Egalet Reports Full Year 2013 Financial Results and Provides Business Update

 Egalet Reports Full Year 2013 Financial Results and Provides Business Update

-- Strengthened balance sheet with $73.0 million in aggregate gross proceeds
from IPO and simultaneous private placement with Shionogi --

--Webcast and conference call today at 8:30 a.m. EDT--

PR Newswire

WAYNE, Pa., March 26, 2014

WAYNE, Pa., March 26, 2014 /PRNewswire/ --Egalet Corporation (Nasdaq: EGLT)
("Egalet") today reported business highlights and financial results for the
year ended December 31, 2013. This marks the first time that Egalet is
reporting its operating results as a public company.

Egalet Logo.

Recent corporate highlights include:

  oInitiated pivotal bioequivalence studies of Egalet-001;
  oReceived Fast Track designation from the FDA for Egalet-001, an
    abuse-deterrent, extended-release, oral morphine formulation, and
    Egalet-002, an abuse-deterrent, extended-release, oral oxycodone
    formulation, both in development for the treatment of moderate to severe
    chronic pain;
  oAdded to the board of directors Timothy P. Walbert, chairman, president
    and CEO of Horizon Pharma, and Greg Weaver, CFO, senior vice president,
    treasurer and corporate secretary of Fibrocell Science, Inc.;
  oEntered into a development, collaboration and license agreement with
    Shionogi Limited ("Shionogi") related to abuse-deterrent oral hydrocodone
    opioid product candidates under which Egalet received $10.0 million in an
    upfront payment. Pursuant to this agreement, Egalet is entitled to receive
    payments in excess of $300 million in aggregate upon the achievement of
    development, regulatory and sales milestones and royalties on future net
    product sales; and
  oStrengthened the balance sheet with $73.0 million in aggregate gross
    proceeds from initial public offering (IPO), subsequent exercise of the
    underwriters' over-allotment option and concurrent private placement with
    Shionogi resulting in $65.5 million in net proceeds after deducting
    underwriting discounts and offering expenses.

"With the ongoing epidemic of opioid abuse and the successful completion of
our IPO, we are well positioned to move forward with the development of our
differentiated abuse-deterrent opioids," said Bob Radie, Egalet's president
and chief executive officer. "Having just initiated the pivotal
bioequivalence studies for Egalet-001, which has received Fast Track
designation, we are one step closer to bringing patients a treatment option to
manage their moderate to severe chronic pain while lowering the potential for
abuse."

2013 Financial Results

  oRevenue: There were no revenues for the year ended December 31, 2013
    compared to net revenue of $1.2 million for the year ended December 31,
    2012. The decrease was due to the completion of research and development
    services under our collaborative agreements in 2012.
  oR&D Expenses: Research and development expenses were $6.3 million for the
    year ended December 31, 2013 compared to $4.3 million in 2012. The
    increase of $2.0 million, or 47.6%, was driven primarily by a $2.3 million
    increase in development costs for Egalet‑001 and a $609,000 increase in
    other clinical and pre-clinical development costs, partially offset by an
    $868,000 decrease in clinical trial expenses for Egalet‑002.
  oG&A Expenses: General and administrative expenses increased to $4.9
    million for 2013 compared to $2.2 million for 2012. The 117.4% increase
    was primarily due to higher compensation, travel costs and
    facility‑related expenses, which relate to the establishment of Egalet's
    U.S. office and personnel hired in 2013, including Egalet's chief
    financial officer. Egalet also incurred higher professional fees and
    communication expenses in 2013 related to increased business development
    efforts, the pursuit of licensing arrangements and preparations for the
    IPO.
  oNet (Loss) Income: Net loss was $20.2 million for the year ended December
    31, 2013 compared to net loss of $5.4 million for the year ended December
    31, 2012. 
  oCash Position: Cash as of December 31, 2013 was $15.7 million compared to
    $3.4 million at December 31, 2012. The cash increase was primarily driven
    by the $10.0 million upfront payment related to the development
    collaboration and license agreement with Shionogi. Subsequent to year end,
    Egalet further strengthened its balance sheet with $73.0 million in
    aggregate gross proceeds or $65.5 million in net proceeds after
    underwriters' discounts and offering expenses raised from its IPO, the
    simultaneous private placement of 1.25 million shares of common stock with
    Shionogi at the IPO price and the subsequent exercise of the underwriters'
    over-allotment.

Upcoming Milestones

  oQ1: Egalet plans to complete the first phase of category 1 abuse
    deterrence studies for Egalet-001.
  oQ2: Egalet plans to initiate category 2 and 3 abuse deterrence studies for
    Egalet-001 and the second phase of category 1 abuse deterrence studies for
    Egalet-002.
  oQ3: Egalet plans to initiate category 2 and 3 abuse deterrence studies for
    Egalet-002.
  oQ4: Egalet plans to initiate its pivotal Phase 3 trial for Egalet-002. In
    addition, Egalet plans to complete bioequivalence studies and submit a new
    drug application (NDA) filing for Egalet-001.

Conference Call Information
Egalet's management will host a conference call to discuss the 2013 financial
results:

Date:                       Wednesday, March 26, 2014
Time:                       8:30 a.m. EDT
Webcast (live and archive): http://egalet.investorroom.com/eventsandwebcasts
                            1-877-870-4263 (domestic)
Dial-in numbers:
                            1-412-317-0790 (international)
                            1-877-344-7529 (domestic)

Replay dial-in numbers:     1-412-317-0088 (international)

                            Conference Number:10042524

About Egalet
Egalet Corporation is a specialty pharmaceutical company developing and
planning to commercialize proprietary, abuse-deterrent oral products for the
treatment of pain and other indications. Egalet has created two distinct drug
delivery systems, each with novel abuse-deterrent features and the ability to
control the release profile of the active pharmaceutical ingredient (API).
Using its proprietary platform, Egalet has developed a pipeline of
clinical-stage, opioid-based product candidates in tablet form that are
specifically designed to deter abuse by physical and chemical manipulation,
while also providing tailored release of the active pharmaceutical ingredient.
Its lead product candidate, Egalet-001, is an abuse-deterrent,
extended-release, oral morphine formulation in development for the treatment
of moderate to severe chronic pain. There are currently no commercially
available abuse-deterrent formulations of morphine, and if approved, Egalet
believes that Egalet-001 would fill a significant unmet need in the
marketplace. Its second product candidate, Egalet-002, is an abuse-deterrent,
extended-release, oral oxycodone formulation in development for the treatment
of moderate to severe chronic pain. The Egalet technology can be applied
broadly across different classes of pharmaceutical products and can be used to
develop combination products that include multiple APIs with similar or
different release profiles. Visit www.egalet.com for more information.

Safe Harbor
Statements included in this press release that are not historical in nature
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
management's current expectations, and are subject to known and unknown
uncertainties and risks. Actual results could differ materially from those
discussed due to a number of factors, including, but not limited to: the
success of our clinical trials; our ability to obtain regulatory approval of
our product candidates; competitive factors; general market conditions; and
other risks factors described in Egalet's filings with the United States
Securities and Exchange Commission. Egalet assumes no obligation to update or
revise any forward-looking-statements contained in this press release whether
as a result of new information or future events, except as may be required by
law.

Contacts:
Investor Relations:
Lisa M. Wilson
In-Site Communications, Inc.
Tel: 917-543-9932
Email: lwilson@insitecony.com

Media:
E. Blair Clark-Schoeb
Tel: 917-432-9275
Email: blair@biotechcomm.com

Tables Follow



Egalet Corporation and Subsidiaries
Consolidated Balance Sheets
                                                     December31,
                                                     2012         2013
Assets
Current assets:
Cash                                                 $3,404,000   $15,700,000
Related party receivable                             34,000       —
Prepaid expenses                                     680,000      1,812,000
Other receivables                                    319,000      231,000
Total current assets                                 4,437,000    17,734,000
Property and equipment, net                          931,000      2,378,000
Intangible asset                                     200,000      209,000
Deposits and other assets                            25,000       33,000
Total assets                                         $5,593,000   $20,363,000
Liabilities, convertible preferred stock, and
stockholders' deficit
Current liabilities:
Related party senior convertible debt, net of        $—           $17,209,000
discount
Accounts payable                                     1,334,000    1,046,000
Accrued expenses                                     581,000      1,755,000
Deferred revenue                                     —            10,149,000
Other current liabilities                            19,000       55,000
Total current liabilities                            1,934,000    30,214,000
Deferred income tax liabilities                      —            22,000
Total liabilities                                    1,934,000    30,236,000
Commitments and contingencies
Convertible preferred stock:
Convertible SeriesA‑1 preferred stock, $0.01 par
value, 1,406,894 shares

issued and outstanding at December31, 2012 and 1,443,000    1,443,000
2013, liquidation

preference of $13,559,000 at December31, 2013
Convertible SeriesA‑2 preferred stock, $0.01 par
value, 593,106 shares issued

and outstanding at December31, 2012 and 2013,  770,000      770,000
liquidation preference of

$4,083,000 at December31, 2013
Convertible SeriesB preferred stock, $0.01 par
value, 2,327,301 shares issued

and outstanding at December31, 2012 and 2013,  12,628,000   12,628,000
liquidation preference of

$42,610,000 at December31, 2013
Convertible SeriesB‑1 preferred stock, $0.01 par
value, 113,916 shares issued

and outstanding at December31, 2012 and 2013,  116,000      116,000
liquidation preference of

$695,000 at December31, 2013
Stockholders' deficit
Common stock, $0.01 par value, 1,292,307 shares
issued and outstanding at                            13,000       13,000

December31, 2012 and 2013
Additional paid in capital                           1,610,000    7,431,000
Accumulated other comprehensive income               271,000      1,125,000
Accumulated deficit                                  (13,192,000) (33,399,000)
Total stockholders' deficit                          (11,298,000) (24,830,000)
Total liabilities, convertible preferred stock and   $5,593,000   $20,363,000
stockholders' deficit

Egalet Corporation and Subsidiaries
Consolidated Statements of Operations
                                         Year Ended December31,
                                         2012         2013
Revenues                                 $1,201,000   $          -
Operating expenses:
Research and development                 4,256,000    6,280,000
General and administrative               2,241,000    4,873,000
Total operating expenses                 6,497,000    11,153,000
Loss from operations                     (5,296,000)  (11,153,000)
Interest expense                         75,000       8,842,000
Loss (gain) on foreign currency exchange 27,000       190,000
                                         102,000      9,032,000
Loss from operations before income taxes (5,398,000)  (20,185,000)
Provision for income taxes               -            22,000
Net loss                                 $(5,398,000) $(20,207,000)



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SOURCE Egalet Corporation

Website: http://www.egalet.com
 
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