- Achieved record quarterly revenues of $21.5 million for Q2/2021, 4.5% increase from Q1/2021 despite challenging market conditions; Cash balance 1 of approximately $71.5 million as of June 30, 2021
- Record Talicia(R) quarterly prescription volume up more than 10%; Movantik(R) quarterly new prescriptions up 5.6%; Talicia and Movantik coverage expanded to 8 and 9 out of 10 commercially insured Americans, respectively
- Opaganib in final stages of selection by Quantum Leap Healthcare Collaborative and BARDA for inclusion in the I-SPY COVID-19 platform trial with funding provided by BARDA
- New preclinical data supports opaganib's potent inhibition of Delta COVID-19 variant
- Top-line results from global Phase 2/3 COVID-19 study upcoming following completion of treatment and follow-up
- Primary endpoint met in the ongoing prostate cancer Phase 2 study of opaganib, based on a preliminary review of partial unaudited data; patient accrual, treatment and analysis ongoing
- Management to host webcast today, at 8:30 a.m. EST
RedHill Biopharma Ltd. (NASDAQ: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, today reported its financial results and operational highlights for the second quarter ended June 30, 2021.
Dror Ben-Asher, RedHill's Chief Executive Officer, said: "We have achieved important progress across the board this quarter. Opaganib is one of the leading drug candidates in the race to develop an effective COVID-19 therapeutic pill. New data further supports opaganib's potent inhibition of SARS-CoV-2 variants of concern, including the rapidly spreading Delta variant. The upcoming Phase 2/3 top-line data could tell us if we have a potential game-changing oral pill treatment for severe COVID-19, one that is aligned with the ideal product profile described by public health experts." Mr. Ben-Asher continued: "Commercially, we are continuing to see the fruits of our labor, with significant growth in both Talicia and Movantik prescriptions. Importantly, record quarterly Talicia prescriptions and improving commercial payor coverage are testament to the growing understanding of the need to treat H. pylori in a way that minimizes treatment failure due to antibiotic resistance. This sets us up for continued strong growth."
Micha Ben Chorin, Chief Financial Officer at RedHill, added: "From a financial perspective, the revenue growth in the second quarter, despite the challenging pandemic conditions, highlights the execution excellence of our U.S. commercial organization. Achieving record revenues of $21.5 million while maintaining gross margin above 50% represents a key accomplishment on RedHill's growth path to become a leading specialty pharma player."
Financial highlights for the quarter ended June 30, 2021 2
Net Revenues were approximately $21.5 million for the second quarter of 2021, an increase of $0.9 million compared to the first quarter of 2021. The increase was attributable to an increase in revenues from Talicia(R) and Movantik(R) despite the challenging pandemic environment.
Gross Profit was approximately $10.9 million for the second quarter of 2021, representing an improved gross margin of approximately 51%.
Research and Development Expenses were approximately $10.3 million for the second quarter of 2021, an increase of $2.8 million compared to the first quarter of 2021, mainly attributable to the progression of our COVID-19 development programs.
Selling, Marketing and General and Administrative Expenses were approximately $25.5 million for the second quarter of 2021, an increase of $4.5 million compared to the first quarter of 2021. The increase was mainly attributable to expenses related to share-based compensation and investment in marketing.
Operating Loss and Net Loss were approximately $24.9 million and $29.1 million, respectively, for the second quarter of 2021, compared to $18.2 million and $22.9 million, respectively, in the first quarter of 2021. The increase was mainly attributable to expenses related to the progression of our COVID-19 development programs, marketing programs and expenses related to share-based compensation, as detailed above.
Net Cash Used in Operating Activities was approximately $18.9 million for the second quarter of 2021, an increase of $6.6 million compared to the first quarter of 2021. The increase was mainly attributable to changes in working capital in the second quarter.
Net Cash Used in Financing Activities was approximately $1.8 million for the second quarter of 2021, comprised primarily of payables with respect to Movantik.
Cash Balance 1 as of June 30, 2021, was approximately $71.5 million.
Commercial Highlights
Movantik (R) (naloxegol)3
The Company's focus on initiatives to drive Movantik market growth and gain market share has resulted in a strong quarterly performance for Movantik, registering a 5.6% increase in new prescriptions.
The Company has also achieved significant market access successes with U.S. major payors, continuing to increase the levels of payor coverage. In July, the Company announced that one of America's largest payors, serving many Blue Cross and Blue Shield Plans and more than 30 million members, had added Movantik as a preferred brand with no restrictions to its Commercial NetResults "A" series formularies and as a preferred brand on its other commercial formularies starting July 1, 2021. In April, Movantik was also included on the Part D formulary of another major payor with no restrictions. Almost 9 out of 10 U.S. commercial lives are now covered and we continue to work toward additional formulary coverage for the remaining patients.
In July 2021, the Company announced that RedHill Biopharma Inc., AstraZeneca AB, AstraZeneca Pharmaceuticals LP and Nektar Therapeutics had entered into a settlement and license agreement with Apotex, Inc. and Apotex Corp. (Apotex) resolving their patent litigation in the U.S. in response to Apotex's Abbreviated New Drug Application (ANDA) seeking approval by the U.S. FDA to market a generic version of Movantik. Under the terms of the settlement agreement, Apotex may not sell a generic version of Movantik in the U.S. until October 1, 2030 (subject to FDA approval) or earlier under certain circumstances.
Talicia(R) (omeprazole magnesium, amoxicillin and rifabutin) 4
Talicia achieved a record quarter, delivering more than 10% growth in prescription volume, compared to the previous quarter.
In July, the Company significantly expanded commercial coverage for Talicia, announcing that OptumRx, part of the UnitedHealth Group, a leader in healthcare coverage, partnered with more than 1.3 million healthcare professionals and 6,500 hospitals, had added Talicia to its Commercial Formulary as an unrestricted brand for H. pylori treatment, effective July 1, 2021. This agreement expands access to Talicia to 26 million additional Americans and increases overall patient access to Talicia to greater than 8 out of 10 covered U.S. Commercial lives.
Aemcolo(R) (rifamycin)5
The Company has increased promotion of Aemcolo in the second quarter of 2021 as travel to Mexico increased. Plans are in place to support and build on the initial momentum that Aemcolo was generating pre-COVID-19 travel restrictions. The Company expects that these plans will drive a resurgence of interest in Aemcolo once international travel from the U.S. returns to significant levels.
R&D Highlights
COVID-19 Program: Opaganib (ABC294640)6
Following completion of treatment and follow-up in the opaganib global 475-patient Phase 2/3 study in hospitalized patients with severe COVID-19 pneumonia (NCT04467840), top-line results are expected shortly - likely positioning opaganib as the first novel investigational dual-action COVID-19 oral pill set to deliver late-stage clinical data from patients with severe COVID-19.
Nearing the end of extensive review, Quantum Leap Healthcare Collaborative and the U.S. government's Biomedical Advanced Research and Development Authority (BARDA) are close to selection of opaganib for inclusion in the I-SPY COVID-19 Trial, with funding for opaganib provided by BARDA. The I-SPY platform is intended for rapidly testing promising therapeutic candidates for severely ill COVID-19 patients.
Opaganib, a novel, oral pill sphingosine kinase-2 (SK2) inhibitor with demonstrated dual anti-inflammatory and antiviral activity, targets a human host factor and is expected to exert its activity across the different variants. Supporting this the Company recently announced preliminary results of a new preclinical study with opaganib demonstrating strong inhibition of the COVID-19 Delta variant of concern, while maintaining cell viability at relevant concentrations. Together with the previously announced inhibition of Beta and Gamma variants, this demonstrates that opaganib has the potential to maintain its effect against further emerging spike protein mutations.
Moreover, preliminary results from preclinical work, conducted at the University of Louisville, demonstrated a reduction of IL-6 in the basal supernatants of SARS-CoV-2 infected human airway epithelial cells treated with opaganib, and opaganib has previously demonstrated reduced thrombosis in a preclinical model of ARDS. These findings demonstrate the anti-inflammatory effects that opaganib exerts, in addition to its antiviral activity.
Opaganib previously delivered positive U.S. Phase 2 data in patients with severe COVID-19, presented in June at the World Microbe Forum (WMF) 2021, as well as encouraging compassionate use experience in Switzerland and Israel and potent inhibition of COVID-19 in preclinical studies. The opaganib Phase 2/3 study has also passed four Data Safety Monitoring Board reviews, including a futility review, and extends the total opaganib safety database to more than 460 patients.
The Company previously announced that it had signed collaborations with several U.S., European and Canadian suppliers, including with Cosmo Pharmaceuticals for large-scale ramp-up of opaganib manufacturing, further strengthening manufacturing capabilities and capacity of opaganib.
The Company maintains ongoing discussions with the FDA, EMA and other regulators, on potential pathways to marketing approval, with next steps to be guided by upcoming study results. The regulatory path for opaganib, including potential submissions of emergency use applications in those countries, is subject to whether the data generated by the ongoing Phase 2/3 study is sufficiently positive and supportive, as well as the specific requirements in each country. Additional studies to support the potential of such applications and the use or marketing of opaganib are likely to be required. For example, the FDA has indicated we will need to complete additional studies to support applications in the U.S. The strength of the safety and efficacy data generated from the opaganib studies will be key to regulatory applications. Evaluations and discussions continue with the FDA, EMA and regulators in other countries.
The Company continues its discussions with U.S. and other government agencies and non-governmental organizations around potential funding to support the development and manufacturing scale-up of opaganib. Discussions are also ongoing with potential partners who are interested in the rights to opaganib in various countries.
COVID-19 Program: RHB-107 (upamostat)7
RedHill continues to advance the U.S. Phase 2/3 COVID-19 study with novel, once-daily, orally-administered, antiviral drug candidate, RHB-107 (upamostat). The study with RHB-107 is evaluating treatment of non-hospitalized patients with symptomatic COVID-19 early in the course of the disease who do not require supplemental oxygen - the vast majority of COVID-19 patients.
RHB-107 targets human serine proteases involved in preparing the spike protein for viral entry into target cells. RHB-107 targets human cell factors and is therefore expected to be effective against emerging viral variants with mutations in the spike protein.
RHB-204 - Pulmonary Nontuberculous Mycobacteria (NTM) Disease
A U.S. Phase 3 study is ongoing to evaluate the efficacy and safety of RHB-204 in adults with pulmonary NTM disease caused by Mycobacterium avium Complex (MAC) infection.
The Company previously announced that the FDA granted Fast Track designation for RHB-204, providing early and frequent communications and a rolling review of any New Drug Application (NDA). RHB-204 is also eligible for NDA Priority Review and Accelerated Approval.
RHB-204 was granted FDA Orphan Drug designation and Qualified Infectious Disease Product designation, extending its U.S. market exclusivity to a potential total of 12 years upon potential FDA approval.
Opaganib - Cholangiocarcinoma and Prostate Cancer
According to a preliminary review of partial and unaudited data in the ongoing investigator-initiated open-label Phase 2 study of opaganib in combination with androgen inhibitors in advanced prostate cancer at the Medical University of South Carolina (MUSC) and Emory University, the study has met its primary endpoint of at least 6 subjects demonstrating disease control (defined as stable disease or better after 16 weeks on treatment) among at least 27 evaluable subjects. The study enrolls patients who have already failed androgen inhibitor therapy, with opaganib being added to the failed inhibitor to reverse resistance which has developed. Data entry is ongoing and results remain subject to further review and analysis. Submission for presentation at a major oncology conference is planned for early 2022.
The Phase 2a study evaluating the activity of opaganib in advanced cholangiocarcinoma (bile duct cancer) is ongoing at Mayo Clinics in Arizona and Minnesota, Emory University and the Huntsman Cancer Institute at the University of Utah. Enrollment has been completed for the first cohort of 39 patients, evaluating the activity of orally-administered opaganib as a stand-alone treatment. Preliminary data from this cohort indicated a signal of activity in a number of subjects with advanced cholangiocarcinoma. Enrollment is ongoing for a second cohort, evaluating opaganib in combination with hydroxychloroquine, an anti-autophagy agent.
Conference Call and Webcast Information:
The Company will host a webcast today, Thursday, August 26, 2021, at 8:30 a.m. EDT, during which it will present key highlights for the second quarter of 2021.
The webcast including slides will be broadcast live on the Company's website, https://ir.redhillbio.com/events, and will be available for replay for 30 days.
To participate in the conference call, please dial one of the following numbers 15 minutes prior to the start of the call: United States: +1-877-870-9135; International: +1-646-741-3167 and Israel: +972-3-530-8845; the access code for the call is:5554521.
About RedHill Biopharma
RedHill Biopharma Ltd. (NASDAQ: RDHL) is a specialty biopharmaceutical company primarily focused on gastrointestinal and infectious diseases. RedHill promotes the gastrointestinal drugs, Movantik(R) for opioid-induced constipation in adults, Talicia(R) for the treatment of Helicobacter pylori (H. pylori) infection in adults, and Aemcolo(R) for the treatment of travelers' diarrhea in adults. RedHill's key clinical late-stage development programs include: (i) RHB-204, with an ongoing Phase 3 study for pulmonary nontuberculous mycobacteria (NTM) disease; (ii) opaganib (ABC294640), a first-in-class oral SK2 selective inhibitor targeting multiple indications with a global Phase 2/3 program for COVID-19 and Phase 2 studies for prostate cancer and cholangiocarcinoma ongoing; (iii) RHB-107 (upamostat), an oral serine protease inhibitor in a U.S. Phase 2/3 study as treatment for symptomatic COVID-19, and targeting multiple other cancer and inflammatory gastrointestinal diseases; (iv) RHB-104, with positive results from a first Phase 3 study for Crohn's disease; (v) RHB-102, with positive results from a Phase 3 study for acute gastroenteritis and gastritis and positive results from a Phase 2 study for IBS-D; and (vi) RHB-106, an encapsulated bowel preparation. More information about the Company is available at www.redhillbio.com / https://twitter.com/RedHillBio.
NOTE: This press release, provided for convenience purposes, is a translated version of the official press release published by the Company in the English language. For full press release in English language, including the forward-looking statements disclaimer, please visit: https://ir.redhillbio.com/press-releases.
| Company contact: Adi Frish Chief Corporate and Business Development Officer RedHill Biopharma +972-54-6543-112 adi@redhillbio.com | Media contacts: U.S.: Bryan Gibbs, Finn Partners +1 212 529 2236 bryan.gibbs@finnpartners.com UK: Amber Fennell, Consilium +44 (0) 7739 658 783 fennell@consilium-comms.com |
| REDHILL BIOPHARMA LTD. | ||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| U.S. dollars in thousands | ||||||||
| NET REVENUES | 21,502 | 20,899 | 42,077 | 21,955 | ||||
| COST OF REVENUES | 10,590 | 14,188 | 20,843 | 15,903 | ||||
| GROSS PROFIT | 10,912 | 6,711 | 21,234 | 6,052 | ||||
| RESEARCH AND DEVELOPMENT EXPENSES | 10,328 | 3,214 | 17,812 | 5,979 | ||||
| SELLING AND MARKETING EXPENSES | 15,235 | 9,964 | 29,130 | 18,970 | ||||
| GENERAL AND ADMINISTRATIVE EXPENSES | 10,235 | 6,033 | 17,330 | 10,619 | ||||
| OPERATING LOSS | 24,886 | 12,500 | 43,038 | 29,516 | ||||
| FINANCIAL INCOME | 15 | 108 | 31 | 322 | ||||
| FINANCIAL EXPENSES | 4,250 | 3,655 | 8,977 | 4,010 | ||||
| FINANCIAL EXPENSES, net | 4,235 | 3,547 | 8,946 | 3,688 | ||||
| LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD | 29,121 | 16,047 | 51,984 | 33,204 | ||||
| LOSS PER ORDINARY SHARE, basic and diluted (U.S. dollars): | 0.06 | 0.04 | 0.12 | 0.09 | ||||
| WEIGHTED AVERAGE OF ORDINARY SHARES (in thousands) | 466,801 | 357,668 | 448,411 | 355,168 |
| REDHILL BIOPHARMA LTD. | ||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION | ||||
| June 30, | December 31, | |||
| 2021 | 2020 | |||
| Unaudited Audited | ||||
| U.S. dollars in thousands | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | 51,816 | 29,295 | ||
| Bank deposits | 3,521 | 17 | ||
| Financial assets at fair value through profit or loss | — | 481 | ||
| Trade receivables | 30,098 | 28,655 | ||
| Prepaid expenses and other receivables | 4,292 | 5,521 | ||
| Inventory | 8,763 | 6,526 | ||
| 98,490 | 70,495 | |||
| NON-CURRENT ASSETS: | ||||
| Restricted cash | 16,161 | 16,164 | ||
| Fixed assets | 506 | 511 | ||
| Right-of-use assets | 4,294 | 5,192 | ||
| Intangible assets | 84,222 | 87,879 | ||
| 105,183 | 109,746 | |||
| TOTAL ASSETS | 203,673 | 180,241 | ||
| CURRENT LIABILITIES: | ||||
| Accounts payable | 13,306 | 11,553 | ||
| Lease liabilities | 1,692 | 1,710 | ||
| Allowance for deductions from revenues | 26,096 | 18,343 | ||
| Accrued expenses and other current liabilities | 23,162 | 24,082 | ||
| Payable in respect of intangible assets purchase | 14,916 | 17,547 | ||
| 79,172 | 73,235 | |||
| NON-CURRENT LIABILITIES: | ||||
| Borrowing | 83,159 | 81,386 | ||
| Payable in respect of intangible assets purchase | 8,035 | 7,199 | ||
| Lease liabilities | 2,976 | 3,807 | ||
| Royalty obligation | 750 | 750 | ||
| 94,920 | 93,142 | |||
| TOTAL LIABILITIES | 174,092 | 166,377 | ||
| EQUITY: | ||||
| Ordinary shares | 1,311 | 1,054 | ||
| Additional paid-in capital | 354,442 | 293,144 | ||
| Accumulated deficit | (326,172) | (280,334) | ||
| TOTAL EQUITY | 29,581 | 13,864 | ||
| TOTAL LIABILITIES AND EQUITY | 203,673 | 180,241 |
| REDHILL BIOPHARMA LTD. | ||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| U.S. dollars in thousands | ||||||||
| OPERATING ACTIVITIES: | ||||||||
| Comprehensive loss | (29,121) | (16,047) | (51,984) | (33,204) | ||||
| Adjustments in respect of income and expenses not involving cash flow: | ||||||||
| Share-based compensation to employees and service providers | 5,274 | 623 | 6,146 | 1,425 | ||||
| Depreciation | 465 | 417 | 957 | 767 | ||||
| Amortization and impairment of intangible assets | 1,830 | 1,773 | 3,657 | 2,849 | ||||
| Non-cash interest expenses related to borrowing and payable in respect of intangible assets purchase | 1,217 | 1,513 | 3,856 | 1,617 | ||||
| Fair value losses (gains) on financial assets at fair value through profit or loss | — | (38) | 6 | 37 | ||||
| Exchange differences and revaluation of bank deposits | 17 | (6) | 63 | (165) | ||||
| 8,803 | 4,282 | 14,685 | 6,530 | |||||
| Changes in assets and liability items: | ||||||||
| Increase in trade receivables | (6,792) | (16,853) | (1,443) | (17,354) | ||||
| Decrease (increase) in prepaid expenses and other receivables | (199) | (3,266) | 1,229 | (2,626) | ||||
| Decrease (increase) in inventories | 507 | (1,983) | (2,237) | (2,868) | ||||
| Increase in accounts payable | 6,770 | 2,123 | 1,753 | 1,124 | ||||
| Increase (decrease) in accrued expenses and other liabilities | (2,284) | 17,804 | (920) | 22,123 | ||||
| Increase (decrease) in allowance for deductions from revenues | 3,418 | (1,089) | 7,753 | (428) | ||||
| 1,420 | (3,264) | 6,135 | (29) | |||||
| Net cash used in operating activities | (18,898) | (15,029) | (31,164) | (26,703) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Purchase of fixed assets | (3) | (20) | (91) | (191) | ||||
| Purchase of intangible assets | — | (52,500) | — | (52,633) | ||||
| Change in investment in current bank deposits | (3,500) | 1,000 | (3,500) | 4,200 | ||||
| Proceeds from sale of financial assets at fair value through profit or loss | — | 1,725 | 475 | 3,950 | ||||
| Net cash (used in) investing activities | (3,503) | (49,795) | (3,116) | (44,674) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from long-term borrowings, net of transaction costs | — | (500) | — | 78,845 | ||||
| Proceeds from issuance of ordinary shares, net of issuance costs | 273 | 6,363 | 58,214 | 6,363 | ||||
| Exercise of options into ordinary shares | 114 | — | 3,341 | — | ||||
| Repayment of payable in respect of intangible asset purchase | (1,754) | — | (3,879) | — | ||||
| Increase in restricted cash | — | — | — | (20,000) | ||||
| Payment of principal with respect to lease liabilities | (402) | (404) | (785) | (736) | ||||
| Net cash (used in) provided by financing activities | (1,769) | 5,459 | 56,891 | 64,472 | ||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (24,170) | (59,365) | 22,612 | (6,905) | ||||
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | 14 | 23 | (91) | 154 | ||||
| BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 75,972 | 81,614 | 29,295 | 29,023 | ||||
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | 51,816 | 22,272 | 51,816 | 22,272 | ||||
| SUPPLEMENTARY INFORMATION ON INTEREST RECEIVED IN CASH | 52 | 71 | 71 | 249 | ||||
| SUPPLEMENTARY INFORMATION ON INTEREST PAID IN CASH | 3,026 | 2,129 | 5,016 | 2,360 | ||||
| SUPPLEMENTARY INFORMATION ON NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Acquisition of right-of-use assets by means of lease liabilities | — | 630 | — | 2,205 | ||||
| Purchase of intangible assets posted as payable | — | 12,058 | — | 12,808 | ||||
| Long-term borrowings transaction costs | — | — | — | 784 |
| 1 Including cash, cash equivalents, bank deposits and restricted cash |
| 2 All financial highlights are approximate and are rounded to the nearest hundreds of thousands. |
| 3 Movantik(R) (naloxegol) is indicated for opioid-induced constipation (OIC). Full prescribing information see: www.movantik.com. |
| 4 Talicia(R) (omeprazole magnesium, amoxicillin and rifabutin) is indicated for the treatment of H. pylori infection in adults. For full prescribing information see: www.Talicia.com. |
| 5 Aemcolo(R) (rifamycin) is indicated for the treatment of travelers' diarrhea caused by noninvasive strains of Escherichia coli in adults. For full prescribing information see: www.aemcolo.com |
| 6 Opaganib (ABC294640, Yeliva(R)) is an investigational new drug, not available for commercial distribution. |
| 7 RHB-107 (upamostat) is an investigational new drug, not available for commercial distribution. |
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