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Hyperion Therapeutics Announces Second Quarter 2013 Financial Results



Hyperion Therapeutics Announces Second Quarter 2013 Financial Results

Strong Early Launch Progress With Company's First Product, RAVICTI(R);
Completed Integration of Acquired Product, BUPHENYL(R)

SOUTH SAN FRANCISCO, Calif., Aug. 14, 2013 (GLOBE NEWSWIRE) -- Hyperion
Therapeutics, Inc. (Nasdaq:HPTX) today reported net revenue of $7.3 million
following the first full quarter of sales of its newly approved compound,
RAVICTI® (glycerol phenylbutyrate) Oral Liquid and one month of sales of
BUPHENYL® (sodium phenylbutyrate) Tablets and Powder following the company's
acquisition of that product.

According to president and chief executive officer, Donald J. Santel, "We are
pleased with our RAVICTI launch thus far and have made solid progress on the
reimbursement and market penetration fronts. We have also successfully assumed
sales and distribution responsibilities for BUPHENYL and are now offering our
comprehensive financial support services to patients on both drugs."

Second Quarter 2013 Financial Results

Hyperion reported GAAP net income of $25.0 million, or $1.17 earnings per
diluted share for the three months ended June 30, 2013 compared with a net
loss of $7.2 million, or $15.26 loss per diluted share for the same period of
2012. The net income in the current period is primarily due to a one-time gain
the company recorded related to its purchase of the BUPHENYL product rights
from Ucyclyd Pharma Inc. (Ucyclyd), a subsidiary of Valeant Pharmaceuticals
International. Hyperion reported adjusted net loss of $4.5 million or $0.22
adjusted net loss per basic and diluted share for the three months ended June
30, 2013 compared with an adjusted net loss of $6.9 million, or $14.74
adjusted net loss per basic and diluted share for the same period of 2012. A
reconciliation of GAAP to adjusted net loss is provided in the accompanying
table below entitled "Reconciliation of GAAP to Adjusted Net Loss."

Revenue

During the three months ended June 30, 2013, Hyperion generated net product
revenue of $7.3 million from the sale of RAVICTI and BUPHENYL. Net product
revenue for the three months ended June 30, 2013 included $6.2 million in net
sales from RAVICTI and $1.1 million in net sales from BUPHENYL.

Cost of Sales

Cost of sales for the three months ended June 30, 2013 was $0.9 million and
consisted of RAVICTI product costs of $0.5 million and BUPHENYL product costs
of $0.4 million. Cost of sales related to the sales of RAVICTI is not
representative of Hyperion's future expectations of this expense as
manufacturing related expenses associated with RAVICTI sales during the second
quarter of 2013 were recorded to research and development expenses in periods
prior to approval. As a result, cost of sales for RAVICTI for the next several
quarters are expected to reflect a lower average per unit cost of materials.
Cost of sales related to the sales of BUPHENYL was higher and not indicative
of future cost of sales due to the recording of the step-up value on BUPHENYL
inventories acquired from Ucyclyd which will be expensed to cost of sales as
that inventory is sold.

Operating Expenses

Total adjusted operating expense increased by $6.0 million to $10.5 million
for the three months ended June 30, 2013 compared to $4.5 million for the
three months ended June 30, 2012. On a GAAP basis, operating expense was $12.1
million for the second quarter 2013 compared to $4.8 million for the same
period in 2012.

Research and Development (R&D)

Adjusted R&D expenses decreased by $0.2 million to $2.4 million for the three
months ended June 30, 2013 compared to $2.6 million for the three months ended
June 30, 2012. On a GAAP basis, R&D expense was $2.6 million for the second
quarter of 2013 compared to $2.7 million for the same period in 2012. The
decrease was primarily due to decreases in clinical development costs due to
completion of the company's Phase II trial in hepatic encephalopathy (HE) in
2012.

Selling, General, and Administrative (SG&A)

Adjusted SG&A expenses increased by $6.2 million to $8.1 million for the three
months ended June 30, 2013 compared to $1.9 million for the three months ended
June 30, 2012. On a GAAP basis, SG&A expense was $9.2 million for the second
quarter of 2013 compared to $2.0 million for the same period in 2012. The
increase in GAAP expenses was primarily due to an increase in employee-related
costs as a result of new hires primarily in the commercial organization,
increases in consulting expenses and other commercial and administrative
related infrastructure expenses pertaining to the commercialization of
RAVICTI.

Amortization of Intangible Asset

Amortization of intangible assets was $0.3 million for the three months ended
June 30, 2013 and pertains to the amortization expense for the BUPHENYL
product rights acquired as part of the BUPHENYL acquisition on May 31, 2013.

Interest Expense

Interest expense decreased by $0.9 million to $0.4 million for the three
months ended June 30, 2013, compared to $1.3 million for the three months
ended June 30, 2012. This decrease was primarily due to the conversion of the
company's convertible notes to common stock upon the closing of its Initial
Public Offering (IPO) in July 2012.
Gain from Settlement of Retention Option

The gain from settlement of retention option was $31.1 million for the three
months ended June 30, 2013. On May 31, 2013, Hyperion acquired the BUPHENYL
product rights from Ucyclyd. In accordance with the restated and amended
collaboration agreement, Ucyclyd made a payment to Hyperion for retaining the
rights to AMMONUL of $32.0 million which was off-set by the amount due to
Ucyclyd of $19.0 million for the purchase of the BUPHENYL product rights and
$2.0 million for the purchase of BUPHENYL inventory resulting in net payment
to Hyperion of $11.0 million. The gain was determined based on the $11.0
million net payment received from Ucyclyd plus the BUPHENYL purchase price of
$20.4 million (representing fair values of BUPHENYL product rights and
inventories) offset by the book value of the option to purchase rights to
BUPHENYL and AMMONUL of $0.3 million previously recorded in 2012.

Other Income (Expense)

Other income (expense), net was $1.1 million expense for the three months
ended June 30, 2012 and included a change in fair value of $1.3 million of
expense and $0.2 million of income related to common stock warrants and
preferred stock warrants, respectively. These warrants converted at the time
of our IPO and accordingly there was no corresponding amount in 2013.

Cash and Cash Equivalents

As of June 30, 2013, Hyperion had cash and cash equivalents of $109.7 million,
an increase of $7.0 million from March 31, 2013. The increase is primarily due
to the $11.0 million net payment received from Ucyclyd as part of Hyperion's
acquisition of BUPHENYL partially offset by cash used in operations.

Conference Call and Webcast

Hyperion's management will discuss the company's financial results and provide
a general business update, during its conference call beginning at 4:30 p.m.
EDT/1:30 p.m. PDT today, Wednesday, August 14, 2013.

To access the live teleconference, please dial (877) 847-7188 (U.S.) or (408)
427-3787 (International) and reference the conference ID# 21769835. To access
the webcast and replay, please go to the Events & Presentation page on the
Investors section of the company's web site at www.hyperiontx.com.

About Hyperion Therapeutics

Hyperion Therapeutics, Inc. is a commercial stage biopharmaceutical company
committed to developing and delivering life-changing treatments for orphan
diseases and hepatology. For more information, please visit www.hyperiontx.com

For additional Important Safety Information including Warnings and
Precautions, Adverse Events, Drug Interactions, and Special Populations,
please see full Prescribing Information (PDF) and Medication Guide (PDF) for
RAVICTI at http://www.ravicti.com/files/RAVICTI_Prescribing_Information.pdf
and for BUPHENYL at
http://www.hyperiontx.com/sites/default/files/BUPHENYL_Prescribing_Information.pdf.

Forward-Looking Statements

To the extent that statements contained in this press release are not
descriptions of historical facts regarding Hyperion, they are forward-looking
statements reflecting the current beliefs and expectations of management made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "may," "will," "expect," "anticipate,"
"estimate," "intend," and similar expressions (as well as other words or
expressions referencing future events, conditions or circumstances) are
intended to identify forward-looking statements. Forward-looking statements
contained in this press release include expectations about future cost of
sales for Ravicti and BUPHENYL. Hyperion undertakes no obligation to update or
revise any forward-looking statements. For a further description of the risks
and uncertainties relating to the business of the company in general, see
Hyperion's most recent Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission and any subsequent filings with the Securities and
Exchange Commission.

Non-GAAP Financial Measures

This press release and the reconciliation table included herein includes the
following non-GAAP financial measures: adjusted net loss, adjusted net loss –
basic and diluted per share, adjusted research and development expense,
adjusted selling, general and administrative expense and adjusted operating
expense. A description of the adjusted calculations and reconciliation to the
comparable GAAP financial measures is provided in the accompanying table
entitled "Reconciliation of GAAP to Adjusted Net Loss."

Hyperion management uses these non-GAAP financial measures to monitor and
evaluate its operating results and trends on an on-going basis, and internally
for operating, budgeting and financial planning purposes. The items excluded
include such items such as non-cash expenses, non-recurring expenses and items
that impact comparability to our peers. Hyperion management believes the
non-GAAP information is useful for investors by offering the ability to better
identify trends in our business and better understand how management evaluates
the business. These non-GAAP measures have limitations, however, because they
do not include all items of income and expense that affect the Company. These
non-GAAP financial measures are not prepared in accordance with, and should
not be considered in isolation of, or as an alternative to, measurements
required by GAAP.

                                       

Hyperion Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
 
                                  Three Months Ended    Six Months Ended
                                  June 30,              June 30,
                                  2013        2012      2013        2012
Revenues:                                                            
Product revenue, net              $ 7,305     $ —       $ 8,088     $ — 
                                                                     
Total revenues                     7,305       —         8,088       — 
                                                                     
Costs and expenses:                                                  
Cost of sales                      875         —         943         — 
Research and development            2,562      2,732      4,401      11,640
Selling, general and                9,220      2,023      17,164     4,340
administrative
Amortization of intangible asset   329         —         329         — 
                                                                     
Total costs and expenses           12,986      4,755     22,837      15,980
                                                                     
Loss from operations               (5,681)     (4,755)   (14,749)    (15,980)
Interest income                      11         3          12         7
Interest expense                   (387)       (1,282)   (795)       (2,322)
Gain from settlement of retention  31,079      —         31,079      —
option
Other income (expense) - net       —           (1,128)   500         (753)
                                                                     
Net income (loss) per share
attributable to common            $ 25,022    $ (7,162) $ 16,047    $ (19,048)
stockholders:
Basic                             $ 1.25      $ (15.26) $ 0.86      $ (40.59)
                                  $ 1.17      $ (15.26) $ 0.80      $ (40.59)
Diluted
                                                                     
Weighted average number of shares
used to compute net income (loss)                                    
per share of common stock:
Basic                             20,050,987   469,319  18,716,332   469,319
                                   21,358,275 469,319    19,978,089 469,319
Diluted

                                       

 
Hyperion Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
 
                                        June 30,           December 31,
                                       2013                2012 ^(1)
                                        (unaudited)         
Assets                                                      
Current assets                                              
Cash and cash equivalents              $ 109,727           $ 49,853
Accounts receivable, net                1,723               — 
Inventories                             4,992               — 
Prepaid expenses and other current      599                 1,155
assets
                                                            
Total current assets                    117,041             51,008
Property and equipment, net             431                 49
Intangible asset, net                   16,171             — 
Other non-current assets                57                  147
                                                            
Total assets                           $ 133,700           $ 51,204
                                                            
Liabilities and Stockholders' Equity                        
Current liabilities                                         
Accounts payable                       $ 2,057             $ 2,177
Accrued liabilities                     4,612               2,540
Deferred revenue                        110                — 
Notes payable, current portion          5,406               4,348
                                                            
Total current liabilities               12,185              9,065
Notes payable, net of current portion   5,248               7,750
                                                            
Total liabilities                       17,433              16,815
                                                            
Stockholders' equity                                        
Preferred stock                         —                   — 
Common stock                            2                   2
Additional paid-in capital              239,215             173,384
Accumulated deficit                     (122,950)           (138,997)
                                                            
Total stockholders' equity              116,267             34,389
                                                            
Total liabilities and stockholders'    $ 133,700           $ 51,204
equity
                                                            
(1) Derived from the audited financial statements, included in the Company's
Annual Report on Form 10-K/A for the year ended December 31, 2012 filed with
the Securities and Exchange Commission on February 26, 2013.

                                       

                                                                              
Hyperion Therapeutics, Inc.                                                   
Reconciliation of GAAP to Adjusted Net Loss                                   
(In thousands, except share and per share amounts)                            
(Unaudited)                                                                   
                                                                              
                                 Three Months Ended   Six Months Ended        
                                 June 30,             June 30,  
                                 2013       2012      2013        2012        
Net income:                                                                   
Net Income (loss) GAAP           $ 25,022   $ (7,162) $ 16,047    $ (19,048)  
Adjustments:                                                                  
Gain from settlement of           (31,079)   —         (31,079)    —          
retention option (a)
Employee stock-based              1,253      242       1,759       320        
compensation (b)
Amortization of intangible asset  329        —         329         —          
(c)
Adjusted Net loss                $ (4,475)  $ (6,920)  $ (12,944) $ (18,728)  
                                                                              
Operating expense (Research and
development expense; Selling,
general and administrative                                                    
expense, and amortization of
intangible asset expense):
Operating Expense – GAAP         $ 12,111   $ 4,755   $ 21,894    $ 15,980    
Adjustments:                                                                  
Employee stock-based              (1,251)    (242)     (1,756)    (320)       
compensation (b)
Amortization of intangible asset  (329)      —         (329)       —          
(c)
Adjusted Operating expense       $ 10,531   $ 4,513   $ 19,809    $ 15,660    
                                                                              
                                                                              
Research and development                                                      
expense:
Research and development expense $ 2,562    $ 2,732   $ 4,401     $ 11,640    
– GAAP
Adjustments:                                                                  
Employee stock-based              (143)      (102)     (235)       (139)      
compensation (b)
Adjusted Research and            $ 2,419    $ 2,630   $ 4,166     $ 11,501    
development expense
                                                                              
Selling, general and                                                          
administrative expense:
Selling, general and             $ 9,220    $ 2,023   $ 17,164    $ 4,340     
administrative expense – GAAP
Adjustments:                                                                  
Employee stock-based             (1,108)    (140)      (1,521)    (181)       
compensation (b)
Adjusted Selling, general and    $ 8,112    $ 1,883   $ 15,643    $ 4,159     
administrative expense
                                                                              
Adjusted Earnings per share:                                                  
Adjusted Net loss                $ (4,475)  $ (6,920) $ (12,944)  $ (18,728)  
Adjusted Weighted average        20,050,987 469,319   18,716,332   469,319    
shares, basic and diluted
Adjusted Basic and diluted net   $ (0.22)   $ (14.74) $ (0.69)    $ (39.90)   
loss per share

Hyperion is providing adjusted information that excludes certain items because
of the nature of these items and the impact they have on the analysis of
underlying business performance and trends. Management believes that providing
this information enhances investors' understanding of the company's
performance. This information should be considered in addition to, but not in
lieu of, information prepared in accordance with GAAP.

Explanation of adjustments:

  (a) Gain from retention payment: Exclude the one-time gain related to the
  acquisition of the BUPHENYL product rights.

  (b) Employee stock-based compensation: Exclude the non-cash employee
  stock-based compensation.

  (c) Amortization of Intangible asset: Exclude the amortization of intangible
  asset related to the acquisition of the BUPHENYL product rights.

CONTACT: Sylvia Wheeler
         V.P. Investor Relations and Corporate Communications
         650 745 7834
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