La Jolla Pharmaceutical Company Announces Financial Results for the Three Months Ended March 31, 2021 and Highlights Corporate Progress

La Jolla Pharmaceutical Company Announces Financial Results for the Three Months Ended March 31, 2021 and Highlights Corporate Progress




La Jolla Pharmaceutical Company Announces Financial Results for the Three Months Ended March 31, 2021 and Highlights Corporate Progress

WALTHAM, Mass.–(BUSINESS WIRE)–La Jolla Pharmaceutical Company (Nasdaq: LJPC), which is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases, today announced financial results for the three months ended March 31, 2021 and highlighted corporate progress.

Corporate Progress

  • Operating Cash Flow Improved: La Jolla’s net cash provided by (used for) operating activities for the three months ended March 31, 2021 was $17.2 million, compared to $(12.2) million for the same period in 2020. La Jolla’s net cash provided by (used for) operating activities excluding net receipts in connection with license agreements and payments related to reductions in headcount for the three months ended March 31, 2021 was $(1.8) million, compared to $(9.2) million for the same period in 2020.
  • $3.0 Million Milestone Payment Associated with NDA Submission for XERAVA™ (Eravacycline) in China by Licensee Everest Received: In March 2021, under its license agreement with Everest Medicines Limited, the Company received a $3.0 million milestone payment associated with the submission of a New Drug Application (NDA) with the China National Medical Products Administration (NMPA) for XERAVA for the treatment of cIAI in patients in China. The Company previously granted Everest an exclusive license to develop and commercialize XERAVA for the treatment of cIAI and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines. The Company is eligible to receive an additional $8.0 million regulatory milestone payment and up to an aggregate of $20.0 million in sales milestone payments. The Company is also entitled to receive royalties from Everest on sales, if any, by Everest of products containing eravacycline.
  • License Agreement for GIAPREZA™ (Angiotensin II) and XERAVA in Europe, which Included a $22.5 Million Upfront Payment, Executed with PAION: In January 2021, the Company entered into a license agreement with PAION AG to commercialize GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland. Pursuant to the agreement: (i) the Company has received an upfront cash payment of $22.5 million, less a 15% refundable withholding tax; and (ii) the Company is entitled to receive potential commercial milestone payments of up to $109.5 million and royalties on net sales of GIAPREZA and XERAVA.

We are pleased to report continued progress toward our goal of becoming cash flow positive from operations,” said Larry Edwards, President and Chief Executive Officer of La Jolla. “The filing of an NDA for XERAVA in China by our licensee Everest and the execution of our license agreement with PAION for GIAPREZA and XERAVA in Europe position us well to serve the needs of patients suffering from life-threatening diseases globally while significantly strengthening our balance sheet. We continue to focus on growing net sales of both GIAPREZA and XERAVA while managing operating costs.”

Financial Results

For the three months ended March 31, 2021, La Jolla’s total revenue was $34.1 million, compared to $7.6 million for the same period in 2020. For the three months ended March 31, 2021, La Jolla’s net product sales were $8.7 million, compared to $7.6 million for the same period in 2020. GIAPREZA U.S. net sales were $6.9 million for the three months ended March 31, 2021, compared to $7.6 million for the same period in 2020. XERAVA U.S. net sales were $1.8 million for the three months ended March 31, 2021, compared to zero for the same period in 2020. La Jolla acquired Tetraphase, which commercialized XERAVA, on July 28, 2020.

La Jolla’s net income (loss) for the three months ended March 31, 2021 was $14.4 million, or $0.42 per diluted share, compared to $(8.6) million, or $(0.32) per diluted share, for the same period in 2020.

As of March 31, 2021 and December 31, 2020, La Jolla had cash and cash equivalents of $38.6 million and $21.2 million, respectively.

La Jolla’s net cash provided by (used for) operating activities for the three months ended March 31, 2021 was $17.2 million, compared to $(12.2) million for the same period in 2020. La Jolla’s net cash provided by (used for) operating activities excluding net receipts in connection with license agreements and payments related to reductions in headcount for the three months ended March 31, 2021 was $(1.8) million, compared to $(9.2) million for the same period in 2020. Net receipts in connection with license agreements were $19.8 million for the three months ended March 31, 2021, compared to zero for the same period in 2020. Payments related to reductions in headcount were $0.8 million for the three months ended March 31, 2021, compared to $3.0 million for the same period in 2020.

About GIAPREZA

GIAPREZA™ (angiotensin II) injection is approved by the U.S. Food and Drug Administration (FDA) as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA is approved by the European Commission (EC) for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. GIAPREZA mimics the body’s endogenous angiotensin II peptide, which is central to the renin-angiotensin-aldosterone system, which in turn regulates blood pressure. Prescribing information for GIAPREZA is available at http://www.giapreza.com. The European Summary of Product Characteristics is available at www.ema.europa.eu/en/medicines/human/EPAR/giapreza. GIAPREZA is marketed in the U.S. by La Jolla Pharmaceutical Company on behalf of La Jolla Pharma, LLC, its wholly owned subsidiary, and will be marketed in Europe by PAION AG on behalf of La Jolla Pharma, LLC.

GIAPREZA Important Safety Information

Contraindications

None.

Warnings and Precautions

There is a potential for venous and arterial thrombotic and thromboembolic events in patients who receive GIAPREZA. Use concurrent venous thromboembolism (VTE) prophylaxis.

Adverse Reactions

The most common adverse reactions that were reported in greater than 10% of GIAPREZA-treated patients were thromboembolic events.

Drug Interactions

Angiotensin converting enzyme (ACE) inhibitors may increase response to GIAPREZA. Angiotensin II receptor blockers (ARBs) may reduce response to GIAPREZA.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

For additional information, please see Full Prescribing Information for the United States and the Summary of Product Characteristics for the European Union.

About XERAVA

XERAVA™ (eravacycline) for injection is approved by the U.S. Food and Drug Administration (FDA) as a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections (cIAI) in patients 18 years of age and older. XERAVA is approved by the European Commission (EC) for the treatment of cIAI in adults. Prescribing information for XERAVA is available at www.xerava.com. The European Summary of Product Characteristics is available at www.ema.europa.eu/en/medicines/human/EPAR/xerava. XERAVA is marketed in the U.S. by Tetraphase Pharmaceuticals, Inc., a wholly owned subsidiary of La Jolla, and will be marketed in Europe by PAION AG on behalf of Tetraphase Pharmaceuticals, Inc. Everest, the Company’s licensee for mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines, recently submitted an NDA in China.

XERAVA Important Safety Information

XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections in patients 18 years of age and older.

XERAVA is not indicated for the treatment of complicated urinary tract infections.

To reduce the development of drug-resistant bacteria and maintain the effectiveness of XERAVA and other antibacterial drugs, XERAVA should be used only to treat or prevent infections that are proven or strongly suspected to be caused by susceptible bacteria.

XERAVA is contraindicated for use in patients with known hypersensitivity to eravacycline, tetracycline-class antibacterial drugs or to any of the excipients. Life-threatening hypersensitivity (anaphylactic) reactions have been reported with XERAVA.

The use of XERAVA during tooth development (last half of pregnancy, infancy and childhood to the age of eight years) may cause permanent discoloration of the teeth (yellow-gray-brown) and enamel hypoplasia.

The use of XERAVA during the second and third trimester of pregnancy, infancy and childhood up to the age of eight years may cause reversible inhibition of bone growth.

Clostridium difficile associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents and may range in severity from mild diarrhea to fatal colitis.

The most common adverse reactions observed in clinical trials (incidence ≥ 3%) were infusion site reactions, nausea and vomiting.

XERAVA is structurally similar to tetracycline-class antibacterial drugs and may have similar adverse reactions. Adverse reactions including photosensitivity, pseudotumor cerebri and anti-anabolic action, which has led to increased blood urea nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis and abnormal liver function tests, have been reported for other tetracycline-class antibacterial drugs, and may occur with XERAVA. Discontinue XERAVA if any of these adverse reactions are suspected.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

For additional information, please see Full Prescribing Information for the United States.

About La Jolla Pharmaceutical Company

La Jolla Pharmaceutical Company is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. GIAPREZA™ (angiotensin II) is approved by the U.S. FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. XERAVA™ (eravacycline) is approved by the U.S. FDA for the treatment of complicated intra-abdominal infections. For more information, please visit www.ljpc.com.

Forward-looking Statements

This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and involve substantial risks and uncertainties that could cause the actual outcomes to differ materially from what we currently expect. These risks and uncertainties include, but are not limited to, those associated with: GIAPREZA™ (angiotensin II) and XERAVA™ (eravacycline) sales; regulatory actions relating to La Jolla’s products by the U.S. FDA, European Commission, China National Medical Products Administration and/or other regulatory authorities; expected future cash flows of La Jolla, including upfront, milestone, royalty and other payments resulting from La Jolla’s out-license agreements and commercial supply agreements; and other risks and uncertainties identified in our filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release apply only as of the date made, and we undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Balance Sheets

(in thousands, except par value and share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,634

 

 

$

21,221

 

Accounts receivable, net

 

 

4,153

 

 

 

5,834

 

Inventory, net

 

 

5,374

 

 

 

6,013

 

Prepaid expenses and other current assets

 

 

6,104

 

 

 

3,388

 

Total current assets

 

 

54,265

 

 

 

36,456

 

Goodwill

 

 

20,123

 

 

 

20,123

 

Intangible assets, net

 

 

14,485

 

 

 

14,873

 

Right-of-use lease assets

 

 

490

 

 

 

536

 

Property and equipment, net

 

 

186

 

 

 

215

 

Restricted cash

 

 

40

 

 

 

40

 

Total assets

 

$

89,589

 

 

$

72,243

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,098

 

 

$

2,762

 

Accrued expenses

 

 

8,721

 

 

 

6,494

 

Accrued payroll and related expenses

 

 

1,693

 

 

 

2,878

 

Lease liabilities, current portion

 

 

196

 

 

 

204

 

Total current liabilities

 

 

11,708

 

 

 

12,338

 

Deferred royalty obligation, net

 

 

124,453

 

 

 

124,437

 

Accrued interest expense on deferred royalty obligation, less current portion

 

 

20,884

 

 

 

19,111

 

Lease liabilities, less current portion

 

 

294

 

 

 

332

 

Other noncurrent liabilities

 

 

4,568

 

 

 

4,112

 

Total liabilities

 

 

161,907

 

 

 

160,330

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders’ deficit:

 

 

 

 

 

 

 

 

Common Stock, $0.0001 par value; 100,000,000 shares authorized, 27,448,571 and 27,402,648 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

3

 

 

 

3

 

Series C-12 Convertible Preferred Stock, $0.0001 par value; 11,000 shares authorized, 3,906 shares issued and outstanding at March 31, 2021 and December 31, 2020; and liquidation preference of $3,906 at March 31, 2021 and December 31, 2020

 

 

3,906

 

 

 

3,906

 

Additional paid-in capital

 

 

986,107

 

 

 

984,756

 

Accumulated deficit

 

 

(1,062,334

)

 

 

(1,076,752

)

Total shareholders’ deficit

 

 

(72,318

)

 

 

(88,087

)

Total liabilities and shareholders’ deficit

 

$

89,589

 

 

$

72,243

 

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

Net product sales

 

$

8,637

 

 

$

7,591

 

License revenue

 

 

25,500

 

 

 

 

Total revenue

 

 

34,137

 

 

 

7,591

 

Operating expenses

 

 

 

 

 

 

 

 

Cost of product sales

 

 

2,731

 

 

 

716

 

Cost of license revenue

 

 

3,600

 

 

 

 

Selling, general and administrative

 

 

8,755

 

 

 

8,152

 

Research and development

 

 

1,558

 

 

 

9,183

 

Total operating expenses

 

 

16,644

 

 

 

18,051

 

Income (loss) from operations

 

 

17,493

 

 

 

(10,460

)

Other (expense) income

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,609

)

 

 

(2,406

)

Interest income

 

 

2

 

 

 

190

 

Other income—related party

 

 

 

 

 

4,085

 

Other expense

 

 

(450

)

 

 

 

Total other (expense) income, net

 

 

(3,057

)

 

 

1,869

 

Income (loss) before income taxes

 

 

14,436

 

 

 

(8,591

)

Provision for income taxes

 

 

18

 

 

 

 

Net income (loss)

 

$

14,418

 

 

$

(8,591

)

Earnings (loss) per share

 

 

 

 

 

 

 

 

Basic

 

$

0.53

 

 

$

(0.32

)

Diluted

 

$

0.42

 

 

$

(0.32

)

Shares used in computing earnings (loss) per share

 

 

 

 

 

 

 

 

Basic

 

 

27,427

 

 

 

27,238

 

Diluted

34,183

27,238

 

LA JOLLA PHARMACEUTICAL COMPANY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Operating activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

14,418

 

 

$

(8,591

)

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

1,116

 

 

 

2,407

 

Depreciation expense

 

 

29

 

 

 

1,060

 

Non-cash interest expense

 

 

1,736

 

 

 

1,682

 

Inventory fair value step-up adjustment included in cost of product sales

 

 

850

 

 

 

 

Amortization of intangible assets

 

 

388

 

 

 

 

Loss on change in fair value of contingent value rights

 

 

450

 

 

 

 

Amortization of right-of-use lease assets

 

 

46

 

 

 

345

 

Loss on disposal of property and equipment

 

 

 

 

 

148

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

1,681

 

 

 

(592

)

Inventory, net

 

 

(211

)

 

 

251

 

Prepaid expenses and other current assets

 

 

(2,716

)

 

 

1,084

 

Accounts payable

 

 

(1,664

)

 

 

(2,282

)

Accrued expenses

 

 

2,286

 

 

 

(2,404

)

Accrued payroll and related expenses

 

 

(1,185

)

 

 

(4,683

)

Lease liabilities

 

 

(46

)

 

 

(674

)

Net cash provided by (used for) operating activities

 

 

17,178

 

 

 

(12,249

)

Investing activities

 

 

 

 

 

 

 

 

Proceeds from the sale of property and equipment

 

 

 

 

 

1,143

 

Net cash provided by investing activities

 

 

 

 

 

1,143

 

Financing activities

 

 

 

 

 

 

 

 

Net proceeds from issuance of common stock under 2013 Equity Plan

 

 

154

 

 

 

305

 

Net proceeds from issuance of common stock under ESPP

 

 

81

 

 

 

200

 

Net cash provided by financing activities

 

 

235

 

 

 

505

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

17,413

 

 

 

(10,601

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

21,261

 

 

 

88,729

 

Cash, cash equivalents and restricted cash, end of period

 

$

38,674

 

 

$

78,128

 

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,634

 

 

$

77,219

 

Restricted cash

 

 

40

 

 

 

909

 

Total cash, cash equivalents and restricted cash

 

$

38,674

$

78,128

 

 

Contacts

La Jolla Pharmaceutical Company Contact
Michael Hearne

Chief Financial Officer

La Jolla Pharmaceutical Company

(617) 715-3598

mhearne@ljpc.com