Egalet provides business update, reports full year 2013 financial results

Mar 26 2014

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. 

Recent corporate highlights include:

• Initiated pivotal bioequivalence studies of Egalet-001;
• Received 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;
• Added 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.;
• Entered 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
• Strengthened 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

• Revenue: 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.
• R&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. 
• G&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. 
• Net (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.
• Cash 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

• Q1: Egalet plans to complete the first phase of category 1 abuse deterrence studies for Egalet-001. 
• Q2: 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. 
• Q3: Egalet plans to initiate category 2 and 3 abuse deterrence studies for Egalet-002.
• Q4: 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:

Source: Egalet Corporation