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Zyla Life Sciences (EGLT)

On March 16, 2020, we entered into the Merger Agreement. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into us, with us continuing as the surviving corporation and a wholly-owned subsidiary of Parent. Pursuant to the terms of the Merger Agreement, at the time the merger is effective, each issued and outstanding share of common stock, par value $0.001 per share, of the Company (the “Common Stock”) (other than Excluded Shares (as defined below) and Dissenting Shares (as defined below)) will be converted into the right to receive 2.5 shares (the “Exchange Ratio”) of common stock, par value $0.0001 per share, of Parent (“Parent Common Stock”). Each share of Common Stock that is held by the Company as treasury stock or that is owned, directly or indirectly, by Parent, the Company, Merger Sub, or any subsidiary of the Company (collectively, “Excluded Shares”), immediately prior to the effective time of the Merger (the “Effective Time”) will cease to be outstanding and will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.  “Dissenting Shares” are shares of the Common Stock (other than Excluded Shares) outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and has properly demanded appraisal for such shares of the Common Stock in accordance with Section 262 of the Delaware General Corporation Law. Consummation of the Merger is subject to certain conditions to closing including, among others: (1) requisite approvals of our and Assertio’s stockholders; (2) the absence of certain legal impediments to the consummation of the Merger; (3) the approval of shares of Parent Common Stock to be issued as consideration in the Merger for listing on the Nasdaq Stock Market, (4) effectiveness of the registration statement on Form S-4 registering the shares of Parent Common Stock and other equity instruments to be issued in the Merger, (5) subject to certain exceptions, the accuracy of the representations, warranties and compliance with the covenants of each party to the Merger Agreement, and (6) Assertio, Parent and their respective Subsidiaries having minimum cash and cash equivalents equal to $25 million in the aggregate (as calculated pursuant to the Merger Agreement).  We are working toward completing the Merger as quickly as possible and currently expect to consummate the merger in the second calendar quarter of 2020. We are a commercial-stage life science company committed to bringing differentiated products to patients and healthcare providers. We are focused on marketing our portfolio of medicines used both in and outside of the hospital by orthopedic surgeons, gynecologists, neurologists, internists, gastroenterologists, physiatrists, rheumatologists and podiatrists. Our six commercially available products include: SPRIX® (ketorolac tromethamine) Nasal Spray, ZORVOLEX® (diclofenac), INDOCIN® (indomethacin) suppositories, VIVLODEX® (meloxicam), INDOCIN oral suspension and OXAYDO® (oxycodone HCI, USP) tablets for oral use only —CII.  VIVLODEX and ZORVOLEX are SOLUMATRIX® Technology non-steroidal anti-inflammatory products. In November 2019, we divested assets related to TIVORBEX® (indomethacin), which was a SoluMatrix product, to a third party, although we continue to supply TIVORBEX tablets to that third party. In January 2020, we divested TIVORBEX to a third party and amended the terms of the license agreement with iCeutica (as defined below). To leverage our commercial infrastructure and augment our current product portfolio, we continually seek to acquire additional late-stage product candidates or approved products to develop and/or commercialize.

Company profile

Ticker
EGLT, EGLT
Exchange
Website
Employees
Incorporated
Location
Fiscal year end
Former names
Egalet Corp
SEC CIK
Subsidiaries
Egalet Limited • Zyla Life Sciences US Inc. ...

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

14 May 20
13 Aug 22
31 Dec 22
13F holders Current Prev Q Change
Total holders 0 0
Opened positions 0 0
Closed positions 0 0
Increased positions 0 0
Reduced positions 0 0
13F shares Current Prev Q Change
Total value 0 0
Total shares 0 0
Total puts 0 0
Total calls 0 0
Total put/call ratio
Largest owners Shares Value Change
Largest transactions Shares Bought/sold Change
Tekla Capital Management 0 0

Financial report summary

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Risks
  • Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict.
  • Our current significant indebtedness and any future debt obligations expose us to risks that could adversely affect our business, operating results and financial condition and may result in further dilution to our stockholders.
  • We rely on available borrowings under the Revolving Facility for cash to operate our business, which subjects us to market and counterparty risks, some of which are beyond our control.
  • The report of our independent registered public accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern.
  • We may require additional capital to fund our planned operations, which may not be available to us on acceptable terms or at all.
  • Despite our current debt levels, we may still incur additional debt or take other actions which would intensify the risks discussed above.
  • Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies, products or product candidates.
  • Our indebtedness may be subject to interest rate risks.
  • The announcement and pendency of the Merger could adversely impact us.
  • Our future prospects are dependent on the success of our products, and we may not be able to successfully commercialize these products. Failure to do so would adversely impact our financial condition and prospects.
  • If physicians and patients do not accept and prescribe/use our products, we will not achieve sufficient product revenues and our business will suffer.
  • Our products are and may become subject to unfavorable pricing regulations or healthcare reform initiatives, which could harm our business.
  • Coverage and reimbursement may not be available, or reimbursement may be available at only limited levels, for our products, which could make it difficult for us to sell our products profitably.
  • Our limited history of commercial operations makes evaluating our business and future prospects difficult and may increase the risk of any investment in our Common Stock.
  • We are a relatively small company with limited sales and marketing capabilities and, if we are unable to effectively utilize our sales and marketing resources or enter into strategic alliances with collaborators, we may not be successful in commercializing our products or any products that we may in-license or acquire.
  • If we fail to obtain the necessary regulatory approvals, or if such approvals are limited, we will not be able to fully commercialize our products and our financial performance could suffer.
  • We may not be able to obtain three-year FDA regulatory exclusivity for certain aspects of our products and, if partnered and approved, our product candidates.
  • If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products.
  • We face substantial competition, which may result in others commercializing products more successfully than we do.
  • The use of legal and regulatory strategies by competitors with innovator products, including the filing of citizen petitions, may increase our costs associated with the marketing of our products, significantly reduce the profit potential of our products, or, if successfully partnered, delay or prevent the introduction or approval of our product candidates.
  • Our business operations may subject us to numerous commercial disputes, claims, lawsuits and/or investigations.
  • Our future success depends on our ability to retain our key personnel.
  • Our employees, principal investigators, CROs, CMOs and other third-party manufacturers, distributors, independent contractors, consultants, collaborators, pharmacy networks or vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
  • OXAYDO is subject to mandatory REMS programs, which could increase the cost, burden and liability associated with the commercialization of OXAYDO.
  • OXAYDO contains a controlled substance, the manufacture, use, sale, importation, exportation and distribution of which are subject to regulation by state, federal and foreign law enforcement and other regulatory agencies.
  • If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur significant costs.
  • If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our Common Stock.
  • Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
  • We are a “smaller reporting company” and we take advantage of reduced disclosure and governance requirements applicable to such companies, which could result in our common stock being less attractive to investors.
  • We may incur increased compliance costs and our management will be required to devote substantial time to new compliance initiatives once we are no longer a smaller reporting company and a “non-accelerated filer.”
  • We no longer qualify as an “emerging growth company” and will be required to comply with certain provisions of the Sarbanes-Oxley Act and can no longer take advantage of reduced disclosure requirements.
  • If third‑party manufacturers of our products fail to devote sufficient time and resources to our concerns, or if their performance is substandard, we may be unable to continue to commercialize our products, and our costs may be higher than expected and could harm our business.
  • Due to the fact that we rely on third parties to carry out aspects of our commercial strategic objectives, if such third parties do not perform as we need them to, we may have difficulty successfully commercializing our products and our financial performance may suffer.
  • INDOCIN suppositories are a branded generic product manufactured by the CMO using our trademark. If the CMO decided not to manufacture the product for us, allow us to manufacture under its ANDA, or manufacture the product itself, our financial condition would suffer.
  • We may seek collaborations with third parties to market and commercialize our products, including outside of the United States, who may fail to effectively and compliantly market our products and suffer reputational harm.
  • We face possible successor liability due to our acquisition of assets from Iroko.
  • If we are unable to obtain or maintain intellectual property rights for our technology and products, we may lose valuable assets or experience reduced market share.
  • If third parties claim that our technology or products infringe their intellectual property, this could result in costly litigation and potentially limit our ability to commercialize our products.
  • We have been, and in the future may be, forced to litigate to enforce or defend our intellectual property, and/or the intellectual property rights of our licensors, which could be expensive, time consuming and unsuccessful, and result in the loss of valuable assets.
  • If we breach any of the agreements under which we license rights to products or technology from others, we could lose license rights that are material to our business or be subject to claims by our licensors.
  • We may be subject to claims by third parties of ownership of what we regard as our own intellectual property or obligations to make compensatory payments to employees.
  • If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
  • We may not be able to protect our intellectual property rights throughout the world.
  • We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
  • We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.
  • We are exposed to risks related to our international operations and failure to manage these risks may adversely affect our operating results and financial condition.
  • Non-U.S. governments tend to impose strict price controls that may adversely affect our future profitability.
  • Conducting clinical trials for our products and product candidates and any commercial sales of our products may expose us to expensive product liability claims, and we may not be able to maintain product liability insurance on reasonable terms or at all.
  • If we do not find suitable partners to assist us with the development and regulatory submissions for our product candidates, we may not be able to further develop or seek or obtain regulatory approval for Egalet-002 and our other product candidates and we may not realize any return on our investment in those assets.
  • We have a significant stockholder, which may exert significant control over our operations. As a result, our future strategy and plans may differ materially from those in the past.
  • Our Common Stock is listed on the OTC Bulletin Board; therefore, it could be highly volatile, difficult to sell and raising capital could be difficult.
  • Future sales of shares by a significant stockholder, including CRG, could cause our stock price to decline.
  • We are party to ongoing stockholder litigation, and in the future could be party to additional stockholder litigation, which is expensive and could harm our business, financial condition and operating results and could divert management attention.
  • Future issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plans or the exercise or our outstanding warrants, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
  • Some provisions of our charter documents and Delaware law have anti‑takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.
  • Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
  • If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
Management Discussion
  • Net product sales increased $1.5 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Net product sales for the three months ended March 31, 2020 consisted of $11.9 million for INDOCIN products, $5.7 million for SPRIX Nasal Spray, $0.9 million for the SOLUMATRIX products, and $0.6 million for OXAYDO.  Net product sales for the three months ended March 31, 2019 consisted of $7.5 million for INDOCIN products, $5.2 million for SPRIX Nasal Spray, $3.8 million for the SOLUMATRIX products, and $1.1 million for OXAYDO.
  • Cost of sales (excluding amortization of product rights) decreased by $9.6 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019.
  • Cost of sales for SPRIX Nasal Spray, OXAYDO, SOLUMATRIX products and INDOCIN products reflects the average cost of inventory shipped to wholesalers and specialty pharmaceutical companies during the three months ended March 31, 2020.

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Avg
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