter. Operating expenses, including
patent amortization, decreased $2.0 million for the three months ended March
31, 2013, to $23.4 million, from $25.4 million for the same period in 2012.
This decrease in costs and expenses for the 2013 period was primarily
attributable to the timing of educational and marketing programs, combined
with lower personnel costs for the company's hospital sales specialists. These
reductions were partially offset by higher legal expenses incurred during the
2013 period related to the company's intellectual property litigation.
As of March 31, 2013, Cadence held cash, cash equivalents and short-term
investments of $64.2 million, an increase of $2.1 million from the $62.1
million at December 31, 2012. Net accounts receivable at March 31, 2013, was
As of May 2, 2013, Cadence is increasing its guidance to reflect the impact of
the deferred revenue recognized in the first quarter of 2013. It now expects
that net product revenue from sales of OFIRMEV for the twelve months ending
December 31, 2013, will range from approximately $97.0 million to $103.0
Conference Call and Webcast on May 2, 2013 at 1:30 p.m. Pacific Time (4:30
p.m. Eastern Time)
Cadence management will host a conference call on May 2, 2013, at 1:30 p.m.
Pacific Time (4:30 p.m. Eastern Time) and interested investors may participate
in the conference call by dialing (877) 303-9145 (domestic) or (760) 536-5203
(international). To access the webcast, please visit the company's website at
www.cadencepharm.com and go to the Investors page. A replay of the webcast
will be available approximately two hours after the call and remain available
on the company's website until the next quarterly financial results call.
Cadence uses the Investors portion of its website as one means of disclosing
material non-public information, and investors are encouraged to monitor
Cadence's website in addition to following the company's press releases, SEC
filings and public conference calls and webcasts.
About OFIRMEV^® (Acetaminophen) Injection
OFIRMEV (acetaminophen) injection (1000 mg / 100 mL, 10 mg / mL; for
intravenous use only), Cadence Pharmaceuticals' proprietary intravenous
formulation of acetaminophen, is indicated for the management of mild to
moderate pain, the management of moderate to severe pain with adjunctive
opioid analgesics, and the reduction of fever. The FDA approval of OFIRMEV was
based on data from clinical trials in approximately 1,020 adult and 355
pediatric patients. These trials included two studies evaluating the safety
and effectiveness of OFIRMEV in the treatment of pain, and one study
evaluating OFIRMEV in the treatment of fever. The effectiveness of OFIRMEV for
the treatment of acute pain and fever has not been studied in pediatric
patients less than 2 years of age.
Important Safety Information
Do not exceed the maximum recommended daily dose of acetaminophen.
Administration of acetaminophen by any route in doses higher than recommended
may result in hepatic injury, including the risk of severe hepatotoxicity and
death. OFIRMEV is contraindicated in patients with severe hepatic impairment,
severe active liver disease or with known hypersensitivity to acetaminophen or
to any of the excipients in the formulation. Acetaminophen should be used with
caution in patients with the following conditions: hepatic impairment or
active hepatic disease, alcoholism, chronic malnutrition, severe hypovolemia,
or severe renal impairment.OFIRMEV should be administered only as a 15-minute
intravenous infusion. Discontinue OFIRMEV immediately if symptoms associated
with allergy or hypersensitivity occur. Do not use in patients with
acetaminophen allergy. The most common adverse reactions in patients treated
with OFIRMEV were nausea, vomiting, headache, and insomnia in adult patients
and nausea, vomiting, constipation, pruritus, agitation, and atelectasis in
pediatric patients. The antipyretic effects of OFIRMEV may mask fever in
patients treated for post-surgical pain.
For more information, please see the complete OFIRMEV Prescribing Information,
available at www.OFIRMEV.com or www.cadencepharm.com.
Non-GAAP Financial Measures
This press release provides financial measures for net revenue, cost of sales,
gross margin, net loss and basic and diluted loss per share that exclude
specifically identified non-routine items, and are therefore not calculated in
accordance with accounting principles generally accepted in the United States
("GAAP"). Management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance that enhances
management's and investors' ability to evaluate and compare Cadence's
These non-GAAP financial measures are not intended to be used in isolation and
should not be considered a substitute for any other performance measure
determined in accordance with GAAP. Investors and potential investors are
cautioned that there are material limitations associated with the use of
non-GAAP financial measures as an analytical tool, including that other
companies may calculate similar non-GAAP financial measures differently than
Cadence, limiting their usefulness as a comparative tool. Cadence compensates
for these limitations by providing specific information regarding the GAAP
amount excluded from the non-GAAP financial measures. Cadence further
compensates for the limitations of its use of non-GAAP financial measures by
presenting comparable GAAP measures more prominently. Investors and potential
investors are encouraged to review the calculation of non-GAAP financial
measures contained within this press release with Cadence's GAAP net income
and basic and diluted loss per share.
About Cadence Pharmaceuticals, Inc.
Cadence Pharmaceuticals is a biopharmaceutical company focused on acquiring,
in-licensing, developing and commercializing proprietary products principally
for use in the hospital setting. The current version of Cadence
Pharmaceuticals' corporate overview may be viewed on the Investors page of
www.cadencepharm.com under "Events & Presentations" by selecting "Corporate
Statements included in this press release and Cadence's conference call that
are not a description of historical facts are forward-looking statements.
Words such as "plans," "believes," "expects," "anticipates," and "will," and
similar expressions, are intended to identify forward-looking statements, and
are based on Cadence's current beliefs and expectations. Such statements
include, without limitation, statements regarding: Cadence's plan to submit a
supplemental new drug application to the FDA for OFIRMEV in flexible plastic
bags in the second half of 2013; the company's belief that it will be able to
meet its customers' increasing requirements for OFIRMEV; and the company's
guidance regarding net product revenue from sales of OFIRMEV for the twelve
months ending December 31, 2013. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof.
Cadence's actual future results may differ materially from Cadence's current
expectations due to the risks and uncertainties inherent in its business.
These risks include, but are not limited to: Cadence's dependence on the
successful commercialization of OFIRMEV, which is the company's only product;
Cadence's ability to achieve broad market acceptance and generate revenues
from sales of OFIRMEV; Cadence's dependence on its contract manufacturers and
its ability to ensure an adequate and continued supply of OFIRMEV to meet
market demand; Cadence's ability to successfully enforce its marketing
exclusivities and intellectual property rights, and to defend the patents
covering OFIRMEV, including in current intellectual property litigation with
the parties that have submitted abbreviated new drug applications ("ANDAs")
for generic versions of OFIRMEV; the potential that Cadence may be required to
continue intellectual property litigation for substantial lengths of time or
file additional lawsuits to defend its patent rights from challenges by
companies that have submitted ANDAs for generic versions of OFIRMEV, and the
substantial costs associated with such lawsuits; the potential introduction of
generic competition to OFIRMEV in the event Cadence is unsuccessful in current
or future intellectual property litigation; Cadence's dependence on its
licensors for the maintenance and enforcement of its intellectual property
rights; the potential product liability exposure associated with
pharmaceutical products such as OFIRMEV and other products Cadence may
in-license or acquire; Cadence's ability to fully comply with numerous
federal, state and local laws and regulatory requirements that apply to its
commercial activities; public concern regarding the safety of drug products
such as OFIRMEV, which could result in the implementation by regulatory
agencies of new requirements to include unfavorable information in the
labeling for OFIRMEV; the risk that Cadence may not be able to raise
sufficient capital when needed, or at all; and other risks detailed under
"Risk Factors" and elsewhere in Cadence's periodic reports and other filings
made with the Securities and Exchange Commission from time to time. All
forward-looking statements are qualified in their entirety by this cautionary
statement, which is made under the safe harbor provisions of Section 21E of
the Private Securities Litigation Reform Act of 1995, and Cadence undertakes
no obligation to revise or update this press release to reflect events or
circumstances after the date hereof.
Cadence^® and OFIRMEV^® are trademarks of Cadence Pharmaceuticals, Inc.
Contact: William R. LaRue Kelli France
SVP & Chief Financial Officer Media Relations
Cadence Pharmaceuticals, Inc. WCG
Phone: 858-436-1400 Phone: 415-946-1076
CADENCE PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
Product revenue, net $ 23,612 $ 8,004
Total revenues 23,612 8,004
Costs and expenses:
Cost of product sales 8,167 4,246
Amortization of patent license 336 336
Research and development 1,363 1,511
Selling, general and 21,635 23,531
Other 50 -
Total costs and expenses 31,551 29,624
Loss from operations (7,939) (21,620)
Other income (expense), net 6,576 (1,053)
Net loss $ (1,363) $ (22,673)
Basic and diluted net loss per $ (0.02) $ (0.27)
Shares used to compute basic and
diluted net loss per share 85,672 85,519
CADENCE PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
March 31, December 31,
Cash, cash equivalents and $ 64,240 $ 62,072
Restricted cash 640 640
Accounts receivable, net 8,908 6,152
Inventory 6,083 6,498
Prepaid expenses and other 2,041 1,154
Total current assets 81,912 76,516
Property and equipment, net 1,905 1,967
Intangible assets, net 11,754 12,090
Other assets 90 7,106
Total assets $ 95,661 $ 97,679
Liabilities and Stockholders' Equity
Accounts payable $ 5,808 $ 5,796
Accrued liabilities 12,532 12,969
Deferred revenue - 2,234
Current debt, less discount 2,552 -
Total current liabilities 20,892 20,999
Other liabilities 233 51
Long-term debt, less discount 26,388 28,818
Total stockholders' equity 48,148 47,811
Total liabilities and $ 95,661 $ 97,679
SOURCE Cadence Pharmaceuticals, Inc.
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