Alimera Sciences Reports Second Quarter 2014 Financial Results

        Alimera Sciences Reports Second Quarter 2014 Financial Results

ILUVIEN® Injections Increased over 25% in the United Kingdom on Sequential
Basis from First Quarter 2014

Alimera Will Host a Conference Call at 4:30 PM ET Today

PR Newswire

ATLANTA, Aug. 7, 2014

ATLANTA, Aug. 7, 2014 /PRNewswire/ --Alimera Sciences, Inc. (NASDAQ: ALIM)
(Alimera), a biopharmaceutical company that specializes in the research,
development and commercialization of prescription ophthalmic pharmaceuticals,
today announced financial results for the second quarter ended June 30, 2014.

"We achieved an important milestone during the second quarter of 2014 as more
commercial patients have now been injected with ILUVIENthan were treated in
our clinical trials. Further, we experienced a 25% increase in ILUVIEN
injections in the United Kingdom during the second quarter of 2014 compared to
the prior quarter. Our second quarter 2014 revenue from the United Kingdom was
similar to the first quarter revenue as several hospitals in the United
Kingdom stocked their pharmacies following the implementation of the NICE
guidance for the reimbursement of ILUVIEN in the first quarter 2014," said Dan
Myers, president and chief executive officer of Alimera Sciences. "As our
operations continue to expand, we expect to experience fluctuations in order
patterns but we believe the underlying organic growth rate of ILUVIEN
injections in the United Kingdom is a strong sign of the demand we are seeing.
We expect usage to continue to increase as the United Kingdom market becomes
more familiar with the available treatments for diabetic macular edema."

Dan Myers continued, "In Germany, we achieved flat revenue on a sequential
basis from the first quarter of 2014, despite repositioning our sales
organization which temporarily limited our sales coverage. We recently
completed the transition to a new country manager and are in the process of
converting from a contract sales model to a direct sales model in Germany. As
we enter September 2014, we expect to have a complete team in place to target
the key physicians and accounts across Germany to drive awareness for ILUVIEN.
We continue to have strong relationships with contract sales organizations in
other EU countries, and as we expand to other markets we will implement
contract, direct or hybrid sales models depending on the unique
characteristics of that market."

"We continue to make strong progress in our geographic expansion efforts and
remain on track to launch ILUVIEN in Portugal and France during the fourth
quarter of 2014. In June 2014, the Italian Medicines Agency granted marketing
authorization to ILUVIEN. We also received a positive outcome of the
Repeat-Use Procedure for ILUVIEN in 10 additional EU countries, and we are
working closely with these countries during the national phase to obtain
ILUVIEN marketing authorization in each one. Recently, Norway and Denmark
became the first countries to grant national marketing authorization following
the positive outcome in June of the Repeat-Use Procedure application."

As announced in April 2014, Alimera's resubmission of its new drug application
(NDA) for ILUVIEN to the U.S. Food and Drug Administration (FDA) to address
questions raised in the FDA's October 2013 complete response letter has been
acknowledged by the FDA as a complete class 2 response and a Prescription Drug
User Fee Act (PDUFA) goal date of September 26, 2014 had been established. In
the October 2013 complete response letter, the FDA referenced deficiencies in
the methods and controls used for the drug product at the third party facility
where ILUVIEN is manufactured. In July 2014, the third party facility received
a notification from the Los Angeles District of the Department of Health and
Human Services (LA District) after their pre-approval and good manufacturing
practice inspection of the facility in connection with Alimera's NDA. In that
notification, the LA District recommended approval of the NDA by the FDA. This
is only a recommendation which the FDA is not obligated to follow. Only the
FDA can issue an official approval of the NDA.

Second Quarter 2014 Financial Results

Net revenue for the second quarter of 2014 was $2.2 million, compared to $2.1
million in the first quarter of 2014 and $179,000 for the second quarter of
2013.

GAAP cost of goods sold for the second quarter of 2014 was $376,000 compared
to $11,000 for the second quarter of 2013. GAAP cost of goods sold for the
second quarter of 2014 were impacted by a reserve of $207,000 for potential
German inventory expiration later in 2014. This reserve relates to the initial
inventory build of German product in late 2012 and early 2013 in advance of
the expected launch in Germany, which has not progressed as initially
expected. Excluding this reserve, non-GAAP adjusted cost of goods sold was
$169,000. Non-GAAP adjusted gross margin was $2.0 million, or 91%, for the
second quarter of 2014, compared to $168,000, or 94%, for the second quarter
of 2013.

Research and development expenses for the second quarter of 2014 decreased 18%
to $1.8 million, compared to $2.2 million for the second quarter of 2013. The
decrease was primarily attributable to the completion of the physician
utilization study in the fourth quarter of 2013 and cost associated with April
2013 resubmission of the ILUVIEN NDA, offset by additional personnel hired in
the EU following the commercial launch of ILUVIEN in Germany and the United
Kingdom.

General and administrative expenses in the second quarter of 2014 increased
17% to $2.8 million, compared to $2.4 million in the second quarter of 2013.
The increase was primarily attributable to additional personnel hired
following the commercial launch of ILUVIEN in Germany and the United Kingdom.

Sales and marketing expenses in the second quarter of 2014 decreased 37% to
$3.1 million, compared to $4.9 million for the second quarter of 2013. The
decrease was primarily attributable to decreases of non-recurring marketing
and market access costs incurred during the second quarter of 2013 in
connection with the commercial launches in Germany and the United Kingdom, and
savings associated with the transition of several management and market access
roles in Germany and the United Kingdom to Alimera that were previously
contracted through Quintiles Commercial in 2013.

GAAP net income attributable to common stockholders for the second quarter of
2014 was $1.1 million, compared with GAAP net loss attributable to common
stockholders for the second quarter of 2013 of $21.3 million. GAAP net income,
or loss, attributable to common stockholders for the quarters ended June 30,
2014 and 2013 were affected by non-cash items and certain items expected to be
non-recurring in nature, including the reserve for potential inventory
expiration previously noted, a change in the fair value of a derivative
warrant liability, an unrealized foreign currency loss, the non-cash accretion
of the beneficial conversion feature and a loss related to an early
extinguishment of debt. GAAP basic earnings per share and diluted loss per
share for the three months ended June 30, 2014 were $0.03 per share and
$(0.16) per share, respectively, based on 40,275,638 and 42,548,254 weighted
average shares outstanding, respectively. GAAP basic and diluted loss per
share for the three months ended June 30, 2013 was $(0.67) per share based on
31,574,858 weighted average shares outstanding.

Non-GAAP adjusted net loss attributable to common stockholders for the second
quarter of 2014 was $6.1 million, compared to a non-GAAP adjusted net loss
attributable to common stockholders for the second quarter of 2013 of $9.5
million. Non-GAAP adjusted basic loss per share for the three months ended
June 30, 2014 and 2013 were $(0.15) per share and $(0.30) per share,
respectively. Non-GAAP adjusted diluted loss per share is not presented as all
outstanding common stock equivalents are anti-dilutive. Net loss for basic
weighted average shares outstanding attributable to common stockholders per
share and non-GAAP adjusted net loss attributable to common stockholders per
share was based on 40,275,638 weighted average shares outstanding for the
second quarter of 2014 and 31,574,858 weighted average shares outstanding for
the second quarter of 2013.

Reconciliations of GAAP cost of goods sold to non-GAAP adjusted costs of goods
sold, GAAP gross margin to non-GAAP adjusted gross margin, GAAP net loss
attributable to common stockholders to non-GAAP adjusted net loss attributable
to common stockholders and GAAP net loss attributable to common stockholders
per common share to non-GAAP adjusted net loss attributable to common
stockholders per common share is included below under the heading "Non-GAAP
Financial Measures."

As of June 30, 2014, Alimera had cash and cash equivalents of $42.0 million,
compared to $31.9 million as of June 30, 2013.

In April 2014, Alimera entered into a Loan Agreement with Hercules Technology
Growth Capital (Hercules) for a term loan in the principal amount of $35
million. Hercules advanced $10 million to Alimera and will advance the
remaining $25 million in the event that the FDA approves ILUVIEN on or before
October 31, 2014 and certain other conditions are satisfied. The additional
$25 million advance will be used to fund a $25 million milestone payment
obligation that Alimera will owe in the event that the FDA approves ILUVIEN.
Alimera used proceeds from the initial funding of $10 million under the term
loan to refinance its 2013 term loan with Silicon Valley Bank, which resulted
in net proceeds of $4.7 million.

Conference Call to be Held Today

Alimera will hold a conference call today at 4:30 p.m. ET to discuss these
results and provide regulatory and commercial updates. The conference call
will be hosted by Dan Myers, President and Chief Executive Officer, and Rick
Eiswirth, Chief Operating Officer and Chief Financial Officer.

To participate in the call, please dial (877) 369-6586 (U.S. and Canada) or
(253) 237-1165 (international). A live webcast will be available on the
Investor Relations section of the corporate website at
http://www.alimerasciences.com.

A replay of the conference call will be available beginning August 7, 2014 at
7:30 p.m. ET and ending on August 14, 2014 by dialing (855) 859-2056 (U.S. and
Canada) or (404) 537-3406 (international), Conference ID Number: 77034836. A
replay of the webcast will also be available on the corporate website.

About ILUVIEN^®

ILUVIEN (190 micrograms intravitreal implant in applicator) is a sustained
release intravitreal implant used to treat vision impairment associated with
chronic diabetic macular edema considered insufficiently responsive to
available therapies. Each ILUVIEN implant provides a therapeutic effect of up
to 36 months by delivering sustained sub-microgram levels of fluocinolone
acetonide (FAc). ILUVIEN is injected in the back of the patient's eye to a
position that takes advantage of the eye's natural fluid dynamics. The
applicator employs a 25-gauge needle, which allows for a self-sealing wound.
In the FAME™ Study, a phase 3 clinical study of ILUVIEN, the most frequently
reported adverse drug reactions included cataract development and increased
ocular pressure. ILUVIEN has not been approved for sale in the United States.

About Alimera Sciences, Inc.

Alimera Sciences, Inc., headquartered in Alpharetta, Georgia, is a
biopharmaceutical company that specializes in the research, development and
commercialization of prescription ophthalmic pharmaceuticals. Alimera's
European operations are conducted from London by its wholly-owned subsidiary,
Alimera Sciences Limited.

Non-GAAP Financial Measures

Alimera believes the metrics Non-GAAP adjusted cost of goods sold, Non-GAAP
adjusted gross margin, Non-GAAP adjusted net loss attributable to common
stockholders and Non-GAAP adjusted net loss attributable to common
stockholders per common share are useful financial measures for investors in
evaluating Alimera's performance for the periods presented. Non-GAAP adjusted
cost of goods sold, Non-GAAP adjusted gross margin, Non-GAAP adjusted net loss
attributable to common stockholders and Non-GAAP adjusted net loss
attributable to common stockholders per common share exclude certain non-cash
items. These Non-GAAP metrics, however, are not measures of financial
performance under accounting principles generally accepted in the United
States (GAAP) and should not be considered a substitute for cost of goods
sold, gross margin, net loss attributable to common stockholders or net loss
attributable to common stockholders per common share in accordance with GAAP
and may not be comparable to similarly titled measures reported by other
companies. Alimera's management believes that these Non-GAAP metrics are
useful supplements for it and investors to Alimera's GAAP financial
information because these measures exclude non-cash or infrequent adjustments
which management believes are not reflective of Alimera's operating results.
These Non-GAAP financial measures also facilitate management's internal
comparison to Alimera's historical financial performance and the financial
performance of other companies. However, Non-GAAP financial measures should
only be read in conjunction with financial information reported under GAAP
when understanding Alimera's operating performance. For a reconciliation of
these Non-GAAP financial measures to their most directly comparable GAAP
financial measure, see the table below.

Forward Looking Statements

This press release contains "forward-looking statements," within the meaning
of the Private Securities Litigation Reform Act of 1995, regarding, among
other things, Alimera's commercial plans for ILUVIEN in Germany, the United
Kingdom, Portugal and France and the regulatory status and potential
commercialization of ILUVIEN in the U.S., Australia, New Zealand and the
additional EU countries for which Alimera has applied for or received
approval. Such forward-looking statements are based on current expectations
and involve inherent risks and uncertainties, including factors that could
delay, divert or change any of them, and could cause actual results to differ
materially from those projected in its forward-looking statements. Meaningful
factors which could cause actual results to differ include, but are not
limited to, uncertainty as to Alimera's ability to commercialize, and market
acceptance of, ILUVIEN in the EU, as well as other factors discussed in the
"Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of Alimera's Annual Report on
Form 10-K for the year ended December 31, 2013 and Alimera's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2014, which are on file with the
Securities and Exchange Commission (SEC) and available on the SEC's website at
www.sec.gov. Additional factors may also be set forth in those sections of
Alimera's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 to
be filed with the SEC. In addition to the risks described above and in
Alimera's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and other filings with the SEC, other unknown or
unpredictable factors also could affect Alimera's results. There can be no
assurance that the actual results or developments anticipated by Alimera will
be realized or, even if substantially realized, that they will have the
expected consequences to, or effects on, Alimera. Therefore, no assurance can
be given that the outcomes stated in such forward-looking statements and
estimates will be achieved.

All forward-looking statements contained in this press release are expressly
qualified by the cautionary statements contained or referred to herein.
Alimera cautions investors not to rely too heavily on the forward-looking
statements Alimera makes or that are made on its behalf. These forward-looking
statements speak only as of the date of this press release (unless another
date is indicated). Alimera undertakes no obligation, and specifically
declines any obligation, to publicly update or revise any such forward-looking
statements, whether as a result of new information, future events or
otherwise.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
                            Three Months Ended        Six Months Ended

                            June 30,                  June 30,
                            2014         2013         2014         2013
                            (Unaudited)
NET REVENUE                 $  2,190     $ 179        $ 4,274      $ 179
COST OF GOODS SOLD          (376)        (11)         (940)        (11)
GROSS MARGIN                1,814        168          3,334        168
RESEARCH AND DEVELOPMENT    1,809        2,180        4,435        4,203
EXPENSES
GENERAL AND ADMINISTRATIVE  2,827        2,429        5,754        5,099
EXPENSES
SALES AND MARKETING         3,136        4,898        6,547        8,461
EXPENSES
OPERATING EXPENSES          7,772        9,507        16,736       17,763
INTEREST EXPENSE, NET AND   (325)        (129)        (454)        (263)
OTHER
UNREALIZED FOREIGN CURRENCY (146)        —            (202)        —
LOSS, NET
CHANGE IN FAIR VALUE OF
DERIVATIVE WARRANT          8,054        (6,742)      (5,076)      (12,336)
LIABILITY
LOSS ON EARLY               (440)        (153)        (440)        (153)
EXTINGUISHMENT OF DEBT
NET INCOME (LOSS) BEFORE    1,185        (16,363)     (19,574)     (30,347)
TAXES
PROVISION FOR TAXES         (69)         —            (69)         —
NET INCOME (LOSS)           $  1,116     $ (16,363)   $ (19,643)   $ (30,347)
ACCRETION OF PREFERRED
STOCK BENEFICIAL CONVERSION —            (4,950)      —            (4,950)
FEATURE
NET INCOME (LOSS)
APPLICABLE TO COMMON        $  1,116     $ (21,313)   $ (19,643)   $ (35,297)
STOCKHOLDERS
NET INCOME (LOSS) PER SHARE
APPLICABLE TO COMMON        $  0.03      $ (0.67)     $ (0.52)     $ (1.12)
STOCKHOLDERS — Basic
WEIGHTED AVERAGE SHARES     40,275,638   31,574,858   38,076,968   31,560,294
OUTSTANDING — Basic
NET LOSS PER SHARE
APPLICABLE TO COMMON        $  (0.16)    $ (0.67)     $ (0.52)     $ (1.12)
STOCKHOLDERS — Diluted
WEIGHTED AVERAGE SHARES     42,548,254   31,574,858   38,076,968   31,560,294
OUTSTANDING — Diluted



CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                     June 30,     December 31,
                                                     2014         2013
                                                     (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents                            $   41,986   $   12,628
Accounts receivable, net                             1,020        500
Prepaid expenses and other current assets            2,560        3,474
Inventory, net                                       1,372        1,786
Deferred financing costs                             597          250
Total current assets                                 47,535       18,638
PROPERTY AND EQUIPMENT — at cost less accumulated    1,123        982
depreciation
TOTAL ASSETS                                         $   48,658   $   19,620
CURRENT LIABILITIES:
Accounts payable                                     $   1,851    $   1,735
Accrued expenses                                     1,118        934
Outsourced services payable                          1,236        603
Note payable                                         —            1,667
Capital lease obligations                            10           10
Total current liabilities                            4,215        4,949
NON-CURRENT LIABILITIES:
Derivative warrant liability                         21,457       16,381
Note payable — less current portion                  9,313        3,194
Other non-current liabilities                        14           21
STOCKHOLDERS' EQUITY (DEFICIT):
Series A convertible preferred stock                 27,238       32,045
Common stock                                         403          316
Additional paid-in capital                           282,384      240,135
Common stock warrants                                968          412
Accumulated deficit                                  (296,989)    (277,345)
Accumulated other comprehensive loss                 (345)        (488)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                 13,659       (4,925)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $   48,658   $   19,620



RECONCILIATION OF GAAP MEASURES TO NON-GAAP ADJUSTED MEASURES
(in thousands, except share and per share data)
                        Three Months Ended,         Six Months Ended,
                        June 30,                    June 30,
                        2014          2013          2014          2013
                        (Unaudited)
GAAP COST OF GOODS SOLD $ (376)       $ (11)        $ (940)       $ (11)
Adjustments to costs of
goods sold:
Reserve for potential     207           —             654           —
product expiration
NON-GAAP ADJUSTED COST  $ (169)       $ (11)        $ (286)       $ (11)
OF GOODS SOLD
GAAP GROSS MARGIN       $ 1,814       $ 168         $ 3,334       $ 168
Adjustments to gross
margin:
Reserve for potential     207           —             654           —
product expiration
NON-GAAP ADJUSTED GROSS $ 2,021       $ 168         $ 3,988       $ 168
MARGIN
GAAP NET GAIN (LOSS)
ATTRIBUTABLE TO COMMON  $ 1,116       $ (21,313)    $ (19,643)    $ (35,297)
SHAREHOLDERS
Adjustments to net gain
(loss):
Unrealized foreign        146           —             202           —
currency loss, net
Change in fair value of
derivative warrant        (8,054)       6,742         5,076         12,336
liability
Loss on early             440           153           440           153
extinguishment of debt
Accretion of preferred
stock beneficial          —             4,950         —             4,950
conversion feature
Reserve for potential     207           —             654           —
product expiration
NON-GAAP ADJUSTED NET
LOSS ATTRIBUTABLE TO    $ (6,145)     $ (9,468)     $ (13,271)    $ (17,858)
COMMON SHAREHOLDERS
GAAP NET GAIN (LOSS)    $ 0.03        $ (0.67)      $ (0.52)      $ (1.12)
PER SHARE — Basic
Adjustments to net gain
(loss):
Unrealized foreign        0.00          —             0.01          —
currency loss, net
Change in fair value of
derivative warrant        (0.20)        0.21          0.13          0.39
liability
Loss on early             0.01          0.00          0.01          0.00
extinguishment of debt
Accretion of preferred
stock beneficial          —             0.16          —             0.16
conversion feature
Reserve for potential     0.01          —             0.02          —
product expiration
NON-GAAP ADJUSTED NET   $ (0.15)      $ (0.30)      $ (0.35)      $ (0.57)
LOSS PER SHARE — Basic
WEIGHTED AVERAGE SHARES   40,275,638    31,574,858    38,076,968    31,560,294
OUTSTANDING — Basic





                        For press inquiries:
For investor inquiries:
                        Katie Brazel, Fleishman-Hillard
John Mills, ICR
                        for Alimera Sciences
for Alimera Sciences
310-954-1105            404-739-0150
John.Mills@ICRINC.com
                        Katie.Brazel@fleishman.com



SOURCE Alimera Sciences, Inc.

Website: http://www.alimerasciences.com
 
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